HBAN - Earnings call transcript Q2 2024 | Huntington Bancshares Incorporated

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Operator

Greetings, and welcome to the Huntington Bancshares Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

At this time, I'll now turn the conference over to your host, Tim Sedabres, Director of Investor Relations. Please go ahead, sir.

Timothy Sedabres

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

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

and Our are Earnings forward-looking join will us turn Chairman, the Q&A. Steve information President Zach Steve. our CEO; and non-GAAP Officer, presenters Chief Chief Financial on over it website. With disclaimer Relations Credit which available today documents, statements include of Wasserman, to section now Officer. that, Steinour, the and Brendan are Lawlor, for me let Investor our

Stephen Steinour

Good are purpose every call better, and Zach colleagues results, Tim. for which help our everyone, pleased supported you who detail thrive communities live second Thank joining today. we These later. people's by quarter Thanks, will the make lives businesses our serve. the results and to morning, day welcome. We're announce we as strengthen our

Slide share with Now on to we today. X. messages key to you want X are There

strategies are growth executing we intensely our leveraging our focused of organic on position First, strength. and

businesses are robust in position to we in and new capital a Our growth, existing and geographies base us drive businesses. to liquidity put in and addition investing

by Second, expansion. supported revenue sequentially accelerating interest to future loan from deposit we it and to This income, grow power is expanded growth net continue the trough. to and expect we outlook first growth quarter sustained

sustained many disciplined direct the risk our performance for moderate Third, the years approach wealth net to markets, result expected payments to we as and strong of This are stable Fourth, year. our we tracking over with capital with drove areas: revenues focus are X fee is higher which in appetite. credit aggregate low major from and credit quarter a management. and support our achieving charge-offs,

strengthened X to us deliver loan actions quarter from $X Slide growth recap billion from average ago. basis loan past by of X XXXX Tier growing as into We delivered quarter equity the was XX.X% XXX%, equity to a the year. $X will Finally, of and beyond. I move these growth common over we points. common of balances basis of Average remains billion with performance. also charge-offs result Capital on level. year of Tier was X.X%, expanded accelerated and further uninsured the point stable X.X% top of believe with first X.X%. coverage will profitability adjusted deposit reported quality Credit improved or deposits X AOCI. Liquidity with net growing in to XX the by a and peer-leading here tier inclusive balances our increased, net from Annualized X

of the year-over-year. and by We seized this quarter, deposit-focused add Texas the specialty and in we've the investments teams to growth respectively, built primary new the we business We're bank title in past and made are sustaining X%, our momentum prior capabilities pleased and and add homeowners X% verticals. increasing commercial escrow new These consumer opportunity the association, to Carolinas, new areas. X upon with mortgage relationships, bankers. in Again, servicing talented

As month, accelerate our further revenues business and last to bringing acquiring within payments our are we in-house shared merchant organization capabilities. we

approximately and mentioned, Liquidity year increase, to liquidity ability a our a from adjusted ago. basis continues positioning robust be with to by robust, deposit supported I gathering. of disciplined sustain XX growth Capital capital continues As up posture. enables to points sustained our CETX

this stress in We top deliver quartile group. to CCAR exercise, were best second Huntington's the year's model test with peer losses again pleased credit results in once

our of hold markets, continuing the up. in came Across the Our X.X%. level at to stress broader capital buffer was see reduced we and minimum economy

somewhat broader you muted. Zach, the Our on growth demand remains to performance. opportunities, more provide provide environment customer geographies over initiatives, teams as to even and our loan new detail for financial

Zachary Wasserman

X.X% earnings tangible Slide or share on billion did QX and quarter by to everyone. good of XX.X% X came loan ROTCE, included the in year-over-year fund Adjusted grow, our by reported quarter. continued Return Assessment. We deposit results. at Steve, last second have item million insurance Special morning, on on common updated of increasing highlights common X.X% FDIC not for to a Average balances deposits ROTCE was an basis. increased $X.XX. billion This related versus Average $X per impact for notable items, $X year. provides equity, $X the XX.X%. or a notable Thanks, or The quarter EPS.

