HBAN 8-K
Huntington Bancshares Inc /Md/ (HBAN)
8-K
2022-10-21
For: 2022-10-21
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Added on
April 12, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________________________________________________________
FORM 8-K
_______________________________________________________________________________________________________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 21, 2022
______________________________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
Registrant's address: 41 South High Street , Columbus , Ohio 43287
Registrant’s telephone number, including area code: (614 ) 480-2265
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
_______________________________________________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of class | Trading Symbol(s) | Name of exchange on which registered | ||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§24012b-2). | |||||||||||||||||
| Emerging growth company | |||||||||||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | |||||||||||||||||
Item 2.02. Results of Operations and Financial Condition.
On October 21, 2022, Huntington Bancshares Incorporated (“Huntington”) issued a news release announcing its earnings for the quarter ended September 30, 2022. Also on October 21, 2022, Huntington made a Quarterly Financial Supplement available in the Investor Relations section of Huntington’s website. Copies of Huntington's news release and quarterly financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated by reference in this Item 2.02.
Huntington’s senior management will host an earnings conference call on October 21, 2022, at 9:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast at the Investor Relations section of Huntington’s website, www.huntington.com, or through a dial-in telephone number at (877) 407-8029; Conference ID #13732539. Slides will be available in the Investor Relations section of Huntington’s website about an hour prior to the call. A replay of the webcast will be archived in the Investor Relations section of Huntington’s website. A telephone replay will be available approximately two hours after the completion of the call through October 28, 2022 at (877) 660-6853 or (201) 612-7415; conference ID #13732539.
The information contained or incorporated by reference in this Current Report on Form 8-K contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; the magnitude and duration of the COVID-19 pandemic and related variants and mutations and their impact on the global economy and financial market conditions and our business, results of operations, and financial condition; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; movements in interest rates; reform of LIBOR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services including those implementing our “Fair Play” banking philosophy; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, FDIC, and CFPB; the possibility that the anticipated benefits of the transaction with TCF are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Huntington does business; and other factors that may affect the future results of Huntington. Additional factors that could cause results to differ materially from those described above can be found in Huntington’s Annual Report on Form 10-K for the year ended December 31, 2021, and in its subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, each of which is on file with the Securities and Exchange Commission (the “SEC”) and available in the “Investor Relations” section of Huntington’s website http://www.huntington.com, under the heading “Publications and Filings” and in other documents Huntington files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Huntington does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
The information contained or incorporated by reference in Item 2.02 of this Form 8-K shall be treated as “furnished” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Item 9.01. Financial Statements and Exhibits.
The exhibits referenced below shall be treated as “furnished” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
(d)Exhibits.
Exhibit 99.1 – News release of Huntington Bancshares Incorporated, dated October 21, 2022.
Exhibit 99.2 – Quarterly Financial Supplement, September 30, 2022.
EXHIBIT INDEX
| Exhibit No. | Description | ||||
| Exhibit 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HUNTINGTON BANCSHARES INCORPORATED | |||||||||||||||||
| Date: | October 21, 2022 | By: | /s/ Zachary Wasserman | ||||||||||||||
| Zachary Wasserman | |||||||||||||||||
| Chief Financial Officer | |||||||||||||||||
Exhibit 99.1
October 21, 2022
Analysts: Tim Sedabres ([email protected]), 952.745.2766
Media: Seth Seymour ([email protected]), 614.480.3538
HUNTINGTON BANCSHARES INCORPORATED REPORTS 2022 THIRD-QUARTER EARNINGS
Second Consecutive Quarter of Record Net Income with Total Revenue Up 9% Sequentially
2022 Third-Quarter Highlights:
•Earnings per common share (EPS) for the quarter were $0.39, an increase of $0.04 from the prior quarter.
•Net interest income increased $143 million, or 11%, from the prior quarter, reflecting net interest margin expansion of 27 basis points to 3.42% and higher average total loans and leases.
•Noninterest income increased $13 million, or 3%, from the prior quarter, reflecting strength in capital markets supported by full quarter impact of Capstone.
•Pre-Provision Net Revenue (PPNR), excluding Notable Items, increased $109 million, or 14%, from the prior quarter to $867 million.
•Average total loans and leases increased $3.0 billion, or 3%, from the prior quarter to $117.0 billion. Excluding the decrease in PPP loans, average total loans and leases increased $3.3 billion, or 3%, from the prior quarter.
◦Average total commercial loans increased $1.8 billion, or 3%, and average total consumer loans increased $1.2 billion, or 2%, from the prior quarter.
•Average total deposits increased $1.0 billion from the prior quarter.
•Net charge-offs of 0.15% of average total loans and leases for the quarter, and 0.08% year to date.
•Nonperforming assets have declined five consecutive quarters.
•Allowance for credit losses (ACL) $2.2 billion, or 1.89% of total loans and leases at quarter end.
•Common Equity Tier 1 (CET1) risk-based capital ratio increased to 9.27%, within our 9% to 10% operating guideline.
•Ranked first nationally for SBA 7(a) loan origination by volume for the fifth year in a row for SBA fiscal year 2022 and the 14th year in a row that Huntington has been the largest originator, by volume, of SBA 7(a) loans within footprint.
•Huntington was named a Fortune Best Workplaces in Financial Services & Insurance 2022, reflecting our commitment to colleagues.
1
COLUMBUS, Ohio – Huntington Bancshares Incorporated (Nasdaq: HBAN) reported net income for the 2022 third quarter of $594 million, or $0.39 per common share, an increase of $217 million, or $0.17 per common share from the year-ago quarter.
Return on average assets was 1.31%, return on average common equity was 13.9%, return on average tangible common equity (ROTCE) was 21.9%, and adjusted ROTCE was 22.2%.
CEO Commentary:
"We are very pleased with our performance this quarter, which included record net earnings for the second consecutive quarter," said Steve Steinour, chairman, president and CEO. "We successfully executed on our business strategies, delivering robust loan growth, higher deposit balances, and expanded fee income. These results, and the benefit from the higher interest rate environment, combined to produce sequential pre-provision net revenue growth of 14% for the quarter when excluding Notable Items.
"We continue to make strategic investments to drive sustainable revenue growth, which resulted in broad-based commercial loan growth across geographies and sectors. Our recent addition of Capstone Partners has expanded the expertise we bring to customers, benefiting our deepening efforts with commercial customers and bolstering our fee income opportunities. In the consumer bank this quarter, we implemented additional Fair Play enhancements that offer a compelling value proposition for customers.
"Credit continues to perform very well with five consecutive quarters of declining nonperforming assets, reflecting our aggregate moderate-to-low risk appetite through the cycle. Capital levels increased during the quarter and credit reserves are robust allowing us to continue supporting customers and economic growth in the communities we serve. Looking forward, we are well positioned with a high quality balance sheet, and earnings power to drive long-term performance and generate significant value for our shareholders in a variety of economic scenarios.
“Finally, Huntington is proud to have been ranked as the largest Small Business Administration 7(a) lender by volume nationally for the fifth consecutive year. This reinforces our commitment to support small businesses and reflects the successful efforts to expand into new geographies, such as Colorado and Minnesota where we are already rank first and third, respectively."
2
Table 1 – Earnings Performance Summary
| 2022 | 2021 | ||||||||||||||||||||||||||||
| (in millions, except per share data) | Third | Second | First | Fourth | Third | ||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||||||||
| Net income attributable to Huntington Bancshares Inc | $ | 594 | $ | 539 | $ | 460 | $ | 401 | $ | 377 | |||||||||||||||||||
| Diluted earnings per common share | 0.39 | 0.35 | 0.29 | 0.26 | 0.22 | ||||||||||||||||||||||||
| Return on average assets | 1.31 | % | 1.22 | % | 1.05 | % | 0.92 | % | 0.86 | % | |||||||||||||||||||
| Return on average common equity | 13.9 | 12.8 | 10.4 | 8.7 | 7.6 | ||||||||||||||||||||||||
| Return on average tangible common equity | 21.9 | 19.9 | 15.8 | 13.2 | 11.5 | ||||||||||||||||||||||||
| Net interest margin | 3.42 | 3.15 | 2.88 | 2.85 | 2.91 | ||||||||||||||||||||||||
| Efficiency ratio | 54.4 | 57.3 | 62.9 | 73.0 | 74.9 | ||||||||||||||||||||||||
| Tangible book value per common share | $ | 6.40 | $ | 6.96 | $ | 7.47 | $ | 8.06 | $ | 8.09 | |||||||||||||||||||
| Cash dividends declared per common share | 0.155 | 0.155 | 0.155 | 0.155 | 0.15 | ||||||||||||||||||||||||
| Average earning assets | $ | 164,024 | $ | 161,225 | $ | 162,414 | $ | 158,692 | $ | 159,148 | |||||||||||||||||||
| Average loans and leases | 116,964 | 113,949 | 111,142 | 109,488 | 109,668 | ||||||||||||||||||||||||
| Average core deposits | 141,691 | 141,802 | 139,148 | 138,008 | 137,816 | ||||||||||||||||||||||||
| Tangible common equity / tangible assets ratio | 5.32 | % | 5.80 | % | 6.28 | % | 6.88 | % | 6.95 | % | |||||||||||||||||||
| Common equity Tier 1 risk-based capital ratio | 9.27 | 9.05 | 9.22 | 9.33 | 9.57 | ||||||||||||||||||||||||
| NCOs as a % of average loans and leases | 0.15 | % | 0.03 | % | 0.07 | % | 0.12 | % | 0.20 | % | |||||||||||||||||||
| NAL ratio | 0.51 | 0.57 | 0.60 | 0.64 | 0.79 | ||||||||||||||||||||||||
| ACL as a % of total loans and leases | 1.89 | 1.87 | 1.87 | 1.89 | 2.01 | ||||||||||||||||||||||||
Table 2 lists certain items that we believe are important to understanding corporate performance and trends (see Basis of Presentation). There was one Notable Item in each of the 2022 third quarter, 2022 second quarter and 2021 third quarter: acquisition-related pretax expense of $10 million, $24 million, and $234 million, respectively.
Table 2 – Notable Items Influencing Earnings
| Three Months Ended | Pretax Impact (1) | After-tax Impact (1) | |||||||||||||||||||||
| ($ in millions, except per share) | Amount | Net Income | EPS (2) | ||||||||||||||||||||
| September 30, 2022 | $ | 594 | $ | 0.39 | |||||||||||||||||||
| • | Acquisition-related expenses (3) | $ | (10) | $ | (8) | $ | — | ||||||||||||||||
| June 30, 2022 | $ | 539 | $ | 0.35 | |||||||||||||||||||
| • | Acquisition-related expenses (3) | $ | (24) | $ | (19) | $ | (0.01) | ||||||||||||||||
| September 30, 2021 | $ | 377 | $ | 0.22 | |||||||||||||||||||
| • | Acquisition-related expenses | $ | (234) | $ | (192) | $ | (0.13) | ||||||||||||||||
(1)Favorable (unfavorable) impact.
(2)EPS reflected on a fully diluted basis.
(3)Includes TCF and Capstone acquisition-related expenses.
3
Net Interest Income, Net Interest Margin, and Average Balance Sheet
Table 3 – Net Interest Income and Net Interest Margin Performance Summary
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | Third | Second | First | Fourth | Third | Change (%) | |||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||||||||||||||||
| Net interest income | $ | 1,404 | $ | 1,261 | $ | 1,146 | $ | 1,132 | $ | 1,160 | 11 | % | 21 | % | |||||||||||||||||||||||||||
| FTE adjustment | 8 | 6 | 8 | 6 | 7 | 33 | 14 | ||||||||||||||||||||||||||||||||||
| Net interest income - FTE | 1,412 | 1,267 | 1,154 | 1,138 | 1,167 | 11 | 21 | ||||||||||||||||||||||||||||||||||
| Noninterest income | 498 | 485 | 499 | 515 | 535 | 3 | (7) | ||||||||||||||||||||||||||||||||||
| Total revenue - FTE | $ | 1,910 | $ | 1,752 | $ | 1,653 | $ | 1,653 | $ | 1,702 | 9 | % | 12 | % | |||||||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Change (bp) | ||||||||||||||||||||||||||||||||||||
| Yield / Cost | Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | ||||||||||||||||||||||||||||||||||
| Total earning assets | 3.86 | % | 3.33 | % | 3.00 | % | 2.97 | % | 3.02 | % | 53 | 84 | |||||||||||||||||||||||||||||
| Total loans and leases | 4.28 | 3.77 | 3.64 | 3.69 | 3.80 | 51 | 48 | ||||||||||||||||||||||||||||||||||
| Total securities | 2.74 | 2.24 | 1.72 | 1.49 | 1.52 | 50 | 122 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 0.64 | 0.25 | 0.18 | 0.18 | 0.17 | 39 | 47 | ||||||||||||||||||||||||||||||||||
| Total interest-bearing deposits | 0.35 | 0.10 | 0.04 | 0.05 | 0.05 | 25 | 30 | ||||||||||||||||||||||||||||||||||
| Net interest rate spread | 3.22 | 3.08 | 2.82 | 2.79 | 2.85 | 14 | 37 | ||||||||||||||||||||||||||||||||||
| Impact of noninterest-bearing funds on margin | 0.20 | 0.07 | 0.06 | 0.06 | 0.06 | 13 | 14 | ||||||||||||||||||||||||||||||||||
| Net interest margin | 3.42 | % | 3.15 | % | 2.88 | % | 2.85 | % | 2.91 | % | 27 | 51 | |||||||||||||||||||||||||||||
Fully-taxable equivalent (FTE) net interest income for the 2022 third quarter increased $245 million, or 21%, from the 2021 third quarter. The results primarily reflect a 51 basis point increase in the FTE net interest margin (NIM) to 3.42% and a $4.9 billion, or 3% increase in average earning assets. The expansion in NIM was driven by the higher rate environment driving an increase in loan and lease and investment security yields, partially offset by higher cost of funds. Net interest income in the 2022 third quarter included $15 million of net interest income from purchase accounting accretion and $4 million of PPP loan fees recognized upon forgiveness payments, compared to $36 million and $30 million, respectively, in the 2021 third quarter. Additionally, derivative ineffectiveness benefited net interest income $17 million in the 2022 third quarter, compared to $2 million in the 2021 third quarter.
Compared to the 2022 second quarter, FTE net interest income increased $145 million, or 11%, reflecting 27 basis points of NIM expansion and a $2.8 billion, or 2%, increase in average earning assets. The expansion in NIM was driven by the higher interest rate environment resulting in increase in loan and lease and investment security yields, partially offset by higher cost of funds. Net interest income in the 2022 second quarter included $16 million of net interest income from purchase accounting accretion and $5 million of PPP loan fees recognized upon forgiveness payments. Additionally, derivative ineffectiveness benefited net interest income $17 million in the 2022 third quarter, compared to $8 million in the 2022 second quarter.
4
Table 4 – Average Earning Assets
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| ($ in billions) | Third | Second | First | Fourth | Third | Change (%) | |||||||||||||||||||||||||||||||||||
| Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 43.6 | $ | 42.7 | $ | 41.4 | $ | 40.6 | $ | 40.6 | 2 | % | 7 | % | |||||||||||||||||||||||||||
| Commercial real estate | 16.1 | 15.3 | 15.1 | 14.6 | 14.7 | 5 | 10 | ||||||||||||||||||||||||||||||||||
| Lease financing | 5.0 | 4.9 | 4.9 | 4.9 | 5.0 | 1 | 0 | ||||||||||||||||||||||||||||||||||
| Total commercial | 64.7 | 62.9 | 61.4 | 60.1 | 60.3 | 3 | 7 | ||||||||||||||||||||||||||||||||||
| Residential mortgage | 21.6 | 20.5 | 19.5 | 19.0 | 18.9 | 5 | 14 | ||||||||||||||||||||||||||||||||||
| Automobile | 13.5 | 13.6 | 13.5 | 13.4 | 13.2 | 0 | 2 | ||||||||||||||||||||||||||||||||||
| Home equity | 10.4 | 10.4 | 10.4 | 10.7 | 11.1 | 1 | (6) | ||||||||||||||||||||||||||||||||||
| RV and marine | 5.5 | 5.3 | 5.1 | 5.0 | 5.0 | 3 | 9 | ||||||||||||||||||||||||||||||||||
| Other consumer | 1.3 | 1.3 | 1.3 | 1.3 | 1.2 | 3 | 11 | ||||||||||||||||||||||||||||||||||
| Total consumer | 52.3 | 51.1 | 49.8 | 49.4 | 49.4 | 2 | 6 | ||||||||||||||||||||||||||||||||||
| Total loans and leases | 117.0 | 113.9 | 111.1 | 109.5 | 109.7 | 3 | 7 | ||||||||||||||||||||||||||||||||||
| Total securities | 42.6 | 42.6 | 42.7 | 40.1 | 36.0 | — | 19 | ||||||||||||||||||||||||||||||||||
| Held-for-sale and other earning assets | 4.5 | 4.7 | 8.6 | 9.1 | 13.5 | (6) | (67) | ||||||||||||||||||||||||||||||||||
| Total earning assets | $ | 164.0 | $ | 161.2 | $ | 162.4 | $ | 158.7 | $ | 159.1 | 2 | % | 3 | % | |||||||||||||||||||||||||||
See Page 7 of Quarterly Financial Supplement for additional detail.
