COLUMBUS, Ohio - Huntington Bancshares Incorporated (NASDAQ:HBAN), a regional bank with $6.69 billion in trailing twelve-month revenue and a notable 54-year history of consistent dividend payments, announced today a strategic move to reposition a portion of its corporate debt investment securities portfolio.
The company has sold approximately $1.0 billion of corporate debt investment securities and associated hedges. This sale is expected to result in a pre-tax loss of about $20 million, which will be recorded in the fourth quarter of 2024 within noninterest income. The loss is anticipated to be offset by an improvement in common equity tier 1 capital. According to InvestingPro, six analysts have recently revised their earnings expectations upward for the upcoming period, suggesting confidence in the bank’s strategic decisions.
The financial institution plans to reinvest the proceeds from the sale into 0% risk-weighted investment securities. Huntington estimates that the earn-back period from this transaction will be approximately two years.
This financial maneuver is part of Huntington’s broader strategy to optimize its balance sheet and enhance capital ratios. The bank has not disclosed specific details regarding the securities sold or the new investments being targeted. With a beta of 1.08 and an attractive dividend yield of 6.37%, Huntington maintains a balanced risk profile while rewarding shareholders. For detailed analysis of Huntington’s financial health metrics and additional insights, InvestingPro subscribers have access to comprehensive valuation tools and expert analysis.
Huntington’s latest action aligns with the banking industry’s ongoing adjustments to investment portfolios in response to changing economic conditions and regulatory requirements. The bank’s decision to shift towards lower-risk securities may reflect a cautious approach in an uncertain economic environment.
Huntington Bancshares Incorporated, headquartered in Columbus (WA:CLC), Ohio, is a regional bank holding company providing full-service commercial, small business, and consumer banking services, mortgage banking services, treasury management and foreign exchange services, equipment
In other recent news, Huntington Bancshares Incorporated has announced the issuance and sale of $1.75 billion in debt securities.
This financial move consists of $1.15 billion of 5.272% Fixed-to-Floating Rate Senior Notes due in 2031 and $600 million of 6.141% Fixed-to-Fixed Rate Subordinated Notes due in 2039. Both the Senior and Subordinated Notes are governed by respective indentures with The Bank of New York Mellon (NYSE:BK) Trust Company, N.A. acting as the trustee.
The underwriting syndicate for this transaction includes Citigroup (NYSE:C) Global Markets Inc., Goldman Sachs & Co. LLC, Huntington Securities, Inc., RBC Capital Markets, LLC, and UBS Securities LLC. The details of this transaction can be found in a prospectus supplement filed with the U.S. Securities and Exchange Commission.
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