of for has the X by ended increased quarter X.XX%. Credit with increased nearly earnings, per and charge-offs net quality XX remains X.X%, by points. Allowance book year-over-year. decreased value ended points from at quarter. and the CETX at Adjusted basis roughly share XX basis points last basis by tangible Supported strong, credit losses X% quarter

is growth Slide Consistent to our Turning and accelerating prior plan X. guidance, quarter-over-quarter. loan with

was year-over-year in year in billion growth than X.X% rate run of current track in dollar plan. likewise growth annualized, our sequential quarter. QX. from the loan more At of to basis are sequential on $X.X the on QX of growth the QX into a loans acceleration into for growth, Our This full first X.X% we double drove X.X%

to year-over-year by by categories. Loan Total loan was commercial over We growth loan course loans future million. the both XXXX. $XXX supported accelerate consumer the and expect quarter in pace commercial the of of growth increased

billion the Excluding commercial growth for commercial totaled quarter. $X.X real estate,

today. of have declined of concentration loans, from percent $X.X past points by CRE the year, the Over declining to billion, percentage X.X with total CRE as balances XX.X% X.X%

million loan balances lower, Services. billion and from specialty Drivers of we X% the increased year. by $XXX $X lending prior million. $XXX $XXX floorplan as the balances in commercial health by and million. Texas, have new increased finance, Carolinas, business loan and geographies included Auto This Regional verticals. Financial asset-based second fund Native quarter American care by growth Even included CRE all from or increased over other managed have banking

Within increased increased by and RV mortgage the from benefiting balances as well auto million, Residential Consumer, $XX million. by average million. million by by $XXX $XXX In total marine grew $XXX consumer loans, increased balances slower X.X% speeds. as average prepay balances or production for quarter.

Slide to X. Turning

decelerating As which deposits billion XX%. noted, deposits the $X.X or deposit in solid Total saw second beta was the increased of was of in asset rate increased. of quarter. earning we a Cost deposit costs the continuation of first quarter, costs another by matched X deposit increase the we X.X% deposit even yields. in the half change as growth. Average quarter points increased drove the cumulative second by basis This funding into in trends growth quarter, in

higher June only further slightly notable deposit costs than with May. was there quarter, the Within deceleration,

selectively actively this action supported rates which other growth delivered. are beta deposit implementing year. down allowing the is our we is have We across terms further portfolio change us cuts robust advance to plan, by position later of in rate and reduce This potential the

Turning to X. Slide

rate growth of start of differentiated the the since deposit is cumulative the versus peers. Our of cycle preponderance X.X%

We have outperformed by time. growth double-digit this percentage deposit points over on

been fund lending. over As deposits loan-to-deposit a manage same with of time, the will at year, continued result, growth we've and acceleration loan to support which lower the able the past ratio

deceleration from our mix closely balances mix the decreased Turning XX. noninterest-bearing continued of with to is X.X% $XXX shift, represents Average forecast. a tracking or million prior by shift consistent to quarter. expectations. This Noninterest-bearing our Slide

depositors. On XX. of quarter-over-quarter. deposit was This the Slide lower modest decelerating consumer from trend commercial balances Within modestly offset average by were to noninterest-bearing base, higher noninterest-bearing a deposits

For million the to income X.X% quarter, or $X.XXX increased interest net by $XX billion.

versus Net saw fourth decrease to to prior from second growth quarter. Reconciling into flat of balances, quarters. higher a will revenues net pleased was the the free the we are X.XX% and the levels quarter. points. and of in change continue This with quarter, trough have funds basis We X this third QX, last was for NIM believe spread cash interest delivered the off from inflection in due margin

loan points by benefit rate to loan from prior with expanding basis repricing, fixed continue quarter. the We yields from X

to continue well develop of scenarios action plans and the rates and of potential slope as as curve. we reminder, for a wide range interest rate economic a the both short-term As and belly for analyze

projects margin next a quarters forward or or basis rate Based points. a by curve stable level, few half outlook, which net the is assumption around working relatively of year the X plus for on the cuts at aligned minus see Our X% second X the interest we over with that year-end.

to Slide XX. Turning

cash and as deposit we Our securities level increased from of benefited growth. sustained from higher balances funding

a securities and as approximately assets cash sheet to of balance over percent total remain XX% expect time. grows We average as the

consistent of the We are our approximately reinvesting to the the portfolio securities short flows duration approach unhedged at current duration in manage range. cash HQLA, with

to Slide XX. Turning

As up-rate protect objectives: primary hedging rate X to scenarios. protect revenue and our designed and program with in a margin reminder, down capital in potential is environments, to

spreads floor of swaps. over years, fix of hedge have begin successfully mature position effective pay As protected course over fixed of billion of June weighted included which just $XX.X XXXX. XX, swaps, The will received $X.X of life billion to and average $XX.X the a fixed billion of pay swaps, capital, X our and

of our we effective more XXXX. the with As fixed in quarters, have fixed of dates past the mature, middle receive The added will reduce. Furthermore, sensitivity generally over these pay next scenario beginning reduce by down the the the swaps a asset of effectiveness sensitivity approximately in of of maturities impact received and a the several instruments at pace measured X/X first swaps swaps, fixed asset forward-starting starting year. by both the rate will half

to continue achieve NIM we objectives always, to As manage our of stabilization. program capital our and hedging will protection dynamically

Moving on Slide to XX.

