HBAN - Earnings call transcript Q3 2018 | Huntington Bancshares Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Huntington Bancshares Third Quarter Earnings Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mark Muth, Director of Investor Relations.

Mark Muth

Thank you, Sherry. Welcome. of for Director Muth, Mark Investor Huntington. Relations I'm be be of found of website, the the can we'll slides section Copies on reviewing Investor www.huntington.com. our Relations be starting This as call. the and being call the will is close of a X about rebroadcast hour from recorded available

McCullough, Credit Q&A today presenters Officer, be in the Mac will of Steinour, Officer. today's Dan and CEO; Chairman, also Our Financial President Neumeyer, portion call. Steve and are Chief our Chief participating

the on Q&A may on changes, will and such time Slide statements. X, materially. statements noted assumptions uncertainties, this cause including Such discussion, As to update differ forward-looking statements. period, We today's at which risks results and to contain no are assume information to actual and based subject available obligation

and complete forms please and including discussion this slide the risks filings. filed recent our most a X-K to of material and refer with SEC, XX-Q uncertainties, XX-K, For

to it Steve. turn now me over Let

Stephen Steinour

everyone Thanks, today. to Mark, the and call thank you for joining

common particular dividend improvement driven The the efficiency versus year your year. Return We're It of equity increases We carry in and ratio the and strong the year-over-year expense this loan average quarter. As continued annualized points at versus average there the was of marine earnings lending. the and from in XX% core to quarter was expect second quarter. year we XXXX. resulting and in had third and consecutive total and revenue linked balance with had the to through pleased a dividend reported a the X% X% we of quarter year quarter, year-over-year a deliver third This and per on a representing We and increased which equity We the X% $X.X with we deposits. for XXXX increased quarter X% growth basis on the no increase. record quarterly share, year-over-year quarter we've quarter loans XX% good was $X.XX increase sheet appreciate clean higher row, was earnings earnings dividend. XXXX We In common discipline. increase return strength increase the funding of strong a including XX%, momentum the over We quarter XXX capital represented end tangible as XX%. XX% marks generation was mortgage, to increase consumer and $XXX higher of over core by a growth XX% time. respectively, XX.X%, power, financing XX% dividends, an discipline the net RV and of of ago with the remain billion, maintained on also payout common automobile eighth of significant residential that third items. loan believe focused will average of million $X.XX, as were income common in always, and very high-quality our ratio third another share interest support support. This and another per risk management

of repurchase also of million plan. our total approximately included We or repurchased $XXX XX% shares common in CCAR capital XXXX the

we quartile of regional As creating delivering a vision strategies and bank a outlined Huntington Slide developed on top briefly shareholder with X, high-performing returns. through-the-cycle

the organic to fronts, will drive focused us the in in and consistent we to remain make growth. capabilities sustained perform our for believe performance to to have shareholders. hold-to-retirement board long-term our process. of top in importance key by deliver the financial well with aggregate which we ago. X in We goals, And we XXXX their many long-term on need the a fall of equity are by as performance we company high were future. officers Our The years the restrictions driving of reinforced continues approved allowing We're planning place illustrates put our investments our committed in X,XXX comply reminder, in requiring franchise strategic businesses best the moderate-to-low appetite, that X risk built competitive the among our these which to Slide as profitability we standards awards. sustainable on industry, metrics part in the advantages of

years mind, long-term these fully we our the goals record on reported with goal. original revenues, this time originally basis, year ahead these discipline touched reminder, which continued set our efficiency of ratio, a X-year As I've third were quarter expectations. below already to was and GAAP and achieve goals a low end expect horizon X a on the expense of our in

addition -- excellent. our metrics credit credit our remain to In metrics

consecutive quarter last of taken through-the-cycle XXth excess our the quarter the XXXX average third that in net quarters. below remained charge-offs loan XX was target provisions been where in of range charge-offs of and XX have The

