Huntington Bancshares Incorporated is a diversified regional bank holding company that has been serving the financial needs of its customers since 1866. The company operates through its wholly-owned subsidiary, The Huntington National Bank, and provides a wide range of commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, and other financial products and services.
Financials
Huntington Bancshares reported annual net income of $1.95 billion, annual revenue of $7.36 billion, annual operating cash flow of $2.66 billion, and annual free cash flow of $2.52 billion in its most recent fiscal year. The company has continued to deliver consistent performance and sustainable growth, as evidenced by its strong financial results.
Second Quarter 2024 Results
In the second quarter of 2024, Huntington Bancshares reported earnings per common share of $0.30, a decrease from $0.35 in the year-ago quarter. Net interest income for the quarter was $1.31 billion, down 2% from the prior-year period, primarily due to a 12 basis point decrease in the net interest margin to 2.99%. The provision for credit losses increased $8 million, or 9%, to $100 million, reflecting the company's continued focus on maintaining a strong credit profile.
Noninterest income for the second quarter was $491 million, a decrease of $4 million, or 1%, from the year-ago quarter. The decrease was primarily due to a $28 million decline in other noninterest income, partially offset by an $11 million increase in capital markets and advisory fees. Noninterest expense increased $67 million, or 6%, to $1.12 billion, driven by higher personnel costs and outside data processing and other services.
Despite the slight year-over-year declines in net interest income and earnings, Huntington Bancshares' performance remains strong, with the company delivering solid loan and deposit growth, stable credit quality, and continued investment in its strategic initiatives.
Loan and Deposit Growth
Loan growth was a key highlight in the second quarter, with average loans and leases increasing $2.0 billion, or 2%, compared to the prior-year period. The growth was driven by a $1.8 billion, or 3%, increase in average consumer loans and a $267 million increase in average commercial loans and leases. The company's focus on expanding its presence in new geographies and specialty verticals, such as fund finance, Carolinas, Texas, healthcare asset-based lending, and Native American financial services, contributed $600 million to the commercial loan growth.
On the deposit side, average deposits increased $8.0 billion, or 6%, year-over-year, with a $13.0 billion, or 12%, increase in average interest-bearing deposits partially offset by a $4.9 billion, or 14%, decrease in average noninterest-bearing deposits. Huntington Bancshares' cumulative deposit growth since the start of the rate cycle has outpaced the peer median by 15 percentage points, reflecting the company's strong deposit gathering capabilities.
Credit Quality and Capital Position
The company's credit quality remains strong, with net charge-offs of 29 basis points of average loans and leases in the second quarter, up from 16 basis points in the year-ago period but still within the company's targeted range of 25 to 45 basis points. The allowance for credit losses was $2.4 billion, or 1.95% of total loans and leases, at the end of the second quarter, broadly consistent with the prior year-end.
Huntington Bancshares' capital position also remains robust, with a common equity Tier 1 ratio of 10.4% at the end of the second quarter, up from 10.2% at the end of 2023. The company's adjusted common equity Tier 1 ratio, inclusive of accumulated other comprehensive income (AOCI), was 8.6% at the end of the second quarter, up from 8.1% a year earlier.
Outlook
Looking ahead, Huntington Bancshares provided the following guidance for the full year 2024:
- Loan growth is expected to accelerate, with the company on track for the full-year plan. - Net interest income is expected to continue growing sequentially in the second half of the year. - Core expenses are well-managed and tracking to the full-year outlook of 4.5% growth, subject to some variability due to revenue-driven compensation. - Credit quality is performing well and aligned with the company's expectations.
The company's strategic initiatives, such as expanding into new geographies and specialty verticals, investing in digital capabilities, and optimizing its balance sheet, position Huntington Bancshares for continued growth and success. The company's strong liquidity, capital, and credit quality provide a solid foundation to support its organic growth strategies and deliver value to shareholders.
Conclusion
Overall, Huntington Bancshares' second quarter results demonstrate the company's ability to navigate the dynamic economic environment and execute on its strategic priorities. The company's consistent performance, sustainable growth, and prudent risk management make it an attractive investment opportunity in the regional banking sector.