Average earning assets for the 2022 third quarter increased $4.9 billion, or 3%, from the year-ago quarter, primarily reflecting a $7.3 billion, or 7%, increase in average total loans and leases and a $6.7 billion, or 19%, increase in average securities, partially offset by an $8.3 billion, or 72%, decrease in deposits held at the Federal Reserve Bank. Average loan and lease balance increases are primarily due to organic growth in average commercial loans and leases of $4.4 billion, or 7%, and average consumer loans of $2.9 billion, or 6%, partially offset by a $3.1 billion decrease in average PPP loans. The increase in average securities was driven by the redeployment of excess liquidity into securities in the second half of 2021.
Compared to the 2022 second quarter, average earning assets increased $2.8 billion primarily reflecting a $3.0 billion, or 3%, increase in average total loans and leases.
5
Table 5 – Average Liabilities
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Change (%) | ||||||||||||||||||||||||||||||||||||
| ($ in billions) | Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | ||||||||||||||||||||||||||||||||||
| Demand deposits - noninterest-bearing | $ | 42.1 | $ | 42.4 | $ | 42.0 | $ | 43.4 | $ | 44.6 | (1) | % | (6) | % | |||||||||||||||||||||||||||
| Demand deposits - interest-bearing | 42.1 | 41.7 | 40.6 | 38.4 | 35.7 | 1 | 18 | ||||||||||||||||||||||||||||||||||
| Total demand deposits | 84.2 | 84.1 | 82.6 | 81.8 | 80.3 | — | 5 | ||||||||||||||||||||||||||||||||||
| Money market deposits | 34.1 | 33.8 | 32.7 | 32.4 | 33.3 | 1 | 2 | ||||||||||||||||||||||||||||||||||
| Savings and other domestic deposits | 21.4 | 21.7 | 21.3 | 20.9 | 20.9 | (1) | 2 | ||||||||||||||||||||||||||||||||||
| Core certificates of deposit | 2.0 | 2.2 | 2.6 | 2.9 | 3.3 | (8) | (39) | ||||||||||||||||||||||||||||||||||
| Total core deposits | 141.7 | 141.8 | 139.1 | 138.0 | 137.8 | 0 | 3 | ||||||||||||||||||||||||||||||||||
| Other domestic deposits of $250,000 or more | 0.2 | 0.2 | 0.3 | 0.5 | 0.6 | (14) | (67) | ||||||||||||||||||||||||||||||||||
Negotiable CDs, brokered and other deposits | 4.1 | 3.0 | 3.5 | 3.8 | 3.9 | 38 | 6 | ||||||||||||||||||||||||||||||||||
| Total deposits | $ | 146.0 | $ | 145.0 | $ | 142.9 | $ | 142.3 | $ | 142.3 | 1 | % | 3 | % | |||||||||||||||||||||||||||
| Short-term borrowings | $ | 2.6 | $ | 2.1 | $ | 4.7 | $ | 0.3 | $ | 0.3 | 24 | % | NM | ||||||||||||||||||||||||||||
| Long-term debt | 8.3 | 7.0 | 6.9 | 7.7 | 7.6 | 17 | 9 | ||||||||||||||||||||||||||||||||||
| Total debt | $ | 10.9 | $ | 9.1 | $ | 11.6 | $ | 8.0 | $ | 7.9 | 19 | % | 37 | % | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | $ | 114.8 | $ | 111.7 | $ | 112.6 | $ | 107.0 | $ | 105.6 | 3 | % | 9 | % | |||||||||||||||||||||||||||
NM - Not Meaningful
See Page 7 of Quarterly Financial Supplement for additional detail.
Average total interest-bearing liabilities for the 2022 third quarter increased $9.1 billion, or 9%, from the year-ago quarter. Average total deposits increased $3.7 billion, or 3%, while average total core deposits increased $3.9 billion, or 3%. These increases were led by higher average commercial deposits of $3.9 billion. Average total debt increased $3.0 billion, or 37%, reflecting higher FHLB borrowings and new debt issuances, which are used as part of the liquidity management program to optimize the funding profile.
Compared to the 2022 second quarter, average total interest-bearing liabilities increased $3.0 billion, or 3%. The increase was primarily due to higher average commercial and brokered deposits more than offsetting lower average consumer deposits. Additionally, new debt issuances and higher average FHLB borrowings were leveraged during the quarter to optimize the funding profile.
6
Noninterest Income
Table 6 – Noninterest Income
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Change (%) | ||||||||||||||||||||||||||||||||||||
| ($ in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | ||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | $ | 93 | $ | 105 | $ | 97 | $ | 101 | $ | 114 | (11) | % | (18) | % | |||||||||||||||||||||||||||
| Card and payment processing income | 96 | 96 | 86 | 93 | 96 | — | 0 | ||||||||||||||||||||||||||||||||||
| Mortgage banking income | 26 | 44 | 49 | 61 | 81 | (41) | (68) | ||||||||||||||||||||||||||||||||||
| Trust and investment management services | 60 | 63 | 65 | 63 | 61 | (5) | (2) | ||||||||||||||||||||||||||||||||||
| Capital markets fees | 73 | 54 | 42 | 47 | 40 | 35 | 83 | ||||||||||||||||||||||||||||||||||
| Insurance income | 28 | 27 | 31 | 28 | 25 | 4 | 12 | ||||||||||||||||||||||||||||||||||
| Leasing revenue | 29 | 27 | 35 | 41 | 42 | 7 | (31) | ||||||||||||||||||||||||||||||||||
| Bank owned life insurance income | 13 | 11 | 17 | 22 | 15 | 18 | (13) | ||||||||||||||||||||||||||||||||||
| Gain on sale of loans | 15 | 12 | 28 | 1 | 2 | 25 | NM | ||||||||||||||||||||||||||||||||||
| Net gains (losses) on sales of securities | — | — | — | (1) | — | — | — | ||||||||||||||||||||||||||||||||||
| Other noninterest income | 65 | 46 | 49 | 59 | 59 | 41 | 10 | ||||||||||||||||||||||||||||||||||
| Total noninterest income | $ | 498 | $ | 485 | $ | 499 | $ | 515 | $ | 535 | 3 | % | (7) | % | |||||||||||||||||||||||||||
NM - Not Meaningful
See Page 11 of Quarterly Financial Supplement for additional detail.
Total noninterest income for the 2022 third quarter decreased $37 million, or 7%, from the year-ago quarter. Capital markets fees increased $33 million, or 83%, primarily reflecting higher advisory fees, and income from gain on sale of loans increased $13 million, primarily due to resuming the sale of SBA loans in 2022. Offsetting these increases: mortgage banking income decreased $55 million, or 68%, primarily reflecting lower secondary marketing spreads and lower salable volume. Service charges on deposit accounts decreased $21 million, or 18%, primarily reflecting impact from Fair Play enhancements implemented in July and conversion of TCF customers to Huntington's Fair Play product and service set in October 2021. Leasing revenue decreased $13 million, primarily reflecting decrease in operating leases.
Total noninterest income increased $13 million, or 3%, to $498 million for the 2022 third quarter, compared to $485 million for the 2022 second quarter. The increase was primarily driven by higher capital markets fees which increased $19 million, or 35%, due to higher advisory fees and an increase in other noninterest income of $19 million, or 41%, primarily due to higher mezzanine investment income. Partially offsetting these increases: mortgage banking income decreased $18 million, or 41%, to $26 million due to lower net MSR risk management and service charges on deposit accounts decreased $12 million, or 11% , to $93 million primarily due to the Fair Play enhancements implemented in July.
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Noninterest Expense
Table 7 – Noninterest Expense
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Change (%) | ||||||||||||||||||||||||||||||||||||
| ($ in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | ||||||||||||||||||||||||||||||||||
| Personnel costs | $ | 614 | $ | 577 | $ | 580 | $ | 632 | $ | 643 | 6 | % | (5) | % | |||||||||||||||||||||||||||
| Outside data processing and other services | 145 | 153 | 165 | 269 | 304 | (5) | (52) | ||||||||||||||||||||||||||||||||||
| Net occupancy | 63 | 58 | 64 | 68 | 95 | 9 | (34) | ||||||||||||||||||||||||||||||||||
| Equipment | 60 | 61 | 81 | 68 | 79 | (2) | (24) | ||||||||||||||||||||||||||||||||||
| Professional services | 18 | 19 | 19 | 22 | 26 | (5) | (31) | ||||||||||||||||||||||||||||||||||
| Marketing | 24 | 24 | 21 | 35 | 25 | 0 | (4) | ||||||||||||||||||||||||||||||||||
| Deposit and other insurance expense | 15 | 20 | 18 | 18 | 17 | (25) | (12) | ||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 13 | 13 | 14 | 14 | 13 | 0 | 0 | ||||||||||||||||||||||||||||||||||
| Lease financing equipment depreciation | 11 | 11 | 14 | 17 | 19 | 0 | (42) | ||||||||||||||||||||||||||||||||||
| Other noninterest expense | 90 | 82 | 77 | 78 | 68 | 10 | 32 | ||||||||||||||||||||||||||||||||||
| Total noninterest expense | $ | 1,053 | $ | 1,018 | $ | 1,053 | $ | 1,221 | $ | 1,289 | 3 | % | (18) | % | |||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||
| Average full-time equivalent employees | 20.0 | 19.9 | 19.7 | 20.3 | 20.9 | 1 | % | (4) | % | ||||||||||||||||||||||||||||||||
Table 8 - Impact of Notable Items
| 2022 | 2021 | ||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | |||||||||||||||||||||||||
| ($ in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
| Personnel costs | $ | 1 | $ | 2 | $ | 5 | $ | 32 | $ | 36 | |||||||||||||||||||
| Outside data processing and other services | 2 | 12 | 25 | 122 | 140 | ||||||||||||||||||||||||
| Net occupancy | 6 | 6 | 10 | 16 | 36 | ||||||||||||||||||||||||
| Equipment | 1 | — | 2 | 8 | 5 | ||||||||||||||||||||||||
| Professional services | — | 1 | 2 | 4 | 9 | ||||||||||||||||||||||||
| Marketing | — | — | — | 2 | 3 | ||||||||||||||||||||||||
| Deposit and other insurance expense | — | 1 | — | — | — | ||||||||||||||||||||||||
| Other noninterest expense | — | 2 | 2 | 3 | 5 | ||||||||||||||||||||||||
| Total noninterest expense | $ | 10 | $ | 24 | $ | 46 | $ | 187 | $ | 234 | |||||||||||||||||||
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Table 9 - Adjusted Noninterest Expense (Non-GAAP)
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Third | Second | First | Fourth | Third | Change (%) | ||||||||||||||||||||||||||||||||||||
| ($ in millions) | Quarter | Quarter | Quarter | Quarter | Quarter | LQ | YOY | ||||||||||||||||||||||||||||||||||
| Personnel costs | $ | 613 | $ | 575 | $ | 575 | $ | 600 | $ | 607 | 7 | % | 1 | % | |||||||||||||||||||||||||||
| Outside data processing and other services | 143 | 141 | 140 | 147 | 164 | 1 | (13) | ||||||||||||||||||||||||||||||||||
| Net occupancy | 57 | 52 | 54 | 52 | 59 | 10 | (3) | ||||||||||||||||||||||||||||||||||
| Equipment | 59 | 61 | 79 | 60 | 74 | (3) | (20) | ||||||||||||||||||||||||||||||||||
| Professional services | 18 | 18 | 17 | 18 | 17 | — | 6 | ||||||||||||||||||||||||||||||||||
| Marketing | 24 | 24 | 21 | 33 | 22 | — | 9 | ||||||||||||||||||||||||||||||||||
| Deposit and other insurance expense | 15 | 19 | 18 | 18 | 17 | (21) | (12) | ||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 13 | 13 | 14 | 14 | 13 | — | — | ||||||||||||||||||||||||||||||||||
| Lease financing equipment depreciation | 11 | 11 | 14 | 17 | 19 | — | (42) | ||||||||||||||||||||||||||||||||||
| Other noninterest expense | 90 | 80 | 75 | 75 | 63 | 13 | 43 | ||||||||||||||||||||||||||||||||||
| Total adjusted noninterest expense | $ | 1,043 | $ | 994 | $ | 1,007 | $ | 1,034 | $ | 1,055 | 5 | % | (1) | % | |||||||||||||||||||||||||||
Reported total noninterest expense for the 2022 third quarter decreased $236 million, or 18%, from the year-ago quarter. The decrease primarily reflects the $224 million decrease in Notable Items and execution of cost reduction initiatives associated with the TCF acquisition.
Reported total noninterest expense increased $35 million, or 3%, from the 2022 second quarter, reflecting a $14 million reduction in Notable Items to $10 million. Excluding the impact from Notable Items, noninterest expense increased $49 million, or 5%, primarily driven by personnel costs and other noninterest expense reflecting the full quarter impact from Capstone and Torana, additional increases in personnel costs largely due to revenue and production driven compensation, and a full quarter impact of merit increases.
9
Credit Quality
Table 10 – Credit Quality Metrics
| 2022 | 2021 | ||||||||||||||||||||||||||||
| ($ in millions) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||
| Total nonaccrual loans and leases | $ | 602 | $ | 657 | $ | 682 | $ | 716 | $ | 861 | |||||||||||||||||||
| Total other real estate, net | 11 | 11 | 11 | 9 | 7 | ||||||||||||||||||||||||
Other NPAs (1) | 14 | 14 | 15 | 25 | 25 | ||||||||||||||||||||||||
| Total nonperforming assets | 627 | 682 | 708 | 750 | 893 | ||||||||||||||||||||||||
| Accruing loans and leases past due 90+ days | 223 | 212 | 280 | 210 | 175 | ||||||||||||||||||||||||
| NPAs + accruing loans & leases past due 90+ days | $ | 850 | $ | 894 | $ | 988 | $ | 960 | $ | 1,068 | |||||||||||||||||||
NAL ratio (2) | 0.51 | % | 0.57 | % | 0.60 | % | 0.64 | % | 0.79 | % | |||||||||||||||||||
NPA ratio (3) | 0.53 | 0.59 | 0.63 | 0.67 | 0.82 | ||||||||||||||||||||||||
| (NPAs+90 days)/(Loans+OREO) | 0.72 | 0.77 | 0.88 | 0.86 | 0.97 | ||||||||||||||||||||||||
| Provision for credit losses | $ | 106 | $ | 67 | $ | 25 | $ | (64) | $ | (62) | |||||||||||||||||||
| Net charge-offs | 44 | 8 | 19 | 34 | 55 | ||||||||||||||||||||||||
| Net charge-offs / Average total loans and leases | 0.15 | % | 0.03 | % | 0.07 | % | 0.12 | % | 0.20 | % | |||||||||||||||||||
| Allowance for loans and lease losses (ALLL) | $ | 2,110 | $ | 2,074 | $ | 2,018 | $ | 2,030 | $ | 2,107 | |||||||||||||||||||
| Allowance for unfunded lending commitments | 120 | 94 | 91 | 77 | 98 | ||||||||||||||||||||||||
| Allowance for credit losses (ACL) | $ | 2,230 | $ | 2,168 | $ | 2,109 | $ | 2,107 | $ | 2,205 | |||||||||||||||||||
| ALLL as a % of: | |||||||||||||||||||||||||||||
| Total loans and leases | 1.79 | % | 1.78 | % | 1.79 | % | 1.82 | % | 1.92 | % | |||||||||||||||||||
| NALs | 351 | 316 | 296 | 284 | 245 | ||||||||||||||||||||||||
| NPAs | 336 | 304 | 285 | 271 | 236 | ||||||||||||||||||||||||
| ACL as a % of: | |||||||||||||||||||||||||||||
| Total loans and leases | 1.89 | % | 1.87 | % | 1.87 | % | 1.89 | % | 2.01 | % | |||||||||||||||||||
| NALs | 371 | 330 | 309 | 294 | 256 | ||||||||||||||||||||||||
| NPAs | 355 | 318 | 298 | 281 | 247 | ||||||||||||||||||||||||
(1)Other nonperforming assets include certain impaired securities and/or nonaccrual loans held-for-sale.
(2)Total NALs as a % of total loans and leases.
(3)Total NPAs as a % of sum of loans and leases, other real estate owned, and other NPAs.
See Pages 12-15 of Quarterly Financial Supplement for additional detail.
Nonperforming assets (NPAs) were $627 million, or 0.53%, of total loans and leases, OREO and other NPAs, compared to $893 million, or 0.82%, a year-ago. Nonaccrual loans and leases (NALs) were $602 million, or 0.51% of total loans and leases, compared to $861 million, or 0.79% of total loans and leases. On a linked quarter basis, NALs decreased $55 million, or 8%, and NPAs decreased $55 million, or 8%. The linked quarter decrease in NALs was primarily due to a decline in commercial and industrial.
