HBAN - Earnings call transcript Q1 2022 | Huntington Bancshares Incorporated

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Operator

Greetings, and welcome to the Huntington Bancshares First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Tim Sedabres, Director of Investor Relations. you. Thank

begin. may You

Tim Sedabres

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

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

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

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

Steve Steinour

welcome, Thanks, joining and Tim. entered you today. a carried year. momentum, the start XXXX Good call forward been We with for quarter. to and the morning, an strong deliver trend to we eventful everyone, and that thank first It's

through environment, persistent and rate Ukraine, all high chain a backdrop. turbulent are for labor challenging curve interest a in tightening, constraints, devastating inflation, fed the moves crisis in We supply rapid yield managing the macroeconomic and have made

I'm slide to our quarter highlight X. to pleased Now on excellent first performance.

synergies. our initiatives results. including growth revenue-producing First, generating are on building supporting strong executing on our revenue delivering colleagues momentum, and We're our profitable

we reductions disciplined of core Second, expenses. sequential management, expense quarter another with operating posted in

even we quarter, full for guided. track are on this are savings originally cost capturing benefits these than targeted and earlier Our realization

record charge-offs exceptional credit had overall with this we quarter net quality. low Third,

be a management risk continues disciplined Our strength. to

our Lastly, full and profitability. ability confident we in to drive additional year our are outlook

we slide let half higher in more guidance me XXXX. recent On detail on medium-term achieve remain and outlook, we quarter our rate X, performance. confident of revising targets the the incorporate second curve our will first to that our are We financial share

reductions Our robust excluding supported loan by growth, record a higher consumer PPP, planned Average commercial new balances, annualized, loan both net PPNR. income XX% portfolios. driven grew in expenses and production across and interest loan

see this pipelines will demand growing continue loan We over momentum and continue of confident this are the and customer strong course to year.

Our are synergy on and fully from aligned teams executing opportunities the TCF. revenue

teams capturing are generating Likewise, expand into markets revenues. expectations. with We are in which inventory initiatives Colorado, to market Twin we are capabilities. is banking our and teams contributing mid-market in enhanced pleased middle and revenue. business market We're seasonal share In with momentum our seeing terrific our wealth new already as has these Cities, management, our also the business and exceeding and banking business, seen growth finance new

set Additionally, the product we productivity to and increased Huntington recession positive customer seeing service experience. and are

on strategic launch as next the card of bank. execute set, card. to leading Fair feature the as our credit we access cash-back our including initiatives across evolution credit offering product our soon-to-be-released continue instant In March, the enhanced of through We announced an well the Play

has by markets discipline quarter another also investments yielding robust is that first This results. to in our of enabled expense our In growth and by evidenced sales us of continued addition, our Management Wealth quarter capital support in record are businesses.

transaction Capstone this investment of Just capabilities the an add Partners, our better bank those Capstone footprint of transaction capabilities businesses. positions expertise adds month, will to adds expected is top-tier culturally, late well our capital fit with markets The for sectors. terrific existing opportunities. basis. significant advisory to that and signing a to us serve key a for excited and specialization last range new on full verticals as as we in close quarter. we're The expanded addition announced industry and acquire that Huntington, and we The growth needs Capstone agreement serve the to definitive and firm a complement clients synergistic both is the our increasingly and market strategically of middle national

will about to XX%, by increase Capstone meaningfully we're new capital our markets to our expect welcome We revenues excited colleagues Huntington. and

Diversity XXXX we were services we best Dennis, are Forbes are of Inclusion in National Greenwich X and number the nationally. Officer, recognized few business small proud Diversity, be the Awards banking Officer of a and XXX And share named that Finally, a market Best to middle We America's Excellence proud we to recognized during Chief we Top were ranked banking where Donald employers, as our large numerous also with and XXXX. industry. lastly, and by financial awards Council We quarter. the received honored The one in Band in as for Diversity Equity

comes of I'd set moving Brant earlier Business to us a to customer-focused of a with who joined as Before foundation strategies. well this President on, to like Huntington a Brad with experiences, take that Consumer and moment broad to us welcome Standridge our aligns including Banking. month our

strategic Rhodes, operating As continued to to profitable growth. track years and of for thank shows driving who us, the trajectory supported Steve special our lead of Brant Slide our long sustainable leverage. our continue a profitability X positive Business will record by managing our you investments joins Banking We've division. prior been

and trend We unlocked are power the will this will continue earnings confident by benefit underlying further increasing TCF. from that

We to PPNR Zach, over to of our sequentially are this year. financial remainder and performance. poised the it more detail you expand growth to the outsized to on over provide have expect year

Zach Wasserman

initiatives, common per tangible common We both plan, our first notable Thanks, $X.XX. Steve, interest increased, driven in results. with reflecting as quarter, revenue-producing as highlights items, reported focus well earnings were see basis Adjusted the increasing realization balances. came expansion. trends for by with also quarter. PPP, billion billion. our XX.X% charge-offs balances, million quarter, everyone. at total Return our of increased consumer Consistent notable X.X% the on we income and quality net exceptional, good $XX last ending low net morning, Pre-provision share in points loan loans equity, Credit or momentum seven points. and was Adjusted and of and core expenses items, provides of and on commercial XX.X%. strong $X.X net nonperforming by We was strategic cost by Slide synergies. from were per for grew ROTCE, XX X last reduced continued $X.X for earnings $X.XX. common accelerated revenue average record reduced driven ROTCE by pleased share with basis from of by to self-funding excluding our assets deposits to Total quarter loans

