Huntington Bancshares Inc. expects full-year net charge-offs to be near the high end of a previously targeted range amid a weak economy in many of its markets, the Columbus, Ohio-based bank is reporting. The bank previously targeted a range of 0.60% to 0.65% of average total loans and leases.
Second-quarter provision for credit losses is expected to exceed net charge-offs by about $55 million to $65 million, compared with $40.2 million in the first quarter. In the second half of 2008, the company expects the allowance for loan and lease losses to increase at a slower pace than it did in the first half.
Huntington said its June 30 Tier-1 capital ratio, a measure of its ability to cover losses, is expected to be at least 8.80%, up from 7.56% at the end of the first quarter. It said it expects the ratio to increase 15-20 basis points each quarter throughout 2008.
"We are fully aware that the economic environment remains difficult and could continue to get even more so," says CEO Thomas Hoaglin. "We firmly believe the actions we have taken over the last several years will result in better relative credit quality performance throughout this cycle."