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Founded in 1866, Huntington Bancshares Incorporated is a regional bank holding company for the Huntington National Bank, providing financial products and services to consumers and businesses including banking, payments, risk management, and wealth management. It is the top originator of SBA 7(a) small-business loans in the country. The company primarily operates in the Midwest, though Huntington National Bank branches are expanding in the South as well.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Q4 2024

Huntington Bancshares (HBAN): Company Profile, Stock Price, News, Rankings

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Huntington Bancshares

huntington bancshares

Greetings and welcome to the Huntington Bancshares 4th Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tim Sadabras, Director of Investor Relations.

Thank you, operator. Welcome, everyone, and good morning. Copies of the slides we will be reviewing today can be found on the Investor Relations section of our website, www.huntington.com. As a reminder, this call is being recorded and a replay will be available starting about 1 hour from the close of the call. Our presenters today are Steve Steinauer, Chairman, President and CEO and Zach Wasserman, Chief Financial Officer.

Brendan Waller, Chief Credit Officer, will join us for the Q and A. Earnings documents, which include our forward looking statements disclaimer and non GAAP information are available on the Investor Relations section of our website. With that, let me now turn it over to Steve.

Thanks, Tim. Good morning, everyone, and welcome. Thank you for joining the call today. Building on a good Q3, we delivered very strong Q4 results, which Zach will detail later. 2024 was an exceptional year for Huntington with our teams delivering accelerated growth over the course of the year.

We're very grateful to our 20,000 colleagues who drove these results, while living our purpose every day as we make people's lives better, help businesses thrive and strengthen the communities we serve. Now on to Slide 4. There are 5 key messages we want to leave you with today. First, we drove record fee revenues and accelerated growth of loans and deposits. This reflected contributions from both existing and new businesses.

Our investments into new geographies and capabilities are delivering attractive returns and we're seeing accelerated contributions from these new areas. We delivered sequential growth in both spread and fee revenues in the quarter. We move into 2025 with strong momentum. We are poised to deliver record net interest income and fee revenues for the full year. 3rd, we are executing our down beta action plans and lowering deposit pricing.

This supports management of net interest margin through a dynamic interest rate environment. 4th, we are achieving strong credit performance. This is a direct result of our disciplined client selection and rigorous portfolio management aligned with our aggregate moderate to low risk appetite. 5th, through execution of our growth strategies, we are driving profit momentum into 2025 and beyond. I'll move us on to Slide 5 to recap our performance last year.

2024 was a breakout year for Huntington. Our many years of consistent and disciplined management benefited us as we came into the year with robust liquidity and capital as well as stable credit. This position of strength enabled us to accelerate growth in our core, add new capabilities and teams, and expand into new geographies in North and South Carolina, as well as Texas. We're just getting started here. We believe our investments and focused execution will deliver robust organic growth in future years.

The results in 2024 included growing average deposits by over $7,500,000,000 and growing average loans by over $3,500,000,000 Our growth accelerated over the course of the year with our new initiatives increasing contributions to our overall results. Additionally, our fee revenue businesses are performing exceptionally well. Within payments, we brought in house our merchant acquiring capabilities and increased treasury management products and services. Within wealth management, we're expanding advisory household relationships 9% year over year and gathering increased wealth assets from our customers. Capital Markets set a new quarterly record for revenue in the 4th quarter at $120,000,000 an increase of 74% from a year ago.

Turning to slide 6, let me take a moment to share the top level revenue trends we've delivered. The organic growth we are driving continues to significantly outpace our peer group. We are well positioned to drive attractive and sustained revenue. These revenue growth trends support expanding PPNR into 2025 and beyond. Now let's turn to Slide 7.

The growth opportunities today are the most attractive they've been since I joined Huntington. We have 3 primary areas of focus. These include executing the organic growth strategy I shared earlier, driving revenues higher and maintaining our consistent approach to risk management. We have numerous growth levers, both in our existing markets and businesses as well as the collective set of expanded geographies and new capabilities. We see substantive opportunities to expand loans, deposits and value added fee revenues.

These efforts will result in sustained revenue expansion in both fee and spread revenue. Huntington benefits from a consistent approach to risk management that has served us well for many years. We expect this bedrock principle to remain unchanged as we maintain our aggregate moderate to low risk appetite. Zack, over to you to provide more detail on our financial performance.

