Huntington Bancshares Incorporated · NASDAQ:HBAN
Huntington Bancshares — Investor Presentation (December 2024)
57 slides from Huntington Bancshares's investor presentation, Dec 16, 2024
Slide 1: 2024 Fourth Quarter Investor Presentation
Welcome.® 2024 Fourth Quarter Investor Presentation December 16, 2024 The Huntington National Bank is Member FDIC. ®, Huntington® and Huntington. Welcome.® are federally registered service marks of Huntington Bancshares Incorporated. ©2024 Huntington Bancshares Incorporated.
Slide 2: Disclaimer
Disclaimer CAUTION REGARDING FORWARD-LOOKING STATEMENTS The information contained or incorporated by reference in this presentation contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical fa
Slide 3: Table of Contents
Table of Contents Huntington Overview 4 Capital Segment Overview 9 Capital Positioning 36 Commercial Banking Overview 10 Balance Sheet Management 37 Consumer & Regional Banking Overview 14 Financial Update 19 Credit Overview 39 3Q24 Financial Performance 20 Asset Quality & Reserve 40 2024 Outlook 21
Slide 4: Overview
Overview (2) Huntington Welcome:
Slide 5: Huntington: A Purpose-Driven Company
Huntington: A Purpose-Driven Company OUR PURPOSE OUR VISION We make people’s lives To be the leading better, help businesses People-First, thrive, and strengthen the Digitally Powered Bank communities we serve Purpose and Vision Linked to Business Strategies Guided by Through-the-Cycle Aggregate Mod
Slide 6: Leading Midwest Regional Bank with Scaled, National Businesses
Leading Midwest Regional Bank with Scaled, National Businesses $201B $158B + 6% $126B + 5% 1.93% Assets Deposits YoY Deposit Growth Loans and Leases YoY Loan Growth ACL 3Q24 (EOP) (EOP) (EOP) (EOP) (EOP) Established Market Leadership Compelling Results Industry Leading Consumer and Business Franchis
Slide 7: Key Messages
Key Messages 1 2 3 4 Delivering Disciplined Maintaining Building Leading Execution in Strong Credit Momentum Organic Growth Dynamic Rate Performance into 2025 Environment ✓ Robust production ✓ Active down beta ✓ Top quartile NCOs ✓ Revenue growth in core and new (cost of deposits vs. peers(2) accele
Slide 8: 2024 Year in Review: Delivering Leading Organic Growth
2024 Year in Review: Delivering Leading Organic Growth Delivering on Growth Accelerating Fee Maintaining Strong Capital Initiatives Revenues Ratios, Liquidity, & Credit ✓ Growing Primary Banking ✓ Increased Treasury ✓ Managed capital ratios higher Relationships YoY Management penetration through org
Slide 9: Segment Overview
Segment Overview (2) Huntington Welcome:
Slide 10: Commercial Bank | Comprehensive Strategy to Drive Organic Growth
Commercial Bank | Comprehensive Strategy to Drive Organic Growth Broad Product Set Combined with Deep Expertise $55B Loan Portfolio Specialty Banking Corporate Top 6 Franchise Lender(1) Middle Middle Asset CRE 19% and Specialty Top 10 Healthcare Lender(1) Market, Market Finance 39% Corporate Ban
Slide 11: Successfully Executing Carolina Expansion Strategy
Successfully Executing Carolina Expansion Strategy Commercial-led Expansion Building on existing coverage of corporate and Raleigh / specialty banking Triad Durham Managing relationships locally and leveraging Charlotte national expertise Focused on middle market, corporate and Upstate S.C. sp
Slide 12: Capitalizing on North and South Carolina Growth Opportunity
Capitalizing on North and South Carolina Growth Opportunity Sizeable deposit markets with outsized growth projections Top 20 HBAN Regions by Deposit Market Size(1) Carolina Expansion Markets Acquired Expansion Regions Existing HBAN Regions # Deposit Market Share Rank Six Carolina Regions feature an
