okay great all right good afternoon everyone um thanks for joining us for the last session of the day here with huntington bank shares i'm ken used in the large cap banks analyst at autonomous very excited to be joined by steve steinauer who's the chairman and ceo of the bank steve's led the company since 2009 has helped turn the business into a 285 billion asset high performing super regional bank with a growing national presence uh before we go if you have any questions uh just a reminder you can put them through the pigeonhole app and uh thanks for being here with us today and thanks to steve steve's going to start us off with just a couple minutes of an intro and then we're going to sit down and do the normal fireside chat so steve over to you thank you good afternoon and thanks ken thank you to sanford birdstein and autonomous for hosting us today we've had

the opportunity to share an updated presentation overnight that provides a clear overview of who we are how we operate and how our differentiated model has consistently delivered peer leading performance and for those of you who are new to the huntington story i want to spend a few minutes grounding you in who we are, how we grow, and how we create long-term value for shareholders. We're very proud of our 160-year history, which is a testament to the deep roots we have with our customers and in the communities we serve, and we're extraordinarily excited about what lies ahead. We're guided by a clear vision to be the leading people-first customer-centered bank in the country. We've built a scaled operating model that delivers our expertise and capabilities to people and businesses nationally and in the local markets we serve through a relationship-based approach we went through this differentiated approach which is oriented around building long-standing long-standing deep and multi-dimensional customer relationships we lead with advice and insight we integrate expertise and innovative capabilities to make everyday banking simple we earn trust by being consistent and dependable through economic cycles in fact we're the number one rated trust bank in the country we organize our teams to deliver leading bank capabilities through local, empowered, and nationally integrated teams, and we compound that value by reinvesting capabilities, innovation, and service to deliver better outcomes for our customers. This approach is central to our unique culture and has been acknowledged through numerous awards that we've won, including Forbes as Best Place to Work, 15 Coalition Greenwich Best Awards, including overall satisfaction, ease of doing business, and number one for trust, most importantly. And today we picked up a J.D. Power Award for best digital bank of the large banks in the country. So the team's doing a good job. So what has this approach accomplished? We're now a top-ten commercial bank with a $189 billion loan portfolio supported by a $223 billion deposit base. And we've achieved significant density in the Midwest and have a growing presence in the most attractive high-growth areas in Texas and the South. So there are five key messages I want to leave you with today and explain how our operating philosophy creates a flywheel of significant value creation. First, our operating model is clearly differentiated. We'll come back to this, I'm sure, in the Q&A. This structure creates multiple growth engines across consumer and regional banking as well as our national commercial bank and has resulted in peer-leading loan, deposit, and fee income growth. Second, we continuously invest in growth, and our investments drive consumer and business customer acquisition, deepen relationships, and increase the scale of our businesses. The resulting revenue and earnings growth expands our capacity to reinvest, further reinforcing our competitive advantage and accelerating value creation in sort of a virtuous cycle. This flywheel is at the core of our strategy, and you can see the benefits in our results. Last year alone, we generated 11 percent revenue growth, 16 percent adjusted earnings growth, and ROTCE of 16 percent, along with 19 percent tangible value growth. Third, we have a disciplined and proven approach to acquisition and integration, which is reflected in our partnership approach. It's a very different model. We bring new partners into Huntington in a way that enhances culture, retains talent, and delivers both cost and revenue synergies. These synergies expand our investment capacity, allowing us to reinvest in the franchise and further accelerate organic growth. Our approach drives long-term organic growth of the combined franchise on a greater trajectory that either bank would achieve independently. Fourth, all of this is executed with an aggregate moderate to low-risk appetite, which we've maintained for more than a decade and a half. Risk management is foundational to our operating model. It enables us to grow consistently, protect the balance sheet, and perform across a wide range of economic environments. We maintain a highly diversified loan portfolio, the quality of which is evident in our low net charge-offs of the last decade and consistently best-in-class C-CAR results. We hold leading liquidity across the banking sector. For example, our ratio of insured-to-total deposits is 69 percent, while our unmodified liquidity ratio, coverage ratio, is 118 percent. We have the best liquidity profile of any large bank in the country, bar none. We view our longstanding risk discipline as a competitive advantage, not a constraint and fifth when you put these elements together you get robust earnings power and growth improving rotce and strong tangible book value growth this fuels uh this growth fuels investment funds builds further competitive advantage that drives increasing returns and creating this flywheel of value creation now this model has and will continue to produce very strong financial performance. As we look ahead to 27, we're projecting 30% growth in earnings per share relative to 25, a return on tangible common equity of 18 to 19%, and growth in tangible book value per share at over 10%. In short, we believe Huntington is very well positioned to deliver durable growth, strong returns, and drive long-term shareholder value. And we're very excited about the opportunities ahead. So with that, Ken, why don't we get into the questions?

