Huntington is among the 12 financial companies that will join the original group of 19 large U.S. holding companies subjected to two previous rounds of government stress tests, for the Federal Reserve's new Comprehensive Capital Analysis and Review, or CCAR, which will take place early next year.
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The Fed on Tuesday issued its final rule on the CCAR, with requirements that all U.S. financial holding companies with over $50 billion in total assets submit detailed capital plans by January 9, 2012. In addition to the stress testing the economic scenarios provided by the Fed, the banks will be required to "estimate potential losses stemming from a hypothetical global market shock" based on the "market price movements seen during the second half of 2008, a time of significant volatility, with adjustments made to incorporate potential sharp market price movements in European sovereign and financial sectors."Large U.S. banks facing their third round of stress tests, through which the Federal Reserve will decide whether or not to approve capital distributions - including dividend increases and new authorizations to repurchase shares - include the "big four" of JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC), as well as U.S. Bancorp (USB), PNC (PNC), Goldman Sachs (GS), Morgan Stanley (MS), and 11 other companies.In addition to Huntington, the group of 12 banks joining the original 19 for the next CCAR includes Northern Trust (NTRS), M&T Bank (MTB), Comerica (CMA), and Zions Bancorporation (ZION). The Federal Deposit Insurance Corp. announced that the over 7,000 U.S. banks and thrifts earned a combined $35.3 billion during the third quarter. The broad U.S. stock indexes saw slight declines when the market closed on Tuesday, following an announcement by the International Monetary Fund of a new Precautionary and Liquidity Line, to be available to "crisis bystanders" among IMF member nations, during times of "heightened economic or market stress."The KBW Bank Index (I:BKX) declined over 1% to close at 35.94.Large banks seeing share prices decline 2% on Tuesday included Bank of America, which closed at $5.37; Bank of New York Mellon (BK), at $18.02; Citigroup, at $24.46; JPMorgan, at $29.40; Northern Trust, at $36.00; Regions Financial (RF), at $3.90; and Goldman Sachs, closing at $89.44.
Tuesday's sector winner was First Niagara Financial Group (FNFG), with shares rising two cents, to close at $8.48.
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