Thanks, Steve, and good morning, everyone. Slide 8 provides highlights of our 4th quarter results. We reported earnings per common share of $0.34 Return on tangible common equity or ROTCE came in at 16.4% for the quarter. Average loan balances increased by $7,000,000,000 or 5.7% versus last year. Average deposits increased by $9,700,000,000 or 6.5% versus last year.

CET1 ended the quarter at 10.5 percent and increased roughly 30 basis points from last year. Adjusted common equity Tier 1 including AOCI was 8.7%. Tangible book value per share has increased by 6.9% year over year. We maintained strong credit performance and are positioned to continue to outperform. Net charge offs were 30 basis points stable from the prior quarter.

Allowance for credit losses ended the quarter at 1.88%. Turning to slide 9, consistent with our plan and prior guidance, year over year average loan growth continued to accelerate. Loan growth in the 4th quarter increased 5.7% year over year, rising from 3.1% year over year in Q3. Average loan balances increased sequentially by $3,700,000,000 or 2.9%. This exceptional loan growth reflects strong production and contributions from our existing and new businesses.

During the quarter, new initiatives represented $1,100,000,000 in growth or 30% of the total net loan growth. Growth from new initiatives continued to accelerate as we have guided previously increasing from approximately $700,000,000 $500,000,000 in the prior two quarters. Of the $3,100,000,000 of loan growth from existing businesses, we saw $766,000,000 from auto, dollars 421,000,000 from regional banking, commercial and industrial, dollars 511,000,000 from asset finance, $327,000,000 from higher auto floorplan balances, dollars 85,000,000 from seasonally higher balances within distribution finance, dollars 165,000,000 from all other consumer categories net, including increases from residential mortgage and home equity offset by lower RV marine balances and approximately $800,000,000 collectively across the commercial bank. Of the $1,100,000,000 of loan growth from new initiatives, the largest contributions in the quarter came from funds finance, North and South Carolina and Texas. Offsetting a portion of this growth was lower commercial real estate balances, which declined by $465,000,000 Turning to slide 10, the result of our accelerated loan growth continues to be a differentiated position compared to our peers.

Over the last year through the Q3, the peer group reported lower loan balances, down nearly 3% at the median. During this time, Huntington outperformed the median by approximately 6%. Importantly, we have sustained deposit growth to self fund our expanded loan balances with deposit growth also substantially outperforming peers on a cumulative basis. Turning to slide 11, we delivered deposit growth through the Q4. Average deposits increased by $2,900,000,000 or 1.9%.

This growth was led by our commercial customers. Non interest bearing deposits expanded, growing by approximately $800,000,000 on average, totaling 18.6 percent of total deposits. We lowered our overall cost of deposits in the quarter by 24 basis points to 2.16%. This is consistent with the trajectory we shared in our mid quarter update and reflects our disciplined deposit pricing. On to slide 12.

During the quarter, we drove a $45,000,000 or 3.3 percent growth in net interest income. This reflects over 6% growth year over year and net interest income has increased for the 3rd consecutive quarter. Net interest margin was 3.03 percent for the 4th quarter, up 5 basis points from the prior quarter. The change in net interest margin included 3 basis points lower spread net of free funds, more than offset by 3 basis points benefit from lower cash balances and a 5 basis point benefit from lower drag from the hedging program. Turning to slide 13, our level of cash and securities at year end decreased to 28% of total assets, as we saw modestly lower cash balances in the quarter.

We expect to operate at or around this level going forward. We have continued to reinvest securities cash flows into treasuries, and as previously stated expect to manage the duration of the portfolio at approximately the current range. As previously disclosed, we sold approximately $1,000,000,000 of corporate securities during the Q4. This repositioning was beneficial to risk weighted assets and capital ratios and resulted in a pre tax loss of $21,000,000 with an earn back of less than 2 years. Turning to Slide 14, we continue to manage our hedging program with 2 objectives in mind to protect net interest margin from a lower rate environment as well as to protect capital from a potential higher rate environment.