Great. Thanks, Steve, for that intro and if i pulled a couple of uh of the most important points out of that you know we've got huntington with one of the best in class organic growth stories and the goal to get to an 18 to 19 rtce but stocks lagged for the last six months or so what's your perception of what's missing in the investor community from the story to start sure great question thank you um there are several things.

First, we've had two partnerships, two acquisitions. Veritex, which was announced in the fourth quarter, and Cadence, which was announced in the fourth quarter. And that combination has led us to a question about whether we can maintain organic growth while at the same time driving the integrations. So that's one. Now, we've already converted Veritex that was done in January and we're three weeks away from the cadence conversion. So we're we're moving along at pace and we will address that question of can we grow can we manage two combinations while we're also delivering organic growth. Second is could we could we handle the economics that are implied by both these acquisitions at the same time. So we've got a 70% expense takeout in Veritex. That is locked in. We've achieved that. And then we've got a $365 million expense takeout in Cadence, and we have that very zeroed in. We will achieve that. So by the fourth quarter of this year, we'll be showing that $435 million of expense reduction. So we see that as extraordinary value creation. And at the same time, the core will perform very, very well. Now, in addition to the expense reduction, the synergies we're getting there, we also have revenue synergies. And we've talked about a three-year incremental $500 million of revenue synergies. We're off to a strong start. It's early. We have not yet converted cadence, as I mentioned. But we have already started to see growth from these revenue synergies. I'll give you a couple of examples. Our capital markets business is off to a very strong start in Texas and in other markets in the South. We opened in April our digital capabilities in the South, and we're running about 10 times in the first six weeks, 10 times the consumer-customer acquisition rate that Cadence managed to average over time. That's before the brand changes, before the signage changes, before we really start the marketing campaign. So we're very, with both those examples and there are others, we're very encouraged by what we see. We said $500 million over three years. First year would be $50 to $75 million of incremental revenue. I think we have that in the bag, and you'll see that this year as well. And then we'll just continue to step up as we go forward. We've got a great group of colleagues.

We've retained the management in these institutions, haven't lost one of our senior managers, and we're very, very bullish about what we're going to be able to deliver here got it so let's talk about that growth in the flywheel you talked about you've you've had several different angles of expansion right you've got the commercial ads that you've made over time you've got the consumer bet ads that you've made over time fee businesses that you've both built and also acquired partnerships that we just walked through how do you break out like where these vectors are going to drive the incremental growth and how is that different than what we've seen in the past from us sure well we have very very significant growth levers Since 2023, we've opened eight new specialty verticals in the commercial bank, as an example.

None of them are mature. They all have terrific growth opportunities in front of them. And right now, they're contributing about 30% of the loan growth as of the first quarter. So they're off to strong starts. They're not mature. They don't have a denominator effect to replace. And so just terrific growth. And we've got great teams of colleagues throughout those specialty and generally throughout the commercial business. So that's that's going very, very well. We've also launched in North and South Carolina de novo. We've got eight branches open. We're off to a really, really good start. We're well ahead of pro formas and we're opening a branch every other week in the North and South Carolina now. So that build out of 55 branches will occur between this year and next. We'll complete it. And again, off to a strong start. um we really like what we see in the carolinas and what the teams are doing we've got great new colleagues there and then we've had this wonderful opportunity to pivot uh cadence was majority texas veritex was a hundred percent texas right so we have a five share in dallas we have a five share in houston we have an eight share in texas overall and we're in important markets in the south uh atlanta tampa orlando nashville just birmingham just a few uh and And we have number one share in Mississippi. So we have a lot to work with in markets, regions that are growing faster than any of these states that we're in in the Midwest. So the population growth in Dallas and Houston, both between 100 and 200,000 people every That's more than these states see in multiple years. And we've got a five share to work with. So we've got really good colleagues who've joined us. There's a lot of cultural alignment within the firm and the firms. And we're bringing to them a lot of product, a lot of capability, a best-in-class set of digital tools. They're enthusiastically embracing us and what we're going to do. And we're also attracting a lot of new talent. We're going to continue to invest. We will build out these markets and drive organic growth throughout the South and Texas.