growth continued, with loan billion. balances Accelerated loan Turning quarter-over-quarter, totaling increasing average X.X% X. momentum to slide $XXX.X

increased total $X.X X.X%, prior increased excluding billion the by commercial X.X% from largely PPP, loans. or $X.X balances Excluding loan commercial, average billion loans Within PPP, quarter. or by driven

continue new to broad-based across categories We see demand production. supporting is lending strong that

we a market, from prepayments and $XXX expansion to real the Inventory Finance utilization. estate in in increased all had indirect increases $XX and commercial higher expanded and floor utilization growth. balances finance, of balances both Middle quarter by and and seasonal Consumer, asset a a during auto increased benefiting performance client slowing quarter and banking, by uptick with also Commercial plan respectively. increase This growth dealer balances driven modest Auto supported specialty row. all quarters contributed balances for have million contributed $XXX drove line and are utilization, marine $XXX We RV in modest expected levels. client corporate by increasing higher as auto the originations. by in by quarter In first net and with relationships in the this RV/Marine in relationships balances record million within million, new million, also two to $XXX million.

Additionally, increased and are on-sheet from driving balances. executing home of are sustained disciplined the prior calling by early-stage in both late-stage million. by $XXX our Across loan lower bankers residential enterprise, the prior quarter year. which were higher growth mortgage the both equity pipelines, and offset These strategies,

We strong XXXX our outlook. confidence and demand customers our degree of in high pipelines are realization our the supports seeing of from

XX, nine. increased excluding increased reflects We with or by growth on PPP income, deepening $X.X relationship customers. net and reported by further Ending prior consumer a commercial accretion, billion. solid from and total increased expansion. Turning continued for throughout delivered track from with XXXX. This quarter, the billion interest deposit we On prior focused our basis, by X.X% margin higher are slide interest and Consistent prior X% On $X.X we commercial purchase billion consumer deposit increased deposit and to NIM billion $X.X growth, net spot $X.XXX income within interest gathering prior balances versus net balances $XXX slide quarter. accounting by million. and Core expansion NIM to guidance, balances balances quarter. increased

present capture and managing slide to balance providing dynamically XX, themselves. Turning incrementally expected remain protection sensitive downside benefit while higher the to are sheet opportunities asset of we rates the

We we're peer-leading expand positioned and increase. to have a NIM, as margin rates

increased protection downside modestly by we $X.X a quarter, our the executing swaps. of fixed billion received During net

the As XXX quarter up at ramp X.X%, quarter noted X.X% reduced basis the ended point ancillary slide, year-end. driven impacts as balance our slower net and interest by denominator such beyond impact other higher The sheet overall and an in X.X%. explicit at remaining from was on other the actions by shifts. of income, mix change in asset sensitivity asset base hedging modeling prepayments estimated these projected sensitivity scenario hedging metric the The actions down this

loan portfolio composition. slide the of bottom the our On is

higher expected mix rates see, has Furthermore, each As the indirect are of attractive year. interest portfolio an auto floating year positioned half weighted roughly with portfolio the our throughout fixed XX average for life of approximately re-pricing you we months and that of with rate loans. can well a

due the mortgage was Fee decline impacted quarter. and well typical Moving million up as lower million down quarter. revenues resulting income lower fourth primarily to in in cards to saleable from $XXX slide seasonality a $XX banking, by XX. and activities were to compared as Non-interest million, payments year-over-year originations $XXX last

increase. our and reinitiated sales in Given a the our opportunity, robust loan pipelines driving quarter, million we SBA attractive $XX market SBA

in Overall, record wealth and addition, within sales increase payments, In key our with businesses we for revenues. wealth investment-related traction be to pleased quarter the management markets contributed and advisory. to our fee-generating outlooks and continue an performance capital first growth in

Moving million savings as $XX slide the declined we on prior delivered billion acquisition. million from $X.XX cost to excluding core $XXX expenses expense to by the declined Non-interest XX. from and notable items, quarter

the by expect billion approximately second we expenses be quarter. previously, shared we $X As to core

investing quarter revenue Common our Even also position. X.X% as expenses, at sustainable equity we're XX Slide we're growth down in are was Tier company. initiatives throughout X that the end. driving capital highlights driving

agreement any Our at dividend the of repurchase at Capstone. signing group We quarter X.X%. the not of acquire during our definitive a did shares due announced to top to yield remains peer our

As quality well. see continues very you can perform to on XX, credit slide

strong continued consumer of net net quality. declined and a mentioned, record both seven recovery charge-offs previous Non-performing from were assets position credit benefiting loans the and As from points, quarter. commercial in criticized low basis portfolios

Our down Slide credit ending quarter unchanged. allowance for loans, XX losses which targets, our from X.XX% financial X.XX% covers end. total remain of medium-term prior represented at

mentioned, we're committed Steve by achieving As second fully XXXX. half of to the these

organic growth de minimis these by loan remains encouraged are as the for remains momentum remainder anticipate of priority trends. our robust loan the that To As our funding I growth, year. share as our buybacks and growth we first would we extent continues, be capital expect, this the will

longer-term We around our operating capital the as growth outlook balance possible expected levels for as at had macroeconomic the scenarios in XXXX. comfortable global we plans are we current these or and XXXX

market continued The interest economic Finally, assumed early to in yield updated of expectations as our expansion share well consensus outlook. provided as me Slide the curve rate let as January. guidance turning January to XX, aligned we

guidance of economic and of growth updated the end the as curve assume March. further continues Our to rate

teens. encouraging revised higher low advisory in rate digits, fee and net low of on we We single-digit by are to accretion, down curve accounting result the while guidance interest than previous on the our businesses, in our of single we now and guidance this, trends and double-digit impacted growth. dollar net interest a income guidance excluding is grow are Capstone. to have banking are excluding industry-wide mid lower high the revising In PPP also outlook, a in flat to markets expect As income. basis, our Based core high mortgage of purchase upward to our to fee we wealth income, seeing pressure. the impact capital we payments, This

to during a the of on created we the are approximately of the could quarter. anticipating on this quarterly On to This at estimates Capstone, believe closing of acquisition business we million QX Based basis. million end $XX stand-alone fee Huntington add the due diligence, would guidance. incremental be topic the $XX income

quarter. financial forecast. we is guidance tracking this excluding as rate billion further run acquisition and finalize again, We we Capstone, expenses, this Capstone. excluding of information still our the items, On for impact will are complete provide on our And the $X to notable