We have remained relatively stable in our hedging position since November. We continue to monitor the likelihood of potential rate scenarios and will remain dynamic as we adjust to the rate environment. Moving to slide 15. On a GAAP basis, non interest income increased by $154,000,000 from the prior year. On a core underlying basis, adjusting for the impacts of the loss on securities, CRT transactions and the pay fixed swaptions mark to market from the prior year, fee revenues increased by $96,000,000 or 20%.

Moving to slide 16, we have continued to see powerful acceleration from our focus on 3 strategic fee businesses. For the full year, fee revenues as a percentage of total revenue increased to 28% from 26% the prior year. Within payments, we saw 8% growth year over year in the 4th quarter, driven by a 16% increase in commercial payment revenues benefiting from higher treasury management fees and the launch of our new merchant acquiring model. Wealth management fees increased by 8% from the prior year. AUM continued to grow, increasing 16% from the prior year, with wealth advisory households having increased by 9%.

Finally, capital markets completed a record quarter with $120,000,000 in revenue. That's up 74% from the prior year. Our KapStone Group had a phenomenal quarter helping to lead our strong capital markets results. Turning to Slide 17, GAAP non interest expense increased sequentially by $48,000,000 and underlying core expenses increased by $57,000,000 from Q3. The primary driver of the increase in expenses was in personnel costs, largely comprised of higher revenue driven compensation expense, which was $42,000,000 higher in the quarter.

Slide 18 recaps our capital position. Common Equity Tier 1 ended the quarter at 10.5%. Our adjusted CET1 ratio inclusive of AOCI was 8.7%, up approximately 10 basis points from a year ago. Our capital management strategy remains focused on driving our top priority to fund high return loan growth while also driving capital ratios higher. We intend to drive adjusted CET1 inclusive of AOCI into our operating range of 9% to 10%.

On Slide 19, credit quality continues to perform very well. Net charge offs were 30 basis points for the quarter, stable from Q3 and within one basis point of that level over the past 4 quarters. For the full year, net charge offs also totaled 30 basis points, well within our through the cycle range. Allowance for credit losses was at 1.88 percent, lower by 5 basis points from the prior quarter. This reflects the continued strong credit performance and loan portfolio growth.

Turning to Slide 20, the criticized asset ratio improved for the 3rd consecutive quarter to 3.76%. The non performing asset ratio ended the quarter at 63 basis points relatively stable over the prior three quarters. Let's turn to Slide 21 for our outlook for 2025. We expect to continue to drive robust loan growth with balances expected to increase between 5% and 7% for the full year. Deposits are also expected to sustain growth with balances increasing between 3% 5%.

We see net interest income on a dollar basis growing between 4% 6% this year. As noted, this level would reflect record net interest income on a full year basis. We will maintain our focus on key fee revenue areas including payments, wealth management and capital markets, which we expect to lead to non interest income growth between 4% 6% for 2025. Expense growth will be driven by sustained investments and revenue producing initiatives, albeit at a moderately lower pace of growth than we saw in full year 2024. We expect expense growth between 3.5% 4.5%.

The pace of expense growth will in part be driven by revenue levels and the associated variable compensation expense. Importantly, we see positive operating leverage for full year 2025. Related to credit, we expect net charge offs for the year to be between 25 and 35 basis points. The effective tax rate for the year is expected to be approximately 19%. Let me also share a couple of thoughts on where we see trends for the Q1 compared to

Q4. We expect average loan balances to grow approximately 2%, average deposits to be relatively stable sequentially, net interest income on a dollar basis to be lower by approximately 2% to 3%, reflecting normal day count headwinds as well as a modestly lower net interest margin. Fee revenues normalizing in the Q1 given seasonality and recognizing the record level we delivered in the 4th quarter. Fee revenues are expected to be approximately $500,000,000 in the Q1 and then expand from that level over the course of the year. Expenses are likewise expected to be lower in the Q1 given the strong year end production levels we delivered in the 4th quarter.

We forecast expenses to be down approximately 2% from the 4th quarter, the exact level of which will fluctuate dependent on revenue driven compensation. With that, we'll conclude our prepared remarks and move to Q and A. Tim, over to you.

Thank you, Zach. Operator, we will now take questions. We ask that as a courtesy to your peers, each person ask only one question and one related follow-up. And then if that person has additional questions, he or she can add themselves back into the queue. Thank you.

