HBAN - Earnings call transcript Q3 2021 | Huntington Bancshares Incorporated

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Operator

Greetings, and welcome to the Huntington Bancshares Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Tim Sedabres, Director of Investor Relations. Please proceed.

Tim Sedabres

Luthania. you, Thank good and Welcome, morning. everyone Copies of found reviewing be we'll the slides Investor www.huntington.com. be on website, Relations can our the section of

will the call. this recorded one reminder, is from be replay hour of a about available close As the starting call and being

Financial are join Chief us Q&A. Rich presenters for Zach today and and Credit Steinour, the Steve Our Pohle, President Chief Chairman, CEO; Wasserman, Officer. will Officer,

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

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

it me now Steve. Let turn over to

Steve Steinour

our core with Thanks pleased very Tim. we with integration. enormous progress quarter, morning, made good everyone. Good the and third deliver TCF I'm performance

Let fee record growth low We deliver nation. included from integration markets of people TCF the At good to our scale, This X, in growth new me improving on total at and objectives the specialty focused organic hard new PPP build performances third Huntington, Slide deliver on the we're drive that complete driven X. remain leading work in metrics. Slide the combination track to with the performance. purpose a delivered planned, and resulting quarter begin quarter bank core company a credit deal We colleagues, excluding and powered density, digitally the first revenue. benefit are growth top economics. and to businesses. of we and our quartile as On Thanks TCF on income, core to a vision to full sustainable financial our

of products week to we our to offer capabilities TCF set customers. ago, Huntington completed and the we now Just an over And systems. integrated experiences a successfully conversion of

complete of the in the our XX great synergies, all since result to to our months actions the conversion efforts track the of were cost able completed on of reductions. of announced drive are to a of cost just targeted most announcement As and the deliver transaction. We've colleagues, we the

behind now With we're momentum the to strong and colleagues close conversion year development XXXXs new us, activities focus business into of able 'XX. up that carry on to

payments. areas markets We in are XX% substantial well commercial the commercial colleagues revenue over these investing are be as in like capital seeing and ago, up from deep and new production activity and to of year and as has cards loan wealth in targeted our generation doubled. nearly well producing productions markets. many as a momentum pipelines Both consumer robust, capabilities We're and continue as revenue of including new initiatives, expanded

were number past we volume, be consecutive eight for ranked fourth the seven pleased in Additionally, year lending by one marking been to recognized nationally we've X(a) the SBA five. the

intend to overall continues, for We years manage drive incremental in for growth self the the across fund strategic investment look the initiatives As efficiencies ahead. the expense drive to necessary ways that additional our base will capacity recovery we will dynamically revenue bank. and

to customers on banking their and Our want when where meeting and channel. supporting centered they strategy is them preferred

to branch of as TCF combined branch the we 'XX are part be equal will X% As network; the of network. first part And are these announced addition to optimizing distribution of we XX closures of the that transaction. quarter strategy, our the in consolidating in continually XXX branches

Importantly, continue we number Ohio the both and to in one will retain branches of Michigan. share

to bank. and we We're leverage within delivering did for up decade to the diligently continuing roles resources are we a as annually positive leading consolidations, branch to to addition committed In optimize operating 'XX.

even as repurchase sharing the expense in on the one an million Finally our of collectively set and demonstrate performance growth the and confidence to density, as markets, actions expanded revenue quarterly customers, but of outlook we well specialty about as the TCF I the we potential well These our our an and to leverage manage new combination our as as than for increase increased When transaction, scale, we we say also benefits drive that up integration. the shareholders organic today, in provides of dividend. can announced future our half to The saw front quarter us. addition on Huntington front, the for the capital announced growth. levels. and in opportunities growth. synergies, of additional to actively update accelerated And commitment more excited the Slide we're our capabilities a X more revenue strong capital

capabilities, across Let our retention, already with Milwaukee, we're Huntington's we're fair deepen customer with the expanded digital product Combined Chicago, in and with me Banking, the philosophy, early In previously, mid will and most will compelling acquisition product Denver, coverage In will this Cities fees. including and new customer markets play wins, market relationships. deploying now customer addition and experience, and share competitive offerings; base services our aspects. Business in bringing couple Huntington's we gaining middle of we're products and with enhance greatly and management set and Twin demonstrated accelerate banking, and we've conversion. capabilities entire capital in customer as corporate the and greater scale improve traction a Consumer the treasury to following

bringing markets. are our wealth and newly award SBA growing platform and lending base customer we Additionally, banking expanded private our winning in

we're as economic Our investments are footprint. robust timed, recovery our seeing continued in well

as seen as capitalize local economic participation. to in as national see well faster labor revenue than force well. these We perform time economies average, very year-to-date opportunities unique a to the moment expand activity higher on continue have regions our Our

financial detail at We entering momentum the provide Huntington performance. our over era to forward look growth on in Zach, are years we with you to new a ahead. to more