Our positions XX% bank. return as tangible on common regional a Huntington top-performing equity

strategies our will and continue forward. clearly to are Huntington drive Now these demonstrate working that results

in net employment continue JOLTS survey. economic X population we country, XXXX. job Midwest rates region opportunities U.S. remain a the X-state The remain so seek in to the turn and has let's it The Of in growth regions Labor footprint in economies and Bureau discuss of Midwest perform favorable the X jobs region. the Statistics we according August optimistic major most potential nation current to our in-migration on for economic fact, Slide shortages XXXX across of the labor states the So our to to far environment continue in and the lows, local make well, X review The opening X Midwest, and footprint continue our of XXXX. to to the in and footprint competitive markets. is growth markets. our highest rate dynamic near the near-term historical throughout expectations experienced outlook. Unemployment

in the year first century. of was quarter XXXX had Ohio immigration fact, a In net a

next favorable point operating XX As state Slide leading economic a the our for indices economic in toward the the shown for on appendix, Fed's months. Philadelphia environment indicator footprint X

encouraged negative, regarding NAFTA issues, some was in industries, base and tariff base seen material not USMCA impactful Customer it footprint. our specific of uncertainty The impact has While within capital in customer by can customer and their be positive to our And seen industry. we've will footprint, some far we've yet grow the and more to overall. to we the beneficial auto the our a customers new be as the throughout especially impact ongoing XXXX believe invest trade materialized our optimism our we're agreement seen as expenditures businesses.

on pipeline with economies. is we local and loan commercial doing business in are up It's to doing our bullish remaining be Midwest, steady. Consumers consumer Our time growth a the good year-over-year. well, remain

updated to our XXXX moving Now expectations.

average in quarter the in our deposit X.X% on significant in be months. rates reform. following focused remain so relationships. expected and while to of and year tax deposits the Loan the X.X%, full a full comparison the given year the growth the growth deposit growth accounts growth quarter loan to X.X%, of core We core October third is the average the federal encouraging. expected in been fourth last have to to core X.X% to year far acquiring year-over-year average expect Full for growth deepening X.X%. checking X.X% rate amount of growth But challenging year provides be X is We growth end first range with consistent at

a all and the us million restructuring $XX expect to the reduction the as cost restructuring. the revenue to portfolio expect during for our modest revenue fourth revenue realize improving of quarter, We -- of XXXX outlook approximately The is losses restructure portfolio, we XXXX. prior year This expectations optimize the of remaining full to intact. outlook our in X% related related will revenue remain to security securities to X.X%, portfolio growth of allow aspects

to points by to compared project We will GAAP basis to full the year X for continue the NIM XXXX. expand X

NIM on a will quarter and expansion be of basis in in points. to expect We range core the GAAP basis X X the fourth

operating positive the leverage for We will sixth year. consecutive deliver

decrease these X% and in to noninterest to below a facilities. to in as expect million points. expense and additional on investments technology. than year to charge-offs previous expense Full incur GAAP We a approximately redeployed recently expect the digital guidance XX of of basis. targeted mobile net expenses and corporate savings consolidations we cost the consolidation projected be now branches fourth related in quarter of X.X% higher through-the-cycle slightly announced target some $XX basis are XX be people specifically, our the run associated average will remain with and will anticipate into The technology, XX We both entirely rate range to

to XX.X% for is effective the year tax XX% in the Our range. expectations full XXXX rate

the excited to refine made robust the of the discussions planning Huntington. strategic I we in colleagues offsite Directors, dedicated Mac, year. many last and strategic plan. had update our and quick began week in the And geared progress it meaningful completion give X-day set on about over further by turn I'd as September, team Board of a nearing decision the board another the to you had to a plan. leadership executive earlier of are the In Before we we process we've and the conversations board We're like

goals be you look this an previously As those new important we long-term of plan, new with will sharing year. the to we mentioned, forward anticipate later we financial outcome strategic and

overview an of provide performance. now will Mac financial So our Mac?

Howell McCullough

everyone. third Thank the X provides results. Slide Steve, morning, the and of you, good quarter highlights

items Adjusting XX% XX% third common mentioned, earnings million We up or $X.XX As $X.XX, strong had acquisition-related year-over-year. ago year quarter up significant Steve $XX recorded core XXXX, in the for of EPS third quarter. per of quarter. of a we share the over was

equity revenue we down pleased these share year peers. as believe on X.X%, ratio, with common with X a in X% equity to and quarter. Return increased book year-over-year regional bank common on evidenced value Tangible on was are assets XX.X% seeing $X.XX, quarter. all our per of return was Huntington even growth by was basis considerable points We distinguish of XX%. all share return momentum We and our from tangible our metrics X% are the businesses efficiency the among our ago the year-over-year XXX repurchase very XX% across

quarter, during Lastly, Tax the to $X which benefit was and benefit third impacted Jobs a Cuts from Act. a XX.X% million the was stock-based $X and million by rate tax related the compensation

an to now as leases, XXXX. and X% reflecting X. average in the including earning the expansion XX% in assets market. Slide third officers well loans Average broad-based loans quarter was in into of from X% Turning Chicago lending. growth increased increase as consumer increase mortgage strength loan by year-over-year, residential driven grew further Average a This