Thank you. The floor is now open for questions. Today's first question is coming from Anant Gosling with Morgan Stanley. Please go ahead.

Good morning. Zach, can you talk about the confidence around the NII guidance range? It's a tighter range than last year. And I asked because I know there's a lot of uncertainty from trade and immigration and tax policy. So I just wanted to get a sense of what's embedded in that guide from a macro perspective.

Yes. Great question, Manav. I appreciate your focus on that. And the short answer to your question is we're very confident that we can drive revenue growth within that range. Ultimately, the way we see the year playing out, obviously, still pretty dynamic here in terms of short term rate outlook and what's going on in the kind of valley in the longer term part of the curve.

But we see the ability to manage the NIM within any reasonable range of 0 cuts to up to 2 or 3 cuts at approximately flat throughout the course of 2025, rising as we go into 2026 and beyond with the normal upward sloping yield curve and just continued growth in high return areas, but generally flat in NIM for 2025. It's really going to be loan growth, therefore, and earnings asset growth overall that drives the revenue performance this year. And we think we've set the range at a level that's very achievable and within the run rates that we're seeing now.

Got it. And you're growing loans faster than deposits this year. It sounds like you're reversing some of the trend that we've seen in 2024. Can you talk about what's driving that? And does that give you more room to flex on deposit costs as you go through the year?

Yes. Another great one. Look, in terms of loan growth, we're running right now in the 4th quarter, we just posted 5.7% growth, greater than the 5% that we've been calling out for some time in terms of the exit growth rate we'd see. Feel really good about that. As we noted in some of the prepared remarks, about 60% of that coming from the core, 40% from the new initiatives.

So a really good mix of growth. As we go into 2025, that 5% to up to 7% growth in loans is for

of continuing on that run rate. We think the growth composition in 2025 will be approximately half and half between the core and the new initiatives. So, continue to see nice balance, particularly great performance across the board. As we as you think about the loan to deposit ratio, we were very intentional over the course of the last couple of years to drive strong deposit growth. I think we talked a number of times before this.

To some degree, we were prefunding what we expected to be accelerating loan growth. And so we're pleased to see that plan play out well. As we think about the plan for 2025, growing deposits still pretty well here between 3% 5%, core funding most of the loan growth, but also benefiting from the fact that we had taken the loan to deposit ratio down a bit. So I think that does set us up pretty well to continue to drive the beta plan, which has outperformed thus far

see further down deposit pricing even as we accelerate loan growth.

Thank you. The next question is coming from John Pancari of Evercore. Please go ahead.

Related to that growth that you're just talking about on the loan side, can you maybe help us with the new money loan production yield that you're bringing on these new loans at, so overall new money production yield versus your existing yield? And then maybe more specifically underneath that, what is the new money yield on that $1,100,000,000 this quarter generated from the new initiatives?

Appreciate the question, John. And not going to dive into the depths of that, but I'll sort of talk about this at a high level. The yields we're seeing ultimately are very consistent with kind of spread levels we've got in the business overall. That's why you're seeing that pretty consistent level of NIM. Obviously, the business being roughly 50% fixed asset production, those are keyed off of the belly of the curve, the other 50% being variable keyed off of the shorter end.

One thing I didn't say just a minute ago when Manal was asking was that if you sort of unpack what's going on in yields and NIM, we continue to benefit from quite a bit of fixed asset repricing given where the ability is. And so all those things will help us together to get to that stable NIM we talked about before.

Okay. All right, Zach. Thank you. And then just hopping to the capital, the I know the CET1 to 10.5 that's down to adjusted for AOCI 8.7 and I know you're targeting 9 to 10 including of that. So fair to assume I know buybacks are still kind of on hold.

How long do you see that? Do you see a potential change in that outlook as you look at the capital generation that you're forecasting for the year? Just trying to figure out how we should think about capital return.

Yes. Yes. Good question. And as you think about capital for us, we're focused on the goals that we've had that are unchanged, most important of which is funding high return loan growth. And so we're pleased that that's really been a great opportunity for us to deploy our internally generated capital.

