• Earnings Per Share (EPS): $0.34
• Return on Tangible Common Equity (ROTCE): 16.7%
• Preprovision Net Revenue (PPNR): $783 million, 24% year-over-year growth
• Average Loan Growth: $2.7 billion or 2.1% from the prior quarter
• Average Deposit Growth: $2.2 billion or 1.4% versus prior quarter
• Common Equity Tier 1 (CET1): 10.6%, increased by 40 basis points from last year
• Tangible Book Value Per Share: Increased by over 13% year over year
• Net Charge-Offs: 26 basis points
• Allowance for Credit Losses: 1.87%
• Net Interest Income Growth: $31 million or 2.2% growth in the quarter
• Net Interest Margin (NIM): 3.1%, up 7 basis points from the prior quarter
• Noninterest Income Growth: 6% or $27 million from the prior year
• Payments Revenue Growth: 6% year over year
• Wealth Management Fees Growth: 15% year over year
• Capital Markets Growth: 20% year over year
• Noninterest Expense: Decreased by $26 million sequentially
• Share Repurchase Authorization: $1 billion multiyear program

• Warning! GuruFocus has detected 4 Warning Sign with HBAN.

Release Date: April 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Huntington Bancshares Inc (NASDAQ:HBAN) reported strong loan and deposit growth, with average loans increasing by almost $9 billion and deposits by $11 billion year over year.
• The company achieved a 10% year-over-year revenue growth and a 24% increase in pre-provision net revenue (PPNR), indicating robust financial performance.
• Net interest margin improved to 3.1%, supported by disciplined deposit pricing and effective management of interest rate risks.
• Huntington Bancshares Inc (NASDAQ:HBAN) maintained strong credit performance with net charge-offs at 26 basis points and an allowance for credit losses at 1.87%.
• The company announced a $1 billion multiyear share repurchase authorization, reflecting confidence in its capital position and future growth prospects.

Negative Points

• The economic outlook for 2025 is uncertain, with increased probability of adverse scenarios that could create headwinds for the industry.
• Criticized asset ratio increased to 3.98%, indicating some deterioration in asset quality.
• Noninterest income growth is subject to market conditions, particularly in areas like M&A advisory, which are sensitive to economic uncertainty.
• The company is cautious about loan growth in the second half of the year, reflecting potential economic challenges.
• There is a potential for modest drag from the hedging program on net interest margin, depending on future interest rate movements.

Q & A Highlights

Q: The net interest margin came in higher than expectations. Should we expect flat net interest margin trends relative to the 3.10%, or should we consider interest recoveries? A: Zachary Wasserman, CFO, explained that the outperformance was primarily due to better-than-expected deposit pricing. The current run rate is around 3.07%, and under most scenarios, the net interest margin is expected to remain flat around this level for the rest of the year.

Q: The $1 billion buyback authorization is interesting. Is this a message of flexibility to support your stock amid uncertainty? A: Stephen Steinour, CEO, stated that the buyback provides flexibility for capital deployment. While they expect modest buybacks this year, the authorization allows for multi-year opportunities depending on economic conditions.

Q: Can you provide more color on the success in deposit cost management? A: Zachary Wasserman, CFO, highlighted that the success was due to a consistent plan around deposit beta, including decreasing the mix of CDs, shortening their duration, and acquiring deposits in money market accounts. The strategy has been executed well, outperforming expectations.

Q: How did the quarter evolve, and have you seen any weakness in the economy affecting client behavior? A: Stephen Steinour, CEO, noted that the quarter started strong with a robust pipeline, and each month performed well. While some activities were deferred, the pipeline for the second quarter remains strong, indicating continued momentum.

Q: What are you hearing from clients since April 2 regarding their sentiment and actions in this environment? A: Stephen Steinour, CEO, mentioned that clients not reliant on imports or exports feel more bullish, while those affected by tariffs are more cautious. Overall, there are pockets of strength, and the diversified portfolio helps manage varying impacts.

Q: How has the uncertain backdrop impacted your CECL model and reserve levels? A: Brendan Lawlor, Chief Credit Officer, explained that they model multiple scenarios, and as economic scenarios have softened, more risk is picked up through quantitative modeling. The strong reserve coverage remains consistent.

Q: Can you discuss the pipeline for building out in the Carolinas and Texas, and any new verticals planned for the year? A: Stephen Steinour, CEO, stated that they plan to add one to two new verticals each year and are accelerating branch expansion in the Carolinas. They continue to increase capabilities in various markets, including Chicago.

Q: How do you expect the drag from the hedging program to evolve throughout the year? A: Zachary Wasserman, CFO, indicated that the hedging drag is expected to be neutral by mid-year, with a potential slight drag by year-end. The strategy is to maintain a neutral position through the end of the year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.