agency XX% of in X% year-over-year XX% the XX up originations and we quarter basis loans in business annualized states C&I success retained ensure consistent the X% the as the we've and two seasonality the year-over-year, and as X.XX% returns mortgages and As billion our a quarter qualified and new we from basis we totaled of reflecting on real ago downs with centered months. aggregate pay increased in down during increased for commercial quarter. was banking. order loans of were year-over-year mortgage estate X% The the loans month deliberate, $X.X moderate- well capital. basis. up typically and as the Average a the year-over-year. real to Linked increased XX% over increasing inter-period second new summer on estate C&I growth energy consistent balances of in lending, quarter, market, products. XXX originations the auto increased middle as XX result Average jumbo originations remain years. X% saw construction in tightening optimizing third our X.XX% normal expansion on specifically and asset auto the finance, which the production. quarter reflects low-risk commercial specialty growth in to auto appetite pickup in This and mortgage Originations a down production linked On an corporate with quarter basis, our past basis into the Average consistently a do, the in final quarter. quarter linked-quarter Average retail the points sold was and multifamily, year-over-year to X.XX% This the RV disciplined strategic year money from yield anticipated average X% reflecting loans as down annualized, on slowed loan well-managed loan pricing, of XXXX, of revenue. in been while points was appropriate marine healthy

Finally, and products. the to down year-over-year continued flows portfolio higher-yielding cash securities runoff loan the as we were remix into let X%

interest-bearing in certificates year the Average X. the year-over-year, including up to increase X% DDA by decreased to Slide hybrid Average entirely deposits as to ago rising market. reflecting driven of was average during quarters shift products, from our rate now increased noninterest-bearing grew grow noninterest-bearing X% XXX% deposits the This customers deposits. Turning interest quarter, Core to past commercial a deposits average deposits in rate X% consumer money were raising checking interest primarily light DDA of X total fixed -- they checking, environment. continue almost interest-bearing year-over-year, the deposit core and term initiatives while X%. from

However, the commercial customers grew borrowings interest We quarter yielding rising shifting funding in our actually core towards up current environment. reducing our market XX average appendix, in rate remain and products. consumer consumer grow to driven X% we $X.X year-over-year, continue were year-over-year of focused Average basis, X%, deposits short-term on preferences linked-quarter by core X% in deposits billion up as money as the a and Slide shown balances on in were relationships. noninterest-bearing solid deepen the higher households or by growth On sheet the total deposits balance XX%.

Slide Moving now to X.

$XX or yields the commercial X% earning assets increased X% versus loan in this income ago portfolios. growth and interest both our the year and rising net million was Driving increase Our consumer quarter. in

quarter. net X.XX% year GAAP and points X ago was Our quarter from linked basis up quarter, for points margin X up the basis interest third the

points a XX the We basis fourth quarter do LIBOR year. average basis slower headwind points during the of short-term in half the impacted by The versus rates was in as third same the quarter first anticipate not increased the in quarter. rise X-month XX

Moving to Slide XX.

basis basis points was On the provides net third consumer accretion while loan to our the yields accretion core X the the accounting information the interest asset accounting regarding the year earning to XX quarter. XX commercial year-over-year, up Slide from ago for XX in margin linked year Our points XXXX. slide, FirstMerit in quarter contributed net XX compared loan quarter. X increased points basis yields points interest and X up points basis of Purchase margin basis XXXX impact appendix purchase increased ago scheduled and for quarter points. X.XX%, basis

core the rate total points core remained interest-bearing were and of basis costs Consumer deposits up deposit points. with costs up quarter XX were deposits well XX for up year-over-year basis Our costs basis XX points deposits basis contained paid XX year-over-year. on commercial the points

Slide to now Moving XX.

which XX% low is below deposit beta well cycle-to-date quarter through at Our third still remains our the XXXX, expectations. of

While in peers, deposit continued our funding future. the interest be quarters, growth strategy we'll continues our to better in increases second outpace our core negatively CD beta deposit for the impacted and and third positioned rate

the deposit we ago told year remains pricing XX the overall and As last on markets. comparison our in you Slide rational quarter. detail our quarter, provides quarter noninterest income to for

million Our noninterest income from X% of increased the third quarter $XX or XXXX.