Zach Wasserman

good and morning, Steve, Thanks everyone.

common third acquisition for expenses X, for included per or XX.X%. GAAP was notable Slide on acquisition to of of items, for earnings the Earnings ROTC million. the adjusted which related for came these equity $XXX adjusted ROTC were $X.XX, $X.XX common at share the in XX.X% tangible we Turning reported quarter, per quarter, items return share notable common

As from managing Deposit were as the the have September, robust loan With production. we billion were quarter. a actively balance grown portfolio $X.X second million pleased to provided sheet of expected in in end we new by the securities consistent of the we strong ex-PPP by see we're third liquidity, and and reduced driven $XXX balances with grow balances guidance the result quarter by continued divestiture. branch the

relatively we associated with period end and investment a markets, has $XXX capital was Loans continued divestiture businesses. in our million. we totaled payments, spot wealth management deposit income basis. divestiture, balance bright stable continued the cards remained and momentum where saw another on -- and where the Excluding Fee treasury

been pleased million managing the and we're capital complete As actively share Steve our of in repurchases noted, to we've $XXX third quarter.

which the in rate annualized $X.XX also fourth common to $X.XX quarter, dividend stock us takes announced dividend an We to share. the increase of per

continued quality XX% decreased of improve to credit assets prior basis while the points, nonperforming XX Finally, charge-offs from net quarter. to with

$XXX and C&I, billion, portfolios. million X, in Auto Slide loan increased Turning with Mortgage, growth during $XXX.X quarter RV PPP, balances totaled Marine excluding period by to loan balances underlying and the

continued by asset $XXX were On to all very lower, and plan off pressure offset encouraging in of new million marginal trends increased year-over-year continues the side, Consumer quarter, PPP by production core net growth run loan pipelines driven somewhat the other while and the auto by seeing C&I We're during growth C&I. and commercial from from and dealer balances commercial that home finance grow sequentially. portfolio. the equity both loans was floor

see we post Marine sequential saw Automobile, observe portfolios with strongest the quarter consumer quarter. continuing quarter production robust origination in while continued activity to mortgage to solid Additionally, our continue in date balance activity growth. to Mortgage, all third for Residential RV with, activity and levels Auto to

we the we specifically, underlying respect through PPP, and trough loan fourth With as accelerate modest move XXXX. levels quarter believe in Excluding continued see expect portfolio behind the And balances commercial quarter. us. to momentum is fourth the to from expect these we we growth throughout for

to relatively divestiture noted on Moving the balances were excluding deposit X, as previously, Slide total stable.

higher liquidity by $XXX of fairly Turn margin Fed while an net continue sticky $X,XXX PPP Core the of the excluding during during slightly Net Overall, reduced interest with the assets, drag at driven as given both million. we X, remained average was liquidity balances net and quarter strong liquidity primarily commercial driven increased, benefit the $X.X of core quarter. to cash excess quarter, to end, CDs TCF. net of excess We much on the interest and for approximately income FTE liquidity by our increased acquired at by optimize excess by continue billion basis funding million, X.X%, the see increased represented full interest was to levels quarter Slide cost deposit interest TCF margin accretion XX the moderate quarter, on points. basis the $XXX million. income income

to absolute expected today. grow future the balance rates. positioned net includes asset to the forward. fourth We're based dynamically assets higher increasingly levels asset to to up basis model the net well XXX hedge points the these on XX, increased We our addition sheet and throughout we as the This sheet dynamically sensitive dollar expect core sensitive was sensitivity and manage And our income the interest XXXX. become X.X% balance X.X%. from actions asset in we pay to are quarter basis managing swaps. going during from on And took benefit capture to be the deliberate interest we the of rollouts, fixed scenario as On income June interest sensitivity quarter, continue we

of swaps. $X select the billion added terminated forward rate downside of and pay protection course the fixed Over we hedges quarter,

Turning Capital net continue XX, the by to Markets TCF higher in well items. by payments to Several Mortgage syndications. and volumes. investments flows. fee noninterest and quarter, performance including quite from cards production addition also for relatively expense income. billion at approximately the driven $X.X total income and foreign the came higher of our of be positive Slide customer primarily solid Slide income well interest exchange $XXX due saleable increased, notable banking higher performed derivatives, spreads, to and performed businesses transaction grew to noninterest wealth driven million of driven Turned and asset benefited the in and XX, quarter, by rate

million, quarter expense full by totaled expenses. noninterest the $X.XX items, these TCF primarily Excluding driven