So as you mentioned in your intro, you've had this great organic loan growth that's been above peer average. And as you just kind of walked through some of the drivers, what's your relative confidence that that is, in fact, sustainable and more insulated from the whims of what the economy might give us?

Well, we definitely believe it's sustainable. First of all, we've got eight new ones. We've got multiple states that we're now in that we weren't in that are going very, very well. Texas is an incredible economy in its own right, eighth largest in the world, growing very significantly. And we're very well positioned to move forward and we'll invest there. But these, again, from North South Carolina, the southern states we're in, Georgia, northern Florida, Alabama, number one chair in Mississippi. We've got a lot to work with, and we've got great colleagues, so we've got enough scale to continue to invest and build out, and that's what we plan to do. Our capabilities, our products, our services, again, off to a good start. It's very early innings, but the embrace we're getting with our colleagues, the customers I've met, been in all the states, most of the markets, very, very strong. There's a lot of the cadence itself, the old Bancorp South, it's been around for 150 years. They have longstanding relationships, lots of stickiness, lots of opportunity for us to continue to build. And, you know, we've got scale in these businesses. We're number four or five in equipment finance, number two in distribution finance, number one SBA lender. There are a whole series of things that we're quite large in. And we've got very significant capabilities in payments, which neither bank had. So you think about the partnerships, the same with wealth. And our capital markets is going very strongly. And you heard from some of the other banks that have reported, particularly large banks, how strong their capital markets is. We have a great first quarter with capital markets. I think that will continue for the foreseeable future.

And so that's the left side of the balance sheet, or the lending side at least. Let's talk about the deposit side. You had good growth in the first quarter. Deposit costs were going down. And then here we are in a little bit of a higher for longer environment. So you talk to us about the ability or your belief in your ability to continue to grow deposits and the relative cost of that as we look ahead.

There's no question we'll be able to grow deposits in my mind. First of all, the core markets we've had, the legacy markets in the Midwest, we're growing deposits. We reported first quarter growth of 4% consumers, 7% business banking, 6% commercial. That will continue. The deposit growth will continue. In addition to that, of the eight new specialty verticals, two of them are deposit-oriented, and they're national in scale. And as I mentioned, the Carolinas, the launch of the branches and the position physically within those markets will be terrific. But neither Cadence nor Veritex had, if you will, a cross-sale orientation. And so what we will bring to them with our optimal customer relationship, it's a form of cross-sale, So giving the customers what they need to help meet their needs, I think will in order and significantly to our benefit from deposits, from Treasury management. We're seeing great uptake already in our commercial card, our merchant, and we're just getting started as examples. Our Treasury management capabilities are vastly more significant than either of those banks had. And as I said, the digital, I won't repeat it, but our digital capabilities are extraordinarily strong. So no question in my mind will grow deposits, but the yield curve has changed, the outlook has changed, the cost of deposits will change a bit as a consequence of that. So, you know, fourth quarter last year, early this year, we're still looking at rate decreases by the Fed. Now it's flat to flat or maybe even an uptick next year. So massive change. And obviously what's going on in the Middle East and the inflation that we're seeing, gas at the price, food and others, this may stay with us for a while and create a combination of factors, including more lending that the banks are doing now that will make deposit pricing a bit more challenging.

Right, right. I think a general expectation at this point for the industry. So I want to come back and juxtapose the organic growth comments that you made and your throughput on that. and then the partnership m a comments you made and the ability to also manage that as well so you've been a consistent acquirer over the course of past um is this any change that we're seeing in your in your view of acquisitions and uh to your view of inorganic growth and and after now we've gotten the veritex and cadence deals done how are you thinking about m a from here our priority has been organic growth we've had four bank acquisitions in 15 years so if it's one every four years i don't think of that as a an acquisition machine by a long stretch