The provision for credit losses increased $168 million year-over-year to $106 million in the 2022 third quarter. Net charge-offs (NCOs) decreased $11 million year-over-year and increased $36 million quarter-over-quarter to $44 million. NCOs represented an annualized 0.15% of average loans and leases in the current quarter, down from 0.20% in the year-ago quarter and up from 0.03% in the prior quarter. Commercial and consumer net charge-offs remained low at 0.10% and 0.22%, respectively, for the 2022 third quarter. We remain confident in the long-term credit performance of our loan and lease portfolios.
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The allowance for loan and lease losses (ALLL) increased $3 million from the year-ago quarter to $2.1 billion, or 1.79%, while allowance for credit losses (ACL) increased by $25 million from the year-ago quarter to $2.2 billion, or 1.89% of total loans and leases, primarily driven by loan and lease growth, partially offset by overall improved credit quality. On a linked quarter basis, the ALLL increased $36 million, and ACL increased $62 million driven primarily by loan and lease growth. The coverage ratio was 2 basis points higher recognizing the uncertainty in the near-term macro-economic outlook, while reflecting the credit performance of the loan and lease portfolios.
Capital
Table 11 – Capital Ratios
| 2022 | 2021 | |||||||||||||||||||||||||||||||
| ($ in billions) | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||
| Tangible common equity / tangible assets ratio | 5.32 | % | 5.80 | % | 6.28 | % | 6.88 | % | 6.95 | % | ||||||||||||||||||||||
Common equity tier 1 risk-based capital ratio (1) | 9.27 | % | 9.05 | % | 9.22 | % | 9.33 | % | 9.57 | % | ||||||||||||||||||||||
Regulatory Tier 1 risk-based capital ratio (1) | 10.83 | % | 10.63 | % | 10.84 | % | 10.99 | % | 11.35 | % | ||||||||||||||||||||||
Regulatory Total risk-based capital ratio (1) | 13.05 | % | 12.81 | % | 13.03 | % | 13.14 | % | 13.57 | % | ||||||||||||||||||||||
Total risk-weighted assets (1) | $ | 138.8 | $ | 137.8 | $ | 134.5 | $ | 131.3 | $ | 128.0 | ||||||||||||||||||||||
(1)September 30, 2022 figures are estimated. Amounts are presented on a Basel III standardized approach basis for calculating risk-weighted assets. The capital ratios reflect Huntington’s 2020 election of a five-year transition to delay for two years the full impact of CECL on regulatory capital, followed by a three-year transition period. As of March 31, 2022, June 30, 2022, and September 30, 2022, 25% of the cumulative CECL deferral has been phased in.
See Page 16 of Quarterly Financial Supplement for additional detail.
The tangible common equity to tangible assets ratio was 5.32% at September 30, 2022, down 48 basis points from last quarter due primarily to a decrease in tangible common equity related to higher interest rates causing a decrease in accumulated other comprehensive income, partially offset by earnings. Common Equity Tier 1 (CET1) risk-based capital ratio was 9.27%, up from 9.05% from the prior quarter. The increase in regulatory capital ratios was primarily driven by current period earnings.
Income Taxes
The provision for income taxes was $146 million in the 2022 third quarter compared to $120 million in the 2022 second quarter The effective tax rate for the 2022 third quarter and 2022 second quarter was 19.7% and 18.1%, respectively. The variance between the linked quarter provision for income taxes and effective tax rate was primarily driven by higher pre-tax income and the impact of discrete tax benefit in the prior quarter.
At September 30, 2022, we had a net federal deferred tax asset of $658 million and a net state deferred tax asset of $84 million.
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Conference Call / Webcast Information
Huntington’s senior management will host an earnings conference call on October 21, 2022, at 9:00 a.m. (Eastern Time). The call may be accessed via a live Internet webcast at the Investor Relations section of Huntington’s website, www.huntington.com, or through a dial-in telephone number at (877) 407-8029; Conference ID #13732539. Slides will be available in the Investor Relations section of Huntington’s website about an hour prior to the call. A replay of the webcast will be archived in the Investor Relations section of Huntington’s website. A telephone replay will be available approximately two hours after the completion of the call through October 28, 2022 at (877) 660-6853 or (201) 612-7415; conference ID #13732539.
Please see the 2022 Third Quarter Quarterly Financial Supplement for additional detailed financial performance metrics. This document can be found on the Investor Relations section of Huntington's website, http://www.huntington.com.
About Huntington
Huntington Bancshares Incorporated is a $179 billion asset regional bank holding company headquartered in Columbus, Ohio. Founded in 1866, The Huntington National Bank and its affiliates provide consumers, small and middle‐market businesses, corporations, municipalities, and other organizations with a comprehensive suite of banking, payments, wealth management, and risk management products and services. Huntington operates more than 1,000 branches in 11 states, with certain businesses operating in extended geographies. Visit Huntington.com for more information.
Caution regarding Forward-Looking Statements
This communication contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
12
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; the magnitude and duration of the COVID-19 pandemic and related variants and mutations and their impact on the global economy and financial market conditions and our business, results of operations, and financial condition; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; movements in interest rates; reform of LIBOR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services including those implementing our “Fair Play” banking philosophy; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, FDIC, and CFPB; the possibility that the anticipated benefits of the transaction with TCF are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Huntington does business; and other factors that may affect the future results of Huntington. Additional factors that could cause results to differ materially from those described above can be found in Huntington’s Annual Report on Form 10-K for the year ended December 31, 2021, and in its subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, each of which is on file with the Securities and Exchange Commission (the “SEC”) and available in the “Investor Relations” section of Huntington’s website http://www.huntington.com, under the heading “Publications and Filings” and in other documents Huntington files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Huntington does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
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, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this document, conference call slides, or the Form 8-K related to this document, all of which can be found in the Investor Relations section of Huntington’s website, http://www.huntington.com.
Annualized Data
Certain returns, yields, performance ratios, or quarterly growth rates are presented on an “annualized” basis. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. For example, loan and deposit growth rates, as well as net charge-off percentages, are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate.
Fully-Taxable Equivalent Interest Income and Net Interest Margin
Income from tax-exempt earning assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.
13
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 associated with ordinary banking activities, are so unusually large that their outsized impact is believed by management at that time to be infrequent or short term in nature. We refer to such items as “Notable Items.” Management believes it is useful to consider certain financial metrics with and without Notable Items, in order to enable a better understanding of company results, increase comparability of period-to-period results, and to evaluate and forecast those results.
14
Exhibit 99.2
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Supplement
September 30, 2022
Table of Contents
Quarterly Accruing Past Due Loans and Leases | |||||
Notes:
The preparation of financial statement data in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect amounts reported. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period’s presentation.
Fully-Taxable Equivalent Basis
Interest income, yields, and ratios on a FTE basis are considered non-GAAP financial measures. Management believes net interest income on a FTE basis provides a more accurate picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21%.
Non-Regulatory Capital Ratios
In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:
•Tangible common equity to tangible assets, and
•Tangible common equity to risk-weighted assets using Basel III definition.
These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows readers to compare the Company’s capitalization to other financial services companies. These ratios differ from capital ratios defined by banking regulators principally in that the numerator excludes preferred securities, the nature and extent of which varies among different financial services companies. These ratios are not defined in GAAP or federal banking regulations. As a result, these non-regulatory capital ratios disclosed by the Company may be considered non-GAAP financial measures.
Because there are no standardized definitions for these non-regulatory capital ratios, the Company’s calculation methods may differ from those used by other financial services companies. Also, there may be limits in the usefulness of these measures to investors. As a result, the Company encourages readers to consider the consolidated financial statements and other financial information contained in the related press release in their entirety, and not to rely on any single financial measure.
Huntington Bancshares Incorporated
Quarterly Key Statistics
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||
| (dollar amounts in millions, except per share data) | September 30, | June 30, | September 30, | Percent Changes vs. | ||||||||||||||||||||||||||||
| 2022 | 2022 | 2021 | 2Q22 | 3Q21 | ||||||||||||||||||||||||||||
Net interest income (2) | $ | 1,412 | $ | 1,267 | $ | 1,167 | 11 | % | 21 | % | ||||||||||||||||||||||
| FTE adjustment | (8) | (6) | (7) | (33) | (14) | |||||||||||||||||||||||||||
Net interest income | 1,404 | 1,261 | 1,160 | 11 | 21 | |||||||||||||||||||||||||||
| Provision for credit losses | 106 | 67 | (62) | 58 | 271 | |||||||||||||||||||||||||||
| Noninterest income | 498 | 485 | 535 | 3 | (7) | |||||||||||||||||||||||||||
| Noninterest expense | 1,053 | 1,018 | 1,289 | 3 | (18) | |||||||||||||||||||||||||||
| Income before income taxes | 743 | 661 | 468 | 12 | 59 | |||||||||||||||||||||||||||
| Provision for income taxes | 146 | 120 | 90 | 22 | 62 | |||||||||||||||||||||||||||
| Income after income taxes | 597 | 541 | 378 | 10 | 58 | |||||||||||||||||||||||||||
| Income attributable to non-controlling interest | 3 | 2 | 1 | 50 | NM | |||||||||||||||||||||||||||
| Net income attributable to Huntington Bancshares Inc | 594 | 539 | 377 | 10 | 58 | |||||||||||||||||||||||||||
| Dividends on preferred shares | 29 | 28 | 29 | 4 | — | |||||||||||||||||||||||||||
| Impact of preferred stock redemption | — | — | 15 | — | (100) | |||||||||||||||||||||||||||
| Net income applicable to common shares | $ | 565 | $ | 511 | $ | 333 | 11 | % | 70 | |||||||||||||||||||||||
| Net income per common share - diluted | $ | 0.39 | $ | 0.35 | $ | 0.22 | 11 | % | 77 | % | ||||||||||||||||||||||
Cash dividends declared per common share | 0.155 | 0.155 | 0.15 | — | 3 | |||||||||||||||||||||||||||
Tangible book value per common share at end of period | 6.40 | 6.96 | 8.09 | (8) | (21) | |||||||||||||||||||||||||||
Number of common shares repurchased | — | — | 33 | — | (100) | |||||||||||||||||||||||||||
Average common shares - basic | 1,443 | 1,441 | 1,463 | — | (1) | |||||||||||||||||||||||||||
Average common shares - diluted | 1,465 | 1,463 | 1,487 | — | (1) | |||||||||||||||||||||||||||
Ending common shares outstanding | 1,443 | 1,442 | 1,446 | — | — | |||||||||||||||||||||||||||
Return on average assets | 1.31 | % | 1.22 | % | 0.86 | % | ||||||||||||||||||||||||||
Return on average common shareholders’ equity | 13.9 | 12.8 | 7.6 | |||||||||||||||||||||||||||||
Return on average tangible common shareholders’ equity (1) | 21.9 | 19.9 | 11.5 | |||||||||||||||||||||||||||||
Net interest margin (2) | 3.42 | 3.15 | 2.91 | |||||||||||||||||||||||||||||
Efficiency ratio (3) | 54.4 | 57.3 | 74.9 | |||||||||||||||||||||||||||||
| Effective tax rate | 19.7 | 18.1 | 19.0 | |||||||||||||||||||||||||||||
Average total assets | $ | 179,557 | $ | 176,561 | $ | 173,833 | 2 | 3 | ||||||||||||||||||||||||
Average earning assets | 164,024 | 161,225 | 159,148 | 2 | 3 | |||||||||||||||||||||||||||
Average loans and leases | 116,964 | 113,949 | 109,668 | 3 | 7 | |||||||||||||||||||||||||||
Average loans and leases - linked quarter annualized growth rate | 10.6 | % | 10.1 | % | 102.0 | % | ||||||||||||||||||||||||||
Average total deposits | $ | 146,008 | $ | 145,008 | $ | 142,303 | 1 | 3 | ||||||||||||||||||||||||
| Average core deposits (4) | 141,691 | 141,802 | 137,816 | — | 3 | |||||||||||||||||||||||||||
Average core deposits - linked quarter annualized growth rate | (0.3) | % | 7.6 | % | 103.7 | % | ||||||||||||||||||||||||||
Average shareholders’ equity | 18,317 | 18,228 | 19,783 | — | (7) | |||||||||||||||||||||||||||
Average common total shareholders' equity | 16,150 | 16,062 | 17,428 | 1 | (7) | |||||||||||||||||||||||||||
Average tangible common shareholders' equity | 10,413 | 10,496 | 11,905 | (1) | (13) | |||||||||||||||||||||||||||
Total assets at end of period | 179,402 | 178,782 | 173,878 | — | 3 | |||||||||||||||||||||||||||
Total shareholders’ equity at end of period | 17,136 | 17,950 | 19,479 | (5) | (12) | |||||||||||||||||||||||||||
NCOs as a % of average loans and leases | 0.15 | % | 0.03 | % | 0.20 | % | ||||||||||||||||||||||||||
NAL ratio | 0.51 | 0.57 | 0.79 | |||||||||||||||||||||||||||||
| NPA ratio (5) | 0.53 | 0.59 | 0.82 | |||||||||||||||||||||||||||||
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period | 1.79 | 1.78 | 1.92 | |||||||||||||||||||||||||||||
| Allowance for credit losses (ACL) as a % of total loans and leases at the end of period | 1.89 | 1.87 | 2.01 | |||||||||||||||||||||||||||||
| Common equity tier 1 risk-based capital ratio (6) | 9.27 | 9.05 | 9.57 | |||||||||||||||||||||||||||||
| Tangible common equity / tangible asset ratio (7) | 5.32 | 5.80 | 6.95 | |||||||||||||||||||||||||||||
NM - Not Meaningful
See Notes to the Quarterly Key Statistics.
1
Huntington Bancshares Incorporated
Year to Date Key Statistics
(Unaudited)
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollar amounts in millions, except per share data) | 2022 | 2021 | Amount | Percent | |||||||||||||||||||
Net interest income (2) | $ | 3,833 | $ | 2,989 | $ | 844 | 28 | % | |||||||||||||||
| FTE adjustment | (22) | (19) | (3) | (16) | |||||||||||||||||||
Net interest income | 3,811 | 2,970 | 841 | 28 | |||||||||||||||||||
| Provision for credit losses | 198 | 89 | 109 | 122 | |||||||||||||||||||
| Noninterest income | 1,482 | 1,374 | 108 | 8 | |||||||||||||||||||
| Noninterest expense | 3,124 | 3,154 | (30) | (1) | |||||||||||||||||||
Income before income taxes | 1,971 | 1,101 | 870 | 79 | |||||||||||||||||||
| Provision for income taxes | 371 | 206 | 165 | 80 | |||||||||||||||||||
| Income after income taxes | 1,600 | 895 | 705 | 79 | |||||||||||||||||||
| Income attributable to non-controlling interest | 7 | 1 | 6 | NM | |||||||||||||||||||
| Net income attributable to Huntington Bancshares Inc | 1,593 | 894 | 699 | 78 | |||||||||||||||||||
| Dividends on preferred shares | 85 | 103 | (18) | (17) | |||||||||||||||||||
| Impact of preferred stock redemption | — | 15 | (15) | (100) | |||||||||||||||||||
Net income applicable to common shares | $ | 1,508 | $ | 776 | $ | 732 | 94 | % | |||||||||||||||
Net income per common share - diluted | $ | 1.03 | $ | 0.63 | $ | 0.40 | 63 | % | |||||||||||||||
Cash dividends declared per common share | 0.465 | 0.45 | 0.015 | 3 | |||||||||||||||||||
Average common shares - basic | 1,441 | 1,202 | 239 | 20 | |||||||||||||||||||
Average common shares - diluted | 1,464 | 1,225 | 239 | 20 | |||||||||||||||||||
Return on average assets | 1.20 | % | 0.82 | % | |||||||||||||||||||
Return on average common shareholders’ equity | 12.3 | 7.5 | |||||||||||||||||||||
Return on average tangible common shareholders’ equity (1) | 19.1 | 10.6 | |||||||||||||||||||||
Net interest margin (2) | 3.15 | 2.99 | |||||||||||||||||||||
Efficiency ratio (3) | 58.0 | 71.7 | |||||||||||||||||||||
Effective tax rate | 18.8 | 18.7 | |||||||||||||||||||||
Average total assets | $ | 177,917 | $ | 145,072 | $ | 32,845 | 23 | % | |||||||||||||||
Average earning assets | 162,560 | 133,709 | 28,851 | 22 | |||||||||||||||||||
Average loans and leases | 114,039 | 92,548 | 21,491 | 23 | |||||||||||||||||||
Average total deposits | 144,656 | 118,246 | 26,410 | 22 | |||||||||||||||||||
| Average core deposits (4) | 140,890 | 114,509 | 26,381 | 23 | |||||||||||||||||||
Average shareholders’ equity | 18,534 | 16,196 | 2,338 | 14 | |||||||||||||||||||
Average common total shareholders' equity | 16,367 | 13,685 | 2,682 | 20 | |||||||||||||||||||
Average tangible common shareholders' equity | 10,754 | 10,116 | 638 | 6 | |||||||||||||||||||
NCOs as a % of average loans and leases | 0.08 | % | 0.26 | % | |||||||||||||||||||
NAL ratio | 0.51 | 0.79 | |||||||||||||||||||||
| NPA ratio (5) | 0.53 | 0.82 | |||||||||||||||||||||
NM - Not Meaningful
See Notes to the Year to Date and Quarterly Key Statistics.