At adjusted CET1 ratio of 8.7%. Our objective remains the same, which

to 10% operating range. And I expect that we'll do that within the first half of twenty twenty five and then continue to drive that higher solidly within that range. My working forecast at this point, John, is that if we continue to see RWA growth and loan growth as we're forecasting, it will likely be bouncing around the kind of the low 9s throughout the course of 2025. It obviously also depends on where the longer end of the yield curve is, which is where the AOCI marks trend. Under that scenario, there's relatively little capacity to do share repurchases in the near term.

Over the longer term, as we continue to drive CET1 up into that range, I would expect us to return to a more normal distribution, including share repurchases. So 2025 will, to some degree, really be dependent on that pace of loan growth and where the longer end of the yield curve ends up coming through.

Thank you. The next question is coming from Ebrahim Poonawala of Bank of America. Please go ahead.

I guess, Zach, just following up on the comments around the loan to deposit ratio. As we think about, let's say, loan growth meets deposit growth in 2025, Just talk about your expectations around the incremental margin and what's the incremental cost of deposits that are coming on relative to where you see the rest of the book repricing?

Yes. Good questions. The loan to deposit ratio we ended with that was kind of exiting Q4 level was 79%. So it really gives us a powerful opportunity to continue to drive loan growth faster than deposit growth for some period of time, even though we're looking to core fund. The marginal spreads we're seeing now are very consistent with us.

Mentioned earlier in Todd's prior question to what we've seen in the past. And I think obviously in the near term, we'll continue to see acquisition deposit rates come down and benefit from the lower yield curve is what's going on with Fed funds reductions. But over the longer term, we'll continue to see that NIM begin to rise as we go into 2025 and the end of 'twenty five, excuse me, into 'twenty six and beyond.

Got it. And I guess just one quick one on the fee outlook around payments, wealth management, cap markets. How much of the fee growth is tied to lending? Or I'm just trying to think through if lending or loan growth is slower, could you still have a fee revenue backdrop which could be in line or better than what you've guided this morning?

Fundamentally, the fee strategies are there to support the overall core business. And so the faster the core business grows, the more fee revenues opportunities there are, of course. And it'll give you a sense as you look at some of our new growth initiatives in the Carolinas, in Texas and some of the new specialty commercial businesses. As those grow, we're seeing nice pull through in terms of fees, particularly treasury management, Ebrahim. With that being said, another core element of the fee strategy is really penetrating the opportunity more fully.

So wealth management, for example, I wouldn't consider to be highly correlated with loan growth more around kind of what we're seeing in terms of penetration. So broadly correlated, but I think also very independent in terms of the strategies that we're driving. My expectation over the long term is we'll see payments, wealth management, capital markets all being high single digit to low double digit growth in revenues in a pretty sustainable way over the course of the long term.

Thank you. The next question is coming from Brian Foran of Truist. Please go ahead.

Hey, all. I guess the first part I definitely recognize that your 25 loan and deposit growth guide, most of your peers so far seem to be like flat, up 2%. So you're continuing peer leading growth. But just in terms of like it's kind of like flat to decelerating in terms of growth rates from where we are now. And conceptually, like why would you decelerate?

Is it macro inputs? Or is it seasoning of investments? Or what would to the extent the growth rates are flat to decelerating, what would drive that kind of change in the derivative, I guess?

Yes. Great question, Brian. And I appreciate you recognizing this pure leading performance because we certainly feel pretty good about that. The way I think about it is sustaining the current run rate of loan growth. Again, we talked earlier, 5.7% year over year in Q4.

It's pretty much spot in the middle of the loan growth range. And certainly, there's potential that will be at the high end of that range, which would represent acceleration actually of loan growth. Deposit growth of 3% to 5% is somewhat of a deceleration from the growth rate we saw in 2024, but really reflective of us not needing to grow deposits as much and purposely driving down the cost of deposits and benefiting from frankly that really advantageous position we have in loan to deposit ratio. So a great way to manage the NIM overall in the face of sort of dynamic interest rate environment we got at this point. Over the longer term, I would expect to really well match fund with core deposits kind of in the business model as you go out past 'twenty five.

But we're kind of managing just the dynamic nature of the environment right now. And so that's how I think about it, sustaining about accelerating loans and really purposely managing the deposit volumes to show that we can have a solid NIM and drive overall revenue growth, which is the objective I can add.

