Huntington Bank Pounded By Subprime Mortgage Exposure
Mortgage Insider » Banks » Huntington Bank Pounded By Subprime Mortgage Exposure
Huntington Bank owned by Huntington Bancshares Incorporated (NASDAQ; HBAN) a $50+ billion regional bank holding company headquartered in Columbus, Ohio is feeling the pain of exposure to the subprime mortgage meltdown. Last week as subprime giant Franklin Credit Management continued to see losses and threats of getting delisted from NASDQ, Huntington Bank who is owed about $1.13 Billion by Franklin saw it’s stock drop 13% in one day.
That was a week ago, so what’s happening now you ask? Zacks.com just named Huntington Bank the “Bear of the Day” even though the bank stock didn’t get hit too badly in the last trading.
Mortgage Crisis Pounds Regional Banks
Regional banks throughout the country are get punished by their zeal to participate in the temporary but huge profits of subprime mortgage lending. Huntington Bank is the latest regional bank to caught in the subprime mortgage web of never-ending losses.
Like a virus once a subprime loan goes bad the losses trickle back up the same pipeline the profits at one time had trickled down. The guys at the end the “loss line” are the regional banks.
On TheStreet.com Andrew Marquardt, an analyst at Fox-Pitt, Kelton Caronia Cochran Waller, questions
“… if Huntington will be able to “rid itself of this exposure” without taking large writedowns. For perspective, a 50% writedown to Huntington’s exposure equates to nearly $1 a share, he writes.”
I doubt it as well. The problem with a Franklin unraveling is the quality of the borrowers, not the home values of the underlying collateral. If Huntington only exposure was sinking real estate values and not D credit borrowers, I’d feel different. If Huntington had bought Alt-A or other better than subprime mortgage obligations, I’d feel different.
But they didn’t…and I don’t.
Huntington Bank…look out below!
Good Luck!
Author: The Mortgage Insider
Date: September 2, 2008
Tags by Post Bank Reviews, Regional Banks, Subprime Mortgage
Technorati Bank Reviews, Regional Banks, Subprime Mortgage
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I had a small amount in a savings account at Huntington Bank, only $150.00 and never paid any attention to that account because it was so small. I was shocked when I recieved a letter from Huntington stating that I owed them $23.00. It seems that they charged that account monthly until the balance was gone and closed the account when it went negative. Thank goodness they are willing to forgive the $23.00 that I owe them. I thought you put money in the bank to prevent it from getting stolen but guess what, they are the thieves. I have no pity on the greedy banks.
Lee,
There is not a bank in the country I’d call “strong”…it will be years for that adjective and the word “bank” can be used together.
RKB
What is the status of Huntington Bank as of 9/29/08? Are strong financially?