2
Key Statistics Footnotes
(1)Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common shareholders’ equity equals average total common shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 21% tax rate.
(2)On a fully-taxable equivalent (FTE) basis assuming a 21% tax rate.
(3)Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).
(4)Includes noninterest-bearing and interest-bearing demand deposits, money market deposits, savings and other domestic deposits, and core certificates of deposit.
(5)NPAs include other nonperforming assets, which includes certain impaired securities and/or nonaccrual loans held for sale, and other real estate owned.
(6)September 30, 2022, figures are estimated.
(7)Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax liability, calculated at a 21% tax rate.
3
Huntington Bancshares Incorporated
Consolidated Balance Sheets
| September 30, | December 31, | ||||||||||||||||
| (dollar amounts in millions) | 2022 | 2021 | Percent Changes | ||||||||||||||
| (Unaudited) | |||||||||||||||||
Assets | |||||||||||||||||
Cash and due from banks | $ | 1,685 | $ | 1,811 | (7) | % | |||||||||||
| Interest-bearing deposits at Federal Reserve Bank | 2,691 | 3,711 | (27) | ||||||||||||||
Interest-bearing deposits in banks | 216 | 392 | (45) | ||||||||||||||
Trading account securities | 32 | 46 | (30) | ||||||||||||||
Available-for-sale securities | 23,306 | 28,460 | (18) | ||||||||||||||
Held-to-maturity securities | 17,173 | 12,447 | 38 | ||||||||||||||
Other securities | 818 | 648 | 26 | ||||||||||||||
Loans held for sale | 893 | 1,676 | (47) | ||||||||||||||
Loans and leases (1) | 118,147 | 111,267 | 6 | ||||||||||||||
Allowance for loan and lease losses | (2,110) | (2,030) | (4) | ||||||||||||||
Net loans and leases | 116,037 | 109,237 | 6 | ||||||||||||||
Bank owned life insurance | 2,768 | 2,765 | — | ||||||||||||||
| Accrued income and other receivables | 1,352 | 1,319 | 3 | ||||||||||||||
Premises and equipment | 1,171 | 1,164 | 1 | ||||||||||||||
Goodwill | 5,571 | 5,349 | 4 | ||||||||||||||
| Servicing rights and other intangible assets | 715 | 611 | 17 | ||||||||||||||
Other assets | 4,974 | 4,428 | 12 | ||||||||||||||
Total assets | $ | 179,402 | $ | 174,064 | 3 | % | |||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||
Liabilities | |||||||||||||||||
Deposits (2) | $ | 146,313 | $ | 143,263 | 2 | % | |||||||||||
Short-term borrowings | 426 | 334 | 28 | ||||||||||||||
Long-term debt | 10,168 | 7,108 | 43 | ||||||||||||||
Other liabilities | 5,324 | 4,041 | 32 | ||||||||||||||
Total liabilities | 162,231 | 154,746 | 5 | ||||||||||||||
Shareholders' equity | |||||||||||||||||
Preferred stock | 2,167 | 2,167 | — | ||||||||||||||
Common stock | 14 | 14 | — | ||||||||||||||
Capital surplus | 15,282 | 15,222 | — | ||||||||||||||
Less treasury shares, at cost | (80) | (79) | (1) | ||||||||||||||
| Accumulated other comprehensive income (loss) | (3,276) | (229) | (1,331) | ||||||||||||||
| Retained earnings | 3,029 | 2,202 | 38 | ||||||||||||||
| Total Huntington Bancshares Inc shareholders’ equity | 17,136 | 19,297 | (11) | ||||||||||||||
| Non-controlling interest | 35 | 21 | 67 | ||||||||||||||
| Total equity | 17,171 | 19,318 | (11) | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 179,402 | $ | 174,064 | 3 | % | |||||||||||
Common shares authorized (par value of $0.01) | 2,250,000,000 | 2,250,000,000 | |||||||||||||||
Common shares outstanding | 1,442,734,255 | 1,437,742,172 | |||||||||||||||
Treasury shares outstanding | 6,341,958 | 6,298,288 | |||||||||||||||
Preferred stock, authorized shares | 6,617,808 | 6,617,808 | |||||||||||||||
Preferred shares outstanding | 557,500 | 557,500 | |||||||||||||||
(1)See page 5 for detail of loans and leases.
(2)See page 6 for detail of deposits.
4
Huntington Bancshares Incorporated
Loans and Leases Composition
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balances by Type: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 44,144 | 38 | % | $ | 43,440 | 38 | % | $ | 42,236 | 37 | % | $ | 41,688 | 37 | % | $ | 40,452 | 36 | % | |||||||||||||||||||||||||||||||||||||||
Commercial real estate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 14,717 | 12 | 14,173 | 12 | 13,381 | 12 | 13,090 | 12 | 12,882 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||
Construction | 1,739 | 2 | 1,522 | 1 | 2,010 | 2 | 1,871 | 2 | 1,812 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | 16,456 | 14 | 15,695 | 13 | 15,391 | 14 | 14,961 | 14 | 14,694 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Lease financing | 5,093 | 4 | 5,043 | 4 | 4,978 | 4 | 5,000 | 4 | 4,991 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial | 65,693 | 56 | 64,178 | 55 | 62,605 | 55 | 61,649 | 55 | 60,137 | 55 | |||||||||||||||||||||||||||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage | 21,816 | 18 | 21,220 | 18 | 19,942 | 18 | 19,256 | 17 | 18,922 | 17 | |||||||||||||||||||||||||||||||||||||||||||||||||
Automobile | 13,430 | 11 | 13,622 | 12 | 13,480 | 12 | 13,434 | 12 | 13,305 | 12 | |||||||||||||||||||||||||||||||||||||||||||||||||
Home equity | 10,440 | 9 | 10,426 | 9 | 10,343 | 9 | 10,550 | 9 | 10,919 | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
RV and marine | 5,436 | 5 | 5,453 | 5 | 5,191 | 5 | 5,058 | 5 | 5,052 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Other consumer | 1,332 | 1 | 1,322 | 1 | 1,256 | 1 | 1,320 | 2 | 1,223 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total consumer | 52,454 | 44 | 52,043 | 45 | 50,212 | 45 | 49,618 | 45 | 49,421 | 45 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 118,147 | 100 | % | $ | 116,221 | 100 | % | $ | 112,817 | 100 | % | $ | 111,267 | 100 | % | $ | 109,558 | 100 | % | |||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ending Balances by Business Segment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Banking | $ | 54,515 | 47 | % | $ | 52,845 | 45 | % | $ | 51,132 | 45 | % | $ | 49,372 | 44 | % | $ | 46,988 | 43 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer and Business Banking | 32,115 | 27 | 32,144 | 28 | 31,756 | 29 | 32,715 | 30 | 34,267 | 31 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicle Finance | 21,707 | 18 | 21,848 | 19 | 21,344 | 19 | 20,968 | 19 | 20,353 | 19 | |||||||||||||||||||||||||||||||||||||||||||||||||
| RBHPCG (Regional Banking and The Huntington Private Client Group) | 9,586 | 8 | 9,181 | 8 | 8,435 | 7 | 8,012 | 7 | 7,743 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury / Other | 224 | — | 203 | — | 150 | — | 200 | — | 207 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans and leases | $ | 118,147 | 100 | % | $ | 116,221 | 100 | % | $ | 112,817 | 100 | % | $ | 111,267 | 100 | % | $ | 109,558 | 100 | % | |||||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Banking | $ | 53,255 | 46 | % | $ | 51,280 | 45 | % | $ | 49,515 | 45 | % | $ | 47,281 | 43 | % | $ | 46,180 | 43 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer and Business Banking | 32,116 | 27 | 31,926 | 28 | 32,134 | 29 | 33,434 | 31 | 35,544 | 32 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicle Finance | 21,748 | 19 | 21,601 | 19 | 21,155 | 19 | 20,598 | 19 | 20,219 | 18 | |||||||||||||||||||||||||||||||||||||||||||||||||
| RBHPCG | 9,416 | 8 | 8,786 | 8 | 8,178 | 7 | 7,842 | 7 | 7,527 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury / Other | 429 | — | 356 | — | 160 | — | 333 | — | 198 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases | $ | 116,964 | 100 | % | $ | 113,949 | 100 | % | $ | 111,142 | 100 | % | $ | 109,488 | 100 | % | $ | 109,668 | 100 | % | |||||||||||||||||||||||||||||||||||||||
5
Huntington Bancshares Incorporated
Deposits Composition
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balances by Type: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Demand deposits - noninterest-bearing | $ | 40,762 | 28 | % | $ | 42,131 | 29 | % | $ | 43,824 | 29 | % | $ | 43,236 | 30 | % | $ | 44,560 | 31 | % | |||||||||||||||||||||||||||||||||||||||
Demand deposits - interest-bearing | 43,673 | 30 | 41,433 | 28 | 42,099 | 29 | 39,837 | 28 | 36,423 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Money market deposits | 33,811 | 23 | 34,257 | 24 | 33,444 | 23 | 32,522 | 23 | 32,662 | 23 | |||||||||||||||||||||||||||||||||||||||||||||||||
Savings and other domestic deposits | 21,274 | 15 | 21,583 | 15 | 21,716 | 15 | 21,088 | 15 | 20,773 | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||
Core certificates of deposit (1) | 2,115 | 1 | 2,103 | 1 | 2,358 | 2 | 2,740 | 2 | 3,080 | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total core deposits | 141,635 | 97 | 141,507 | 97 | 143,441 | 98 | 139,423 | 98 | 137,498 | 97 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other domestic deposits of $250,000 or more | 186 | — | 221 | — | 274 | — | 359 | — | 521 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Negotiable CDS, brokered and other deposits | 4,492 | 3 | 3,707 | 3 | 3,250 | 2 | 3,481 | 2 | 3,879 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 146,313 | 100 | % | $ | 145,435 | 100 | % | $ | 146,965 | 100 | % | $ | 143,263 | 100 | % | $ | 141,898 | 100 | % | |||||||||||||||||||||||||||||||||||||||
Total core deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | $ | 65,151 | 46 | % | $ | 63,629 | 45 | % | $ | 64,013 | 45 | % | $ | 61,521 | 44 | % | $ | 61,210 | 45 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer | 76,484 | 54 | 77,878 | 55 | 79,428 | 55 | 77,902 | 56 | 76,288 | 55 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total core deposits | $ | 141,635 | 100 | % | $ | 141,507 | 100 | % | $ | 143,441 | 100 | % | $ | 139,423 | 100 | % | $ | 137,498 | 100 | % | |||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balances by Business Segment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Banking | $ | 37,194 | 25 | % | $ | 34,670 | 24 | % | $ | 35,034 | 24 | % | $ | 31,845 | 22 | % | $ | 32,531 | 23 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer and Business Banking | 93,854 | 65 | 95,693 | 66 | 96,907 | 65 | 95,352 | 67 | 94,439 | 67 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicle Finance | 1,173 | 1 | 1,291 | 1 | 1,323 | 1 | 1,401 | 1 | 1,437 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| RBHPCG | 8,982 | 6 | 9,226 | 6 | 9,672 | 7 | 10,162 | 7 | 9,025 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury / Other (2) | 5,110 | 3 | 4,555 | 3 | 4,029 | 3 | 4,503 | 3 | 4,466 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 146,313 | 100 | % | $ | 145,435 | 100 | % | $ | 146,965 | 100 | % | $ | 143,263 | 100 | % | $ | 141,898 | 100 | % | |||||||||||||||||||||||||||||||||||||||
Average Balances by Business Segment: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial Banking | $ | 36,636 | 25 | % | $ | 35,156 | 24 | % | $ | 33,355 | 23 | % | $ | 31,950 | 22 | % | $ | 32,867 | 23 | % | |||||||||||||||||||||||||||||||||||||||
| Consumer and Business Banking | 93,924 | 65 | 95,263 | 65 | 94,464 | 66 | 94,593 | 67 | 94,719 | 67 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicle Finance | 1,252 | 1 | 1,257 | 1 | 1,289 | 1 | 1,501 | 1 | 1,328 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| RBHPCG | 9,242 | 6 | 9,493 | 7 | 9,520 | 7 | 9,505 | 7 | 8,587 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury / Other (2) | 4,954 | 3 | 3,839 | 3 | 4,289 | 3 | 4,754 | 3 | 4,802 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits | $ | 146,008 | 100 | % | $ | 145,008 | 100 | % | $ | 142,917 | 100 | % | $ | 142,303 | 100 | % | $ | 142,303 | 100 | % | |||||||||||||||||||||||||||||||||||||||
(1)Includes consumer certificates of deposit of $250,000 or more.
(2)Comprised primarily of national market deposits.
6
Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
| Quarterly Average Balances (1) | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | Percent Changes vs. | |||||||||||||||||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | 2Q22 | 3Q21 | |||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits at Federal Reserve Bank | $ | 3,204 | $ | 3,532 | $ | 7,195 | $ | 7,227 | $ | 11,536 | (9) | % | (72) | % | ||||||||||||||||||||||||||||||
Interest-bearing deposits in banks | 260 | 161 | 174 | 521 | 466 | 61 | (44) | |||||||||||||||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||||||||||
Trading account securities | 24 | 30 | 46 | 51 | 49 | (20) | (51) | |||||||||||||||||||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||||||||||||||||||||||
Taxable | 21,677 | 21,672 | 24,205 | 23,895 | 20,147 | — | 8 | |||||||||||||||||||||||||||||||||||||
Tax-exempt | 2,917 | 2,859 | 2,886 | 3,057 | 3,116 | 2 | (6) | |||||||||||||||||||||||||||||||||||||
Total available-for-sale securities | 24,594 | 24,531 | 27,091 | 26,952 | 23,263 | — | 6 | |||||||||||||||||||||||||||||||||||||
Held-to-maturity securities - taxable | 17,188 | 17,234 | 14,556 | 12,421 | 11,964 | — | 44 | |||||||||||||||||||||||||||||||||||||
| Other securities | 804 | 755 | 967 | 651 | 677 | 6 | 19 | |||||||||||||||||||||||||||||||||||||
Total securities | 42,610 | 42,550 | 42,660 | 40,075 | 35,953 | — | 19 | |||||||||||||||||||||||||||||||||||||
Loans held for sale | 986 | 1,033 | 1,243 | 1,381 | 1,525 | (5) | (35) | |||||||||||||||||||||||||||||||||||||
Loans and leases: (2) | ||||||||||||||||||||||||||||||||||||||||||||
Commercial: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | 43,598 | 42,689 | 41,397 | 40,582 | 40,597 | 2 | 7 | |||||||||||||||||||||||||||||||||||||
Commercial real estate: | ||||||||||||||||||||||||||||||||||||||||||||
Commercial | 14,405 | 13,516 | 13,186 | 12,758 | 12,891 | 7 | 12 | |||||||||||||||||||||||||||||||||||||
Construction | 1,697 | 1,760 | 1,877 | 1,820 | 1,803 | (4) | (6) | |||||||||||||||||||||||||||||||||||||
Commercial real estate | 16,102 | 15,276 | 15,063 | 14,578 | 14,694 | 5 | 10 | |||||||||||||||||||||||||||||||||||||
| Lease financing | 4,981 | 4,919 | 4,912 | 4,933 | 4,983 | 1 | — | |||||||||||||||||||||||||||||||||||||
Total commercial | 64,681 | 62,884 | 61,372 | 60,093 | 60,274 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage | 21,552 | 20,527 | 19,505 | 18,955 | 18,886 | 5 | 14 | |||||||||||||||||||||||||||||||||||||
| Automobile | 13,514 | 13,557 | 13,463 | 13,355 | 13,209 | — | 2 | |||||||||||||||||||||||||||||||||||||
| Home equity | 10,431 | 10,373 | 10,414 | 10,748 | 11,106 | 1 | (6) | |||||||||||||||||||||||||||||||||||||
| RV and marine | 5,454 | 5,317 | 5,103 | 5,040 | 4,998 | 3 | 9 | |||||||||||||||||||||||||||||||||||||
Other consumer | 1,332 | 1,291 | 1,285 | 1,297 | 1,195 | 3 | 11 | |||||||||||||||||||||||||||||||||||||
Total consumer | 52,283 | 51,065 | 49,770 | 49,395 | 49,394 | 2 | 6 | |||||||||||||||||||||||||||||||||||||
Total loans and leases | 116,964 | 113,949 | 111,142 | 109,488 | 109,668 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | (2,099) | (2,053) | (2,047) | (2,112) | (2,219) | (2) | 5 | |||||||||||||||||||||||||||||||||||||
Net loans and leases | 114,865 | 111,896 | 109,095 | 107,376 | 107,449 | 3 | 7 | |||||||||||||||||||||||||||||||||||||
Total earning assets | 164,024 | 161,225 | 162,414 | 158,692 | 159,148 | 2 | 3 | |||||||||||||||||||||||||||||||||||||
Cash and due from banks | 1,697 | 1,669 | 1,648 | 1,695 | 1,535 | 2 | 11 | |||||||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets | 5,781 | 5,613 | 5,584 | 5,570 | 5,578 | 3 | 4 | |||||||||||||||||||||||||||||||||||||
All other assets | 10,154 | 10,107 | 10,013 | 9,827 | 9,791 | — | 4 | |||||||||||||||||||||||||||||||||||||
Total assets | $ | 179,557 | $ | 176,561 | $ | 177,612 | $ | 173,672 | $ | 173,833 | 2 | % | 3 | % | ||||||||||||||||||||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits: | ||||||||||||||||||||||||||||||||||||||||||||
Demand deposits - interest-bearing | $ | 42,038 | $ | 41,712 | $ | 40,634 | $ | 38,441 | $ | 35,690 | 1 | % | 18 | % | ||||||||||||||||||||||||||||||
Money market deposits | 34,058 | 33,791 | 32,672 | 32,400 | 33,281 | 1 | 2 | |||||||||||||||||||||||||||||||||||||
Savings and other domestic deposits | 21,439 | 21,683 | 21,316 | 20,896 | 20,931 | (1) | 2 | |||||||||||||||||||||||||||||||||||||
Core certificates of deposit (3) | 2,040 | 2,228 | 2,560 | 2,909 | 3,319 | (8) | (39) | |||||||||||||||||||||||||||||||||||||
Other domestic deposits of $250,000 or more | 193 | 225 | 316 | 452 | 582 | (14) | (67) | |||||||||||||||||||||||||||||||||||||
Negotiable CDS, brokered and other deposits | 4,124 | 2,981 | 3,453 | 3,843 | 3,905 | 38 | 6 | |||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 103,892 | 102,620 | 100,951 | 98,941 | 97,708 | 1 | 6 | |||||||||||||||||||||||||||||||||||||
Short-term borrowings | 2,609 | 2,103 | 4,728 | 342 | 317 | 24 | 723 | |||||||||||||||||||||||||||||||||||||
Long-term debt | 8,251 | 7,024 | 6,914 | 7,674 | 7,587 | 17 | 9 | |||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 114,752 | 111,747 | 112,593 | 106,957 | 105,612 | 3 | 9 | |||||||||||||||||||||||||||||||||||||
Demand deposits - noninterest-bearing | 42,116 | 42,388 | 41,966 | 43,362 | 44,595 | (1) | (6) | |||||||||||||||||||||||||||||||||||||
All other liabilities | 4,340 | 4,168 | 3,964 | 3,957 | 3,823 | 4 | 14 | |||||||||||||||||||||||||||||||||||||
| Total Huntington Bancshares Inc shareholders’ equity | 18,317 | 18,228 | 19,064 | 19,375 | 19,783 | — | (7) | |||||||||||||||||||||||||||||||||||||
| Non-controlling interest | 32 | 30 | 25 | 21 | 20 | 7 | 60 | |||||||||||||||||||||||||||||||||||||
| Total equity | 18,349 | 18,258 | 19,089 | 19,396 | 19,803 | — | (7) | |||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 179,557 | $ | 176,561 | $ | 177,612 | $ | 173,672 | $ | 173,833 | 2 | % | 3 | % | ||||||||||||||||||||||||||||||
(1)Amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(2)Includes nonaccrual loans and leases.