we have a lot before us to do organically in uh in texas and the south and uh and continuing to ramp up north and south carolina along those lines and so you're going to see us continue to invest and grow in those markets on that basis, as we'll continue to invest in the Midwest markets where we're also getting growth. Our acquisitions of Veritex and Cadence give us a unique sort of breakout position. For many, many years, we were focused on building out the Midwest. Well, we're one, two, or three in everything in Ohio and Michigan now, and we're growing significantly in Chicago and Minneapolis. there's only so much more room. We'll continue to grow, but we don't have the demographic and economic growth, a new business formation that the South has and certainly the Texas has. So we're excited to be there. We don't feel we need to acquire. If we stay on a one every four years, I don't think that puts us out of bounds in any stretch. And what we've chosen to do over time is a view that the acquisitions will make us better, stronger, and provide better returns than either of the banks could do independently. And we call it a partnership because we want to bring the company in and not just do an expense play. We want the relationships maintained, colleagues maintained, the customers maintained, so we can build on. And with the management teams in place, staying in place, that gives us that unique leverage. So as we transition out of Veritex, we're selling now. As we transition out of Cadence, it'll take a couple weeks post-conversion, we'll be selling and the revenue build will be achieved as it was with TCF. So we think we've got a very unique model. It's working well, but it augments and it has to add to the core growth. That's the emphasis. grow the core organically, grow the core, will always be our priority.

And so coming back to that point about the selling part as you get through the conversions and move on to the other side of it, you talked about the synergies. You talked about the $500 million over a couple of years. You talked about tracking pretty well. So I guess take us through the sequencing of that, like the ramp that you expect, the confidence that you get as you get to these pivot moments and any anecdotes maybe that you have about, yeah, this is growing, this is building, we're really seeing the throughput?

Sure. Well, there's always the show me stuff when you do something like this. So we absolutely have the expense side of this. There's no question about that. The revenue side, strong start. And what we try to do is focus our colleagues on maintaining customer relationships through conversions and then it's not quite flip a switch but it's start to gear them up you can't flip a switch we've got a lot of other product capabilities we have different processes we prioritize what we want to to try and and bring to our customer base for example and i said there were a number of areas where we're seeing early signs of success our merchant business is going very well now in these veritex markets they didn't have merchant it's a layup to offer it we have a we're number four or five in equipment finance in the country we have a branch small business product that's same day approval next day funding called best it's off to a great start now it's not large dollars but it starts to show the the cross sell the optimal customer relationship uh extension and it builds confidence in the sales force We're very, very strong in home equity lending. We're a force in direct auto as we are in indirect auto. So we'll harvest the branches. We've got great mortgage colleagues in the south now as well. And housing is growing dynamically there, particularly in Texas. So that will be opportunistic. And then we're the largest SBA lender in the country. We push our SBA capabilities and other small business into these regional markets. And we'll have a lot of activity that will flow into us and around our branches, helping and supporting those small businesses. And then these national businesses are going great guns. Look at it this way. The one way I think about it, we've got 40-some relationship managers in our health care banking. We've just added several hundred RMs in Texas and the South. We have an integrated model of delivery. So we bring our national expertise in locally. Most of our competitors, when they bring their specialty businesses in, take the customer out of the local market. We don't do that. We want the relationship with the CEO, the C-suite, all of that to stay intact. And we've designed the program so our national teams work well locally. They get the benefit of the local relationships to leverage up and get access they might not otherwise have or see opportunities that they wouldn't otherwise get. And we see multiple examples of this literally every week because we've got so many people in the field now that have some sense of what we're looking for, and that only gets refined. That's one of the reasons our capital markets business is off to a great start. I think we've got either a half dozen energy deals done or lined up in terms of capital markets activity already, and that's pre-conversion. It's from a Feb 1 close to not even June. So very strong start. We like what we see a lot. We've got a lot of work to do to phase it up, phase, you know, ramp it up. But we've got a track record of doing that. We get a lot of input from our partners about pacing, and we adjust to that.

One last point on the two companies then, Veritex and Caden.