Finally, across previously. XX revising our from performance given than our net down are charge-offs points we to approximately basis continued full our exceptional credit portfolios, XX points year less basis

to let a Q&A. for pass Now open we couple for me of Steve before it back comments closing

Steve Steinour

Thank and is capabilities, Huntington believe well a you, compelling leading Zach. a footprint Slide as scale recaps compelling in both we XX as a set XX powerful stands nationally. what as with regional density, of bank top market and opportunity.

We substantial shareholders. are value believe on executing we our focused plan, drive which creation our strategic for will

positioned revenue capabilities. which expanded businesses and growth, by is well deliver new sustainable are markets, We to bolstered new

proactive and disciplined we revenue expense our and management. gain synergies accelerate As to committed remain our traction, also

deliver with a the medium-term we on for the expectations As half second Q&A, a we the percent open in year. targets are as up Tim, in of let's call result, our profile confident robust financial please. return ROTCE, XX-plus for increasingly our

Tim Sedabres

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

Operator

Graseck will Thank proceed you. be session. come of questions from a line time, Our we with first with At this Betsy [Operator questions. Instructions] Please your the Stanley. Morgan question-and-answer conducting

Betsy Graseck

morning. Good Hi.

Steve Steinour

morning. Good

Zach Wasserman

morning. Good

Betsy Graseck

forward is sense a if how changes, I from NII bit that from to the unpack the cash little those to wanted understand growth upgraded us give bit, guide the Thanks. takes from the just a curve loan see more coming of thoroughly? puts redeployment, just to could and you much a as little

Zach Wasserman

approximately XXXX. I'll funds a time is give XXX basis the the points rates. expected driver come Sure. take hikes with what of by Betsy, baked at of five had Zach. thanks The going curve Fed that. points basis for XX you rate main of into we're XX forecast forward rate we was the the budget, in of is question. from through This our basis September sense, XXXX, seeing our it and up to points end by To

the basis and basis points curve points this of million the it's XX XXX year. XXX up by obviously, Now changed so end significantly full $XXX to points XXX or better by basis with by a yield December, March better

of majority what's So it. that's the driving

that, to I us sensitivity, as to our drive asset drag from say peer the we cash from Fed poised we point. that both in reduced and Given well we're to from benefit spread that would expect at leading QX – that this from saw help will that

Betsy Graseck

the And Okay. growth getting anticipating you're wondering, is increase your then balance on have think funding there left you the anything the as redeployment in I'm about to here? how sheet, just loan you're planning from curve? flexibility the over And that into I

Zach Wasserman

but as commercial than well. continue as, and consumer, both this I well solid cash utilizing to that said, as deposit of as source at on continued this will some we've faster at grow deposits continued nice trends excess liquidity got the point. in think gathering, I funding point, we're be to main the producers We be growing continue expecting see to

Betsy Graseck

All you. right. Thank

Zach Wasserman

You’re welcome.

Operator

you. Thank

come Our Pancari line with Please proceed the next questions John from with Evercore. your of question.

John Pancari

morning. Good

Steve Steinour

Good morning.

John Pancari

just you of utilization. improvement momentum growth? the terms mentioned did to strengthening? see strengthening start the cited you in to CapEx-related this what areas utilization in line Are that you're seeing exactly much you talk Could I you growth you In drive and demand beginning line are know loan improved? seeing How – about

Zach Wasserman

me. well. loan to for room for to is a take high just taking drive consumer as flowing the it bookings single-digit the what step This we're momentum take it we've model from that mid-market. the the the could our big than two strength like with we'll and seeing we're is in led that here be really growing the that in in within commercial, going pipeline, what but sources continued – into consumer, And continue my we're Generally, I'll of similar seeing and we're pleased as on is one faster Sure. to of in what Zach. confidence, the that realization back. the through us The production drive quarters. into year pretty is back gives see to continuing strength last growth QX. by And half That seen seeing commercial with of loan colleague

customers. that middle encouraging seasonal, of to on more steady percentage Saw see increase X% RV/Marine in dealer consumer most the steady that the also Our I to points we're on delivering driven allows improving again, modest, growth there. drivers increased corporate auto and And market just I plan beginning hold by that's characterize specialty on finance in general couple what point perspective, inventory. financial. floor well. really and encouraging also equipment, then very inventory plan, areas, in estate percentage is saw and now utilization floor to of around sign chain. will as residential inventory gradually well to Commercial auto dealers the mix seeing is mortgage real sign increase as would inventory the which auto by business contributing continued function our them side, a a a basis what for sheet And think the the a the lines, of although And supply those also auto purchase well. we dealer I was flow in healthy as a in of From the but as think several be quarter really

healthy pretty going overall, driven said, and production a I in by forward, is So much as model the mix commercial. very

Steve Steinour

would I number add. in these lending Steve. a is We closing of TCF And invested with John, units. this since

Denver Cities specialty on, lot a some of been that's the brought groups. capacity So particularly in of and we and have Twin

we're as scale just able -- So the to well. we're businesses

And from so picking beyond. up and this we'll these be investments throughout volume year

Rich Pohle

The spending. And part do John, it's CapEx of to Rich. question had with last your

seeing capital increase the labor spending, market. in just We absolutely an given are tightness of the

there's the year. to So through intense an the continue course we'll to of see that move and automation,

John Pancari

Got it.