Within and million areas of by capital fee Our were Collectively, revenues. by the these fee related revenues driven capital revenues banking management. from increased revenues. markets capital substantive prior quarter-to-quarter. markets, Commercial areas: $XX revenue stable X/X represent payments quarter, advisory our markets, driven growth X wealth higher total nearly is X

of expected expect over back pipelines well by commercial in to upon this supported new the the and Capstone year, as level as build half advisory robust loan sustain We production.

the increased year-over-year. deepen management within to and customer grow we cash XX% at penetration. fees in as payments year-over-year second $X was million and management quarter strongly Treasury continue revenue Payments up X%

increased assets Advisory year-over-year under management have basis. Our wealth and revenues a by by increased and relationships year. asset from X% X% on year-over-year have the XX% increased prior management

overall Slide an income million $XX On from GAAP increasing second first level, $XXX low. quarter by Moving quarter, noninterest the XX. the million on to for increased to seasonal

increased impacts transactions, CRT million income quarter-over-quarter. $XX noninterest the Excluding by the of

on Slide expenses XX expense GAAP $XX $XX decreased million. by to expenses. noninterest underlying million and core by increased on Moving

FDIC $X incremental million incurred to of assessment. fund quarter, During the expense insurance we related deposit the special

core came approximately item, quarter, by recur. driven this lower-than-expected expectations for in not to expected the benefits half result discrete expenses of our better the with than Excluding

impact higher in production, the primarily core full as increases as saw compensation driven incentives revenue-driven March. well merit increase expenses personnel quarter The and we as expenses effective by quarter-over-quarter of due was to in

the expense forecast for to core full growth X.X% continue year. We

be some the be look given higher, to core approximately third billion. revenue-driven we may compensation. expenses variability, expect As into quarter, There at $X.XXX we

recaps XX ended equity position. X Slide quarter our at the XX.X%. Tier capital Common

Our basis adjusted inclusive was ratio, AOCI, XX CETX ago. points from of year grown and has X.X%, a

strategy management XX%. CETX, ratios fund driving to growth. into to capital range our remains X% drive maintaining AOCI, of priority capital to while higher, top We Our focused of operating adjusted high-return our intend on loan inclusive

our year's result highlights losses results pleased from our peers. We once quartile credit trend expected to compared XX This this year's of best for Slide the from continue again exercise. was CCAR second performance to were top test. stress

improved minimum, the to modeled group. in was second stress CETX the SCB our Our ratio our and X.X% peer best

moderate effectively reflects the lower appetite. On percentage at highest target the is increased consistency basis and well. aggregate be peers. approach portfolio. long-standing point through-the-cycle a our points well in to X results of by we losses, basis declined half from economic our to very both improved loan basis the lower compared continues modestly than Net continued outlook validate X Allowance ACL, XX of QX, XX range and were basis prior maintaining expected risk the credit to the quarter, credit prior of losses These to remain quality points. points quarter. to charge-offs perform as in in coming for as an XX of as X.XX% XX, to They CCAR as an flat Slide Our our low modeled level

XXXX declined ratio approximately increased from assets driven X% level. improvements XX portfolios. On points, the Nonperforming by prior below remaining Slide quarter, across basis while commercial XX, previous quarter from asset the prior criticized broad-based the to the X%

to Slide XX. Turning

for outlook guidance. our remains year full unchanged Our from the prior

in-sourcing full expenses are of managed levels merchant revenue-driven in higher business. our As well quarterly the income our trough sustain accelerate trend to discussed, to We to the sequentially Core growth and net expect timing that trend. loan adds and expenses to acquiring to outlook, interest deposit and we growth of and drove subject year variability its expect half. its and from compensation to we the some staffing tracking second related given continue

our single-digit to well a We aligned at performing year Credit rate. is low the with exit year-over-year growth expect expectations.

you. we'll to With our conclude prepared Tim, and over move to that, Q&A. over remarks

Timothy Sedabres

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

Operator

[Operator of Manan is the from line Gosalia Instructions] Morgan And our question first Stanley. with

Manan Gosalia

year? a Can more expand Zach, a total cuts your past, you've competitive you're on beta by of little first in can we deposits think deposit of better the the a couple of on I you've on the you about beta managing downside been spoken that on comments deposits. in how be if year rate bit that XX% downside end? get given or so half

Zachary Wasserman

question. elaborate great A just on Appreciate to this one. Thanks.

