Huntington loan customers get back on track after deferred payments
As the pandemic took hold and the economy shut down, many of Huntington Bancshares’ business and consumer customers took up the bank’s offer to defer loan payments.
Now, nearly all of them are back on track.
Huntington said Friday when it released its fourth-quarter earnings report that less than 1% of its business and consumer loans remain in deferral, down from 9% as of June 30.
Business deferrals are down $4.8 billion from the peak with only a modest amount of commercial real estate and business banking deferrals remaining, the bank said. Nearly all of the bank’s hospitality customers, the hardest hit by the pandemic, have resumed making payments.
Consumer deferrals are down $1.8 billion from the June 30 peak with the remainder centered on residential mortgage.
“It’s not kudos to us. It’s kudos to (the customers), the steadfastness and grit to work through this,” said Steve Steinour, the bank’s chairman, president and CEO.
Recognizing the difficulty created by the pandemic, the bank offered deferrals to anyone who needed one back in March, he said.
“We had deferral percentages higher than any other bank . ... The vast majority have gotten right back on their feet,” he said.
Those customers have benefited from low interest rates and stimulus programs, but the bank is doing its part as well, Steinour said.
The pandemic has created a split in the economy, he said.
“There are companies that are doing well, a number that are doing very, very well,” he said. “On the other side are people who are really impacted, people who work in hotels, bars and restaurants and a slice of our service sector that is entertainment-related. They’re crushed. That’s the really terrible side of this.”
The bank reported that its fourthquarter profit held steady as it moves ahead with its $6 billion deal to buy Detroit-based TFC Financial.
Huntington reported profit of $316 million for the last three months of 2020, or 27 cents per share, similar to what it reported in the fourth quarter of 2019. Earnings missed analyst estimates by 2 cents a share because the bank made a $20 million donation to the Columbus Foundation meant to help those hurt by the pandemic.
Revenue for the quarter rose 7% from the final three months of 2019 to $1.3 billion.
Its profit for all of 2020 fell 42% from 2019 to $817 million as it bolstered its reserves to cover loans that could go sour because of the fallout from the coronavirus. At the same time, low interest rates have hurt all banks.
The bank announced in December its plan to buy Detroit-based parent TCF National Bank in a deal that will make Huntington one of the 20 biggest banks in the country and one of the nation’s top 10 regional banks.
The deal strengthens Huntington’s position in Michigan and Chicago while giving it access to new markets such as Minneapolis and Denver. Steinour said the acquisition remains on track to close this summer.
The acquisition is going well, even better than the bank’s last big deal when it bought Akron-based Firstmerit in 2016.
“We feel really good. They are just great people there. We will be a stronger company combining,” he said.
Huntington said it plans to close 198 branch offices with half of them planned for Michigan and some in northern Ohio. No closures are planned in central Ohio at this time.
Even with those closings, the combined bank still will have 300 offices in Michigan, 100 more than the next biggest bank, Steinour said.
Huntington shares were off 3% in trading Friday on the report, but shares have been on a roll in recent months, jumping more than 50% since the fall. mawilliams@dispatch.com @Bizmarkwilliams