Okay. Great. Thanks.

in cost then remarks, the sorry trajectory early the and hikes your bit your expectation, trend can prepared the a And basis I your deposit missed first and on XXX if this for deposit talk of how of beta data Thanks. little you points thereafter? could about

Zach Wasserman

totality cycle, cycle with there take rate there are signal we this the John, hike forecast beta, of Yes. to but rates the the might industry in rate going expectation I'll the would liquidity Zach, blend across excess as similar some Generally, lower. to forces little we're is and Clearly, that they competing dynamics see last lower tend the this a to the is one. saw beta that starting across be one. that could level higher of our

think been I of As noted over by has time. participants number a industry

carefully and our we're had approaches, strategy detailed with the really And commercial secondly, we client-by-client very we the poised and the I the early to bit and is that us assumption robust, would relatively what's we've to segmented be think so that accounts. quite for rate say accounts I can operating against industry, really higher a long incredibly primary But One moves around and environment business of for the several we're disciplined. market first this general to benefit watching react this relationships cycle, is things. beta product-by-product management level. two share be operating is how through very rate here pretty important it the increase a as the and reaches interest within core to the going impacts will to bank drive lower is think I manage poised given

vigilant the positioned it, and So as about through just go really with good quarters. we staying manage very next feel forward few we're to we how

John Pancari

Okay.

fact, in your through-cycle beta ALCO In that is your assuming you're current what assumption?

Zach Wasserman

model what Yes. we That's It's which cycle, our last in about the XX%. saw baked into was internally.

John Pancari

Got Thanks Zach. right. it. All

Zach Wasserman

Welcome.

Operator

you. Thank

from Sandler. of questions. Siefers Please with proceed questions next your Our Piper line come Scott with the

Scott Siefers

taking Thanks Good for guys. question. morning, the

hover shortly side. that these First expenses question we billion remainder quarter of outlook? of Once or plan the prior around the coming the here, up hold overwhelming to pressures is cost $X about ask that was level get sort year, in to the the I wanted just on are for to per of any down inflationary

Zach Wasserman

term, of half delivered with operating the we're year expense planning And initiatives as eight and leverage, of that got those guided the we think, into driving revenue be the confident for costs by and Yes. very half -- expenses again in of that We're as My of investments back the flat rigorous exceptionally deliver $X our you sight $X outperform about us certainly to about poised we of year. do there's year, proud go expense for medium-term talked will seeing we line growth then back Generally, the we've feel towards that of into half I drive see mentioned revenue, are billion expenses strong back the I feel great by we this able commitment we've posturing roughly pressures. nine But which throughout driving billion driven about. mindset we'll Longer run rate the and we're where just based current to to we mean, our efficiency that discipline And, to. years by on the ago. leave in the that it's putting the just And base this long-range that's talked And some generally of our by -- will to a outlook. feel we've we've the in inflationary financial core expectation self-funding is targets that a is out really on for a into way bit approximately company as our really and speaking, really get flat on XXXX. QX. XXXX, that. last minute

Steve Steinour

we're we of aware, acquisition also, announced Scott, might -- Capstone. the You be

incorporated closes, rate to be will as so, that And have well. as that run in

Scott Siefers

of just will forward, balance on your do a -- sort changes function synthetically from Yes. rate Perfect. just Thank sense will you look anticipate you. or be a of of we it in sensitivity out? of your sheet changes as And function the anymore, sensitivity Zach, complexion kind the in kind then, of be altering here

Zach Wasserman

that really Thanks, one. level have now. right like asset We sensitivity Scott, for the of we Yes.

As to we've the are But take it. year you to of series really likely now, of protect a we're point we that along that. downside get all about know, to we last way, talked when opportunities in conservative from that we came took to some and lock actions the benefiting up would of benefit, some

that in net to near change, coming the general at dynamic, book months, say downside We protection adding that's Meanwhile, what would over the it you here, And as watch very we pretty the operating around of sensitivity QX saw could much environment. in point. asset us of in do prepared so on stay the with fixed term. From received X.X%. that asset would we noted but hedge the impact the net course billion it's to as swaps, the sensitive $X.X expect slowly remarks, I here posture us modest this

Scott Siefers

Good. All Perfect. very right. Thank guys, much. you,

Zach Wasserman

Scott. Thanks,

Operator

Thank you.

line Ken the from Jefferies. with with come questions next questions. of Usdin your Our Please proceed

Ken Usdin

Hey, thanks. Zach, on point. cost one the follow-up Hey,

Capstone? billion plus an outlook, And from side approximate year, minus revenue you end add relative if expect what cost do to Capstone we the you're the towards that $X or in to that? calibration So of would on then have you'd the the zone-ish

Zach Wasserman

that sure for I to make want we clarify Thanks that. Yes. question.

modeling and that close. rate firms the pretty have. we'll ratio the at advisory near-term back to all. to we'll get now like not what of payments, historical some M&A then run costs. important merger-related And significant there through Based closer little guidance we lastly, would for very a are on compensation of, the is to retention I'm guidance the top really right of are have to that of company's the other fund business with that and that Capstone of diving a is which quarters, we're expenses incremental and come be deal this. On excluding aware So boutique similar the On as into comp we further due-diligence Capstone, bit kind expecting in efficiency really modeling core clear.