prepared the and the from towards CDs early manage the reductions in easier beta shifting reducing client targeted time noted segments. down already the of deposits trajectory, rate market, a we're duration stages of I in money certain playbook, As acquisition beginning faster [indiscernible] acquisition to in which shortening thinking, the is and rates, more remarks, making mix

the already second and beginning these in they So actions, us benefited quarter.

the As we will be what With around a the function yield [indiscernible] be projects what now this data forward the to down ready markets performance clients to this that seeing invest generally playbook rate and being look clearly, presume actually is to said, conducive rate the trajectory believe clearly what the in in of set forward, environment. curve when year. beta being later full we're action, CRE we very up reduction continuing

going So in are there's of good terms confidence that. in things where

give then in And first those well sort pretty our over be to it's of there. year assumption early the trajectory will so But general year period the market little up function working guidance XXs continuing percent the the first high here will course to said, a as over because on It's [indiscernible]. of I be precise shaping and mid- clearly, or range beta down a expectations. from here of beta

Manan Gosalia

We've demand then it. growth. tracking? can growth, how spreads on talk are maybe the had side, about all weaker for banks loan loan you Got but And on several looking loan they're highlighting

loan it overall? does, So And how seeing are you things is competitive? that impacting getting more if spreads

Zachary Wasserman

we into the growth, competitive the driving quarter. is it a On Look, the growth double the a we we're quarter certainly saw environment. And second first quarter. as we into basis, than dollar said, second in saw

some So that. the for pretty acceleration time, that been about and we're seeing we pleased have -- feel calling

product pretty we drive Part of for with with in? focused that with us, which flat we're segments, is in if net and spreads, areas also come obviously, on for categories would are fee along really where trying are a of attractive on spread the that overall performance lot question growing, we've a basis on to on focused new what driving a relative as loan well. us growing the capital the where level. is is what to in, we investing the would growth there And optimization, pretty return been we're spreads spreads category spread to the generally highest environment average. I characterize business but offset is come And particularly

Operator

UBS. the line Next from is Erika with of Najarian question

L. Erika Penala

preponderance that and of quarter. the that Clearly, the you that better terms the rate [indiscernible] [indiscernible] I back at did got of growth securities move some And through your half as loan mentioned growth. year. in rate impression perhaps relative you rest -- trends of deposit cycle I the the notice of to your good for the get for of deposit guess, a out like you went expected portfolio to [ the peers could curve. you even ] through that I is growth deposit prefunding second have

[indiscernible]? but expecting the continue just basis the the X Or won't continue acceleration I'm plus the fund In pace to do wondering, But as it [indiscernible], deposits you that to this in have I question for be you rate to you as points other you to can competitive at enough closer observed do in are quarter. guess, and words, expensive to -- grow June. dynamics

Zachary Wasserman

take question. is I'll Thanks, Zach. This Erika for it. the

I'm the forward year, deposit fund and line I for was trajectory bit Your up. growth what I and a of back sorry, and kind But will around here think is the our pricing to what flipping was little going loan -- I went the what in we as have rate what is deposit price growth, half expectation kind heard enough of levels deposit of that. sorry, and

address it, can up. covered let me can you see if I follow if have that So I and

pleased really for things deposit sure. going are how with on [indiscernible] We're

take that You median outperformance XX% versus a history over to cycle, the the a back, beta big of with pretty the favorably compares rate peer step both course peers. and

well. doing really So

think what your This ratio I the disclosed. to to now XX%. that's in quarterly future growth. And to last a deposit a do time degree, is, just year to XX% allowed loan seen question, us there's prefund year, we've loan some the last from

it ability to So up with fund we expect. core accelerating growth that deposits, sets that the loan

it be question come down sort back and where beta really and I second would unit from us flexibility gives note, that ago, next terms of also goes selective funding lot But to a disciplined it. to and manage it Manan's of of to of a will in

sort been why growth to budget we reasons [indiscernible] share initial intention, of well. of the is we're really deposit the of deposit performing just elevated initial high our up we've outperforming end mean, and that guidance that So on the forecast actually growth I range. one our is

growth of I the some expect sequential the extraordinary and guidance [ of would level grow, fourth of sequential too, I year. level second nice and don't growth expect billion. of growth second X quarter, into almost to an within be quarter saw to do that overall X same for the I $X but we it I think that to the quarter into full range ] see in

So that [indiscernible] the ability I allow and we're increased think to down them the volumes absorb to beta. that projecting lending core fund us manage will

In terms us in is and can Manan, still we're the are we beta. allow a acquisition very to [indiscernible] execute of we're down but go much mode, to stages the of judicious. being back I little which the pricing in strength, strategy, of we that We're position of to sort cognizant a gave that bit early

it pricing. We're the in that So the be market likewise reductions and forward I able here go-to-market in that if further. be uncertainty drive on we'll expectations, which believe based it that doing to And rate marketplace, September, and do acquisition we're seems reductions in taking continue to is -- opportunity. even seeing to get we that

