Huntington Bank revises its 3Q earnings downward

Huntington said in a filing with the Securities and Exchange Commission that its net income, after paying dividends to preferred shareholders, was $62.97 million, or 17 cents per share. That was significantly lower than the previously reported net income of $103.1 million, or 28 cents per share.

When the Columbus, Ohio-based regional bank released its earnings Oct. 16, investors had believed the results had surpassed Wall Street estimates for earnings of 24 cents a share.

After Monday's adjustment revealed that they had not beat estimates, Huntington shares sank 69 cents, or 7.3 percent, to close at $8.79.

The bank said in the Monday filing that it recognized an impairment of $76.6 million in its portfolio of securities backed by Alt-A loans. Alt-A loans are those typically given to people with minor credit problems or who lack documentation for a traditional, prime loan.

Huntington said "it became evident and was validated by our third party pricing consultant that defaults and losses on mortgage loans underlying these securities would worsen." It added that the "expected loss severity assumption on defaulted loans was increased up to 5 percent."

Keefe Bruyette & Woods analyst Robert Hughes lowered his 2008 earnings per share estimate for Huntington, and reiterated his Underperform rating. Sandler O'Neill & Partners analyst R. Scott Siefers also lowered his 2008 earnings estimate, and reiterated his Hold rating.