it give clear as closer So more to come, on acquisition. get the we'll guidance to we

Ken Usdin

question understand like deposit quarter? it. And other In changes continue you outlook, incremental are of is to impact also what us this you the sell SBA And on products? just your got Okay, and Fair got Thanks either you you fees. then back help loans, one to Zach. or can assuming Play into that total

Zach Wasserman

points. problems. no Those both are Yes, important

line it relates Fair we evolution, the relative back guide slightly provided we from around $XX RBC impact has January Conference, our Play nothing the guidance the 'XX the line. million the That of to which the to the March than run earlier better of provided changed is on rate in in on continues was to fee impact QX, As be fee in in net expectation the

and part to from better question that, sorry, expect to claw And was? – As we've back result we of benefit impact. a the overtime noted after months acquisition, account of your as immediate those of kind higher times, changes, then number of over second course that of deepening retention, that's the the a XX more XX to but do the

Ken Usdin

you The well? as the and SBA are into that outlook loans baking

Zach Wasserman

Yes.

get selling to driving the is guaranteed loan practice really really, and performing it really bears It continue to our SBA historical well, right of of should our portion that expecting noting back production. exceptionally -- are we So, to the strongly doing team production. now

that from high is given level bit than of have in – really a the sustainment would just quarter QX, to of that's premium we expected gains, had higher the gains great. which sale the So, the by marketplace. we of in think support we In going

fact, will that And So modulate it like that kind in run done. But of rate we modestly might continue we'll forward. to, continue. from historically the we that that production expectation as go generally, level have is sell

Steve Steinour

great in they're invested we've SBA SBA capabilities and year, particular, last well Ken, off course start. And as adding a the the Colorado in Minnesota, to over and of in unit

So, should a terms in production. have record of we year

Ken Usdin

you. Thank

Operator

you. Thank

next of line question. questions proceed your Our come from the with Please RBC. Jon Arfstrom with

Jon Arfstrom

Hey good morning.

Steve Steinour

Good morning, Jon.

Jon Arfstrom

the for health some of your And market. out assessment There's now? now? Can just us what you. you in right give us mixed right you're thinking question your of consumer give assessment a Rich, just messages

Rich Pohle

particularly Yes. standpoint, is No, in where shape, From our play. consumer to. very the happy super prime good the segments we in

it's If delinquency numbers. the following From you terms there. we're look in all standpoint, the seasonal, normal our at patterns of that

particularly course the good metrics over So, bit our of and disciplined very play. feel remained do we we but the expect where a FICOs. with credit in the about to start LTVs norm, XXXX, will our to the spots consumer it, we've revert We

a steady with comfortable that state over about feel very we're good it. It's been book. So, We cycles. performer many

Steve Steinour

a residential sort the of impact. But more is price for the the having there housing, of whether we than when risk the phenomenon and auto been shape. in an good Jon, gas at give talk aggregate decade including portfolio We consistency assets that, hold inflation we've to in spectrum, the very be in again, about of pump lower low of or on aggregate will to And performance prime moderate is us a generally, super it's low. the where income and end the

Jon Arfstrom

if then, a touch Yeah, And that growing themes, area. bit enough. more a something there? called few you on okay. little a I you talk can but themes the about auto, seeing in guys finance And obviously, it's in wondering inventory you're as Fair particularly and other TCF the was know But little business a bit watch all that what we the sectors. out

Steve Steinour

doing sort dealers ago. even many a TCF business has that in about we're this group been existence And it that with formed now nationally. is of Well, years of XX,XXX

outstanding So experienced It's high relationship. quality, very we've got there's dealer the steady and team, very with team. and great just an distribution

and in So, with there of depending in the of on able dealer. be part we're agreements dynamic their sales different OEM OEMs, to process the support to, are

It's well. group will Certainly, performs this support and low with each dealers other. from the gone time support OEMs again, loss of rates through very very the generally cycles dealers that So to will happens time. transitions

including it So, feeling up for to the we talk the about schedule big right of the dealers. what's many the they're now for how -- issue disruptions, in supply. chain is as supply areas, group most And just ramping

will time be that so inventories over grow naturally group low. this a So because will just are

and it's also a that based far the with the this been customer years next that group thus year would year. it's every So we the occurred very adding provides And typically that OEMs the discussions in year, well to this great to expect over continue service we few expect on and group. do

hidden on So very the probably to an it some side, allow great in TCF to will that conference. extent group, upcoming from one bullish us do other finance things of talk team, about we'll the a and and on consumer jewels the

Jon Arfstrom

Okay. Thank you.

Operator

you. Thank

of next O'Connor come questions. proceed Bank. from Matt Our your the Deutsche line Please with with questions

Matt O'Connor

Good morning.

we've and last car as car But really LTVs little inflated further and tighten But of are seen yourself trend and think to prices same think LTV I good bit the and looking even a just guess about slide insulate I some disclosure used I'm I in of just to thoughts a the there? quarter there and prices down XX, curious, Marine, these being just at. new the we asked from about like RV question corrections auto. on I'm metrics

Rich Pohle

one. new actually the We used good of of down that to prices the take -- Matt, a mix at car it's from actually it's picking look is thing. if I'll And a XXXX. prices think coming used, little bit you up the the quarter Rich. third lower

the part that coming are scorecard more We've the in From overall standpoint, custom us first and a as So having seeing effective a keeping FICO super we that's high an in new to our prime the lender mix. very been relying on we cars take use product are in from place. space. we of in back got

concerned really X.XX to you We've in to mid-XXs. as around we mentioned, range. X.XX that able goes seen in keep that been the the the movement LTVs, And FICO So that industry. about the aren't we've price

feel that. we about good So

to not keep side, that is too, that loan mind, retail in value RV costs, wholesale on based the the On cost.