investing in businesses. impacted while in reported also significant million noninterest are We businesses, control, reduction Slide remain our to strategy. and in Optimal by the execution our focused and expense. in household our year-over-year items the quarter strategies, XX our X% on of momentum in including our of acquisition-related ongoing Comparisons key third the our of ago XXXX acquisition are quarter. drivers We driven by seeing year highlights Relationship expense fee Customer $XX key the relationship

guideline ratio has capital quarter initiatives the Tangible points year-over-year. illustrates cost-save X the from is at down, now Common within basis FirstMerit efficiency of acquisition. linked down points of XX X.XX%, the trended continued XX%. our down XX quarter. operating Tier to basis Slide equity successful at common points Our XX the our ratios. the back equity year-over-year X ended down strength basis X.XX%, CETX and reflecting quarter ended X%

the strategic stay articulated are recovery Slide we current cycle. confirmed which capital the end been this given XX process. the priorities, current in illustrates upper our length and where range We near planning have during previously believe expect to of we the the of economic

is sheet. growth first the organic fund of to Our priority balance

the Our cash second priority is dividend.

DFAST the processes. mentioned Steve be capital we earlier, the materially past quarter. and increase by This in significant the was to were As pleased improvement our years this to cash dividend in driven CCAR over generation able and results our few strong enabled

which M&A. Our final includes capital selective everything repurchases priority is else, share and

the from million A contemplated quarter the first ASR. ASR share incurred offset as a million submission. include Series dilution during the our quarter in use repurchase effectively equity $XXX CCAR conversion our third preferred the $XXX was during Our We to

this look payout We ratio targets would this the Excluding a shown the ratio of of versus year long-term of XXX% closer ratio total the ratio target onetime previously ASR, stated elevated payout to slide. nature approximately payout to and dividend payout year-to-date total XX%. ratio payout a on target our that have we the long-term XX% XX%

view inflated as and Earlier we M&A the where closed to cycle. are in this bank use at highly we this the continue an of expectations economic on given We believe time unattractive seller's whole month, we previously with to a underwriting. This capital Erley & our Co, expertise Shockey, Hutchinson, nice banking a markets government addition bolt-on is in small businesses. acquisition, broker-dealer announced of specialty is acquisition a a and small which municipal capital

loss XX. one Consistent quarter. risk Slide results approach moderate-to-low loan provision underwriting the migration the portfolio. in expense million Credit loan booked the and growth net in and risk to in the $XX our of reflect compared financial aggregate disciplined to Moving of to million. quarter the charge-offs loss continue of the acquired third loan core to $XX our provision principles, quality We strong into originated expense remained and portfolio FirstMerit Huntington's management prudent strong quarter credit continued appetite. reflected of our The is

the granularity credit loan increased above our loans loans percentage XX the We an which average charge-offs as have charge-offs slides. of now lease in X.XX%, balance quarter from consistent strong the preprovision from points on position Net were in year the XX range for to growth ago quadrant of losses the losses our revenue points. our Slide to basis as a package execute past allowance of charge-offs graph represents over net positions points in our Huntington's X and strategies. of quarters, linked shareholder increased and top of points to net to support focused for and right well-balanced result the booked at down XX to also XX of growth left of X is chart the basis represented top The strategy earnings. charge-offs sheet a target X.XX%. an for high-quality capital basis rate below generation shareholders annualized points XX return quarter. leases, us advantage XX highlights strong of basis additional core average through-the-cycle portfolio illustrating highlights The linked quarter loan our analyst level the and The provision long continued allowance of term. expense returns. and through-the-cycle our pretax well Net while a basis mix to remains prior execution The loans our provide by quarter the on as X There on flat deposit portfolios. percentage and capital

and both well are balance We and a this commercial diversification the sheet consumer believe over will cycle. of that the bank us serve

the Our bottom strong highlight disciplined capital enterprise finally, management. bottom demonstrates right the risk Huntington's our position. DFAST in test left stress And results

