A narrowing net interest margin left little room for error, but it still proved more than enough for Huntington Bancshares. Tight expense control, continued solid asset quality and strong deposit growth helped the Columbus, Ohio-based bank post an 11% increase in first-quarter net income.

The $68 billion-asset Huntington reported a profit of $165.9 million, compared with the $149.1 million it reported a year earlier.

"We feel really good about the quarter and how it positions us for the year," Stephen Steinour, Huntington's chairman and chief executive, said in an interview Wednesday.

Huntington saw its margin compress 12 basis points, finishing the quarter at 3.15%, compared to 3.27% a year ago. The ongoing slimming has magnified the importance of expense control.

Total revenue rose 2% to $699.3 million. Noninterest expense fell 0.27% to $458.9. Reduced expenses resulted in an efficiency ratio of 63.5%, down from 66.4% a year ago.

"We're going to continue to manage our expenses so we have the capacity to invest," Steinour said.

Deposits totaled $52.8 billion at March 31, up 7%. No-cost demand deposits comprised 30% of total deposits.

Huntington ended the first quarter with $47.2 billion of loans and leases on its books, an increase of 10%. Asset quality remained healthy, with the ratio of nonaccrual loans to total loans at a modest 0.76%.

Huntington closed its acquisition of Macquarie Equipment Finance in the first quarter, giving the company enhanced leasing capabilities that should drive loan growth going forward. The deal adds small-ticket leasing, asset finance and health-care leasing capacities that Huntington did not possess on its own, according to Steinour.

"Macquarie has been around for two and one half decades," Steinour said. "It's a very well-managed company. It came through the cycle in very good shape."

Huntington did not anticipate an increase in rates in its planning and budgeting for 2015, Steinour said. The ongoing low-rate environment makes it increasingly difficult for banks to generate acceptable returns.

"There's a lot of running in place that is occurring," he said. "It's an industry issue."

That said, Steinour is not about to use low rates as an excuse.

"We're not going to let the [Federal Reserve] dictate our earnings outlook," he said. "We're going to manage and direct our results irrespective of that factor."

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