So going show to higher, that's FICO. in XXX-plus but bit a that there, little we're

standpoint, of both and don't need our had from years last any its books. we tighten. RV/Marine through So loss great experience couple really then of those our We've from outperformed us The cycle went standpoint. with in to book expectations real in a the see first

one of about So those at all not we're concerned either portfolios.

Steve Steinour

in in XX% we than half we to the had century. for portfolios and Matt, test were unemployment the been business, auto stress rates. we've And XX% XXXX more able where a And

back really and this got there's decade shows a we've that a dialed this think over in quarterly discipline reporting with goes we So that this consistency.

approach very in So fault loss been the to may rates, the based while has be low some overall underwriting. frequency there on movement

Matt O'Connor

change that the in Thank is similar in book client I'm And against home helpful. just or and But you're guess, of originations. seen question something base a then more curious, driving, that these seeing mortgage equity the really that something helpful that That’s couple a we've in is using a on I slide, -- there, again, your the more next data is loans? this material your over And, you. the driving equity LTV, years.

Rich Pohle

No.

driving of a than combination would but say done tightening. more I it's think customers any of really it I the both, we've it's

I to and housing the if disciplined think shows And making sure in prices. there's keep conscious our seeing slide on we've equity going what you're been sufficient certainly, into a that values. been that think of there there's with we've safe originations loan the I drop us

Matt O'Connor

Thank you.

Steve Steinour

lending, shared the shape secured believe cycles. in Matt, we great us like and that consumer as We put through will we've in the comparatively a past,

Operator

you. Thank

Our questions Please next proceed Najarian from your the line UBS. question. Erika of with with come

Erika Najarian

Zach. from to how I'm And about or rate more single-digit here. if total point thinking we negative mix shift you're Hi, non-interest-bearing that in absolute growth, just to we line high that to of wanted what about earning wondering earlier start the growth? deposits? relative growth from I growth away should could you're know asset with thinking good quantify follow-up perhaps looking also should modeling earning expecting. but at think an loan positive deposit growth Betsy's I you about morning. forward asset But questioning, deposit

Zachary Wasserman

Yeah. both. Good questions,

as color. Let some me just see incremental

earning parts to As to talked question, side of will we of there sort really the it two as in your about. be that relates the single-digits high growth loan asset One, it.

XX%. on expectation we're the now, My at right securities about standing -- book. Secondly,

assets I of securities. on think precisely XX.X%

of I just assets future the general range XX% for of foreseeable stay XX% balance just and and management. sheet here within liquidity think securities to the will we as we yield manage

two factors the threshold hard From and sort where growth assets will loan terms level it's to to So perspective, similar start deposit a the earning in think, to to overly of unstick things be of be likewise those I drive, precise guidance. move. pretty

so said, Our later, period. and general relatively beta trending the see throughout assumption lower is I we'll initially going to be, higher that

sort down And earning factor will generally -- so well side loan to where bit add into draw comment that that just I the funding the is remember my we maybe that's one the cash have asset of the is growth dynamic. thing continuing The a that our redeploy one as the will just to we're around would cash growth.

trend average And operating billion will on we'd down but billion towards $X course more of growth, see, which typical that in so higher like we now really that got to pull we've will year earning the benefit $X that the NIM the back assets. will earning as assets down range throughout around

Erika Najarian

cycle TCF got as fund for clearly the revenue terms Is about thinking XXXX? Got perhaps And investment up reasonable are savings, growth half my a we growth taking good extracting seems delivering Steve, we a the Zach of expense your but cost the I'm cost on for and that that franchise second about as savings here, it. question and the to their banks into saying forward sort about X% to into look Steve. from from to is investing like future outlook, performing of account the follow-up company second some sort expense of X% core the in have are set you've that been inflation. done half is you settled job in in of balancing, that cost something think wondering savings. something good think

Steve Steinour

of for earlier. Well, the we've guided second XXXX half

of and of of billion We we with plan we a and the early included investments this consolidated and that other deal of view include did to would being generally branches that XX make. Zach's last comments heard of expense round expectations with reductions that and You set that Erika, inflation the when inflation, a flattish year. around to expense, February started in up August the XX $X

laid summer, if we're not So last with with we're and on out point. plan track, that track ahead, we the TCF this at on

adding with that year, this and well. confidence lot So we've as think of then be Capstone. we'll in revenue We synergies a coming got

So we're we positioned very going stage for year optimistic confident certainly like and and about the forward. at how optimistic this

on will We've being of of eight positive it's that be to operating expenses committed years in past, count equation. you our relative out part to leverage. dynamic the nine We and revenues. And operating with XXXX think I can

Erika Najarian

so Great. Thank Steve. much you

Steve Steinour

you. Thank

Zach Wasserman

Erika. Thanks

Operator

you. Thank

questions. line questions with of the your come proceed Our Poonawala from Bank America. next Please of with Ebrahim

Ebrahim Poonawala

Hey, good Steve morning. Zach. had question, I one just and

you the medium the year. target mentioned hit plus term you ROTCE of think I XX% half back

downside is terms looking medium even us Fed the where of backdrop? point Just to cutting some of in think here, conducive interest ROTCE normalization the risk maybe less about you term, rates, of profile as in back talk we a level of ROTCE in a just think from sustainability the to goes to revenue defensible that What's credit. into getting in the the terms the

