Magazine article American Banker

Huntington's Stock Price Jumps Once Again on Merger Rumors

Magazine article American Banker

Huntington's Stock Price Jumps Once Again on Merger Rumors

Article excerpt

Huntington Bancshares is becoming a favorite pick among investors who are betting on the next bank merger target.

In the last two weeks, shares of the Columbus, Ohio-based regional gained 6%, while the Standard & Poor's bank index lost less than 1%. On June 4, Huntington's stock hit a 52-week high of $36.96875.

Talk about the company died down early last week because of much more insistent merger rumors about Hibernia Corp. of New Orleans. But last Thursday the talk picked up again after Thomas H. Hanley, a bank analyst at Warburg Dillon Read, listed Huntington among six banks on his takeover list.

The most likely acquirer of the bank would be Fifth Third Bancorp of Cincinnati, at a price of $53, Mr. Hanley told clients through his sales force.

Huntington, like most midsize banks, has always been the subject of merger rumors, but speculation dogs the company more than it has before.

"People mention Huntington as a takeover candidate because they have underperformed in the past," said Anthony J. Polini, bank analyst at Advest Group in New York. "In today's banking environment you have to earn the right to be independent in investors' eyes."

Indeed, recent mergers show that banks that misstep often find themselves merging with another bank not too long after.

But so far this year, Huntington has traveled a steady path to good financial performance.

In a statement to American Banker, Frank Wobst, Huntington's chairman and chief executive officer, said the company had "outlined a number of performance improvement initiatives in late 1998, and the company has begun to deliver on those initiatives as evidenced by strong first-quarter 1999 earnings and consistent improvements in efficiency."

Analysts agree that the company's performance has improved. But they also wonder if Huntington can maintain it. One of the strengths of the $28 billion-asset banking company is its sizable market share in higher-growth states such as Ohio, Michigan, and Florida. …

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