L. Erika Penala

a and sensitive just evolve in I financial having year the that put the of short continued that benefit together into in rate? pricing set -- you've trends, question, it as try facing some like Zach, repricing And of curve year, rolling the of rate follow-up strategically next terms balance as engineering rate generally started terms about a from position, us sounds will your maturing, you potentially up way while be both are the lower fixed or to sheet asset swaps deposit everything to in told mechanically and all, that will you and asset

Zachary Wasserman

Yes. Great question.

X.X objective has the asset vis-a-vis maximize But been management well. the works new years the to to really of sensitivity last our environment, value even, trajectory pretty some the plans. around asset asset want we've allow sensitivity the natural operating of to which sensitivity address we had thinking year, So over

of prepared topping reducing then will sensitivity intentional now the strategically fall, that, swaps to rates. of dynamic beginning sensitivity swaps ] end [indiscernible] [ that to reduced in remarks, increasing fixed about and reduce the very between And in we of of presence rates Clearly, asset now to combination X/X And managing sensitivity. I and a but manage reduction by highlighted are continue out -- presumably we we'll in expiration as about the next that asset pay middle of the and think the in or that's year. be

pretty to hedge the seeing discussed substantial stable here asset positive quarters. We several I trends there will think continue -- over by NIM, [ second repricing over And benefit NIM. drag. factor are next X factors we've time, the ] generally fixed

net we by next the that down We drag have XX a year the the position hedge about of go in points That of quarter just almost scenario. in middle to and second neutral basis [indiscernible] closed. forward will

next for So we'll from some get pretty the benefit over several that quarters. [indiscernible] here

depending you'll yield here. to variable NIM with an factors see other are middle expectations, in X that an in what the effective things But reductions. mitigate will a costs. are liability and be happens pretty path great that our interest-bearing accelerating The yields, with help happens variable And what very flat down beta of will clearly

I see the drive term, upward to environment. more in over sloping curve the think longer NIM -- yield upwards higher opportunities certainly do we curve

that term so market go what get longer the I think, the of is, pretty positive And is stages downgrade. this over we're will NIM initial where through after about so expecting, we

Operator

is from JPMorgan. question of line with Steven Our next Alexopoulos the

Steven Alexopoulos

for I Zach, start, maybe, want to you.

do if range what's December, in down X we outlook this cuts it year, Zach, bias down September, we get you to the lead? as do your Where to [ X say, think the to ]. relates So NII X

Zachary Wasserman

question. Yes. Great

in practice going. our our basic rates of to of try [indiscernible] is these trend think -- we what So terms we is box

the pretty cuts that trending couple middle of including we're So of range, there. and generally well the that's in

driving to do the a course, lower. customers them And flat I of the is what ability interest-bearing is. be will that that of function trajectory is reducing rate continued competitive environment factors believe the and a a begin path do real what on then to of think costs, managing and key lot NIM the one execution in -- of that of the rising

are pretty year said, will will the But to And market conviction full and where up curve the being where of going. in does that on rates economy data broadly the be depending the set it go. confidence so good the continue around

ability we feel good to that. do so our pretty about And

strong. is really clearly seeing Pipelines element growth. look loan other encouraging it signs And So there. of we're the

Solid in QX. performance

here the expect accelerate continue basis a on of the grow year. to to We half year-over-year back and in

-- even initiatives I better there good. our base of they're our think their to in looks really even perform than some faster could growth Pipeline loan do forecasted even plan. well we see -- new than growth in

even And so if better. pull-through is

Our base growth. upward see plan loan we that some bias on

addressed section loan volumes the and we more that the Q&A trying could of that, CRE lift did in point revenues budgeting. factors pretty us about the had second can see even. those take initial expected see base is we end, in of here we haven't plan, To to we higher this lower that the is converse forward, about extent runoff if good quarter some were going [indiscernible] the kind than you lower either what Likewise, those but if the any at could that that feel to range worse, have

Steven Alexopoulos

what is saying? the of middle range, you're that The

Zachary Wasserman

That's the baseline.