Brian, this is Steve. There's also seasonality. We're a very large asset finance lender, as you know, and that typically has a very strong 4th quarter. And so, annualizing on that 4th quarter doesn't reflect seasonality in Asset Finance and some other businesses that are seasonal in nature. But we're coming into 'twenty five with momentum.

We have had we're about 50% better this year to last year with pipelines in most of the businesses. So we've got a lot of confidence in the loan growth within the range we talked about and perhaps if the outlook continues to be robust, we'll have an opportunity to exceed.

That's really helpful. Maybe as a follow-up, the 8 states and 3 verticals, the 8 verticals in 3 states, anything you would highlight as kind of the standout on the good side? Anything that's been maybe a little bit more challenging? And as you think about investments for 2025, is it mostly about continuing to invest in the 8 and the 3? Or is there anything that could potentially be new verticals or new states on the docket?

Well, Brian, great question. Thank you. We've invested in the core markets as well as these 3 new geographic markets and then these 8 verticals. So we've added several 100 RMs and new business generators in the last year and a half. We're very pleased with the overall performance.

We've had some outstanding results. We're off to a strong start in both Carolinas and Texas. Our funds finance business has ramped up faster than any business we've had any specialty business we've had. They're all doing reasonably well. In aggregate, they're ahead, meaningfully ahead of expectations.

The regional geographies, the Carolinas and Texas, on a direct expense basis all actually made money last year. So we like the start. We're confident. We have excellent colleagues who are who joined us and we're well positioned to continue that growth. So organic growth is our priority and we'll continue to look for growth from those where we've made investments.

And at the same time, as you saw earlier this month, we launched 2 others with Arrow and Defense and FIG. And there will potentially be additional specialty verticals as we go forward, probably not at the rate of the last year and a half, however.

The next question is coming from Jon Arfstrom of RBC Capital Markets. Please go ahead.

Steve, just maybe following up on that a little bit on loan growth. You or in your prepared comments, you said these are some of the most attractive opportunities you've seen since you've joined Huntington and 50% higher pipelines. Can you talk a little bit about the borrower feedback that you're hearing over the last few months? And then if you could touch a little bit also on the core growth, the $3,100,000,000 in core growth was obviously much stronger and you guys flagged lower CRE. So just kind of curious if there's a sentiment change and what's driving that core growth?

John, the borrower sentiment, the customer sentiment, I should say, is consistently positive. The outlook post election has changed. You see it in the confidence measures indices that are a small consumer business. And we're not now I've probably been out with 100 or so customers and prospects since the election and it's almost 100% or more positive about 25% and beyond. So there is a consensus, I think, of expected growth, increased inventories.

We saw record asset finance in the 4th quarter, about $600,000,000 more than we did previously as a record. And I think that reflects sort of an unlocking of expectations. There was a lot of deferred finance activities, I think, in the first half of the year and then waiting to see the election and then decisions were made and significant investments reflected in the Q4. December was a very robust month for us, for example, in the Asset Finance side. Side.

So we're heading in the momentum we have. It is reflective, I think, of the settlement and gives us a lot of confidence as we come into the year. In terms of the core growth, again, we have some seasonality in that core growth in the Q4 with Asset Finance. And commercial real estate, we believe is close to bottoming out. We're prepared to increase the outstandings and commitments.

In CRE, the book has performed exceptionally well. In aggregate, the group is performing exceptionally well. So while we're talking about home growth, feel the same way about fees and deposits with our 2024 performance. And so we come into the into the meeting with a lot of confidence in terms of our growth.

Good. That's very helpful, Steve. And then one more for you with the new administration coming in and some changes in the regulatory leadership. What regulatory changes would you like to see? What could help Huntington?

I think the business community as a whole will benefit from a more positive pro business orientation with the new administration. And so I think you'll see more acquisition and combinations in the business community as a whole. I think in banking, we'll have more stability and less uncertainty about liquidity and capital and other issues. I think the banks generally are well capitalized and this overhang of Basel III, I think, will get addressed fairly quickly. Beyond that, I believe a more constructive dialogue about willingness to do business in with less oversight and constraint is probable and we'll just have to see if that develops.

Huntington Bancshares (HBAN) Q4 2024 Earnings Call Transcript

Company Participants