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Huntington EPS falls 14% YOY on M&A hit

Huntington Bancshares Inc. on Jan. 25 reported fourth-quarter 2016 net income applicable to common shares of $193.4 million, or 18 cents per share. In comparison, it was $170.3 million, or 21 cents per share, a year ago.

Full-year 2016 net income applicable to common shares, meanwhile, was $619.8 million, or 67 cents per share, compared with 2015's $661.1 million, or 81 cents per share.

The company noted that the integration of FirstMerit Corp. continues, with branch conversion on track for a mid-February completion. All cost-saves are expected to be implemented by the third quarter.

Merger-related expenses hit EPS by 6 cents per share. The S&P Capital IQ consensus normalized EPS estimate was 22 cents for the recent quarter and 87 cents for the full year.

Commercial real estate loans grew 37% year over year; auto loans increased by 17%. Residential mortgages were up 27%.

Net interest margin was 3.25%, up from the linked quarter's 3.18% and the year-ago period's 3.09%.

Total nonperforming assets stood at $480.9 million, up from the preceding quarter's $475.6 million. Huntington recorded a provision for credit losses of $75 million, up sequentially from $64 million and from the $36 million of a year ago. Net charge-offs amounted to $44 million, compared with the third quarter's $40 million and fourth-quarter 2015's $22 million.

Its efficiency ratio fell to 65.4% from the prior quarter's 75.0%.

The company projects full-year revenue growth of more than 20%, thanks to the FirstMerit acquisition. Loan growth of 4% to 6% is expected, on a period-end basis.