Steven Alexopoulos

it's know, billion initiatives, baseline, I from then average Slide the your new to was loans X, it in That's Okay. you That $XXX That's ] look funny right? when you're -- $X.X a don't helpful. at call And increase up year. million. [ calling

I'm because and say, verticals and over but curious a momentum then you sort at you're of bankers new that saying new bring is Ed, building. have well, catch-up, that's their you books, could look

we about roll the you look a see in from here, we Do we from quarters more new billion that that? should forward, $X.X to or rate contribution As dollar run initiatives perspective? would out think so. So see upside

Zachary Wasserman

one both on of loans. them initiatives. these to booking how terms in -- in new I doing. expecting strong deposits relationship very full customers is Every they're seeing has really think fees come We're with We're good I'm pleased of performance starting see and performance through. to

really with So pleased it.

se, steady growth is basis. per I I over. in. The And see to expect very don't I'd to those bringing in core here. books highlighted, pretty launched you but the on industries a know just client new in we're loan experience already pretty with bankers were I also build rod acquisition see to from deep we've them necessarily their wouldn't trajectory characterize talented it accretive through trajectory These geographies grinding growth. that a their of acceleration

Operator

Our from question with next line Sandler. of Scott came the Siefers Piper

Robert Siefers

being is in demand answered. on have question as auto it's noticed particular. my hoping I been high been was and than sort is a it years. maybe that more you flex, the address several overall could robustly the that later that outside you albeit think of I as customer like So had anticipated overall I advance in -- earlier category of on But things year, of maybe within as going sounds given maybe the used Is last softer loans to growth on. this production context

you're just So how curious auto. about thinking

And maybe car in the fluctuations of just what of portfolio, that quality given follow-up, slower then as seen the sort used we've et values, economy, cetera?

Stephen Steinour

buffer. expect Scott, this don't performed auto we will not has second very question. a business the it take year. is in Steve. continue. the And as quarter, I'll this our well And We we're -- it using

as this what opportunity. I were a terrific We asking. see think that you essentially just was

in Some the growth. so of an significant it's on us, generating and and banks for pulled bit volume we'd auto, created year back other to expect the a continue last or of opportunity

but done point. with all bit we've As this in at aggregate got the you saw the at the CLM and book, room we've the a securitization, exposure of we'll quite manage past as with

and In book, default of talked about on a of quality terms and so frequency. super low it's very years. the we've prime this We book, default, for focus

book loss, the the this not so. pricing be very slight for a well car or over impact on avoided either to a number performs on but expect and incremental we way. can each continue We've margin, do the shown us years, but big to repossession, that we'll On loss going have used it's

Robert Siefers

to into next that growth talked thinking broadly change all the the the Perfect. too Or the sort third quarter of sort year. that? normalization about want how year, full and it costs. detailed cost still track you're I past, Okay. I as rise, but get for to we And then Zach, like sounds are on well? sort we're appreciate next maybe you for of of overall but just that on track you've on about In still for one Any then year. of don't on

Zachary Wasserman

headline what the of little the answer good expenses are about have a with our there. really in year now, timing is have year. that guidance. for full looks track we're delta expected we feel thought There's initially from for would but been the where how managing and to bit line On we where initially live really I quite we

think, as will single the year-over-year. the effectively X% year. growth by in deceleration that previous I in we fourth basis. of we we'll rate on that low into last our of quarter It set the digits was The trend out around expense a time steady as discussed X%, about that up What quarter towards is course we we'll year-over-year year-over-year this calls, QX, XXXX. will throughout expectation, see the trend is, get growth disclose go run on that And to a

Operator

Our of questions Ebrahim America. from the of Poonawala Bank next with are line

Ebrahim Poonawala

I I guess, sure if I'm missed Zach, not it.

about loan-to-deposit as like think us in, loan-to-deposit these we be deposits to is, that's about where mix what talk flat? stay loan that around to stay talk Just as the coming is? kind The Like expect XX%. to expect about ratio, But that. we the talk guidance would this to should ratio up, of Do helpful. implies are you And banks growth these the rates also NIB that the of blended you mix that the if managed? going us can or coming be to deposits of all

Zachary Wasserman

question. great Yes,

drive to higher degree, that over think deposit loan on we're time. prefunding doing it's growth and to pleased we're that I -- gathering to continue how with really some expecting

at the see period, we've time of kind higher a loan-to-deposit would diverged. we short as the we very trends to I be is basis pretty longer again, the got back be to and temporary but drift lot within so over time ratio time average course stay of similarly The see objective loans, relatively set range. like a of on And over a deposits might expect our delta grow a