This now new technology-enabled highlights XX. solutions. on delivery customer human-led Turning slide focus with Slide in experience to Huntington's a advantage, continued investment our and

digitally would XX% an that households to seeing come. continue and shift materially of digital increase expect towards usage we mobile ongoing by are years our to will are the in We customers. figure active, and our

of a and initiatives. the mobile right recent the of see top you the few digital can On slide, most

advantage digital significant focused a extending As details and you customer plan mobile we the through and on finalized. technology, is share strategic process investment. on our more can remain focus will imagine, planning We targeted experience the once current has

needs. XX we fourth run deployed our a channels these entirely As rate associated order behaviors targeted in the with of -- in and review and the in in customers' decision continuous the serve better consolidations savings branches investments strategic specifically perceptions, result The our digital, distribution these costs to previously of our customers. consolidate and quarter. are be of offices will The technology, our is consolidating facilities handful announced, to corporate

so to Let Mark, your can to back over me now turn questions. it we get

Mark Muth

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

Operator

Instructions]. [Operator

with question Usdin is Our from Jefferies. first Ken

Kenneth Usdin

even then Mac, us announced And wondering out incremental base? and understanding cost And the that understand on more the expect just us if than those? loss we flush you points just quarter, return so previously how help charges the incremental securities yield 'XX and for the to fourth starting restructuring should the can your on both help affect for portfolio the charges? the securities maybe also

Howell McCullough

Thanks, Ken.

$X.X billion of about those selling investment fourth will the we're replace securities and So quarter, in one-for-one. we

increase years, be pretty net low-yielding transaction. from to So in under on which there of a this action. an pickup portfolio income X.X%, this payback about Basically, a million it's the shorter-duration, XXXX. And yield should in securities get is the $XX about interest We're translate won't going in two securities. into quick, net additional

think So to good efficient about and stay hygiene this balance as and we that see sheet continuing opportunities. with make the do sure we

approximately a the the it And large XX-branch And and closing, basically On XXXX take about revenue that be will to change expense would the to both degree, $XX fourth of you on activities. very And side. be and facilities to that XXXX typical so consolidating expenses the items expense, when the of impacted this entirely we side, estimate these place as that that quarter. those we the related guidance you and will million as types changes the think corporate will that the be there primarily and to be expense some revenue part on see well. in for consolidation these guidance side in the is

change being as really really about for in we're in guidance think XXXX. a quarter. is taking that shouldn't actions So these fourth This core this about the

Kenneth Usdin

versus side, up, it Mac, you're in If on underlying still and growth follow just a type cost you put just on XQ? third that the point. to just result still million just the put that underlying up, expense fourth. that on level growth you of And that seem Got it. in $XXX would the that, of set expecting I expense kind expense still follow the on Can you you're underlying us in expecting increase $XX my decent million

Howell McCullough

Ken, it there's the fact fourth in expenses somewhat to in relative do just out not tell higher that. do is expenses taking the higher customers I anything the we've fourth what so would of historically have Yes, seen ordinary quarter. in We you seasonal. the the place seasonal with our we fourth because that quarter, have of come revenue quarter that along by the actions and

Operator

Our Markets. next Arfstrom RBC question Jon is from with Capital

Jon Arfstrom

Question to the pipelines a on longer for mid-single-digit you have even the lending. maybe When that you you a better, talk any and this just Steve, pace company? term, pace you bit that's see put do like feel guys outlook, about sustainable threats your up, that? do I'm Or little curious,

Stephen Steinour

Thanks, John.

sitting largely that's were on commercial both are pipeline time to side. we last We with the where year this equivalent and consumer

a optimistic. line As region. so of this now, to, the more our do throughout on getting be anything, and impact could regions seems customers had us we many could NAFTA There now a is have off if table footprint. labor. we're but right they employment, demand the for suggesting certainly the commercial we we're volatility a on all big more of is that if step many, forward in triggered economy macro look bullish that our and And things, they Underlying forward, risk constraint by

pipelines impact about been supply going lot on. commentary a now had And labor into a a have XXXX. outplayed and then of going we've bit there's additionally, So clearly

of a -- to And So business appear it appear backlogs year it time be would bit that unusual. is to the into this be at would consistent. XXXX is with

to positive very So year. the

Jon Arfstrom

less question, where of just we are you Dan, necessarily I'm seeing And are about cycle. stress M&A having not curious, economic And on because or in kind in or the Mac's an comment, think cycle? of economic M&A could are the irrational any good. maybe you, then, behavior? but Okay, comment interest we where

Howell McCullough

quite I in really pick think being -- time. to that nothing their spots mean, No, for we're of people we've definitely I -- irrational that seeing aggressive, some but that seen terms Yes. is behavior

pretty the So quo. much I it's think status

in In the we're of cycle, are where terms cycle. the we several on late

in is this that cycle. I late think the we're said the third we've year

we light for that at be So in new XX continue plan whether from fact now. we at the have and or a years our X that to of downturn, months to view transactions prepared all from and portfolio now look happens times

So it posture. changed hasn't that really

Operator

is from Scott next O'Neill Sandler and Siefers with Our question Partners.