Our to these expense guidance. benefits, our to unchanged accelerated overall of cost is has of realization drive savings. to magnitude due reductions from actions however, The prior outlook for the realize timing

core As Core a we on throughout fourth should watermark that an high QX for result, expenses we down and continue into they expenses, absolute down benefit thought while XXXX. dollar to was as trail earlier basis quarters. the stepped they previously expect than the first should

to X continuing return in balance to drive while Common As TCF from the the highlights growth. well few we invest our of the within XX as recognize synergies ended our a actions. revenue well equity capital X% as Tier recent operating benefits the quarter cost XX% Slide X.X%, the of well term to top line initiative highlights guidelines. capitalized medium sheet,

focused our our returning quarter over on half to recently the the common have capital We priorities. program past we the pleased an the dividends. announced the million moment to were stock executed repurchase alignment capital increase in share at Over and $XXX we to with shareholders following authorization of

release resulted can you X.XX% the loans improved of in and for allowance total economic on $XXX quarter outlook reserve our credit our ending X.XX% see quality The quarter quarter. prior at represented third a end. XX, losses million As for stable from down of credit Slide

Home on increased recoveries charge-offs quality to has on average history, cycle. seven well NPA in XX net levels RV points points our loans NPA Marine, ACL and below XX, net continued basis Slide to lowest of basis as expected, average XX key at charge-offs this credit points. an the of further Auto, reflecting ratio declined and XXX%. XX% low remained Equity, perform through leases. quarter With in the our portfolio range coverage Additional profile, our the as Consumer in and target basis metrics Most improving XX annualized recent shown of are credit represented to of

Finally, Slide to our turning outlook XX. on

strategy, in to on tangible operating common focused revenue we macro we're expenses our driving committed environment, on control. sustained return long-term We our and a managing we leverage As achieving to what investing within powered dynamic commitment equity. while XX% can remain a operate positive growth, digitally in people managing first

our to aligned shareholders. a tax efficiency of leverage closely XX%. return normalized for expect leading creation believe key capital growth, group metrics, are ratio set and performance and a these a value with of peer on XX% effective financial annual We revenue rate indicators positive and operating compelling We

me turn back so to let Now, your it over can we get questions. Tim to

Tim Sedabres

Zack. Thank you,

peers, one they let's We themselves that each question will to Operator, one person a follow queue. that only then related Thank person the courtesy your into And now questions. and can you. for if We up. ask has add questions, as open ask up take additional questions. back

Operator

Piper [Operator Instructions] Scott Siefers Our Sandler. from first with question comes

ScottSiefers

Good XXX% trying when point saves. the y for you investment along I And come there savings into morning, then we do which Zack might sort expect on the Hey, was to acceleration, core future question. course lines of spending sense to guys. just finer get of thanks basics, down that think in hoping will a taking you results? put a the be cost costs might way million for mentioned acceleration of quarter's from cost this baked so the the a minus the be sort $X.XX degree to of to the core quarters roughly maybe

ZachWasserman

synergy we're Scott. fund really, couple larger a reduction investments I'd millions the Yes, sequential is I synergies of the the I cost self generally be that in noted could level just our guidance. quarter with you point we And amount, specific into is in across revenue say think what about. to those likely to the would the that each really for which end, the is overall do of Overall, expect I've remarks, and growth and in But drive business. investments question. trajectory. quarters not revenue and to next my the But Great going guidance given, double expense give cost net the you the that the for synergies delivery that digit pleased as prepared thanks, of making I'm to you

So five sequential of next quarters. balance slightly more front loaded growth driving the throughout the

ScottSiefers

a how constructive that was switching bit. you you I translates just overall it's lending into maybe, curious the aggregate, of loan know pretty on Perfect. for of and if let us growth. Thank could gears an outlook aggregate then maybe sort momentum. And sort ex-PPP

kind growth the constructive you I and maybe a sooner? guys loans underlying we remainder of think grow previously, flattish the Does little they thereafter. saying then more year, tone more get have been of suggest the through

ZachWasserman

Yes, great it's a question.