So in the growth year, not meaningful. see back but slightly sequential that much. deposit very growth, shift It's faster half loan of than probably expecting I'm ratio to so this maybe

in is in commercial helpful. growth been names And of household of Fundamentally, also the deposit in what good, gathering, acquisition a new quarters. new we've for on talked growing seeing couple which much we've relationships X% our of importantly, got very bank the also particularly lot growth the Underlying focused is new very is several much we're growth X% seeing bank, primary and initiatives. verticals deposit business terms new of last quite given and a new we consumer, customers, function same

this The topping rate and costs out up, And to on help sort as noted that way volume more one to as move it, beta down of of really that earlier the which as discussed. will going all down of then a faster forward. questions, money then them that's deposit and down market mix I to in we've a production us here, just slow up going up out at of the bringing back on of actively time into shifting contribute driver way more accelerating decelerating

shift quarter, We're chart seeing of we disclosed the only it this sort of mix out up. where billion sense what that's that think the fourth of noninterest-bearing point seeing -- I into million noninterest-bearing you give second going. reduction meaningful And the on to question consumer into But reduction can of quarter, think $XXX the from Let's at $X.X quarter, a don't we're any in a noninterest-bearing. noninterest-bearing, went the yet. I've see I you terms fact, first deceleration in got materials, in of

So shift in some allows this we a mix out and near the of done of here think terms to noninterest-bearing almost term. we're here in

Ebrahim Poonawala

quick Got one it. And just follow-up.

Does be digits, as year. of that the in -- being You if 'XX? reading mentioned I or higher, that lower you be should end terms same correctly, expenses heard will growth the expense we low by single of 'XX into

Zachary Wasserman

I was we're intentionally while terms otherwise importantly, invest and Because of that's of XXXX. low. into the expense year, a great very growth running quite a higher lower X.X% is company. But and saw time we're seeing be kind invest I expect already than this we automation growth And point plan. rate we'll of capabilities of think, a of have at -- in went this been the The we So that of rate for was much at a these discussing, so what that pace of lot of question. the year-over-year some by can that -- we've I XXXX, exit is new our throughout growth, in data the supportive run exiting trend year, we'll that. as also and growth reduce XXXX initiatives that that thing to growth see expenses in in would we

rates into that to go lower maintain trying to growth So 'XX.

Stephen Steinour

Zach primarily. has shared opportunities growth in in invest in revenue-producing lower of the past, order -- continue to in different rates bank efforts to core expense opportunities the to levels

and beyond expect us see in from well. should that as to 'XX You

Operator

from Our O'Connor next of question line Bank. with Matt Deutsche the is

Matthew O'Connor

some just the guys some I been got out capital. guys media. a I'm media the in There's for mean strong got pretty on could executed out realize the you've a book there slide that auto guess your you what you've you growth I on. in capital, show high loan logic, in the figure to was trying rate was kind it about hoping I seems outlook. And done risk about strong have the put coverage in talk of transfers you've a the high-quality But I what as building you that show. others

So to the side logic of have financial the understand cost X.X%. and the logic the just and of that around kind media things? of like trying Anything of

Zachary Wasserman

I'll question. that Great one. Yes. take

plans, context up And away will I several said, second range doing trajectory. as we put our think the that of If were intend just quarters we're the twofold, into overall loan, that. We is these then on key continue the XX%. operating in the higher a and transactions drive our a back X% objective quarter. plan you handful drive return achieving of higher. of is And We're year-over-year the second that CETX to to that plan, capital basis. of take from CETX correct fund accelerate to of adjusted capital We X.X% really in

and -- really core company. power the focus. support and objectives of So And earnings the the earnings the the prime prime is organic that creating both focus, driver capital of of core the is to those

[indiscernible], just can be and balance With just for on CRT shifting question and transactions to and optimization. your up said, RWA further that being at the helpful margin, very sheet these

pleased to fourth the transaction And so a and do of year transaction [indiscernible] quarter CDs very the in second quarter. successful in a we're last

deal To good. a give Less second you economics, capital. was exceptionally of the than X% the quarter of cost sense

against mean risk high-quality indirect I related auto billion the by what So reduction of $X notional loans. assets XX% reduction $X in that, transactions through transaction billion in RWA.

transaction. basis, We from transaction costs. some cost modest only spread X is also got a $X $XXX on million the funding almost year And upfront that plus of million the into of

bps margin and continue incredibly at CETX XX of prime So to support those efficient the it's just unlock objectives.

look underlying with through. we're And it we at are So went really that the economics the driver, just but not tactical. very much incredibly pleased It's although as core to the things come opportunistic favorable. how

Operator

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

Jon Arfstrom

a How next loan thinking far a curious two? exit question out XXXX. do thinking Steve. for you, you're just how Maybe have growth? about quarter beyond on I'm you NII little I'm bit for in rates the visibility more or the