That point about the learning, as you obviously with any deal or with any situation, with any build-out, you kind of do learn. you take away you grow you figure things out what what's your what's been your biggest observations about um things you get from the two companies and things you can further optimize as you move forward first of all we got great colleagues we really have great colleagues you know everybody says they're culturally aligned but when you look at the the cultures of texas in the south you know family god community military you know usa that's it you could repeat the same in the midwest and and so the we're like them they're like us stuff is really significant with our our teams working together huge asset in this these combinations for us as we go forward we've been really warmly received and you're never quite sure how that will go off and so we've got very high engagement we were out we spend a week in the field uh just thanking colleagues every year we call it colleague appreciation we just had that two weeks ago we're out in all the all the markets 32 stops multiple teams going out the embrace we have felt the engagement we've seen and the customer interactions we've had around that just been outstanding so we're very very bullish on um uh you know acceptance and coming into uh uh the the company there's an eagerness to get the conversion behind and move forward so i credit the local management teams and the rest of our teams and how they're integrating so so effectively together working well as a team one team together that's been better than we thought we we had some uncertainty north south other things none of that and so much better now we have long and deep diligence that we do with with Cadence we've had we had I don't know how many management meetings and one-offs so in terms of negative surprises we haven't seen any in fact Zach and I were just our CFO just looking at where we are with Cadence and Veritex and we're ahead in in both and that was yes based on yesterday's look as of a couple of weeks ago. So we wouldn't expect surprises because we have so much communication along the way, and we haven't been. The real positive is this eagerness to get on with it and bring our capabilities, which we love, of course.

Got it. So let's step back out to a bigger, broader lens.

And we've been talking with a lot of the banks that have attended the conference is just you know you see a lot now more of the country than you even did six to nine months ago and so how would you just characterize the economy backdrop and what you're hearing when you're actually out in the field and talking to clients whether it's in the Midwest Texas Southeast how's the vibe in in terms of the feel in this at this moment there's um there's a consistency to the vibe the business community generally status quo to what it had been at as of the end of the court I was worried about what might happen because of what's going on the Middle East it's it's been better than I would have better than I did expect and so we've got a number of sectors that are doing very very well and we've only got a few I think that are more challenged if you think about those catering if you go back to the consumer if you're a low moderate income consumer it's been a tough couple of years and it just got a lot harder energy food in place you know a lot harder so of course you know hearts go out but the businesses that serve them also get impacted significantly. So we have so we see some some some revenue challenges like quick service restaurants franchised lending which we do a bit of. But by and large our portfolio looks really good and that's what we're hearing from our customers. That's what we're seeing. And we're a prime super prime consumer lender. So that looks good.

And we think of that as lower risk anyway because it's 90 plus percent secured and um so we're not seeing a lot of change credit's holding in yeah and one of the things you mentioned on the april call was that you had gotten a little more concerned about the world uh that we live in and you guys took a few steps just to take on some excess liquidity which was earnings neutral but but you kind of made some commentary about that and so has that manifest in terms of your concern about the business at all or was it just being extra prepared and has that view changed at all?

This had nothing to do with our business. This was geopolitical. You've got a war in Europe, now a war in the Middle East. We've got a government transition going on in Venezuela and one possibly happening in Cuba. We've got a lot of foreign geopolitical issues coming at us and some of them are coming with economic consequences. So of course we're worried about that. I'm surprised more of my peers didn't pile into a little more liquidity. We've got the best deposit franchise in the country, I think, and certainly one of them, and a very strong deposit ratio, as I referenced earlier. But when we get periods where there's significant negative change, I get concerned, will markets function as they have in the past? And we've seen disruption in 2008, 2009. We saw a pandemic. We saw it at Silicon Valley. And so I want to make sure we're in a position of relative strength with liquidity on sheet. So if there's a moment to do something, we're prepared to do it. But we didn't see draws. And as I said a minute ago, Cadence Veritech is performing very, very well. This is all about a geopolitical outlook, maybe too conservative. But I'd rather be on that side than the other side.

Yep, understood. And as that relates to then your business, as you've talked about already in a few different spots, it seems like your outlook and your backdrop for commercial activity, consumer activity, sales sounds pretty sanguine.

We have very good pipelines. And, you know, the nice thing about this liquidity, just to close it out, if we don't need it, we'll just return it. Just a couple of bips and nimm. It's like nominal costs. No cost. so um uh uh when we're confident we're on the other side of of of this um we'll we'll we'll ramp it back down great um but but uh pipelines look really good activities strong and as we complete this conversion and get you know we've got 6 000 colleagues that are conversion focused you know the entire cadence veritex teams now the veritex team helping the cadence team And we've got a couple of thousand colleagues in the Midwest. This is their prime focus, you know, three weeks away from our Super Bowl. So we're really looking forward to transitioning that and moving forward. And I think it only gets better from here. Pipelines, again, look very strong.