(3)Includes consumer certificates of deposit of $250,000 or more.
7
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin - Interest Income / Expense (1)(2)
(Unaudited)
Quarterly Interest Income / Expense | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
| Interest-bearing deposits at Federal Reserve Bank | $ | 19 | $ | 7 | $ | 3 | $ | 3 | $ | 4 | |||||||||||||||||||
Interest-bearing deposits in banks | 2 | 1 | — | — | 1 | ||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||
Trading account securities | — | 1 | — | — | — | ||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||
Taxable | 165 | 123 | 90 | 77 | 68 | ||||||||||||||||||||||||
Tax-exempt | 25 | 19 | 22 | 19 | 18 | ||||||||||||||||||||||||
Total available-for-sale securities | 190 | 142 | 112 | 96 | 86 | ||||||||||||||||||||||||
Held-to-maturity securities - taxable | 95 | 90 | 66 | 50 | 47 | ||||||||||||||||||||||||
| Other securities | 7 | 6 | 5 | 4 | 2 | ||||||||||||||||||||||||
Total securities | 292 | 239 | 183 | 150 | 135 | ||||||||||||||||||||||||
Loans held for sale | 13 | 10 | 10 | 10 | 13 | ||||||||||||||||||||||||
Loans and leases: | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | 490 | 415 | 392 | 393 | 419 | ||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Commercial | 169 | 115 | 97 | 102 | 105 | ||||||||||||||||||||||||
| Construction | 21 | 16 | 17 | 17 | 17 | ||||||||||||||||||||||||
| Commercial real estate | 190 | 131 | 114 | 119 | 122 | ||||||||||||||||||||||||
| Lease financing | 63 | 61 | 61 | 61 | 61 | ||||||||||||||||||||||||
| Total commercial | 743 | 607 | 567 | 573 | 602 | ||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| Residential mortgage | 174 | 158 | 146 | 141 | 139 | ||||||||||||||||||||||||
| Automobile | 120 | 115 | 112 | 119 | 121 | ||||||||||||||||||||||||
| Home equity | 143 | 115 | 102 | 109 | 113 | ||||||||||||||||||||||||
| RV and marine | 59 | 55 | 52 | 54 | 55 | ||||||||||||||||||||||||
| Other consumer | 32 | 30 | 28 | 29 | 29 | ||||||||||||||||||||||||
| Total consumer | 528 | 473 | 440 | 452 | 457 | ||||||||||||||||||||||||
Total loans and leases | 1,271 | 1,080 | 1,007 | 1,025 | 1,059 | ||||||||||||||||||||||||
Total earning assets | $ | 1,597 | $ | 1,337 | $ | 1,203 | $ | 1,188 | $ | 1,212 | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||
Demand deposits - interest-bearing | $ | 42 | $ | 11 | $ | 3 | $ | 3 | $ | 3 | |||||||||||||||||||
| Money market deposits | 25 | 8 | 4 | 6 | 7 | ||||||||||||||||||||||||
Savings and other domestic deposits | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
Core certificates of deposit (3) | 1 | — | 1 | — | (2) | ||||||||||||||||||||||||
Other domestic deposits of $250,000 or more | — | — | — | — | 1 | ||||||||||||||||||||||||
Negotiable CDS, brokered and other deposits | 23 | 5 | 2 | 1 | 1 | ||||||||||||||||||||||||
Total interest-bearing deposits | 92 | 25 | 11 | 11 | 11 | ||||||||||||||||||||||||
Short-term borrowings | 22 | 7 | 7 | 1 | — | ||||||||||||||||||||||||
Long-term debt | 71 | 38 | 31 | 38 | 34 | ||||||||||||||||||||||||
| Total interest-bearing liabilities | 185 | 70 | 49 | 50 | 45 | ||||||||||||||||||||||||
Net interest income | $ | 1,412 | $ | 1,267 | $ | 1,154 | $ | 1,138 | $ | 1,167 | |||||||||||||||||||
(1)Fully-taxable equivalent (FTE) income and expense calculated assuming a 21% tax rate. See page 10 for the FTE adjustment.
(2)Amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)Includes consumer certificates of deposit of $250,000 or more.
8
Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin - Yield
(Unaudited)
Quarterly Average Rates | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
Fully-taxable equivalent basis (1) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
| Interest-bearing deposits at Federal Reserve Bank | 2.39 | % | 0.80 | % | 0.17 | % | 0.15 | % | 0.17 | % | |||||||||||||||||||
Interest-bearing deposits in banks | 3.31 | 1.32 | 0.15 | 0.06 | 0.04 | ||||||||||||||||||||||||
Securities: | |||||||||||||||||||||||||||||
Trading account securities | 4.12 | 3.99 | 3.39 | 3.67 | 2.98 | ||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||
Taxable | 3.06 | 2.25 | 1.49 | 1.29 | 1.34 | ||||||||||||||||||||||||
Tax-exempt | 3.39 | 2.71 | 3.00 | 2.40 | 2.37 | ||||||||||||||||||||||||
Total available-for-sale securities | 3.09 | 2.30 | 1.65 | 1.42 | 1.48 | ||||||||||||||||||||||||
Held-to-maturity securities - taxable | 2.21 | 2.10 | 1.81 | 1.59 | 1.58 | ||||||||||||||||||||||||
| Other securities | 3.21 | 3.62 | 1.88 | 2.18 | 1.43 | ||||||||||||||||||||||||
Total securities | 2.74 | 2.24 | 1.72 | 1.49 | 1.52 | ||||||||||||||||||||||||
Loans held for sale | 4.98 | 4.08 | 3.15 | 3.14 | 3.23 | ||||||||||||||||||||||||
Loans and leases: (3) | |||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||
| Commercial and industrial | 4.40 | 3.84 | 3.79 | 3.79 | 4.04 | ||||||||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||||||||
| Commercial | 4.57 | 3.38 | 2.94 | 3.14 | 3.17 | ||||||||||||||||||||||||
| Construction | 4.95 | 3.70 | 3.52 | 3.71 | 3.68 | ||||||||||||||||||||||||
| Commercial real estate | 4.61 | 3.41 | 3.01 | 3.21 | 3.23 | ||||||||||||||||||||||||
| Lease financing | 4.95 | 4.98 | 4.93 | 4.81 | 4.84 | ||||||||||||||||||||||||
| Total commercial | 4.50 | 3.83 | 3.69 | 3.73 | 3.91 | ||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||
| Residential mortgage | 3.23 | 3.09 | 2.99 | 2.97 | 2.95 | ||||||||||||||||||||||||
| Automobile | 3.53 | 3.40 | 3.38 | 3.53 | 3.62 | ||||||||||||||||||||||||
| Home equity | 5.43 | 4.44 | 3.99 | 4.01 | 4.03 | ||||||||||||||||||||||||
| RV and marine | 4.29 | 4.12 | 4.15 | 4.31 | 4.33 | ||||||||||||||||||||||||
| Other consumer | 9.55 | 9.08 | 8.96 | 9.06 | 9.72 | ||||||||||||||||||||||||
| Total consumer | 4.02 | 3.70 | 3.57 | 3.64 | 3.67 | ||||||||||||||||||||||||
Total loans and leases | 4.28 | 3.77 | 3.64 | 3.69 | 3.80 | ||||||||||||||||||||||||
Total earning assets | 3.86 | 3.33 | 3.00 | 2.97 | 3.02 | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||||||||
Demand deposits - interest-bearing | 0.40 | 0.10 | 0.03 | 0.03 | 0.04 | ||||||||||||||||||||||||
| Money market deposits | 0.29 | 0.09 | 0.05 | 0.08 | 0.08 | ||||||||||||||||||||||||
Savings and other domestic deposits | 0.02 | 0.02 | 0.02 | 0.02 | 0.03 | ||||||||||||||||||||||||
Core certificates of deposit (4) | 0.10 | 0.07 | 0.14 | — | (0.23) | ||||||||||||||||||||||||
Other domestic deposits of $250,000 or more | 0.35 | 0.23 | 0.08 | 0.18 | 0.21 | ||||||||||||||||||||||||
Negotiable CDS, brokered and other deposits | 2.25 | 0.72 | 0.17 | 0.14 | 0.15 | ||||||||||||||||||||||||
Total interest-bearing deposits | 0.35 | 0.10 | 0.04 | 0.05 | 0.05 | ||||||||||||||||||||||||
Short-term borrowings | 3.31 | 1.40 | 0.57 | 0.09 | 0.14 | ||||||||||||||||||||||||
Long-term debt | 3.40 | 2.16 | 1.83 | 1.93 | 1.81 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 0.64 | 0.25 | 0.18 | 0.18 | 0.17 | ||||||||||||||||||||||||
Net interest rate spread | 3.22 | 3.08 | 2.82 | 2.79 | 2.85 | ||||||||||||||||||||||||
Impact of noninterest-bearing funds on margin | 0.20 | 0.07 | 0.06 | 0.06 | 0.06 | ||||||||||||||||||||||||
Net interest margin | 3.42 | % | 3.15 | % | 2.88 | % | 2.85 | % | 2.91 | % | |||||||||||||||||||
| Commercial Loan Derivative Impact | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
Average Rates | |||||||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||
Fully-taxable equivalent basis (1) | Third | Second | First | Fourth | Third | ||||||||||||||||||||||||
Commercial loans (2)(3) | 4.62 | % | 3.69 | % | 3.47 | % | 3.53 | % | 3.65 | % | |||||||||||||||||||
Impact of commercial loan derivatives | (0.12) | 0.14 | 0.22 | 0.20 | 0.26 | ||||||||||||||||||||||||
Total commercial - as reported | 4.50 | % | 3.83 | % | 3.69 | % | 3.73 | % | 3.91 | % | |||||||||||||||||||
Average 1 Month LIBOR | 2.46 | % | 1.01 | % | 0.23 | % | 0.09 | % | 0.09 | % | |||||||||||||||||||
(1)Fully-taxable equivalent (FTE) yields are calculated assuming a 21% tax rate. See page 10 for the FTE adjustment.
(2)Yield/rates exclude the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)Includes nonaccrual loans and leases.
(4)Includes consumer certificates of deposit of $250,000 or more.
9
Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||
| (dollar amounts in millions, except per share data) | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||
Interest income | $ | 1,589 | $ | 1,331 | $ | 1,195 | $ | 1,182 | $ | 1,205 | |||||||||||||||||||
Interest expense | 185 | 70 | 49 | 50 | 45 | ||||||||||||||||||||||||
Net interest income | 1,404 | 1,261 | 1,146 | 1,132 | 1,160 | ||||||||||||||||||||||||
| Provision for credit losses | 106 | 67 | 25 | (64) | (62) | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 1,298 | 1,194 | 1,121 | 1,196 | 1,222 | ||||||||||||||||||||||||
| Service charges on deposit accounts | 93 | 105 | 97 | 101 | 114 | ||||||||||||||||||||||||
| Card and payment processing income | 96 | 96 | 86 | 93 | 96 | ||||||||||||||||||||||||
| Mortgage banking income | 26 | 44 | 49 | 61 | 81 | ||||||||||||||||||||||||
| Trust and investment management services | 60 | 63 | 65 | 63 | 61 | ||||||||||||||||||||||||
| Capital markets fees | 73 | 54 | 42 | 47 | 40 | ||||||||||||||||||||||||
| Insurance income | 28 | 27 | 31 | 28 | 25 | ||||||||||||||||||||||||
| Leasing revenue | 29 | 27 | 35 | 41 | 42 | ||||||||||||||||||||||||
| Bank owned life insurance income | 13 | 11 | 17 | 22 | 15 | ||||||||||||||||||||||||
| Gain on sale of loans | 15 | 12 | 28 | 1 | 2 | ||||||||||||||||||||||||
| Net gains (losses) on sales of securities | — | — | — | (1) | — | ||||||||||||||||||||||||
| Other noninterest income | 65 | 46 | 49 | 59 | 59 | ||||||||||||||||||||||||
Total noninterest income | 498 | 485 | 499 | 515 | 535 | ||||||||||||||||||||||||
| Personnel costs | 614 | 577 | 580 | 632 | 643 | ||||||||||||||||||||||||
| Outside data processing and other services | 145 | 153 | 165 | 269 | 304 | ||||||||||||||||||||||||
| Net occupancy | 63 | 58 | 64 | 68 | 95 | ||||||||||||||||||||||||
| Equipment | 60 | 61 | 81 | 68 | 79 | ||||||||||||||||||||||||
| Professional services | 18 | 19 | 19 | 22 | 26 | ||||||||||||||||||||||||
| Marketing | 24 | 24 | 21 | 35 | 25 | ||||||||||||||||||||||||
| Deposit and other insurance expense | 15 | 20 | 18 | 18 | 17 | ||||||||||||||||||||||||
| Amortization of intangibles | 13 | 13 | 14 | 14 | 13 | ||||||||||||||||||||||||
| Lease financing equipment depreciation | 11 | 11 | 14 | 17 | 19 | ||||||||||||||||||||||||
| Other noninterest expense | 90 | 82 | 77 | 78 | 68 | ||||||||||||||||||||||||
Total noninterest expense | 1,053 | 1,018 | 1,053 | 1,221 | 1,289 | ||||||||||||||||||||||||
| Income before income taxes | 743 | 661 | 567 | 490 | 468 | ||||||||||||||||||||||||
| Provision for income taxes | 146 | 120 | 105 | 88 | 90 | ||||||||||||||||||||||||
| Income after income taxes | 597 | 541 | 462 | 402 | 378 | ||||||||||||||||||||||||
| Income attributable to non-controlling interest | 3 | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||
| Net income attributable to Huntington Bancshares Inc | 594 | 539 | 460 | 401 | 377 | ||||||||||||||||||||||||
| Dividends on preferred shares | 29 | 28 | 28 | 28 | 29 | ||||||||||||||||||||||||
| Impact of preferred stock redemption | — | — | — | (4) | 15 | ||||||||||||||||||||||||
| Net income applicable to common shares | $ | 565 | $ | 511 | $ | 432 | $ | 377 | $ | 333 | |||||||||||||||||||
Average common shares - basic | 1,443 | 1,441 | 1,438 | 1,444 | 1,463 | ||||||||||||||||||||||||
Average common shares - diluted | 1,465 | 1,463 | 1,464 | 1,471 | 1,487 | ||||||||||||||||||||||||
Per common share | |||||||||||||||||||||||||||||
| Net income - basic | $ | 0.39 | $ | 0.35 | $ | 0.30 | $ | 0.26 | $ | 0.23 | |||||||||||||||||||
| Net income - diluted | 0.39 | 0.35 | 0.29 | 0.26 | 0.22 | ||||||||||||||||||||||||
Cash dividends declared | 0.155 | 0.155 | 0.155 | 0.155 | 0.15 | ||||||||||||||||||||||||
Revenue - fully-taxable equivalent (FTE) | |||||||||||||||||||||||||||||
Net interest income | $ | 1,404 | $ | 1,261 | $ | 1,146 | $ | 1,132 | $ | 1,160 | |||||||||||||||||||
FTE adjustment | 8 | 6 | 8 | 6 | 7 | ||||||||||||||||||||||||
Net interest income (1) | 1,412 | 1,267 | 1,154 | 1,138 | 1,167 | ||||||||||||||||||||||||
Noninterest income | 498 | 485 | 499 | 515 | 535 | ||||||||||||||||||||||||
Total revenue (1) | $ | 1,910 | $ | 1,752 | $ | 1,653 | $ | 1,653 | $ | 1,702 | |||||||||||||||||||
(1)On a fully-taxable equivalent (FTE) basis assuming a 21% tax rate.