Slide 13: Exceptional Performance Across Core and New Initiatives
Exceptional Performance Across Core and New Initiatives Expanding into High-Growth High-Return Businesses Commercial led loan growth and growing contributions by new initiatives offset by CRE declines ✓ +2 geographic expansions Core growth led by Auto Floorplan, Regional & Business Banking, Auto
Slide 14: Consumer & Regional Banking (CRB)
Consumer & Regional Banking (CRB) $110B $71B $338M $33B …With Established Scale and Scope Deposits Consumer & Fee Wealth Business Loans Revenue(1) Advisory AUM #1 975 Leading Midwest Consumer and National Specialty Franchises Branch Share in Ohio and Branches in 12 States Michigan 3.2M 4.3M 380K Con
Slide 15: CRB | Growing Our Local Advantage through Enhanced Regional Banking Model
CRB | Growing Our Local Advantage through Enhanced Regional Banking Model 2023 Regional Banking Enhancements Regional Banking Model brings localized delivery and service differentiation, building on Strong Regional P&L accountability Local Advantage in existing geographies Eliminated dotted Aligned
Slide 16: De Novo Branch Expansion Boosting Growth Posture
De Novo Branch Expansion Boosting Growth Posture Branch Network Established Markets: Optimization & Expansion Strategy Continued optimization with new builds and select consolidations Penetrate highest density opportunity in Denver/Boulder: 1 established footprint 17 planned new builds 4 recent open
Slide 17: Executing Proven De Novo Branch Playbook
Executing Proven De Novo Branch Playbook Optimized Performance Innovative Experience Proprietary models select for A+ locations with high traffic, Environments that spotlight our value proposition with visibility, convenience, and growth potential an immersive experience that invites customers t
Slide 18: Financial Update
Financial Update (2) Huntington Welcome:
Slide 19: 2024 Third Quarter Financial Performance
2024 Third Quarter Financial Performance Key Metrics GAAP Highlights EPS $0.33 GAAP EPS of $0.33 • Notable Items, $6 million, include $13 million of GAAP Adjusted(1) expenses related to efficiency programs, partially ROTCE 16.2% 16.3% offset by a $7 million benefit from FDIC special assessment Loa
Slide 20: 2024 Outlook
2024 Outlook As of FY24 vs. FY23 4Q24 YoY Commentary 10/17/24 10/17/24 (Unchanged from 9/9/24) Average Loans Continue to drive sequential loan growth, Up ~3% Up 4% - 5% FY23 Baseline = $120.9 billion inclusive of lower CRE balances Acquiring and deepening primary bank Average Deposits Up 3% - 4% Up
Slide 21: Momentum Building into 2025
Momentum Building into 2025 Executing organic growth across the core and new initiatives Delivering high-quality primary bank relationship inclusive of loans, deposits, and fees Decisively implementing down-beta action plan Driving higher net interest income, while managing net interest marg
Slide 22: Driving Expected Record 2025 Net Interest Income
Driving Expected Record 2025 Net Interest Income Net Interest Income (FTE) and Net Interest Margin (NIM) Net Interest Income Net Interest Margin Expecting approximately flat to modestly higher $1,379 $1,327 $1,325 $1,364 sequential NII in 4Q24E $1,300 Expect Record Dynamically managing net inter
Slide 23: Noninterest Income | Diversified Fee Revenues
Noninterest Income | Diversified Fee Revenues Noninterest Income Trends Total Adjusted Noninterest Income by Category(2) 3Q23 4Q23 1Q24 2Q24 3Q24 +12% YoY Total Noninterest Income (GAAP) $509 $405 $467 $491 $523 $59 All Other(3) $51 Leasing Revenue Mark-to-market on pay-fixed swaptions $33 $(74) - -
