Huntington Bancshares, a once troubled Columbus, Ohio based regional bank received some positive press today, thanks to Bank of America (NYSE: BAC). In a note this morning, BofA commented “We are upgrading HBAN to Buy from Neutral. Shares have underperformed the [KBW Regional Banking index] of late, following its announcement of [on Dec. 13] that it would raise $920 million in common equity to repay TARP. Investors were likely surprised by the amount of capital raised (67% of TARP outstanding), but we believe the weakness has created an attractive entry point to own the most compelling turnaround story in our universe.”
Regionals have really had one heck of a run in December. They’re up 10.3% this month, using the KBW index. That’s better than the S&P financial sector, which is up 6.8%. But both finance indexes are doing better than the broader market which is up about 4.7%, this month, using the S&P 500. Huntington is up about 2% premarket.
Public sentiment has been negative on the banking sector since the TARP plan was announced. Now though, nearly two years later, nearly all of the banks have repaid those loans early, in full, and with interest. These investments turned out to be highly lucrative for the government. If the regional banks soon bounce back the way the large national banks have, we could be in for a strong 2011.