10
Huntington Bancshares Incorporated
Quarterly Mortgage Banking Noninterest Income
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | Percent Changes vs. | |||||||||||||||||||||||||||||||||||||||
(dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | 2Q22 | 3Q21 | |||||||||||||||||||||||||||||||||||||
Net origination and secondary marketing income | $ | 25 | $ | 27 | $ | 37 | $ | 56 | $ | 80 | (7) | % | (69) | % | ||||||||||||||||||||||||||||||
| Net mortgage servicing income | ||||||||||||||||||||||||||||||||||||||||||||
Loan servicing income | 22 | 22 | 22 | 22 | 21 | — | 5 | |||||||||||||||||||||||||||||||||||||
| Amortization of capitalized servicing | (14) | (16) | (15) | (20) | (21) | 13 | 33 | |||||||||||||||||||||||||||||||||||||
| Operating income | 8 | 6 | 7 | 2 | — | 33 | 100 | |||||||||||||||||||||||||||||||||||||
| MSR valuation adjustment (1) | 17 | 44 | 51 | (1) | 1 | (61) | NM | |||||||||||||||||||||||||||||||||||||
| (Losses) gains due to MSR hedging | (24) | (34) | (47) | 2 | (4) | 29 | NM | |||||||||||||||||||||||||||||||||||||
| Net MSR risk management | (7) | 10 | 4 | 1 | (3) | (170) | (133) | |||||||||||||||||||||||||||||||||||||
| Total net mortgage servicing income (expense) | $ | 1 | $ | 16 | $ | 11 | $ | 3 | $ | (3) | (94) | % | 133 | % | ||||||||||||||||||||||||||||||
| All other | — | 1 | 1 | 2 | 4 | (100) | (100) | |||||||||||||||||||||||||||||||||||||
Mortgage banking income | $ | 26 | $ | 44 | $ | 49 | $ | 61 | $ | 81 | (41) | % | (68) | % | ||||||||||||||||||||||||||||||
| Mortgage origination volume | $ | 2,491 | $ | 3,366 | $ | 2,881 | $ | 3,880 | $ | 4,467 | (26) | % | (44) | % | ||||||||||||||||||||||||||||||
Mortgage origination volume for sale | 1,339 | 1,263 | 1,519 | 2,380 | 2,514 | 6 | (47) | |||||||||||||||||||||||||||||||||||||
| Third party mortgage loans serviced (2) | 31,988 | 31,704 | 31,570 | 31,017 | 30,554 | 1 | 5 | |||||||||||||||||||||||||||||||||||||
| Mortgage servicing rights (2) | 486 | 463 | 416 | 351 | 338 | 5 | 44 | |||||||||||||||||||||||||||||||||||||
| MSR % of investor servicing portfolio (2) | 1.52 | % | 1.46 | % | 1.32 | % | 1.13 | % | 1.11 | % | 4 | % | 37 | % | ||||||||||||||||||||||||||||||
NM - Not Meaningful
(1)The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
(2)At period end.
11
Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Allowance for loan and lease losses, beginning of period | $ | 2,074 | $ | 2,018 | $ | 2,030 | $ | 2,107 | $ | 2,218 | |||||||||||||||||||
| Loan and lease charge-offs | (83) | (52) | (81) | (79) | (106) | ||||||||||||||||||||||||
| Recoveries of loans and leases previously charged-off | 39 | 44 | 62 | 45 | 51 | ||||||||||||||||||||||||
| Net loan and lease charge-offs | (44) | (8) | (19) | (34) | (55) | ||||||||||||||||||||||||
| Provision (benefit) for loan and lease losses | 80 | 64 | 7 | (43) | (56) | ||||||||||||||||||||||||
Allowance for loan and lease losses, end of period | 2,110 | 2,074 | 2,018 | 2,030 | 2,107 | ||||||||||||||||||||||||
| Allowance for unfunded lending commitments, beginning of period | 94 | 91 | 77 | 98 | 104 | ||||||||||||||||||||||||
| Provision (reduction in allowance) for unfunded lending commitments | 26 | 3 | 14 | (21) | (6) | ||||||||||||||||||||||||
| Allowance for unfunded lending commitments, end of period | 120 | 94 | 91 | 77 | 98 | ||||||||||||||||||||||||
Total allowance for credit losses, end of period | $ | 2,230 | $ | 2,168 | $ | 2,109 | $ | 2,107 | $ | 2,205 | |||||||||||||||||||
Allowance for loan and lease losses (ALLL) as % of: | |||||||||||||||||||||||||||||
| Total loans and leases | 1.79 | % | 1.78 | % | 1.79 | % | 1.82 | % | 1.92 | % | |||||||||||||||||||
Nonaccrual loans and leases (NALs) | 351 | 316 | 296 | 284 | 245 | ||||||||||||||||||||||||
Nonperforming assets (NPAs) | 336 | 304 | 285 | 271 | 236 | ||||||||||||||||||||||||
Total allowance for credit losses (ACL) as % of: | |||||||||||||||||||||||||||||
Total loans and leases | 1.89 | % | 1.87 | % | 1.87 | % | 1.89 | % | 2.01 | % | |||||||||||||||||||
| Nonaccrual loans and leases (NALs) | 371 | 330 | 309 | 294 | 256 | ||||||||||||||||||||||||
| Nonperforming assets (NPAs) | 355 | 318 | 298 | 281 | 247 | ||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
| Allocation of allowance for credit losses | |||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||
| Commercial and industrial | $ | 860 | $ | 804 | $ | 937 | $ | 832 | $ | 801 | |||||||||||||||||||
| Commercial real estate | 504 | 498 | 521 | 586 | 678 | ||||||||||||||||||||||||
| Lease financing | 50 | 40 | 56 | 44 | 70 | ||||||||||||||||||||||||
| Total commercial | 1,414 | 1,342 | 1,514 | 1,462 | 1,549 | ||||||||||||||||||||||||
| Consumer | |||||||||||||||||||||||||||||
| Residential mortgage | 178 | 177 | 139 | 145 | 127 | ||||||||||||||||||||||||
| Automobile | 118 | 146 | 101 | 108 | 122 | ||||||||||||||||||||||||
| Home equity | 126 | 131 | 60 | 88 | 108 | ||||||||||||||||||||||||
| RV and marine | 127 | 147 | 96 | 105 | 111 | ||||||||||||||||||||||||
| Other consumer | 147 | 131 | 108 | 122 | 90 | ||||||||||||||||||||||||
| Total consumer | 696 | 732 | 504 | 568 | 558 | ||||||||||||||||||||||||
| Total allowance for loan and lease losses | 2,110 | 2,074 | 2,018 | 2,030 | 2,107 | ||||||||||||||||||||||||
| Allowance for unfunded lending commitments | 120 | 94 | 91 | 77 | 98 | ||||||||||||||||||||||||
| Total allowance for credit losses | $ | 2,230 | $ | 2,168 | $ | 2,109 | $ | 2,107 | $ | 2,205 | |||||||||||||||||||
12
Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
| Net charge-offs (recoveries) by loan and lease type: | |||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 16 | $ | (4) | $ | (23) | $ | 6 | $ | 28 | |||||||||||||||||||
Commercial real estate | (3) | (4) | 8 | (4) | 7 | ||||||||||||||||||||||||
| Lease financing | 2 | (3) | 5 | 3 | 12 | ||||||||||||||||||||||||
Total commercial | 15 | (11) | (10) | 5 | 47 | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
| Residential mortgage | (1) | (1) | — | (1) | — | ||||||||||||||||||||||||
| Automobile | 3 | — | — | — | (4) | ||||||||||||||||||||||||
| Home equity | (2) | (2) | (1) | (1) | (3) | ||||||||||||||||||||||||
RV and marine | 2 | 1 | 3 | 2 | — | ||||||||||||||||||||||||
Other consumer | 27 | 21 | 27 | 29 | 15 | ||||||||||||||||||||||||
Total consumer | 29 | 19 | 29 | 29 | 8 | ||||||||||||||||||||||||
| Total net charge-offs | $ | 44 | $ | 8 | $ | 19 | $ | 34 | $ | 55 | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||
| Net charge-offs (recoveries) - annualized percentages: | |||||||||||||||||||||||||||||
Commercial: | |||||||||||||||||||||||||||||
Commercial and industrial | 0.15 | % | (0.04) | % | (0.22) | % | 0.06 | % | 0.28 | % | |||||||||||||||||||
Commercial real estate | (0.06) | (0.11) | 0.22 | (0.12) | 0.21 | ||||||||||||||||||||||||
| Lease financing | 0.17 | (0.24) | 0.40 | 0.24 | 0.87 | ||||||||||||||||||||||||
Total commercial | 0.10 | (0.07) | (0.06) | 0.03 | 0.31 | ||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||||
| Residential mortgage | (0.02) | (0.02) | — | (0.01) | — | ||||||||||||||||||||||||
| Automobile | 0.07 | — | 0.01 | (0.03) | (0.10) | ||||||||||||||||||||||||
| Home equity | (0.07) | (0.08) | (0.03) | (0.04) | (0.08) | ||||||||||||||||||||||||
RV and marine | 0.17 | 0.10 | 0.20 | 0.13 | (0.01) | ||||||||||||||||||||||||
Other consumer | 8.09 | 6.60 | 8.46 | 9.21 | 4.84 | ||||||||||||||||||||||||
Total consumer | 0.22 | 0.15 | 0.23 | 0.23 | 0.07 | ||||||||||||||||||||||||
| Net charge-offs as a % of average loans and leases | 0.15 | % | 0.03 | % | 0.07 | % | 0.12 | % | 0.20 | % | |||||||||||||||||||
13
Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) (1)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
(dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Nonaccrual loans and leases (NALs): | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 288 | $ | 324 | $ | 323 | $ | 370 | $ | 494 | |||||||||||||||||||
Commercial real estate | 110 | 117 | 114 | 104 | 103 | ||||||||||||||||||||||||
| Lease financing | 30 | 22 | 38 | 48 | 60 | ||||||||||||||||||||||||
| Residential mortgage | 94 | 111 | 117 | 111 | 108 | ||||||||||||||||||||||||
| Automobile | 4 | 4 | 4 | 3 | 3 | ||||||||||||||||||||||||
Home equity | 75 | 78 | 84 | 79 | 87 | ||||||||||||||||||||||||
RV and marine | 1 | 1 | 2 | 1 | 6 | ||||||||||||||||||||||||
Total nonaccrual loans and leases | 602 | 657 | 682 | 716 | 861 | ||||||||||||||||||||||||
Other real estate, net: | |||||||||||||||||||||||||||||
Residential | 11 | 11 | 10 | 8 | 6 | ||||||||||||||||||||||||
Commercial | — | — | 1 | 1 | 1 | ||||||||||||||||||||||||
| Total other real estate, net | 11 | 11 | 11 | 9 | 7 | ||||||||||||||||||||||||
| Other NPAs (2) | 14 | 14 | 15 | 25 | 25 | ||||||||||||||||||||||||
Total nonperforming assets | $ | 627 | $ | 682 | $ | 708 | $ | 750 | $ | 893 | |||||||||||||||||||
Nonaccrual loans and leases as a % of total loans and leases | 0.51 | % | 0.57 | % | 0.60 | % | 0.64 | % | 0.79 | % | |||||||||||||||||||
| NPA ratio (3) | 0.53 | 0.59 | 0.63 | 0.67 | 0.82 | ||||||||||||||||||||||||
(NPA+90days)/(Loan+OREO) (4) | 0.72 | 0.77 | 0.88 | 0.86 | 0.97 | ||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
| Nonperforming assets, beginning of period | $ | 682 | $ | 708 | $ | 750 | $ | 893 | $ | 1,014 | |||||||||||||||||||
| New nonperforming assets | 119 | 181 | 204 | 146 | 195 | ||||||||||||||||||||||||
| Returns to accruing status | (42) | (81) | (57) | (99) | (125) | ||||||||||||||||||||||||
| Charge-offs | (39) | (26) | (32) | (35) | (51) | ||||||||||||||||||||||||
| Payments | (89) | (97) | (155) | (152) | (128) | ||||||||||||||||||||||||
| Sales | (4) | (3) | (2) | (3) | (12) | ||||||||||||||||||||||||
| Nonperforming assets, end of period | $ | 627 | $ | 682 | $ | 708 | $ | 750 | $ | 893 | |||||||||||||||||||
(1)December 31, 2021 and all periods prior generally exclude loans and leases that were under payment deferral or granted other assistance, including amendments or waivers of financial covenants in response to the COVID-19 pandemic.
(2)Other nonperforming assets include certain impaired securities and/or nonaccrual loans held-for-sale.
(3)Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs.
(4)The sum of nonperforming assets and total accruing loans and leases past due 90 days or more divided by the sum of loans and leases and other real estate.
