In a report released on December 24, John Pancari from Evercore ISI maintained a Hold rating on Huntington Bancshares (HBAN – Research Report), with a price target of $10.50.
Geoff Meacham has given his Hold rating due to a combination of factors affecting Huntington Bancshares’s financial position and strategic actions. The bank’s recent announcement of capital actions intended to mitigate the impact of an FDIC special assessment while positioning itself advantageously for a potential shift in interest rate trends is seen as a modest positive. These actions contribute to a net increase in Huntington’s Common Equity Tier 1 (CET1) capital, despite the financial burden imposed by the FDIC’s assessment. The strategic termination of a pay-fixed swaption program is also indicative of the bank’s adaptive approach to the changing rate environment, suggesting a cautious but proactive financial management strategy.
Further influencing the Hold rating is the execution of a synthetic Credit Risk Transfer (CRT) relating to a significant portion of prime auto loans that Huntington Bancshares holds. This CRT is expected to reduce risk-weighted assets and enhance CET1 by a notable margin. However, the costs associated with the transaction and ongoing premium expenses, along with the expected non-recurring expenses from efficiency measures, temper the immediate financial benefits. The analyst’s assessment appears to weigh these positive developments against the costs that will impact short-term earnings, leading to a cautious stance on the bank’s stock.
In another report released on December 20, Stephens also maintained a Hold rating on the stock with a $13.50 price target.
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Huntington Bancshares (HBAN) Company Description:
Huntington Bancshares, Inc. operates as a bank holding company. It provides commercial and consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. The company operates through the following segments: Consumer & Business Banking, Commercial Banking, Commercial Real Estate & Vehicle Finance, Regional Banking & The Huntington Private Client Group, and Home Lending. The Consumer & Business Banking segment provides financial products and services to consumer and small business customers including but not limited to checking accounts, savings accounts, money market accounts, certificates of deposit, investments, consumer loans, credit cards and small business loans. The Commercial Banking segment provides products and services to the middle market, large corporate, and government public sector customers located primarily within its geographic footprint. The segment is divided into following business units: Middle Market, Large Corporate, Specialty Banking, Asset Finance, Capital Markets, Treasury Management, and Insurance. The Commercial Real Estate & Vehicle Finance segment provides products and services include providing financing for land, buildings, and other commercial real estate owned or constructed by real estate developers, automobile dealerships, or other customers with real estate project financing needs, and financing for the purchase of automobiles, light-duty trucks, recreational vehicles and marine craft at franchised dealerships, financing the acquisition of new and used vehicle inventory of franchised automotive dealerships. The Regional Banking and The Huntington Private Client Group segment consists of private banking, wealth & investment management, and retirement plan services. The Home Lending segment originates and services consumer loans and mortgages for customers who are located in primary banking markets. Huntington Bancshares was founded in 1966 and is headquartered in Columbus, OH.
Read More on HBAN:
- Huntington Bancshares price target raised to $13.50 from $12 at Stephens
- Huntington Bancshares price target raised to $15 from $12 at RBC Capital
- Huntington Bancshares price target raised by $2 at BofA
- Unusually active option classes on open December 14th
- Huntington Bancshares Incorporated Declares Cash Dividend On Its Series I Preferred Stock
