Huntington Bancshares Inc (HBAN)

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*****BIG NEWS!!!!!!!!!!!*****

=DJ Big Banks Rally As Wells Fargo Bolsters 1Q Expectations


By Donna Kardos
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Shares of big banks Citigroup Inc. (C) and Bank of America Corp. (BAC) rallied Monday as JPMorgan said first-quarter results of some larger banks will likely reflect "solid revenues led by mortgage banking and capital markets."
Large banks also continued to gain following Wells Fargo & Co.'s (WFC) announcement last week that it would post better-than-expected first-quarter results.
"The flood gates of optimism have been opened and investors are just trying to get in ahead of the earnings announcements for the other banks," Motley Fool senior analyst James Early told Dow Jones Newswires.
The KBW Bank Index was up 2% recently. Shares of Citigroup were up 12% recently to $3.40. Earlier, they rose as much as 15% to an intraday high of $3.50, where they last traded two months ago. Bank of America, meanwhile, was recently up 8% to $10.31. Its shares climbed as much as 12% at one point to $10.67, their highest level since mid-January.
But shares of Wells Fargo were down 2.2% in recent trading to $19.17 as some are skeptical of the company's pre-announcement, including Keefe, Bruyette & Woods, which cut its investment rating on Wells Fargo's shares to underperform. The firm and other bears are arguing that the true condition of Wells Fargo's business was obscured through financial accounting for its purchase of Wachovia Corp.
And while several larger regional banks also helped lead the sector's Monday gains, including Huntington Bancshares Inc. (HBAN), which rose 11% recently, and Fifth Third Bancorp Inc. (FITB), which climbed 10%, many other regional bank stocks were slumping. The KBW Regional Banking Index slid 0.7% as JPMorgan said some regionals are likely to be more pressured by credit costs.
Many are also fearing a warning from Pennsylvania-based Susquehanna Bancshares Inc. (SUSQ) - which late Thursday projected first-quarter earnings below expectations amid higher loan-loss provisions and net charge-offs - may be a sign of things to come for regional banks.
As for the big banks, JPMorgan analyst Vivek Juneja told clients in a Monday note that some of them are likely to benefit not only from their mortgage banking and capital markets revenues, but also from tight cost controls and expense reduction initiatives. Higher mortgage warehouse loans are also expected to help net interest income and offset lower net interest margins, Juneja said.
And as additional fixed-income securities benefit from future government programs such as Treasury's Term Asset-Backed Securities Loan Facility and the Public-Private Partnership Investment Program, "it could offset rising credit losses and help [tangible common equity] ratios recover for some banks near-term," Juneja added.
Juneja raised his 2009 and 2010 earnings per share estimates for Citigroup, citing better capital-markets results. He said first-quarter 2009 revenues "are likely to benefit from capital markets led mainly by positive marks in fixed income trading and some improvement in flow business in fixed income which should continue into future quarters."

-By Donna Kardos, Dow Jones Newswires; 201-938-5963; [e-mail]
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April 13, 2009 13:31 ET (17:31 GMT)