14
Huntington Bancshares Incorporated
Quarterly Accruing Past Due Loans and Leases
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Accruing loans and leases past due 90+ days: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | 29 | $ | 11 | $ | 10 | $ | 13 | $ | 6 | |||||||||||||||||||
| Lease financing | 18 | 10 | 12 | 11 | 12 | ||||||||||||||||||||||||
| Residential mortgage (excluding loans guaranteed by the U.S. Government) | 17 | 14 | 25 | 25 | 16 | ||||||||||||||||||||||||
| Automobile | 6 | 6 | 6 | 6 | 5 | ||||||||||||||||||||||||
| Home equity | 12 | 13 | 12 | 17 | 10 | ||||||||||||||||||||||||
| RV and marine | 2 | 2 | 1 | 3 | 2 | ||||||||||||||||||||||||
Other consumer | 3 | 2 | 2 | 3 | 2 | ||||||||||||||||||||||||
Total, excl. loans guaranteed by the U.S. Government | 87 | 58 | 68 | 78 | 53 | ||||||||||||||||||||||||
Add: loans guaranteed by U.S. Government | 136 | 154 | 212 | 132 | 122 | ||||||||||||||||||||||||
Total accruing loans and leases past due 90+ days, including loans guaranteed by the U.S. Government | $ | 223 | $ | 212 | $ | 280 | $ | 210 | $ | 175 | |||||||||||||||||||
Ratios: | |||||||||||||||||||||||||||||
Excluding loans guaranteed by the U.S. Government, as a percent of total loans and leases | 0.07 | % | 0.05 | % | 0.06 | % | 0.07 | % | 0.05 | % | |||||||||||||||||||
Guaranteed by U.S. Government, as a percent of total loans and leases | 0.12 | 0.13 | 0.19 | 0.12 | 0.11 | ||||||||||||||||||||||||
Including loans guaranteed by the U.S. Government, as a percent of total loans and leases | 0.19 | 0.18 | 0.25 | 0.19 | 0.16 | ||||||||||||||||||||||||
15
Huntington Bancshares Incorporated
Quarterly Capital Under Current Regulatory Standards (Basel III) and Other Capital Data
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Common equity tier 1 risk-based capital ratio: (1) | |||||||||||||||||||||||||||||
Total shareholders’ equity | $ | 17,136 | $ | 17,950 | $ | 18,452 | $ | 19,297 | $ | 19,479 | |||||||||||||||||||
Regulatory capital adjustments: | |||||||||||||||||||||||||||||
| CECL transitional amount (2) | 328 | 328 | 328 | 437 | 440 | ||||||||||||||||||||||||
| Shareholders’ preferred equity and related surplus | (2,177) | (2,177) | (2,177) | (2,177) | (2,281) | ||||||||||||||||||||||||
| Accumulated other comprehensive loss offset | 3,276 | 2,098 | 1,314 | 230 | 125 | ||||||||||||||||||||||||
| Goodwill and other intangibles, net of taxes | (5,675) | (5,686) | (5,474) | (5,484) | (5,477) | ||||||||||||||||||||||||
Deferred tax assets that arise from tax loss and credit carryforwards | (29) | (36) | (46) | (54) | (36) | ||||||||||||||||||||||||
Common equity tier 1 capital | 12,859 | 12,477 | 12,397 | 12,249 | 12,250 | ||||||||||||||||||||||||
Additional tier 1 capital | |||||||||||||||||||||||||||||
| Shareholders’ preferred equity and related surplus | 2,177 | 2,177 | 2,177 | 2,177 | 2,281 | ||||||||||||||||||||||||
Tier 1 capital | 15,036 | 14,654 | 14,574 | 14,426 | 14,531 | ||||||||||||||||||||||||
Long-term debt and other tier 2 qualifying instruments | 1,441 | 1,462 | 1,464 | 1,539 | 1,552 | ||||||||||||||||||||||||
Qualifying allowance for loan and lease losses | 1,637 | 1,541 | 1,485 | 1,281 | 1,290 | ||||||||||||||||||||||||
Tier 2 capital | 3,078 | 3,003 | 2,949 | 2,820 | 2,842 | ||||||||||||||||||||||||
Total risk-based capital | $ | 18,114 | $ | 17,657 | $ | 17,523 | $ | 17,246 | $ | 17,373 | |||||||||||||||||||
Risk-weighted assets (RWA)(1) | $ | 138,788 | $ | 137,841 | $ | 134,484 | $ | 131,266 | $ | 128,023 | |||||||||||||||||||
Common equity tier 1 risk-based capital ratio (1) | 9.27 | % | 9.05 | % | 9.22 | % | 9.33 | % | 9.57 | % | |||||||||||||||||||
Other regulatory capital data: | |||||||||||||||||||||||||||||
Tier 1 leverage ratio (1) | 8.51 | 8.46 | 8.43 | 8.56 | 8.62 | ||||||||||||||||||||||||
Tier 1 risk-based capital ratio (1) | 10.83 | 10.63 | 10.84 | 10.99 | 11.35 | ||||||||||||||||||||||||
Total risk-based capital ratio (1) | 13.05 | 12.81 | 13.03 | 13.14 | 13.57 | ||||||||||||||||||||||||
Non-regulatory capital data: | |||||||||||||||||||||||||||||
Tangible common equity / RWA ratio (1) | 6.66 | 7.28 | 8.00 | 8.83 | 9.14 | ||||||||||||||||||||||||
(1)September 30, 2022, figures are estimated.
(2)Upon adoption in 2020, Huntington elected to temporarily delay certain effects of CECL on regulatory capital, utilizing a two-year delay followed by a three-year transition period. January 1, 2022 began the three-year transition period, whereby 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL will be recognized over the three-year transition period. As of March 31, 2022, June 30, 2022 and September 30, 2022, 25% of the cumulative CECL deferral has been phased in.
16
Huntington Bancshares Incorporated
Quarterly Common Stock Summary, Non-Regulatory Capital, and Other Data
(Unaudited)
Quarterly common stock summary
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | |||||||||||||||||||||||||
Cash dividends declared per common share | $ | 0.155 | $ | 0.155 | $ | 0.155 | $ | 0.155 | $ | 0.15 | |||||||||||||||||||
| Common shares outstanding (in millions) | |||||||||||||||||||||||||||||
Average - basic | 1,443 | 1,441 | 1,438 | 1,444 | 1,463 | ||||||||||||||||||||||||
Average - diluted | 1,465 | 1,463 | 1,464 | 1,471 | 1,487 | ||||||||||||||||||||||||
Ending | 1,443 | 1,442 | 1,439 | 1,438 | 1,446 | ||||||||||||||||||||||||
Tangible book value per common share (1) | $ | 6.40 | $ | 6.96 | $ | 7.47 | $ | 8.06 | $ | 8.09 | |||||||||||||||||||
| Common share repurchases (in millions) | |||||||||||||||||||||||||||||
Number of shares repurchased | — | — | — | 10 | 33 | ||||||||||||||||||||||||
Non-regulatory capital
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||||||||
Calculation of tangible equity / asset ratio: | |||||||||||||||||||||||||||||
| Total shareholders’ equity | $ | 17,136 | $ | 17,950 | $ | 18,452 | $ | 19,297 | $ | 19,479 | |||||||||||||||||||
| Goodwill and other intangible assets | (5,775) | (5,788) | (5,577) | (5,591) | (5,571) | ||||||||||||||||||||||||
| Deferred tax liability on other intangible assets (1) | 43 | 46 | 48 | 51 | 54 | ||||||||||||||||||||||||
Total tangible equity | 11,404 | 12,208 | 12,923 | 13,757 | 13,962 | ||||||||||||||||||||||||
| Preferred equity | (2,167) | (2,167) | (2,167) | (2,167) | (2,267) | ||||||||||||||||||||||||
Total tangible common equity | $ | 9,237 | $ | 10,041 | $ | 10,756 | $ | 11,590 | $ | 11,695 | |||||||||||||||||||
Total assets | $ | 179,402 | $ | 178,782 | $ | 176,856 | $ | 174,064 | $ | 173,878 | |||||||||||||||||||
| Goodwill and other intangible assets | (5,775) | (5,788) | (5,577) | (5,591) | (5,571) | ||||||||||||||||||||||||
| Deferred tax liability on other intangible assets (1) | 43 | 46 | 48 | 51 | 54 | ||||||||||||||||||||||||
Total tangible assets | $ | 173,670 | $ | 173,040 | $ | 171,327 | $ | 168,524 | $ | 168,361 | |||||||||||||||||||
Tangible equity / tangible asset ratio | 6.57 | % | 7.06 | % | 7.54 | % | 8.16 | % | 8.29 | % | |||||||||||||||||||
Tangible common equity / tangible asset ratio | 5.32 | 5.80 | 6.28 | 6.88 | 6.95 | ||||||||||||||||||||||||
Other data: | |||||||||||||||||||||||||||||
Number of employees (Average full-time equivalent) | 19,997 | 19,866 | 19,722 | 20,309 | 20,908 | ||||||||||||||||||||||||
Number of domestic full-service branches (2) | 1,032 | 1,032 | 1,030 | 1,092 | 1,236 | ||||||||||||||||||||||||
ATM Count | 1,715 | 1,731 | 1,729 | 1,756 | 2,317 | ||||||||||||||||||||||||
(1)Deferred tax liability related to other intangible assets is calculated at a 21% tax rate.
(2)Includes Regional Banking and The Huntington Private Client Group offices.
17
Huntington Bancshares Incorporated
Consolidated Year To Date Average Balance Sheets
(Unaudited)
YTD Average Balances (1) | |||||||||||||||||||||||
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(dollar amounts in millions) | 2022 | 2021 | Amount | Percent | |||||||||||||||||||
Assets | |||||||||||||||||||||||
| Interest-bearing deposits at Federal Reserve Bank | $ | 4,629 | $ | 8,432 | $ | (3,803) | (45) | % | |||||||||||||||
Interest-bearing deposits in banks | 200 | 322 | (122) | (38) | |||||||||||||||||||
Securities: | |||||||||||||||||||||||
Trading account securities | 33 | 50 | (17) | (34) | |||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||
Taxable | 22,509 | 18,376 | 4,133 | 22 | |||||||||||||||||||
Tax-exempt | 2,887 | 2,868 | 19 | 1 | |||||||||||||||||||
Total available-for-sale securities | 25,396 | 21,244 | 4,152 | 20 | |||||||||||||||||||
Held-to-maturity securities - taxable | 16,336 | 9,185 | 7,151 | 78 | |||||||||||||||||||
| Other securities | 841 | 524 | 317 | 60 | |||||||||||||||||||
Total securities | 42,606 | 31,003 | 11,603 | 37 | |||||||||||||||||||
Loans held for sale | 1,086 | 1,404 | (318) | (23) | |||||||||||||||||||
Loans and leases: (2) | |||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||
| Commercial and industrial | 42,569 | 35,657 | 6,912 | 19 | |||||||||||||||||||
| Commercial real estate: | |||||||||||||||||||||||
| Commercial | 13,707 | 8,953 | 4,754 | 53 | |||||||||||||||||||
| Construction | 1,777 | 1,392 | 385 | 28 | |||||||||||||||||||
| Commercial real estate | 15,484 | 10,345 | 5,139 | 50 | |||||||||||||||||||
| Lease financing | 4,938 | 3,336 | 1,602 | 48 | |||||||||||||||||||
| Total commercial | 62,991 | 49,338 | 13,653 | 28 | |||||||||||||||||||
| Consumer: | |||||||||||||||||||||||
| Residential mortgage | 20,536 | 14,941 | 5,595 | 37 | |||||||||||||||||||
| Automobile | 13,512 | 12,891 | 621 | 5 | |||||||||||||||||||
| Home equity | 10,406 | 9,771 | 635 | 6 | |||||||||||||||||||
| RV and marine | 5,293 | 4,549 | 744 | 16 | |||||||||||||||||||
| Other consumer | 1,301 | 1,058 | 243 | 23 | |||||||||||||||||||
| Total consumer | 51,048 | 43,210 | 7,838 | 18 | |||||||||||||||||||
Total loans and leases | 114,039 | 92,548 | 21,491 | 23 | |||||||||||||||||||
Allowance for loan and lease losses | (2,067) | (1,953) | (114) | (6) | |||||||||||||||||||
Net loans and leases | 111,972 | 90,595 | 21,377 | 24 | |||||||||||||||||||
Total earning assets | 162,560 | 133,709 | 28,851 | 22 | |||||||||||||||||||
Cash and due from banks | 1,672 | 1,242 | 430 | 35 | |||||||||||||||||||
| Goodwill and other intangible assets | 5,660 | 3,615 | 2,045 | 57 | |||||||||||||||||||
All other assets | 10,092 | 8,459 | 1,633 | 19 | |||||||||||||||||||
Total assets | $ | 177,917 | $ | 145,072 | $ | 32,845 | 23 | % | |||||||||||||||
Liabilities and shareholders’ equity | |||||||||||||||||||||||
Interest-bearing deposits: | |||||||||||||||||||||||
Demand deposits - interest-bearing | $ | 41,467 | $ | 30,776 | $ | 10,691 | 35 | % | |||||||||||||||
| Money market deposits | 33,512 | 29,243 | 4,269 | 15 | |||||||||||||||||||
Savings and other domestic deposits | 21,480 | 16,165 | 5,315 | 33 | |||||||||||||||||||
Core certificates of deposit (3) | 2,274 | 2,186 | 88 | 4 | |||||||||||||||||||
Other domestic deposits of $250,000 or more | 244 | 320 | (76) | (24) | |||||||||||||||||||
Negotiable CDS, brokered and other deposits | 3,522 | 3,417 | 105 | 3 | |||||||||||||||||||
Total interest-bearing deposits | 102,499 | 82,107 | 20,392 | 25 | |||||||||||||||||||
Short-term borrowings | 3,139 | 256 | 2,883 | NM | |||||||||||||||||||
Long-term debt | 7,401 | 7,413 | (12) | — | |||||||||||||||||||
Total interest-bearing liabilities | 113,039 | 89,776 | 23,263 | 26 | |||||||||||||||||||
Demand deposits - noninterest-bearing | 42,157 | 36,139 | 6,018 | 17 | |||||||||||||||||||
All other liabilities | 4,158 | 2,952 | 1,206 | 41 | |||||||||||||||||||
| Total Huntington Bancshares Inc shareholders’ equity | 18,534 | 16,196 | 2,338 | 14 | |||||||||||||||||||
| Non-controlling interest | 29 | 9 | 20 | NM | |||||||||||||||||||
| Total equity | $ | 18,563 | $ | 16,205 | $ | 2,358 | 15 | ||||||||||||||||
Total liabilities and shareholders’ equity | $ | 177,917 | $ | 145,072 | $ | 32,845 | 23 | % | |||||||||||||||
NM - Not Meaningful
(1)Amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(2)Includes nonaccrual loans and leases.
(3)Includes consumer certificates of deposit of $250,000 or more.
18
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest Margin - Interest Income / Expense (1)(2)
(Unaudited)
| YTD Interest Income / Expense | |||||||||||
| Nine Months Ended September 30, | |||||||||||
(dollar amounts in millions) | 2022 | 2021 | |||||||||
Assets | |||||||||||
| Interest-bearing deposits at Federal Reserve Bank | $ | 29 | $ | 8 | |||||||
Interest-bearing deposits in banks | 3 | 1 | |||||||||
Securities: | |||||||||||
Trading account securities | 1 | 1 | |||||||||
Available-for-sale securities: | |||||||||||
Taxable | 378 | 184 | |||||||||
Tax-exempt | 66 | 52 | |||||||||
Total available-for-sale securities | 444 | 236 | |||||||||
Held-to-maturity securities - taxable | 251 | 124 | |||||||||
| Other securities | 18 | 6 | |||||||||
Total securities | 714 | 367 | |||||||||
Loans held for sale | 33 | 31 | |||||||||
| Loans and leases: | |||||||||||
| Commercial: | |||||||||||
| Commercial and industrial | 1,297 | 1,053 | |||||||||
| Commercial real estate: | |||||||||||
| Commercial | 381 | 205 | |||||||||
| Construction | 54 | 38 | |||||||||
| Commercial real estate | 435 | 243 | |||||||||
| Lease financing | 185 | 125 | |||||||||
| Total commercial | 1,917 | 1,421 | |||||||||
| Consumer: | |||||||||||
| Residential mortgage | 478 | 338 | |||||||||
| Automobile | 347 | 352 | |||||||||
| Home equity | 360 | 282 | |||||||||
| RV and marine | 166 | 145 | |||||||||
| Other consumer | 90 | 83 | |||||||||
| Total consumer | 1,441 | 1,200 | |||||||||
Total loans and leases | 3,358 | 2,621 | |||||||||
Total earning assets | $ | 4,137 | $ | 3,028 | |||||||
Liabilities | |||||||||||
Interest-bearing deposits: | |||||||||||
Demand deposits - interest-bearing | $ | 56 | $ | 9 | |||||||
| Money market deposits | 37 | 15 | |||||||||
Savings and other domestic deposits | 3 | 4 | |||||||||
Core certificates of deposit (3) | 2 | 1 | |||||||||
Other domestic deposits of $250,000 or more | — | 1 | |||||||||
Negotiable CDS, brokered and other deposits | 30 | 4 | |||||||||
Total interest-bearing deposits | 128 | 34 | |||||||||
Short-term borrowings | 36 | — | |||||||||
Long-term debt | 140 | 5 | |||||||||
Total interest-bearing liabilities | 304 | 39 | |||||||||
Net interest income | $ | 3,833 | $ | 2,989 | |||||||
(1)Fully-taxable equivalent (FTE) income and expense calculated assuming a 21% tax rate. See page 21 for the FTE adjustment.
(2)Amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)Includes consumer certificates of deposit of $250,000 or more.