Let me elaborate more. a bit

the that's I pleased really talked we expecting deliver noted, Barclays of end some as what the then QX. the for well Investor QX we to I think in characterize I at as modest see we're expect Conference And I to September, growth ultimately between that. be would and growth modest. and with

consumer commercial robustly pretty in momentum and then bit also. marine RV think, of factors the we in driven the So do really by of it's a production remarks, expect growth, pipelines really And continuation seen for strong continued prepared and activity to driving well likely the is in and quarters. last banking, the that strength modest, noted and bit in calling perform quite residential we've and, and business I several continued auto the mortgage, space, continued a we

The we to focus gotten, the on that behind now other conversion we've thing of we're I would able growth. have colleagues say us, that XXXXs is, now

do so go as the and we expect into go well. on year of next we the frankly then QX course continuing as growth And accelerating as throughout and we modest

Operator

Our next question Poonawala Bank from Ebrahim of with comes America.

EbrahimPoonawala

morning. Good

First follow to the expense question. on on wanted Zack up

Or out. call the, those that So the stick some expense core around we just does overall on or go we in guess, about merger completely I terms that When you related about notable think you of that? the as items the think talked of do away?

ZachWasserman

Ebrahim. question, great Yes,

December levels the costs the outlook guided announcement relatively level. step And elevated. be was related merger overall, QX we a to of will that continued million. should it for seen, to $XXX be at think remained overall, time expect the back near the back we've Similar I in our taking relatively be to

more So the we've this I quarter. think million seen timing at $XXX of this point that through than

bit and of perhaps a And in done. then should QX, be and QX, come bit essentially see then into by end likely a QX, in so we'll bit tiny last it the more a QX, trailing

EbrahimPoonawala

when your shifting Steve, concerns Got around to win regulatory stance bank, TCF it. hearing sort the guess we And are nearing an around end, strategically, I you making piece a of M&A just just from integration of you about still what an sense getting the growing of the deal terms some to capital the acquisitive tough, us of priorities think is puzzle in give a just deployment, are how bank?

SteveSteinour

like as in we a but we've Chicago. performance. said tremendous apt scale density Denver, driving we've We've Ebrahim, the and for got the bank beyond number that's combinations core Michigan, the larger years, done never we've businesses Twin characterization Greenfield two got think really think that our a I revenue Frankly, opportunities we're that, have We is focus not in XX us. of upside here. we've significant before, is in so got had in certainly to Cities, we've on

and more So revenue we're that the our the the of past, combination possibly But done entire likely in bank over We've core. focus, driving getting of our very focus benefits things few focused some the on of years, next non on say a is do I'd equation. that. the driving to part

Operator

Carcache Our Wolfe comes Bill from next with question Research.

BillCarcache

the how have morning. about remind Good relative performance bit And gearing than the short think the Can an curve? long you to end? in the versus you. how long us perhaps you Thank a of end you short end faster environment much rises where

ZachWasserman

our has our that, to do, you of irrespective it four the range and two for the that this five by move of a years portfolio as sense. appreciate benefit incremental is rise. move steepening year think bit of and Yes, the benefit to to as to but as to we're pay we're Bill, driving I years we're asset look, to as a doing we give And, continued sense the start of Zack, continue going you to little two if we average swaps up, some up, preferred delta almost my for within it arrange certainly give four to one we'd been as sensitive are four first duration expectation, I was and rates a here two we of range of the, half hedging the in benefit remarks, the from to to in versus curve current noted our and -- most all, to duration yield positioning thanks most sensitivity, sensitive that your question, fix within

So in by I a sensitivity, think we'll to dynamic to go positioned as now that as we're of we asset look than quarter and even the more forward. I point be noted improve

BillCarcache

at on rates then Thanks up we based ahead Zack, comfortable rest and to consider that over of normalize, continue curious portfolio been I about you've utilization you following as as on amount loan the this which rate the that's quarters, at should Fed? the are -- liquidity, expect from higher year, you which super securities outlook? extent growth helpful. based preserving have And grow we to look with the next look just your, parked to short as ahead rates the you guess, on of reducing through that, the you the few to And better you liquidity the how just

ZachWasserman

we're levels, that the we key exceptionally watch it's our Yes, area I that and terrific very, we and is watch -- very, would well. say something a But full very liquidity great managing very cash Fed stop, think carefully. about feel we a carefully. the we question, certainly

holding time a more do securities also characterize of and additional I couple optimize by and we're, I we to in number activities as comes liquidity quarter. XX% priority some funding is be trends quarter, third on NIM comfortable I here, of last if we've here. you portfolio completed add that the the the as watching I the accretive we'd seeking assets. about will as incrementally incremental, to as expect, We're given kind And currently see we the that the out, during add so cash, to securities and information from approaches seeing say we're securities the noted in of a mentioned and over would intentionally behaviors goes we expected a quarters deposit fourth our continue, And percentage quarter, $X is billion period acceptable clients period growth. I would now, expect returns rose we that think guided that the for we'll our it in modestly holding but fact versus we to at that where as the

very a trends. both And approach so take much watching we'll incremental

Operator

Our Zerbe from next Ken question with Stanley. Morgan comes

KenZerbe

Hi, Good morning. guys. Thanks.