Slide 24: Adjusted Noninterest Income | Strategic Fee Revenue Focus Areas
Adjusted Noninterest Income | Strategic Fee Revenue Focus Areas 1 Payments & Cash Management Commercial Payments Merchant Revenues (inc. TM) Acquiring Treasury management penetration continues to increase through deepening efforts 28% % Total Sustained volume growth across debit card +$2MM +8% R
Slide 25: Bolstering Payments through Expanded Merchant Acquiring
Bolstering Payments through Expanded Merchant Acquiring Prior In-house Model: Projected Outcome Out-sourced Model: Customer Penetration Provided Referrals to Integrated Capabilities with Third-party Service Banking Product Set >2x Outsourced sales and servicing Create multi-channel acquisitions
Slide 26: Noninterest Expense | Disciplined Expense Management
Noninterest Expense | Disciplined Expense Management Noninterest Expense (NIE) Highlights Notable Items $6M Notable items included $13 million related to efficiency NIE excluding Notable Items programs, partially offset by a $7 million FDIC special $1,600 assessment benefit $1,400 $1,348 $1,137 $1
Slide 27: Delivering Peer Leading Organic Growth
Delivering Peer Leading Organic Growth Loan and Deposit Growth (EOP)(1) Cumulative Loan Growth (ADB) +5.7% Peer median +3.1% +$3.1B QTD(2) 8% HBAN HBAN 6% Peer 10 Peer median 3Q24 YoY Deposit Growth 4% -2.9% 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 2% Peer 6 Peer 4 Peer 2 QTD Peer median Peer 1 0% Peer 5 Peer
Slide 28: Loans and Leases | Balanced and Diversified Growth
Loans and Leases | Balanced and Diversified Growth Average Loan and Lease Balances Highlights Average balance growth accelerated, increasing 3.1% YoY in 3Q24 compared to 1.7% YoY in 2Q24 +3.1% YoY $126.4 Strong quarterly EOP loan growth of 6.3% annualized ADB $124.5 $123.4 Q3 average quarterly
Slide 29: Loans and Leases | Loan Growth Optimized for Return
Loans and Leases | Loan Growth Optimized for Return Commercial Average Loan and Lease Balances Highlights CRE Loans vs Linked Quarter Commercial Loans Ex. CRE +2.5% Average balances increased $0.1 billion, or $67.5 $68.3 $69.0 $69.1 0.2% $67.6 $13.0 $12.6 $12.6 $12.2 $11.7 CRE average balances d
Slide 30: Loan Yields | Benefitting From Fixed Rate Re-Pricing
Loan Yields | Benefitting From Fixed Rate Re-Pricing Loan Portfolio Composition (as of 3Q24) Highlights Both variable rate and short-term loan portfolios benefited Other Fixed from asset repricing 24% Variable Auto portfolio weighted-average life (WAL) less than 2 RV / Marine 49% years 5% Resi
Slide 31: Deposits | Non-Interest Bearing (NIB) Deposit Trends
Deposits | Non-Interest Bearing (NIB) Deposit Trends Deposit Balance – End of Period (EOP) Deposit Balance – Average (ADB) Interest Bearing Interest Bearing Non-Interest Bearing Non-Interest Bearing $148.9 $151.2 $153.2 $154.4 $158.4 $148.2 $149.7 $150.7 $153.6 $156.5 $31.7 $31.0 $29.7 $28.6 $29.0 $
Slide 32: High Quality, Granular Deposit Franchise
High Quality, Granular Deposit Franchise Leading Percent of Insured Deposits(1) Diversification by Business Lines (3Q24) Banks at 3Q24 HBAN 69% Bank 1 61% Bank 2 61% Consumer BAC 61% Bank 3 58% 51% Commercial C 57% 26% WFC 57% Bank 4 56% 13% 4% 6% Bank 5 56% Business Banking Bank 6 56% Other Wealth
Slide 33: Commercial Deposit Relationships Bolstered by Off Balance Sheet Liquidity Management Solutions
Commercial Deposit Relationships Bolstered by Off Balance Sheet Liquidity Management Solutions Commercial Off B/S Overview Total Commercial Banking Segment Liquidity (Average) 2019: Enhanced off balance sheet liquidity YoY Annually solutions for commercial customers $67.7 Total +13% $62.7 $64.5 $58.