19
Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest Margin - Yield
(Unaudited)
YTD Average Rates | |||||||||||
| Nine Months Ended September 30, | |||||||||||
Fully-taxable equivalent basis (1) | 2022 | 2021 | |||||||||
Assets | |||||||||||
| Interest-bearing deposits in Federal Reserve Bank | 0.84 | % | 0.13 | % | |||||||
Interest-bearing deposits in banks | 1.85 | 0.04 | |||||||||
Securities: | |||||||||||
Trading account securities | 3.75 | 3.21 | |||||||||
Available-for-sale securities: | |||||||||||
Taxable | 2.24 | 1.33 | |||||||||
Tax-exempt | 3.04 | 2.43 | |||||||||
Total available-for-sale securities | 2.33 | 1.48 | |||||||||
Held-to-maturity securities - taxable | 2.05 | 1.81 | |||||||||
| Other securities | 2.83 | 1.57 | |||||||||
Total securities | 2.23 | 1.58 | |||||||||
Loans held for sale | 4.00 | 2.90 | |||||||||
| Loans and leases: (3) | |||||||||||
| Commercial: | |||||||||||
| Commercial and industrial | 4.02 | 3.90 | |||||||||
| Commercial real estate: | |||||||||||
| Commercial | 3.66 | 3.02 | |||||||||
| Construction | 4.04 | 3.58 | |||||||||
| Commercial real estate | 3.70 | 3.09 | |||||||||
| Lease financing | 4.95 | 4.96 | |||||||||
| Total commercial | 4.01 | 3.80 | |||||||||
| Consumer: | |||||||||||
| Residential mortgage | 3.10 | 3.02 | |||||||||
| Automobile | 3.44 | 3.65 | |||||||||
| Home equity | 4.62 | 3.86 | |||||||||
| RV and marine | 4.19 | 4.26 | |||||||||
| Other consumer | 9.21 | 10.44 | |||||||||
| Total consumer | 3.77 | 3.71 | |||||||||
Total loans and leases | 3.91 | 3.76 | |||||||||
Total earning assets | 3.40 | % | 3.03 | % | |||||||
Liabilities | |||||||||||
Interest-bearing deposits: | |||||||||||
Demand deposits - interest-bearing | 0.18 | % | 0.04 | % | |||||||
| Money market deposits | 0.15 | 0.07 | |||||||||
Savings and other domestic deposits | 0.02 | 0.03 | |||||||||
Core certificates of deposit (4) | 0.10 | 0.05 | |||||||||
Other domestic deposits of $250,000 or more | 0.24 | 0.23 | |||||||||
Negotiable CDS, brokered and other deposits | 1.14 | 0.16 | |||||||||
Total interest-bearing deposits | 0.17 | 0.05 | |||||||||
Short-term borrowings | 1.52 | 0.26 | |||||||||
Long-term debt | 2.51 | 0.10 | |||||||||
Total interest-bearing liabilities | 0.36 | 0.06 | |||||||||
Net interest rate spread | 3.04 | 2.97 | |||||||||
Impact of noninterest-bearing funds on margin | 0.11 | 0.02 | |||||||||
Net interest margin | 3.15 | % | 2.99 | % | |||||||
| Commercial Loan Derivative Impact | |||||||||||
(Unaudited) | |||||||||||
YTD Average Rates | |||||||||||
| Nine Months Ended September 30, | |||||||||||
Fully-taxable equivalent basis (1) | 2022 | 2021 | |||||||||
Commercial loans (2)(3) | 3.93 | % | 3.41 | % | |||||||
Impact of commercial loan derivatives | 0.08 | 0.39 | |||||||||
Total commercial - as reported | 4.01 | % | 3.80 | % | |||||||
Average 1 Month LIBOR | 1.24 | % | 0.10 | % | |||||||
(1)Fully-taxable equivalent (FTE) yields are calculated assuming a 21% tax rate. See page 21 for the FTE adjustment.
(2)Yield/rates exclude the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3)Includes the impact of nonaccrual loans and leases.
(4)Includes consumer certificates of deposit of $250,000 or more.
20
Huntington Bancshares Incorporated
Selected Year To Date Income Statement Data
(Unaudited)
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollar amounts in millions, except per share data) | 2022 | 2021 | Amount | Percent | |||||||||||||||||||
| Interest income | $ | 4,115 | $ | 3,009 | $ | 1,106 | 37 | % | |||||||||||||||
| Interest expense | 304 | 39 | 265 | NM | |||||||||||||||||||
| Net interest income | 3,811 | 2,970 | 841 | 28 | |||||||||||||||||||
| Provision for credit losses | 198 | 89 | 109 | 122 | |||||||||||||||||||
| Net interest income after provision for credit losses | 3,613 | 2,881 | 732 | 25 | |||||||||||||||||||
| Service charges on deposit accounts | 295 | 271 | 24 | 9 | |||||||||||||||||||
| Card and payment processing income | 278 | 241 | 37 | 15 | |||||||||||||||||||
| Mortgage banking income | 119 | 248 | (129) | (52) | |||||||||||||||||||
| Trust and investment management services | 188 | 169 | 19 | 11 | |||||||||||||||||||
| Capital markets fees | 169 | 104 | 65 | 63 | |||||||||||||||||||
| Insurance income | 86 | 77 | 9 | 12 | |||||||||||||||||||
| Leasing revenue | 91 | 58 | 33 | 57 | |||||||||||||||||||
| Bank owned life insurance income | 41 | 47 | (6) | (13) | |||||||||||||||||||
| Gain on sale of loans | 55 | 8 | 47 | NM | |||||||||||||||||||
| Net gains (losses) on sales of securities | — | 10 | (10) | (100) | |||||||||||||||||||
| Other noninterest income | 160 | 141 | 19 | 13 | |||||||||||||||||||
| Total noninterest income | 1,482 | 1,374 | 108 | 8 | |||||||||||||||||||
| Personnel costs | 1,771 | 1,703 | 68 | 4 | |||||||||||||||||||
| Outside data processing and other services | 463 | 581 | (118) | (20) | |||||||||||||||||||
| Net occupancy | 185 | 209 | (24) | (11) | |||||||||||||||||||
| Equipment | 202 | 180 | 22 | 12 | |||||||||||||||||||
| Professional services | 56 | 91 | (35) | (38) | |||||||||||||||||||
| Marketing | 69 | 54 | 15 | 28 | |||||||||||||||||||
| Deposit and other insurance expense | 53 | 33 | 20 | 61 | |||||||||||||||||||
| Amortization of intangibles | 40 | 34 | 6 | 18 | |||||||||||||||||||
| Lease financing equipment depreciation | 36 | 24 | 12 | 50 | |||||||||||||||||||
| Other noninterest expense | 249 | 245 | 4 | 2 | |||||||||||||||||||
| Total noninterest expense | 3,124 | 3,154 | (30) | (1) | |||||||||||||||||||
| Income before income taxes | 1,971 | 1,101 | 870 | 79 | |||||||||||||||||||
| Provision for income taxes | 371 | 206 | 165 | 80 | |||||||||||||||||||
| Income after income taxes | 1,600 | 895 | 705 | 79 | |||||||||||||||||||
| Income attributable to non-controlling interest | 7 | 1 | 6 | NM | |||||||||||||||||||
| Net income attributable to Huntington Bancshares Inc | 1,593 | 894 | 699 | 78 | |||||||||||||||||||
| Dividends on preferred shares | 85 | 103 | (18) | (17) | |||||||||||||||||||
| Impact of preferred stock redemption | — | 15 | (15) | (100) | |||||||||||||||||||
| Net income applicable to common shares | $ | 1,508 | $ | 776 | $ | 732 | 94 | % | |||||||||||||||
| Average common shares - basic | 1,441 | 1,202 | 239 | 20 | |||||||||||||||||||
| Average common shares - diluted | 1,464 | 1,225 | 239 | 20 | |||||||||||||||||||
| Per common share | |||||||||||||||||||||||
| Net income - basic | $ | 1.05 | $ | 0.65 | $ | 0.40 | 62 | % | |||||||||||||||
| Net income - diluted | 1.03 | 0.63 | 0.40 | 63 | |||||||||||||||||||
| Cash dividends declared | 0.465 | 0.45 | 0.02 | 3 | |||||||||||||||||||
| Revenue - fully taxable equivalent (FTE) | |||||||||||||||||||||||
| Net interest income | $ | 3,811 | $ | 2,970 | $ | 841 | 28 | % | |||||||||||||||
| FTE adjustment (1) | 22 | 19 | 3 | 16 | |||||||||||||||||||
| Net interest income | 3,833 | 2,989 | 844 | 28 | |||||||||||||||||||
| Noninterest income | 1,482 | 1,374 | 108 | 8 | |||||||||||||||||||
| Total revenue (1) | $ | 5,315 | $ | 4,363 | $ | 952 | 22 | % | |||||||||||||||
NM - Not Meaningful
(1)On a fully-taxable equivalent (FTE) basis assuming a 21% tax rate.
21
Huntington Bancshares Incorporated
Year To Date Mortgage Banking Noninterest Income
(Unaudited)
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollar amounts in millions) | 2022 | 2021 | Amount | Percent | |||||||||||||||||||
Net origination and secondary marketing income | $ | 89 | $ | 244 | $ | (155) | (64) | % | |||||||||||||||
Net mortgage servicing income | |||||||||||||||||||||||
Loan servicing income | 66 | 55 | 11 | 20 | |||||||||||||||||||
Amortization of capitalized servicing | (45) | (61) | 16 | 26 | |||||||||||||||||||
| Operating (expense) income | 21 | (6) | 27 | NM | |||||||||||||||||||
MSR valuation adjustment (1) | 112 | 28 | 84 | NM | |||||||||||||||||||
| (Losses) gains due to MSR hedging | (105) | (28) | (77) | NM | |||||||||||||||||||
Net MSR risk management | 7 | — | 7 | — | |||||||||||||||||||
Total net mortgage servicing income | $ | 28 | $ | (6) | $ | 34 | NM | ||||||||||||||||
| All other | 2 | 10 | (8) | (80) | |||||||||||||||||||
Mortgage banking income | $ | 119 | $ | 248 | $ | (129) | (52) | % | |||||||||||||||
Mortgage origination volume | $ | 8,738 | $ | 12,516 | $ | (3,778) | (30) | % | |||||||||||||||
Mortgage origination volume for sale | 4,121 | 7,448 | (3,327) | (45) | |||||||||||||||||||
Third party mortgage loans serviced (2) | 31,988 | 30,554 | 1,434 | 5 | |||||||||||||||||||
Mortgage servicing rights (2) | 486 | 338 | 148 | 44 | |||||||||||||||||||
| MSR % of investor servicing portfolio (2) | 1.52 | % | 1.11 | % | 0.41 | % | 37 | % | |||||||||||||||
NM - Not Meaningful
(1)The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
(2)At period end.
22
Huntington Bancshares Incorporated
Year To Date Credit Reserves Analysis
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
(dollar amounts in millions) | 2022 | 2021 | |||||||||
Allowance for loan and lease losses, beginning of period | $ | 2,030 | $ | 1,814 | |||||||
| Loan and lease charge-offs | (216) | (303) | |||||||||
| Recoveries of loans and leases previously charged off | 145 | 122 | |||||||||
| Net loan and lease charge-offs | (71) | (181) | |||||||||
Provision for loan and lease losses | 151 | 42 | |||||||||
| Allowance on PCD loans and leases at acquisition | — | 432 | |||||||||
Allowance for loan and lease losses, end of period | 2,110 | 2,107 | |||||||||
| Allowance for unfunded lending commitments, beginning of period | $ | 77 | $ | 52 | |||||||
| Provision for unfunded lending commitments | 43 | 47 | |||||||||
| Unfunded lending commitment losses | — | (1) | |||||||||
| Allowance for unfunded lending commitments, end of period | 120 | 98 | |||||||||
Total allowance for credit losses | $ | 2,230 | $ | 2,205 | |||||||
Allowance for loan and lease losses (ALLL) as % of: | |||||||||||
Total loans and leases | 1.79 | % | 1.92 | % | |||||||
Nonaccrual loans and leases (NALs) | 351 | 245 | |||||||||
Nonperforming assets (NPAs) | 336 | 236 | |||||||||
Total allowance for credit losses (ACL) as % of: | |||||||||||
Total loans and leases | 1.89 | % | 2.01 | % | |||||||
| Nonaccrual loans and leases (NALs) | 371 | 256 | |||||||||
| Nonperforming assets (NPAs) | 355 | 246 | |||||||||
23
Huntington Bancshares Incorporated
Year To Date Net Charge-Off Analysis
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
(dollar amounts in millions) | 2022 | 2021 | |||||||||
| Net charge-offs (recoveries) by loan and lease type: | |||||||||||
Commercial: | |||||||||||
| Commercial and industrial | $ | (11) | $ | 93 | |||||||
| Commercial real estate | 1 | 21 | |||||||||
| Lease financing | 4 | 41 | |||||||||
Total commercial | (6) | 155 | |||||||||
| Consumer: | |||||||||||
| Residential mortgage | (2) | — | |||||||||
| Automobile | 3 | (6) | |||||||||
| Home equity | (5) | (4) | |||||||||
RV and marine | 6 | 3 | |||||||||
| Other consumer | 75 | 33 | |||||||||
Total consumer | 77 | 26 | |||||||||
| Total net charge-offs | $ | 71 | $ | 181 | |||||||
| Nine Months Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net charge-offs (recoveries) - annualized percentages: | |||||||||||
| Commercial: | |||||||||||
| Commercial and industrial | (0.04) | % | 0.35 | % | |||||||
| Commercial real estate | 0.01 | 0.27 | |||||||||
| Lease financing | 0.11 | 1.64 | |||||||||
| Total commercial | (0.01) | 0.42 | |||||||||
| Consumer: | |||||||||||
| Residential mortgage | (0.01) | — | |||||||||
| Automobile | 0.03 | (0.06) | |||||||||
| Home equity | (0.06) | (0.05) | |||||||||
RV and marine | 0.16 | 0.09 | |||||||||
| Other consumer | 7.72 | 4.07 | |||||||||
| Total consumer | 0.20 | 0.08 | |||||||||
| Net charge-offs as a % of average loans | 0.08 | % | 0.26 | % | |||||||
24
Huntington Bancshares Incorporated
Year To Date Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs)
(Unaudited)
| September 30, | |||||||||||
(dollar amounts in millions) | 2022 | 2021 | |||||||||
Nonaccrual loans and leases (NALs): | |||||||||||
| Commercial and industrial | $ | 288 | $ | 494 | |||||||
| Commercial real estate | 110 | 103 | |||||||||
| Lease financing | 30 | 60 | |||||||||
| Residential mortgage | 94 | 108 | |||||||||
| Automobile | 4 | 3 | |||||||||
| Home equity | 75 | 87 | |||||||||
| RV and marine | 1 | 6 | |||||||||
| Total nonaccrual loans and leases | 602 | 861 | |||||||||
| Other real estate, net: | |||||||||||
| Residential | 11 | 6 | |||||||||
| Commercial | — | 1 | |||||||||
| Total other real estate, net | 11 | 7 | |||||||||
Other NPAs (1) | 14 | 25 | |||||||||
Total nonperforming assets (3) | $ | 627 | $ | 893 | |||||||
| Nonaccrual loans and leases as a % of total loans and leases | 0.51 | % | 0.79 | % | |||||||
NPA ratio (2) | 0.53 | 0.82 | |||||||||
| Nine Months Ended September 30, | |||||||||||
(dollar amounts in millions) | 2022 | 2021 | |||||||||
| Nonperforming assets, beginning of period | $ | 750 | $ | 563 | |||||||
| New nonperforming assets | 504 | 440 | |||||||||
| Acquired NPAs | — | 629 | |||||||||
| Transfer to OREO | — | — | |||||||||
| Returns to accruing status | (180) | (204) | |||||||||
| Charge-offs | (97) | (180) | |||||||||
| Payments | (341) | (264) | |||||||||
Sales and held-for-sale transfers | (9) | (91) | |||||||||
Nonperforming assets, end of period (2) | $ | 627 | $ | 893 | |||||||
(1)Other nonperforming assets include certain impaired securities and/or nonaccrual loans held-for-sale.
(2)Nonperforming assets divided by the sum of loans and leases, net other real estate owned, and other NPAs.
(3)Nonaccruing troubled debt restructured loans are included in the total nonperforming assets balance.
25
Huntington Bancshares Incorporated
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
Huntington believes certain non-GAAP financial measures to be helpful in understanding Huntington’s results of operations. The following tables provide the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure.
| Three months ended | Change (%) | |||||||||||||||||||
| ($ in millions) | September 30, 2022 | June 30, 2022 | ||||||||||||||||||
| Pre-Provision Net Revenue (PPNR) | ||||||||||||||||||||
| Total revenue | $ | 1,902 | $ | 1,746 | ||||||||||||||||
| FTE adjustment | 8 | 6 | ||||||||||||||||||
| Total revenue (FTE) (a) | 1,910 | 1,752 | ||||||||||||||||||
| Noninterest expense (b) | 1,053 | 1,018 | ||||||||||||||||||
| Less: Notable items | 10 | 24 | ||||||||||||||||||
| Noninterest expense, excluding notable items (c) | 1,043 | 994 | ||||||||||||||||||
| PPNR (a-b) | 857 | 734 | ||||||||||||||||||
| PPNR, adjusted (a-c) | 867 | 758 | 14 | % | ||||||||||||||||
| Return on Tangible Common Equity (ROTCE) | ||||||||||||||||||||
| Average common shareholders' equity | $ | 16,150 | ||||||||||||||||||
| Less: intangible assets and goodwill, net of deferred tax | 5,737 | |||||||||||||||||||
| Average tangible common shareholders' equity (d) | $ | 10,413 | ||||||||||||||||||
| Net income applicable to common shares | $ | 565 | ||||||||||||||||||
| Add: amortization of intangibles, net of deferred tax | 11 | |||||||||||||||||||
| Net income, excluding amortization of intangibles (e) | 576 | |||||||||||||||||||
| Add: Notable items, after tax | 8 | |||||||||||||||||||
| Net income, excluding amortization of intangibles and notable items (f) | $ | 584 | ||||||||||||||||||
| ROTCE, annualized (e/d) | 21.9 | % | ||||||||||||||||||
| Adjusted ROTCE, annualized (f/d) | 22.2 | % | ||||||||||||||||||
26