for. is just was our did the or you In NIM, clients the X.XX%, your around about which bit right, ex-PPP confusion there bit terms were things. is X.XX%, Can I wasn't. than I NIM guess talk of about PAA your core math is know fair of two lower a I think I that a sorry, two, If the think just why we though, core sort we shooting

what one, NIM sort about the go drove you think So core also do of NIM basis? that how the Thanks. PAA, ex forward on weaker but a

ZachWasserman

for Ken. Sure. Yes, the thanks question,

into came you reported to X.XX%. NIM as X.XX%. And know it was excluding fully PAA So

a it bit guidance assumption. my sequential elevated so drivers I X.XX%. And The rate think several also things with points happens last expected. additional spot impacted lower and question were would of which levels, from the stable points function generally was million drive about the cash liquidity of stable a at of rate and that than growth of a our I levels into the excluding had from yields prior going been be dollars cash interestingly, came our in expected, tell that given was our we've few than these drag but biggest the a the few interest that and than two excluding sort that lower had spreads lower basis did X.XX% Look, it $X,XXX than the contributed in we forward, at previously And overall, generally, that. you a expectation expecting grow talked the lower these we expectation of it'll ultimately PPP, Fed just purchase net And DAA just So basis actually points net the stability quarter a level. throughout is securities, we drove mix this in Fed elevated loan on basis key those fair projecting, core is I'm given point to environment, loan them income, XXXX. is interest what to we're income what and going my is dollars, we're grow trying focus QX accelerate

KenZerbe

XX you all in Got want we else? it, then, to we're okay, And up Because about, the that that make wrapped perfect. talked terms anything correct. not the shouldn't branch closures of just part just into the guidance. of in just that's that's I first plus quarter, expense -- expense sure your outlook, guidance take

ZachWasserman

You're Ken. spot on,

as we And dynamically leverage, ensure can about is is those ultimately, drive network, our capital, things. that toward revenue this noted expenses prepared of revenue time we're, return accelerating that the the talked those targets the the driving is overall, expenses, operating Steve on in that half on powerful to positive manage we'll to capture 'XX. of all synergies, remarks, moderate in needed what So to second to over net continue guidance we and achieving financial term really growth, all I his optimize invest gave the XX%

Operator

Alexopoulos Our with next question comes Steven JPMorgan. from

StevenAlexopoulos

momentum Steve, talked about Zack not you the on up response, talked pipeline growth you how wanted sound for much growth. fourth about In up, momentum, I everyone. here how right? Scott's you loan pretty is your stronger loan building. on guys question in follow morning, the is bullish quarter? on looking initial to Why you are good commercial loan Hey,

SteveSteinour

funny we've effort a in sort talents think got our lot focus different the of weeks. did. business Steve, around out good have making of peak substantial we'll holidays a the is production of so a lines in finance question. great because origination, a of asset but ambassadors great conversion. conversion, XXX the had moments, for This interrupting This on we very a quarter we We sure Steve. We've of had at and is a couple pulled we

So to in if it's new it's yearend, Thanksgiving not between harder business do the and pipeline. already

three So weeks the four talking pipeline. for another three, half, we're about a and max,

Now the up. pipelines are

up indicated, they're quarter-over-quarter year-over-year; we As sequentially. up they're

driving the contributing bullishness. We're an forward. that's will be what, how this very to for 'XX to we full then go So quarter it. as But optimistic translate odd about year it's

We place, a management of producers have to great us in TCF do in and other Chicago. Twin we've revenue much RMs some looking the number that capabilities already and in we to the with have that Cities and Denver, of are come the put increasingly and in

the very So together coming the scheduled contributing that's have and are pieces optimism. also and I to nicely

StevenAlexopoulos

level? take Okay, from how client below that's scores brand's it'll do Huntington all know for you impact helpful. Huntington's Thanks. on Did notable We my follow satisfaction up. view. Steve, And, a well, a negative have really And satisfaction move think the to consolidations to client long levels? TCF peer satisfaction up