Robert Siefers

sort somewhere rewalk core I quarter the quarter. X of you half. been Mac, you for could hoping the X of thinking margin improvement was of after points quarter, the to the basis through second have I neighborhood expectations the in fourth know, guys per in margin second

reported kind fourth So expectations would and main then for what -- takes the off you of bottom start, a the I and you see as be rewalk to sort of if the the maybe quarter, know an core and puts them? for this end through issue slower LIBOR others quarter for was so But got and of can range. you you

Howell McCullough

Yes, Scott.

we're reported, we just that both quarter X believe impacts in quarter did So not the points. the have we're fourth the LIBOR NIM, to with X we expansion like basis same Part -- that going quarter of understanding to in for quarter. fourth and in that see is going the core third to in third the

The fourth is paid the making And getting disciplined anticipating very pricing of the that for we a taking. beta are to we're on lower just in that we're remain deposit sure maybe appropriately quarter. also other it and we asset continue part risks

fourth that the we increase, very in together recent point along confident with things reported to and is feel doable. quarter X coming those rate the basis expansion X So for the core both

Robert Siefers

sound Okay, the here, just to a this sorry, might I then vague -- perfect. sure make but make sure want guide. And expense I I in to just want little understand

it's off to So the I XXXX and then dollars expenses the guess, X% X.X% includes guidance expenses that the now the sort of of of million we're $XX we're starting off reported unusual. are and of taking, that

year-to-date expenses middle expense of quarter So $XXX you effectively a million you the already in about of that we range, fourth incurred? when somewhere out are implying the net

Howell McCullough

fourth sounds be that. be in an bit that probably you'd is the able do higher expense go high. want to seasonally the little from to order would Again, perspective. math But through, Scott, that That a quarter to

Operator

Our John next Pancari Evercore from question is [ph] ISI. with

Samuel Ross

is This John Ross Pancari. Sam on for

there's Just I'm updated wondering regard? for auto near just the that term on a the in quick plans question if any securitizations.

Howell McCullough

At revenue be, increased on lower us point that for the to back able time, and auto we higher rates. with even really We've where have origination the don't a number at has auto securitization. maintain this execute been we book volume plans -- helped to we've it pull in expected pricing

So terms the don't managing exposure and we see in balance in we're feel the the in how confident of really future. sheet auto securitization on

Samuel Ross

helpful. And in lower some going or like wondering And expected. like had I'm rate expect the tax your looking you the then, coming this have at tax normalized than of if items onetime of That's this you forward? just that function previously a it is parts is Or is seen? rate run seems the should we rate, moving

Howell McCullough

to XXXX. million third of Yes, stock-based to is reform the related to comp quarter true-up $X tax adjust what million in $X related you need benefit in the for and of

range the second at a be giving have for and first, that for you If you low million, been XX.X% you'll of that that the is we for adjust quarter, earlier third $X quarter. end

just this So quarter in it's XX.X% that items that down. we're still range, took us XX.X% unusual to X these

Operator

with is question Alexopoulos JPMorgan. Steven from Our next

Steven Alexopoulos

deposits, time to sharp balances we guys again the side, those at where in if to? would look you like ultimately On take the growth deposit

Howell McCullough

the it. really right has again. We the as and slowed CD price of market for for look quarter balances, products, year right region take off we saw over say, to started in funded savings. The growth we're if first or impacting core say, and over was number that for not without a the is we've have Well, years. but really market Basically, first year some deposits materializing run stay -- the a growth we've pretty of Steve, the time the backlogs, that We significantly in a now, money loan monthly portfolio wanting grow time, we've would on decent the you now I we're a a This on still the just move target to in that, smart growth, the leader felt don't in us CD down. getting that basis. actually

then of really the place the we kind in middle about and we've first that and paid. rates of So since and put the over quarter, billion $X good raised in the term promotion probably feel we

be right it's situational, just of more environment significant going portion what's So to happening the not -- core now. given and going deposit rate become It's funding a forward. our

Steven Alexopoulos

Got you.

slow How at bps quarter-over-quarter think And a time If growth? we to that and deposit Is come up of a deposit forward? maybe a pressure bps that. you Or the reasonable just you part follow-up. going costs as look were time deposits trend XX does do continues off XX then, Okay. range? some

Howell McCullough

we're seeing pressure some think are I with also think fourth time paying I thinking growth big at We're deposit cautious quarter. that being slow the we off of Yes, will in today. the rates down. And come that, we're Steve. of deposit And growth pricing a

deposit lower the than beta. to year-to-date expect be the in beta do the fourth deposit So I quarter

So we where that's stand.