Zach Wasserman

This if level. to as see Zach great tack about feel to then Generally, at the he is well. I'll and and take wants the first XX% on Steve shot that

the level future than the So, curve. was which considerably forecasting if lower curve, foreseeable rate I that even current mentioned for before, rate budgeted and the

about as feel good we that over said. term, we the that think I So, medium level

TCF the that and as some guidance well. that is of the my XXXX half level able put internally we're, second December really frankly, announced One that provide expectation we delivering that the point. above being first at we'll and these updated guidance excited to term in of see getting we of targets then at year, acquisition about things out is medium And to the when reset or that

Steve Steinour

on talked lot on other very the upside are a not about some to the but add, growing of and see cylinders. good hitting the had first still just of we momentum, We've a on we've synergies quarter. since investments fourth we We quarter TCF So, made. all

side, you to know, on different as positioned, are be and we we're products, businesses there's forward continue And And a year. as of part in well in balanced, way the and see over lot will Like we we've that. that throughout and as hope able for added this expect the the scenarios. year, dynamic TCF us to with you'll continue a of develop variety position we'll business and years next maybe and plan continue revenue be new So, consistency able to to investments consumer That's roughly normalized scenarios. a cushion going have think that provide go this provision I some the as had and the that's business. a few scale of to made capabilities to somewhat to

Zach Wasserman

to that, at The just tack this is end our not one to which sheet just allocation, the balance capital I is thing and on a would only key is here contributor to robust provided be the cost and but of in Notwithstanding we our returns, will quarter drive businesses. growth this our guidance fee that fees dialed also more ever growing. just where

businesses percentage and capital at question, contribute capital revenues which I scenarios. year, ones it's driven fee of by per product sort toward think payments point in allocation by driving driven factors are rate markets fair things the that to So, that the long-term, wealth our extraordinary driving year. by the And under returns, rate course our for advisory, just those your of mortgage this was I nature that the and revenues temporal various by I spread of slower ROE think disciplined as of sustaining speaking, a and the around to interest percentage grow fee-intensive QX even some play than though, and evolution, environment of expect broadly a

Ebrahim Poonawala

How at? just or terms or about mentioned be management Capstone-like that we in should do this That's quick the you inorganic it anything a allocation, on as think that follow-up transactions clear. looking wealth the you're that. fee side, year? the when you fintech buybacks to capital And own no side expect and on growth, anything of we But

Steve Steinour

guidance be provided to overall you. available fee them there would wouldn't would us. Zach characterize they Well, smaller if side I are the were change to on the that businesses But interesting that generally and

with we continue to as or years out we ago. As our Finance, we did build think, four Technology from capabilities, time-to-time five Huntington I -- look

and greater service and that. we'd be things sense couple growth is to if of we've at extent fee-generating driving next capabilities opportunities an even And this may investments build make customer opportunities already than and with we potential so made. the some have -- the very focused and But look our find we we're that over the to to in what TCF complement portrayed. years combination there And would hand then additive our be on the generally the our customer Zach

Ebrahim Poonawala

Got it. Thanks for taking my questions.

Steve Steinour

one. you, next Thank

Operator

you. Thank

of JPMorgan. Our your next Steven proceed with the from line come Please Alexopoulos questions with questions.

Steven Alexopoulos

everyone. Hi. Good morning

Zach Wasserman

Good morning.

Steve Steinour

Good morning, Steven.

Steven Alexopoulos

the I response wanted to your deposit understand didn't XXXX? growth fully to on deposits. Erika's question. NII What's first follow-up assumption guide underlying I that's the for

Zach Wasserman

but do change and the of slower, let's consumer trends it, of of call faster. in a that precisely, activity growing growing. little around both Consumer signs imminent but I any side, deposits. haven't I the And any mid-single-digit level continued, I expect savings growing provided deposit commercial sort guidance growth overall not we think on are are seeing

sticky surge are of been the at has whole the think side. concept somewhat consumer point, I trends on fairly stable and balances fairly they're but the this debunked

middle driving the and as in sort of benefiting client market specialty operating that's particularly management and through side, our accounts we're treasury areas. commercial On acquisition our just from around new penetrating focus well that our growth as really

that it growth continued generally So, in deposits seeing is to going positive slow. are single-digit be

Steven Alexopoulos

capabilities You're Thanks. do banking for focus in plan build capability? existing clients, verticals make Huntington, the a better new to you you you this serve a Okay. helpful. going you're then, deal, this these position really to of intended on this That's And Steve, your around more is is Capstone And shop, new right, invest to right? to picking one-stop meaningfully or up?

Steve Steinour

our in own market eventually them a is wealth help significant we even right. top-ranked were of made bank available the to investment that and But our services Capstone if cross-sell a advisory have expand client and would us firm middle menu its feed base businesses.

synergistic give So us important help will the And does they component additional we're investment core this and verticals core with capabilities quite delivery. be I the will the in us out bank But banking of we'll think this. continue have so or a really are their that. about that number to was basis, of that it's build grow to overall. select suspect as doing I what well, that we additive. on at think we an a expertise commercial optimistic to access felt It national

been ways the share and for fee attractive. insight made year them terms a that's over its opportunity the referrals both gotten arrangement have working capabilities. what into certain very really with have this for We a and of of in company culture And

Steven Alexopoulos

banking the energy, building in the et out like And of fintech that do part you cetera? areas plan Is on plan? services,

Steve Steinour

build-out the We plans on don't yet. have

they away a We'll have capabilities, have we maybe on of they capabilities. have have from And then assess but -- we'll over some where if existing take will We couple there's closing a augmentation they up at -- those. of now to areas. where what time, and look that new scale specialty months advantage to even we're

Steven Alexopoulos

Okay, great. for my taking questions. Thanks

Steve Steinour

Thank you.