SteveSteinour

resources course activity during of year. amount Just of required has and the efforts the substantial the sheer

would just embracing the respect products branches saw from expect conversion that, flat, -- play see With see our customer new could increase. frankly, but we we we wouldn't to it and who the colleagues TCF, decline they efforts set. very we an are in And be modest to expect TCF So was a the to customers. the from what new during outstanding are and fair TCF our with could

so who us And group level to pleased. of great from colleagues order quarters, joined have couple in couple it We take customer that years very, got We're newer maybe take in a we're it won't TCF. get of a will equivalency of encouraged, added very those very branches. a but service

Operator

question with next Pancari from Evercore. Our comes John

JohnPancari

can positive that positive expectation Good How morning. I a that given on you and you're year. on -- guiding indicated line you've help are magnitude? leverage. do us 'XXXX? leverage for you operating for if Maybe expense operating know know next specifically a you but you you've not the us can your with think think basis continued top for your expectation, expectations the with of here core growth magnitude I about maybe reasonable the or help Thanks.

ZachWasserman

will I to to I noted repeat to I your the for Thanks question. Yes, you you will that, but guidance, think the John. try to not And specific answer I'm in and characterize question, give going question. your

we're year's next be look of calculate think year growth positive business to levels of at leverage exiting over TCF targets. where into we total. the in adding And quarters certainly but the point continued second I to that from for challenging some financials and on to grow half driving the to the those perspective degree the a year-over-year year, targeted moderate two are we've to the going expect that momentum impact just thing operating the and full the year on is metric do of given focused then the big on coming is that very

positive at sort point, get can while ensure see trending, this going that dynamic, we able invest in, we'll into modulate expenses, as continue point. it better. but at revenue is the we my be to specifically year-over-year to given it level leverage, solid look, so operating to as won't expectation to see growth we of clean been where And have is characterize not the to always period be that And, a

JohnPancari

you're of type What do Thanks. think XX%? curious based glide updated, and business on XX%. related can Okay, on in down That's XX I the you're that you then reasonable, you're And updated you think helpful. question goal hit that all to an right. the you the do two seeing? When thinking path timing efficiency of guess the trends medium is upon on about Currently of adjusted how XX%. basis, is term sort spot

ZachWasserman

But is are efficiency And on to I a drive driving we're are numbers would return capital ratio note the operating revenue an Yes. frankly. to. toward that is Significantly, we that sort important the that key most efficiency metric. metrics positive outcome, of growth, going

are by this rate of half is QX certainly, second expectation. those my quarters, My carefully. so of the point second precision with budgeting year, sort it respect modulate the will and still I the emerge. of the And during see expectation We're we the run is think of year, some watching half at to the of we to the but doing exit

JohnPancari

Second half of 'XX?

ZachWasserman

-- 'XX, misspoke. I Correct.

Operator

with from Terry comes question Stephens. next Our McEvoy

TerryMcEvoy

today. portfolio where pre And portfolio. in finance curious, auto plan I'm And kind a Hi, balance the thanks. inventories plus those that what Huntington hypothetically what's versus when getting had Good upside dealer the at of morning. normalize? the both today. sheet TCF COVID is then floor balances dollar about of billion two I'm portfolios at of inventory is

ZachWasserman

each auto about over three to $X roughly we've levels. kinds utilization normalize those motor Yes, line pre-COVID that of opportunities, represented major time. a talked businesses I we've billion got general Interestingly, of rates bit them each think of return the when market, and as inventory

relative this stability, well totality perhaps flat I second, rental answer for that I And space. expects should your flat couple similar more point, 'XX. really issues those into produce however, QX, modest points chip an and this will lines we're auto, expectation to throughout we're term we're of and that into am some back that of the still change out. has sort zero is but But expect three degree, But that point, flat be And the plan going that other of relatively would to for I end to actually just continue even At seeing loan defined So some an we're at robust and in those be the plan of growth. very I'm down be time XX%. my to some you in and being, think good creating to the our in at auto some of issues this seeing. the to the seeing so get some a the new pretty pulling purposes, supply gives highlight that. planning I lines, of general between of planning it's or could percentage point, There activity we that debt a that's order QX back market inventory just a opportunity here known stability these at commitments also question, getting to magnitude, that businesses of production that QX some precise and be would the uses interestingly, incremental of to opportunities business, relatively pressure, no finance such this point trying we're uptick, new trends end course to expectation the the pointing floor

moderated and ultimately to why it do general we could that's we over nature, be largely will time expect tailwind this as the So and headwind be expected the flat.