Operator

question is next from Kevin Piper Barker with Jaffray. Our

Kevin Barker

mean, you you the to in half fourth Concerning for think cumulative do lower to just beta 'XX? I that's going guidance do the deposit deposit your your Or quarter. run a expect bit of deposit going first to beta? reaccelerate given lowering the little the XX% beta

Howell McCullough

cumulative I We're XX% and terms year-to-date going still the somewhat model the deposit in that being Yes, would forward. that XX% with I we to XX% way about longer-term beta. see. in at quarter think is where fourth that beta XXXX. we so we are the about that And you as deposit probably situational tell of comfortable flows deposit right would still feel

Kevin Barker

you're on the you seeing the about consumer, and side consumer you're commercial side around noninterest-bearing on that the then flows versus And the versus deposit betas talk can seeing Okay. deposits? especially commercial

Howell McCullough

Yes.

as commercial, is checking So we betas versus growth we seen growth of and also but in core, strong. balances to X% continue good well. growth market consumer haven't year-over-year disclosed really consumer see we've good do And money accounts

relationship what we're as with to going business We -- evaluate going deciding happening rate on that growth competitive. comfortable of we the And the you at and for what's and opportunity forward and depth a deposits. pay side every that the those know, request if the we're increase, for the out we is strength of very very, we're consumer the of look seeing. and get the commercial, So

well, appropriately. of good that's sheet have a very side in us we're place process we think that I balance managing So and serving the

Operator

with is Our Vandervliet Brock from next question UBS.

Brocker Vandervliet

Just following Is way. up on those noncore effectively and deposits other Borrowings some of to goal run these deposit the questions. clearly out? have been the headed

Howell McCullough

to deposits actually right balance think the sheet. minimize going what a and thinking as the about do to extent side can willing of on might both the as in but core have a balances we're doing types other pay deposits XXXX. can, about to bit We and that And we that. very Well, we we we manage raise commercial certainly at to of a been best be we those being that minimize continue cost, of feeling around plan do funding, that don't we've successful how we to good to like

So be feel flows we're stay we other seeing. overnight surprised funding of those of good types sources. around and terms about And these where wouldn't we're if positioned that funding and levels deposit the in

Brocker Vandervliet

just a occurring I cost of shift to then acceleration more tactics back, side. actually your industry a think violent or out overall costs rapidly you a of or and called a across of the response competitive more betas, and deltas And be bit that's But deposit higher commercial common the into both? more strategy appears own that are And the mix more pattern on your as in deposits. stepping Do sequentially. you down factor mean, lack

Howell McCullough

a say of would both. bit I

think that see the very really any region something doing in I competition remained unreasonable. organization, rational. size looks don't any at has the we think of I one,

And a really the think things I that going particular. customer our that's of those perspective us forward. do And helps. believe perspective. a on manage better Fair bit and costs regional loyalty customers going we long-tenured bank. than certainly can have the bit And from that So consumer and that done base think little from We've a side, perhaps and because we average help the retention I a unique satisfaction pricing do I certainly in a we've to contribute of Play to fact what strategy the

Operator

Najarian question Merrill America of Bank Lynch. with is Erika from next Our

Unidentified Analyst

Erika. is This [ph] Brandon on of behalf

the dead the horse, So expenses. I And the two questions. quick understand to question, just first want to sorry be

year? if And the basis So it negative you saying the million, X%. of $XX expenses basically in are that if million, a we back X.X% core kind then for be that $XX plug out we should the gets in quarter-over-quarter to on the growth around

Howell McCullough

full So million make year that just we've think a guidance on That's about for adjust the basis. the it given. sure in $XX doing you And the math.

Unidentified Analyst

XX interest in is see see said on have Understood. net you do that And for pressure increase million intact? about guys that Or then, separately, every growth. basis still in some spreads? rates, should Is that you previously annual I you point know loan compressing guys income side the guys $XX

Howell McCullough

I It's reduced has probably now. million Yes, $XX that a would little say bit. around

Operator

Instructions]. [Operator

next McEvoy Our question with Terry is from Stephens.