Slide 34: Securities Portfolio
Securities Portfolio Securities + Cash(1) - Average Highlights Purchased $4.2 billion of Treasury securities at a 4.42% yield $57.8 $55.2 Securities yields of 4.26% decreased 3bps QoQ and $50.8 $50.8 $52.6 increased 11bps YoY $13.6 $12.2 $10.8 $11.0 34% of portfolio classified as HTM to protec
Slide 35: Diversified Sources of Liquidity
Diversified Sources of Liquidity Robust Level of Available Liquidity(1) Highlights $ in billions Peer leading available liquidity as a percent of $93 $94 $95 $95 uninsured deposits highlighting the proactive approach $10 $12 $13 $13 Cash to liquidity risk management and strength of our granular de
Slide 36: Capital Positioning | Robust Capital Generation
Capital Positioning | Robust Capital Generation CET1 Ratio Highlights Target operating range 9-10% AOCI Adj. for Cash Flow Hedges Capital Priorities include: CET1 Adj.(1) 1) Fund Organic Growth 10.1% 10.2% 10.2% 10.4% 10.4% 2) Dividend 3) Buybacks/other 1.6% 1.7% 1.8% 1.5% 2.1% Targeting Expect
Slide 37: Balance Sheet Hedging Program Overview
Balance Sheet Hedging Program Overview Hedging Program Profile – Effective Swaps(1) Future Effective Swap Profile NIM Protection: $6.0 $6.0 $6.0 Reduces volatility & $6.0 $6.0 $5.0 $5.0 $5.0 $5.5 $6.0 supports a narrow $24.7 $25.2 Floor Spreads corridor in lower rate $20.3 $23.4 $16.8 $16.8 $16.8 $1
Slide 38: Accumulated Other Comprehensive Income Dollars
Accumulated Other Comprehensive Income Dollars AOCI Outlook(1) Highlights $ in billions Projecting ~32% total AOCI accretion by YE26 vs 3Q24 level Dynamically managing hedge position subject to risk $3.6 profile and market conditions $2.9 $2.1 Components of Fair Value (FV) Mark on Investment Sec
Slide 39: Credit
Credit (2) Huntington Welcome:
Slide 40: Asset Quality and Reserve | Top Tier Credit Performance
Asset Quality and Reserve | Top Tier Credit Performance Net Charge-off Ratio(1) Robust Client Selection and Underwriting HBAN Peer Median Through the Cycle Target NCO Range (25 – 45bps) 0.48% Consumer – 44% of total loans 0.40% 0.42% Prime, super-prime focus with ~770 0.38% 0.35% weighted average
Slide 41: Asset Quality | Criticized and NPA Ratios
Asset Quality | Criticized and NPA Ratios Criticized Asset Ratio 5.0 0% 4.8 0% 4.6 0% 4.81% 4.4 0% 4.62% 4.66% 4.2 0% 4.48% 4.47% 4.0 0% 4.34% 4.31% 4.07% 4.09% 3.97% 3.97% 3.8 0% 3.6 0% 3.58% 3.4 0% 3.2 0% 3.44% 3.51% 3.50% 3.0 0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q2
Slide 42: Commercial Real Estate (CRE) Overview
Commercial Real Estate (CRE) Overview CRE Loans as % of Total Loans(1) Portfolio Characteristics Peer Median: 15.4% Peers at 3Q24 Well diversified portfolio with rigorous client selection Peer 1 9% CRE reserve coverage 4.4% vs peer median of 2.5% (3Q24) HBAN 9% Office reserve coverage of 11% P
Slide 43: CRE | Low Concentration and Top Tier Reserve Coverage
CRE | Low Concentration and Top Tier Reserve Coverage CRE Reserve Ratio vs. CRE as % of Total Loans Includes U.S. Listed Banks over $50B in assets as of 9/30/2024(1) 5.0% HBAN 4.0% Bank 3 CRE Reserve Ratio (3Q24) Bank 2 3.0% Bank 4 Bank 9 Bank 8 Bank 5 Bank 7 2.0% Bank 10 Bank 1 Bank 6 Bank 20 Bank
Slide 44: Commercial Real Estate (CRE) – Multi Family Overview
Commercial Real Estate (CRE) – Multi Family Overview Top 5 MSAs (3Q24) Management Approach Balance % of Total Metropolitan Statistical Area (MSA) ($ in millions) Multifamily Portfolio Sponsor-driven strategy focused on experienced Columbus, OH $301 6.7% owners and operators Chicago-Joliet-Napervil
Slide 45: Minimal Exposure to Leveraged Lending
Minimal Exposure to Leveraged Lending Loan Portfolio Composition (3Q24) Highlights $2.9 billion, or 2.3% of total loan balances, with a All Other defined portfolio concentration limit 97.7% HNB leveraged defined as: Senior leverage 3.0x, total leverage 4.0x The portfolio is built around our re