TerryMcEvoy

service forward. the asking up and sustainable Thank that And the Were were conversion? the on that million fees. revisions made after part. going if just remember then $XXX made some fee you. charges there as TCF at looking that a run lower of right the that's And adjustments to rate I'm follow going I we're result would in

ZachWasserman

Yes, question. dynamics. all the customers the we product conversion platform products, of it's our play great upon over on and the Day all the weekend TCF fair now are And Huntington that Columbus completed a to

QX. higher deepening great And run conversion time And fee, so fair in the we've modestly offset over returns longer XX Overall, the times we those into generated. from feel dynamic generally to payback. incremental see income and the a an by we're for many trajectory have of play are we play is month about very the talked incremental that this the of term, will early Typically, about as degree market lot. products, and the lower a business over confident to that a periods, the about acquisition sort in in line expect a is we reduction

the And so paying and sort kind see climb period. half a lower over back of to and QX then expecting year and bit of a we're that into a back dynamic roughly

Operator

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

JonArfstrom

morning. Hey, Good thanks.

you then, borrowers. curious how any the of that growth XX%. on Steve Rich, or things quarters. stage, supply loan behind just topic up you your from And up think highlighted a feedback on back the and last changed couple what middle chain is loosening late market the And over Just much have

SteveSteinour

And may Steve, earnings is of before To to seeing with this year that. chain but inventory you're think this, allot. next are Rich Ford the be supply and you got autos add doing start auto gets saw in continue It's chips. challenge, I'll go without some it the GM and we've going with I Even to challenges shocking. as dealers new But here. illustrate a the ship the deepen no to announcements, normalized. John, Zack expectations the are deliver issues that choose some and OEMs

happens, why Zach's next that's in normalization a inventory, earlier utilization, or that's we're it finance tailwind counting not be So on is auto great. comment year. to If

with resolved issues And year, maybe getting states and even a Now, including chain little in. America, fueling in additional we're resolution lot would time. depending we the footprint But about over a do of and expect see manufacturing that to through or getting North beyond supply that a to activity in footprint on again there's industry. adjacency capabilities bit next continue, the

clearly So out every over bullish, sets and that's for we're labor we issue virtually supply terms up and a a chain like today. this time but in opportunity have us business how both we of additional there in

RichPohle

will issues. Hi, some Steve, labor low that, just is to maybe garner market that a think relates is production piggyback the automate it couple offset that Steve CapEx Rich, of that to this middle increased that mentioned, think, on I to places to the rich, push a demand, we're issues, given productivity I bigger as labor there seeing

heightened other of thing is seeing The a that level we're just M&A.

and think flows, kind they looking a aggressively we're think fog tired, levels just picking expand I they and flows with up of a sell. here COVID are of have just them when through a things, and can, certainty their think cash cash want respect around sense position I some a EBITDA to are and I to of little kind buyers maybe environment gotten to there's where as going sellers, of COVID of back greater if out the coming

And market just series Denver, a in in are were of also, There TCF do. space did Twin There's have so not seeing well. increased we the didn't Cities as M&A Jon, dynamic they the in a market middle banking. their things

Greenfield customer's translating got to we'll be earlier as And the places, revenue further, cross mentioned, and in place, are sell optimism. contributing but teams as success, And new. four additional that's net that's are and in out these So that's this we've well. seeing we're them building every into

JonArfstrom

falls fair? SBA that Is well. I'm guessing in that as

ZachWasserman

Yes, it does.

JonArfstrom

just your Okay from and on here? then repurchase can appetite you touch

ZachWasserman

This Zack. is I'll that Jon. Yes. take one,

call dynamic We going going a it. plan in in million; noted be third the front with we're that. and QX, but dynamic still loaded pretty into it. continue that we to I think And in $XXX of through be to very the had front to here a the I July think as we QX accelerate we're we I being into on working looking about go load. as balance likely somewhat do quarter, to think, as great felt And we intentional

Operator

Ken question Usdin from next Jefferies. comes Our with

KenUsdin

Or did Thanks. only some you're in telling savings might I have and wondering of were? already us there? quarter, us morning. you Good was I you tell what just the Zack, gross third you in we're decline but here, going know from have they captured? can wondering, to just what kind

ZachWasserman

quite Yes, I modest the would were say quarter. third in they

reductions, go of opportunities sourcing and synergies you with most long the around some the we quarter, come I tech decisions business more cost TCF beginning most other with rationalization, about the from during sort ultimately as of of essentially planning to just largely the in the those fourth. savings, increased that of think onto the And were sort vendor importing essentially into of employee of think achieve the level mode have the that's savings, them into execution part, be completed. stack. all quarter and tail of if actions necessary first really a third a realizing scale them effect executed for Huntington And related on they we're And technology, and been the and came now to number branch including them. the

why fourth answer current the then of a down but long so we're than of I expectation, level of as more yet stepping the asymptotic which is winded go a a is down of we in step then a larger And quarter, substantively, get quarter sort in still much, into into talking partially you the thought first third QX, the not guess similar about bit more quarter, before. down. fourth and quarter, again, the my QX, function, we if is step an So