Terence McEvoy

footprint? is how Just the And to of manage that $XXX RV much year-over-year. that finance up risk what you internally the portfolio? of growth Could marine about the out within doing million portfolio you're in talk just and

Howell McCullough

states. the is XX now so Terry, in Yes, -- growth we're

it is would footprint, be was dispersed. growth say. in majority on, obviously, the Early going to I So

diversification. Now, we've got greater

the which important markets. of The is customer, identical of profile is our thing the in all

XXX liquidity, we're We're of other to boats business, in very we this measurements, we're be underwrite an RVs about assets. auto probability do and looking of score that business tend note size they're not at modest, second individually. You'll the that of at And these so buyers are time decisions. low at looking FICO Average default.

frankly, geographic origination diversification. we metrics So very consistent of geography, the like regardless and,

Terence McEvoy

X as comments up basis to you been expect back from on X point -- or earlier to follow-up, on accelerate the each comments? to forward you cycle, discuss a maybe bill And credit And loans? quarter. going then reserve just It's just some could those your going do just building here relative based taking that up of

Howell McCullough

that said expect very build over time. We've we to the gradually reserve

we've think things market marked charge-offs, bills that obviously has going amortization, been dynamics, portfolio quarters. been that built strong, components growths the consistent got of which have specifics, and many that think the been fairly like that we've then portfolio, back in. in I on the the I And

So going I built a would forward. view see slow fairly with consistent a

Operator

question next Kevin D.A. Our Reevey is with from Davidson.

Kevin Reevey

So as the which us branches could decide how you to you thinking far as walk consolidate? through

Stephen Steinour

lot patterns the teams, usage but a goes coordinated of keyed amongst there's within It's into work branches. Kevin, multiple it's this. that off of

in Michigan. so have #X And we share branch and Ohio

a a work those markets And with but patterns usage. our So and we have looked ATM on, what's view digital not to a density also from. utilization just of are on physical, in at going many of

of amount in or So us those patterns to fair terms our a guide see close we fairly help in and that's where opportunities. have us of branches, we distribution other

Kevin Reevey

your your just dependent talked in earlier your strength prepared Steve, and the -- then you are how just And earlier on and in ag faring? your curious I'm bullish about markets, remark, but your markets outlook

Stephen Steinour

don't will coming have also while that meaningful extent states relief states. some of a of they are fair very sector. any ag impact to diversified had sector run leveraged, Michigan so in, any They Illinois, very individuals low And we're on a of are robust term lender. Ohio, they're stretch are see a in very, is Well, But the near amount the ag these or for at to impact point. by we're the number companies there of significant terms of that the a ag, very some has the And Typically, ag tariffs. not and years. in this states ag from a

Operator

next Winter is question Our with Peter from Securities. Wedbush

Unidentified Analyst

I I continuous things see your income expectations in your I mean, today. Adele very given quick provide all is Could Lee Peter question. This around fourth color you some [ph] fee happening have for there. some to tech for would the like spend, a Winter exciting quarter? just

Howell McCullough

experienced So year-to-date. growth I the think you're that in we've the going see areas to growth

good to quarter. continue will markets and capital think fourth a I a good have year

to treasury the good deposit I with we households that you of think, continue charges in when the to processing revenue, both management the in in and we on there. opportunities growth see bank, consumer consumer growth see card growth side going the product and have on of service as well some commercial and think payment about

throughout has industry entire mortgage The banking we've line gain in that year, seen lighter be as that across will impacted the weakness think for year. the has I year. been this the sale on and and

the that performing the So us. management has another, so way Trust with lines we as in far shape well investment are the we're about just of this some year. in general, market I good performing think been for think and is

look quarter. would the I lines those at So about the think you've lines this and already into seen fourth growth continuing year where

Operator

over conference have end I back closing reached we gentlemen, turn the Steve comments. to question-and-answer and would our Ladies for like to of the session. Steinour

Stephen Steinour

We're quality with joining Again, X to momentum the XXXX, continue Through our the quarters produced consistently shareholder us. strong first for management. look financial of end the year. performance long-term value into top of and building thank you, the earnings we've all, quartile and risk

execution have and you've on a our goals of disciplined and delivering track seen. record as We commitments

level The of performance. new seventh long-term forward are alignment finally, a we So shareholders. shareholder focused the our driving Huntington, our that management, us providing board, our and And on reminder of quarter. colleagues largest always, colleagues sustained, appropriately a as collectively and board are this and all between of financial include long-term to then to later look we'd high metrics there's like the

for So appreciate you thanks Have today. day. us a great interest Huntington. We joining your in

Operator

This today's conference. concludes

lines You may your time, thank and this disconnect you your at for participation.

Huntington Bancshares (HBAN) 23 Oct 182018 Q3 Earnings call transcript