Slide 46: Auto – Proven Track Record of Strategic Growth
Auto – Proven Track Record of Strategic Growth Optimize through the Cycle Calibrating production to balance growth and returns Indirect Auto Production ($B) and New Origination Yield 6.9% 7.1% 7.2% 6.8% 6.8% 7.0% 3.00 New Origination Yield 6.3% 6.4% Indirect Auto Production 5.9% 2.50 $2.4 6.0% $2.1
Slide 47: Auto | Strong Credit Performance Through the Cycle
Auto | Strong Credit Performance Through the Cycle Auto Loans Key Highlights of Credit Strength Auto % of Total Loans $13.6 $13.2 $14.0 $12.2 $12.5 $12.9 $12.9 $12.5 $12.7 $13.2 Strong Credit Quality $11.0 Auto Loans and % $8.7 $9.5 Industry knowledge and focus on $6.7 of Total Loans 18.3% 18.8% 1
Slide 48: Appendix
Appendix (2) Huntington Welcome:
Slide 49: Basis of Presentation
Basis of Presentation Use of Non-GAAP Financial Measures This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntington’s results of operations or financial position. Where non-GAAP financial measures are used, th
Slide 50: Basis of Presentation
Basis of Presentation Rounding Please note that columns of data in this document may not add due to rounding. Notable Items From time to time, revenue, expenses, or taxes are impacted by items judged by management to be outside of ordinary banking activities and/or by items that, while they may be a
Slide 51: Non-GAAP Reconciliation
Non-GAAP Reconciliation Pre-Provision Net Revenue (PPNR) Pre-Provision Net Revenue Percent Change 3Q23 4Q23 1Q24 2Q24 3Q24 ($ in millions) vs. 2Q24 Total revenue (GAAP) $1,877 $1,721 $1,754 $1,803 $1,874 FTE adjustment 11 11 13 13 13 Total revenue (FTE) A 1,888 1,732 1,767 1,816 1,887 Less: net gain
Slide 52: Non-GAAP Reconciliation
Non-GAAP Reconciliation Average Tangible Common Equity, ROTCE ($ in millions) 3Q23 4Q23 1Q24 2Q24 3Q24 Average common shareholders’ equity $16,256 $16,275 $16,819 $16,861 $17,719 Less: intangible assets and goodwill 5,722 5,710 5,697 5,685 5,674 Add: net tax effect of intangible assets 34 32 29 25 2
Slide 53: Non-GAAP Reconciliation
Non-GAAP Reconciliation Tangible common equity ratio, Tangible book value per share Tangible Common Equity Ratio ($ in millions) 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Huntington shareholders’ equity $17,136 $17,731 $18,758 $18,788 $18,483 $19,353 $19,322 $19,515 $20,606 Less: preferred stock
Slide 54: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Noninterest Expense, Efficiency Efficiency Ratio ($ in millions) – Pre-tax 3Q23 4Q23 1Q24 2Q24 3Q24 Noninterest expense (GAAP) $1,090 $1,348 $1,137 $1,117 $1,130 Less: intangible amortization 12 12 12 12 11 Noninterest expense less amortization of intangibles (A) $1,
Slide 55: Non-GAAP Reconciliation
Non-GAAP Reconciliation Common Equity Tier 1 (CET1) CET1 – AOCI Impact ($ in millions) 3Q23 4Q23 1Q24 2Q24 3Q24 Common Equity Tier 1 (A) $14,211 $14,212 $14,283 $14,521 $14,803 Add: accumulated other (3,622) (2,676) (2,879) (2,911) (2,104) Comprehensive income (loss) (AOCI) Less: cash flow hedge (66
Slide 56: Notes
Notes Slide 6: (1) By number (units) of 7(a) loans nationally (2) S&P Global market share data as of 6/30/2024 – Peers include: CFG, CMA, FITB, KEY, MTB, PNC, RF, TFC, USB, ZION (3) Equipment Leasing & Financing Association, 2024, rank amongst bank-owned firms, includes HTF portfolio (4) Based on pu
Slide 57: Notes
Notes Slide 24: (1) Noninterest income, adjusted as a percentage of Total Revenue (FTE); adjusted noninterest income (non-GAAP) excludes effect of MTM on PF Swaptions and CRTs (“Credit Risk Transfers”) Slide 27: (1) Source: S&P Global Market Intelligence and filings ‐ Peers include CFG, CMA, FITB, K
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