Operator

you. Thank

questions with come the of proceed from next Our your Brian Autonomous. line Please Foran questions. with

Brian Foran

last I especially deposit guess Hi. last growth, or really growth. low-cost one you I deposit time rate maybe follow-up on and I'll deposits, cycle, preface on the it. rising definitely outperformed remember industry

probably with commercial of capacity this I But, So maybe I say, led done kind is your, commercial, like, declining by and history before. like is flattish on year a guess, you've growth mid-single-digit the bit. center of it deposit growth your side

is of growth environment little What flesh much really commercial high -- down that bit? You are can an get maybe in you where listed reasons, your peers a do kind couple of but you a out single-digit how differentiation? just

Zach Wasserman

not our both the to knowing the about hard business manifestation returns of capturing on to then as because those seem commercial TCF I gaining the late, commercial winning, it's be their what's particularly middle exclusive and on surprising to we've business they've of opportunity in we've been deposits got. can in All the TCF I investments build to tell and investing in you in It's think peers we that share making, of and the is, is And visibility the the us, say really been sort comparison of the much is, to side. market of flow-through market. not

and area within just Huntington Denver out geographies building Cities I for generally in new the As space teams would we available middle the seizing say. and the Colorado opportunity and in we're TCF the said, also that then Twin business and that's market in terrific banking,

it's to it's other than encouraging. comparison, make and again, hard we So those trends say, then seeing are manifest a

is tip is treasury not before, use management of are really only capabilities this often strategy. the of making our really These of sort those not the said operating that I to As We spear accounts. focus hot penetration and the in sure -- accounts as terms cement to drive of those but as core money. services, those the treasury ultimately

confident about feel We that seeing. we're trends the that's So forecast.

Steve Steinour

we've or more for or have customer not. decade TCF had to sell the OCR than didn't Brian, a did just business And They lines deepening cross approaches now. relationship optimal the capabilities.

insight coming lot put place broad place and the that fourth of the So That's overall base customers data quarter. we teams the edge access have in of that traction that a we and in for given us a commercial to that we on the there's OCR tool in that put strategy.

good execution the teams. by So,

We we bring with remember on also well. off portal change, as quarter using shared over if the view to we'll we of that with that of I sheet some deposits move correctly, were of call, our and do the partners, balance them the quarter rate -- third investment back an as some one that cycle fourth

addition in the question. shared. Thank So you factors Zach what those for contributing the of to may some be

Brian Foran

all ratio? rates, that But values one crux getting specific. the just the other. long If it Is tangible Huntington one about been mean, a of on industry of capital, is a there maybe ratio It I the ratio the TCE line solely floor? at is Should as than matter AOCI peers concept. item, it's is funky for But not about you question? TCE an has any guess, lower driven I CETX all, we I view of it and care you fair ratio kind level Is question common of a much the I any time. a could and this squeeze certainly cycle. guess in equity in lot at by as it's

Steve Steinour

about, of path to It's today. Brian, nature. hedging done up appear was it the the high one the including but that, ratio driver. that on to in CETX. of your well. first does probably obviously we're right? cared and That's other surprising It certain but the And not Zach has HCM fairly we clearly -- at it as why we industry described to does So decade only be XXXX, question have We've migrated that And is at we'll XXXX that come is not percentage a the portfolio. focused this a investment conversations. regulatory continue a actions, to look me

So and investment it community regulatory on moved would seem CETX. that to both the the community

Brian Foran

Thank you. That's great.

Steve Steinour

you. Thank

Operator

you. Thank

final question your Securities. today Winter Our will for from Peter come with question. Please Wedbush with proceed

Peter Winter

just I a question Thanks. had auto. on quick indirect follow-up

of you peers loan bit auto, indirect for pulling I'm some outlook just because could about thoughts are are? a If talk wondering what little your of pressures. pricing the the back the

Steve Steinour

months and as average, is paper a that XX average on we've shared It and asset weighted life. cycles. Zach duration like really We been earlier, out of with class, it in short

rising with and in spread looks rates, great. even it So the a rates, it. We're tighter gets little declining

that's part on a dealers. of to and We stay will basis, value the consistent the it with

of shown rising for consequence it's achieving that, alternatives. still we believe have in but a many It so than the premium a in And the spreads market. lot. the short-lived the it's bit narrow asset consistency of a and a rate environment, pricing better we the we're a a -- We as relative and asset in the still of terms like past in will

from As we're performance. the Rich, in you confident heard

good auto a dealers, that in our have cross-sell cross-sell technically this relationship is, our ROA we perspective, dealers asset our company. from And deepest the total of So X-plus historically. the asset

Peter Winter

Got it. Steve. Thanks,

Steve Steinour

Peter. Thanks,

Operator

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

Steve Steinour

thank very So us in for their for to proud of I quarter. a results you and our very commitment them want colleagues, today. joining much great thank to We're driving

especially customers your in lot day. what our a over Huntington. have we shareholders XXXX our of heard. our you support can for a Have of deliver teams I interest We great and as appreciate confidence much course and in very and the

Operator

today's conference. concludes This

at You disconnect the participation. rest Thank lines Enjoy may time. your you day. your your for of this

Huntington Bancshares (HBAN) 21 Apr 222022 Q1 Earnings call transcript