KenUsdin

us what you're a change follow expect? to in a a absolute perspective. of that. amount? know of on a up bit And the see the total telling maybe about that view timing I you more pull we you little to from But Do forward original your any XXX have

SteveSteinour

higher absolute that. the than that mean kind we're solid of errors level. rounding I is within amount And No, at

substantive that out, and achieve I I pointed got nothing the So -- would for number call Huntington years. it's nine overly That's to

KenUsdin

something? to And in $XX the you that How traject have from the cleanup quarter you XX fees million to the Okay. one, expect NII last just beyond PPP left. on do here deck, the fourth you related and show PPP of

ZachWasserman

a of again quarters, then into we're roughly three the half fourth kind life the XX% to the function; like you quarter. It's of And that of yet XX% -- recently. I've should the into second. then into and accelerating assumptions reducing given forgiveness quite over reduce to tell next credit And expecting These SBA roughly are PPP you, I we would their the substantively planning first pretty the should has that dynamic. note you it's been

outlook of from we've numbers planning function And around essentially the so that a move kind that's these perspective, got.

Operator

with Long David Our question next from comes James. Raymond

DavidLong

everyone. Good morning,

the then on a yes headlines you And service how Steve, gets about I look restrictions quarter the little forward. secondly, at of I a that banking, you to overdraft going be fees revenue be guys screen but fair when, talked drill the to Just expectations. when for some and that there's higher and may And and on that I play have, overdraft and overdraft fees just the curious peers, going think of it your side would charge of something that, smaller wanted your there. things, about down you're here good a how impact a lot, your think think my when that deposits press portion to bit thinking

think as well. be case Thanks. that may to curious you Just as the why

SteveSteinour

that, that it There's things our a is $XX the up up customers call certain to [Indiscernible] XX questions, minimum year continuing overdraft, last last and continues example more cash to of by zone. of with use an of great day, that year safety classic we put business. And funds do stand And to a we help hour David, in we opened limit this that. ago. to a those small customers, for for we than decade our put no we're

products. tend of part been banking in continuously on we very, philosophy. checking working or to the And strong have play revenue customer a over give features fair quench our terms relative of customers So of very to so, basis be functions this different constant benefit We a both on ameliorated time that's as decade the our acquisition over up very and substantially. last as the

quarters bit and advantage well. pointed existing thereafter As in as services quarter fourth Zack out, get have step customers of the TCF that and of all they'll for the of previously down for they're be a products a of going same couple a customers, the but to our

So reductions, and things some to with been but and fees, to, it's can't that year again, our hard of it elimination we've requirements, half time. do. just ago. help trying retention consumers we've, overdraft -- regard, fee quite But customer for will and accompany both and around customer unlike they acquisition. a do expectation a system we've It's I speculate new other alert in types put businesses those a regulators Not

to tools a are lot of fees. there cetera customer overdraft avoid money, et and So their available budget, manage help

Operator

have reached would gentlemen, Mr. and to the end like of back turn ladies session. for call question-and-answer we to the Thank you, I Steinour remarks. closing the Steve over

Steve Steinour

for to expect the value completed cost for you achieve of shareholders. will TCF the across the I'm our reductions. with the create our We've and momentum us that actions bank of diversion joining confident today. of thank significant substantial the We're disciplined majority execution So and to achievement leading off coming planned synergies all

management mentality stock colleagues, of shareholders. We our embedded deeply board, which the interests have aligns with ownership a and our

interest Huntington. your day. and support appreciate So a in Have great

Operator

conference. concludes This today's

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

Tim Sedabres	Director, Investor Relations
Steve Steinour	Chairman, President and Chief Executive Officer
Zach Wasserman	Chief Financial Officer and Senior Executive Vice President
Rich Pohle	Executive Vice President and Chief Credit Officer
Scott Siefers	Piper Sandler
Ebrahim Poonawala	Bank of America
Bill Carcache	Wolfe Research
Ken Zerbe	Morgan Stanley
Steven Alexopoulos	JPMorgan
John Pancari	Evercore
Terry McEvoy	Stephens
Jon Arfstrom	RBC Capital Markets
Ken Usdin	Jefferies
David Long	Raymond James

Huntington Bancshares (HBAN) 28 Oct 212021 Q3 Earnings call transcript