Stephen Steinour

Well, our quarters. couple pipelines out of a go

to tie we the that Certain a supply of significant of insight we is though, through finance, Jon. of fourth to don't visible, but significant And don't through nature visibility businesses in as some distribution what produce. quarter. -- going And on have our multi-quarter back whole, so have get But because we intend into part base. it the relationships, to visibility, from 'XX. they the a full not We the get we visibility the in

this from however, see customers, performing our You do well year. they're

come business an sentiment more there's with think doing to -- you. share a they'll that more as general expectation that's year, next even rates down, I and be

Jon Arfstrom

Yes. credit? hasn't seeing been touched bothering you, helpful. surprising I anything but you that's That's And anything guess on, that's you're on Anything to positively? note this

Stephen Steinour

good. the very with performance well. to continues Credit looks perform pleased very We're year-to-date. The outlook

of management, spent we're good. looking on and portfolio lot As reviews time you we a know, in

be real over be estate issue. of the some not and others sloppiness commercial on in will outside for to us looking the in whole next going of years it's But couple there that, industry. the for And So an good. us,

pre-concentration our you As know, continues reduce. to

a of been commitments think So last over had X construction we payouts $XXX office quarters. have I over little half unused absorbed. The the the million

books shape. good So -- in books the

Operator

D.A. Our final the line Winter from Davidson. question with of is Peter

Peter Winter

you've in fee rebound back I had in third merchant a nice in-house million income starting and got which then coming $X fees. the You acquiring adds about guys the quarter, think on

Just upper momentum do end at you think continue kind and income maybe come X% fee in of that of you range? to can this the that X%

Zachary Wasserman

take I'll one. Zach. is that This

fee income strong. So we very saw. the what what -- with was would were of premise really performance I share your We underlying was question your pleased

in year our X% year-over-year up to land And within to expectation full the similar sequentially first, year-over-year. range. X% continue from was first to run rates at growth quarter the to X% is Second X% our quarter

conducive little of into year, growth to noted back execution That being And the X very As continue the really and growth is that's strong payments priority much X%. to AUM of client said, [ the to agents capital management, trends and grow continue driven of some I sequential The the very QX. versus Wealth we're half double-digit of wealth strong, is continues in we year, to flows focus: of get areas think management we good, at penetration. management household within Treasury markets, very really performance of the be levels power looks net revenue seeing here. quality that and that. by that X% last our payments up run driving a year-over-year over easier. ], advisory, we'll it

activity last bit markets, quarter, a is which middle last and rate in advisory pleased we think half particularly second the back M&A capital business. what We as to expect, the sustain. a choppy And our growth see challenging rise which that would now been is in the the little were environment in up, was interest core year. we'll in environment in been That yields were has I of picking know year. We and strong market

areas. of each I'm those So sequential growth expecting in

the confidence I in perform think there. in how well we function is range which of strong we but we landed and it, get where a clearly

Peter Winter

at mean, just end as top And the then question, really you at If credit. are look last of about talked peers. on good. ACL Okay. the I credit I just ratio, trends you're

ACL the levels of growth, ratio ratio? about start to keep Is going need support kind forward? guess are you Just see steady and ACL it fairly do loan at and you reserving I thinking the what lowering current to how

Brendan Lawlor

Peter, take it's I'll Brendan. that one.

[ sort ] the had of basically last ] flat quarter XXX versus XXX at this you [ we As noted, reserve quarter.

our So the in the dollar market, with to rates just core to respect continue reserve. the particularly impact the modest We the overall add higher to estate real the portfolio. as but rates just of the volatility watch on well of longer amount as

continued period we with as So look would materially, over out reserve our that performance the time. modeling, longer the come will be play to in combined through economic credit of more start performance a really solid portfolio, we stronger move when down to the see that's of

we're continuing to And we're right and watch level. the reserved. we so adequately to just we're feel right -- But manage like this now,

Operator

we've turn At of reached for to I the to Mr. call this the time, like back session. closing would end Steinour over question-and-answer our remarks.

Stephen Steinour

revenues. strategies We're momentum having thank delivered sequential Well, growth our we're growth pleased In closing, day. in investments results, and second quarter you joining our today. the for organic across both are us our strategy building with fruitful bearing expecting

liquidity. remains capital Our with strong robust competitive position

bankers on businesses. our remain our focused seize And the executives collectively, top XX such across We continue and long-term We colleagues opportunities shareholder. Board the talented to objectives. and strategic to add

We shareholders. value have a alignment, strong delivered meaningful for our

at here these of our backbone special are the customers thank and who colleagues XX,XXX Finally, you every nearly results. the our to day bank, support

support Thank great you Have day. a Huntington. interest in for and your

Operator

This will conference. today's conclude Thank you.

this You may time. and wonderful day. disconnect Thank at lines participation, your your you for a have

Huntington Bancshares (HBAN) 19 Jul 242024 Q2 Earnings call transcript