Your higher quality portfolio on the consumer side, you walked by before. Do you see any stresses on the consumer as it affects Huntington? Obviously, you mentioned the lower-income cohort. That's a commentary I think that's running through a lot of bank commentary. In what way, shape, or form are you concerned at all about it as it would affect Huntington?

We're 90-plus percent secured. Loss will be triggered off of unemployment. Unemployment continues to be quite low by historical standards. remember 0809 we had 10 percent unemployment in ohio 14 that's how the models are geared yep um and we really like we see in the consumer side um the biggest issue for us is we get a very small fha portfolio but fha just suspended their post-pandemic support and and and delinquencies are going up there that's got the government guaranteed you got to carry it for a while then do the put so i don't see that as as as risk other than um you know there'll be a little headline delinquency moment yep so um talked a little bit about um the industry dynamics and when you think

about just the the landscape today um what competitive pressures uh or or considerations do you guys think about the most when you think about planning and strategy and and um and and and trying to outdo and outgrow the competitive landscape?

Sure. Well, there's a lot of competition. There's been competition throughout. I started four and a half decades ago. There were 16,000 banks, right? So that was a lot of competition back then, too. But we have different things coming at us today. You know, number one worry right now is cyber and what's happening on that front. And so there are a whole series of things we and others are doing, both for ourselves and the industry as a whole. Beyond that, we've got a lot of opportunity with AI, and that's how we think about it. Certainly a threat, but opportunity. We've been working for years to get our data in great shape. We've had a lot of the plumbing done. I think we did Snowflake five years, six years ago, for example, in terms of data lake. So we've got colleagues who are building agentic tools so we can standardize our adoption. We're multi-cloud, multi-region. We've got a lot of diversification and the crown jewels we keep in-prem, on-prem, primarily deposit system. So I think we've got a relatively unique position to play from. We've got a lot of expertise on the board. We've got two very senior cyber executives, former executives on the board. we've had them for years we had a tech committee for 14 years so um uh we've we've we've got work to do to be sure but um uh we see ai is really transformational and we're embracing it after that you you know it's fintechs and so you know being an effective partner and choosing those wisely we do partner uh sometimes we invest in and occasionally we've acquired but But we'll continue to build with partners. That's particularly true in payments, somewhat true in wealth, not so much in capital markets. Okay, got it.

Talking about the flywheel that you mentioned and the investments and cyber, of course, just being one of the things that's taking up and escalating part of the budget. But more importantly, when you talk about creating that growth flywheel and investing to generate that growth. How do you think about what the right magnitude of investment is, what the right spend is, how you're spending it, and ensuring that you're, in fact, both more than just keeping the lights on but pushing that agenda while also protecting that path towards higher returns and operating leverage?

So we've been doing this flywheel since 2019, and I think it's on page 14 in the deck. you'll see um a level of of a core expense reduction that's become part of the discipline zach and our my partners have done just a great job and it's hard to do and get it the first couple of years kind of easy it gets hard to do uh six years in but we we are continuing on that approach and that gives us an excess then to in uh reinvest and there are always criteria around balancing out how much is tech how much is marketing what are the what are the new businesses we're going to do the branch builds would be an example longer term payback not typically something that would compete head to head with like the commercial specialties but as we we think about it over time and the relative position of the company strategically and where we want to be you make those trade-off decisions now we've said all along we'll modulate our investment rate tied to the revenue creation we've had terrific revenue growth over the period of time more than 10 percent uh i think it was 11 last year it's allowing us to to to meaningfully reinvest we've got about 550 million dollars of reinvestment now that's going on annually and we're trying to grow that at a double digit rate every year right um and and and parse it out And then that keeps that flywheel moving. Got it.

And at the same point, I would think that, as you guys talked about on the April call, this generating a little bit more flexibility to be either aggressive and push some things forward or, as you did talk about last quarter, maybe be a little bit more deliberate about pushing things out.

How do you kind of make those calls on forward back? and and do you feel like you've got um a better mechanism to kind of decide uh you know here's where we should be directionally like shifting our initiatives uh at any given time well we're always trying to play forward six to 12 months yep um if you think about some of the silliness we might have seen in our career there was one ceo that said i'm gonna keep um you know investing to expand uh because everybody else is until the music stops right well you know that feels kind silly to me we we we should be looking forward six to 12 and trying to project where we think things will be and then tuning it as we go we did that in the first quarter we pulled back a bit on loan growth uh and we did that we also modulated our expense investment yep uh we we uh we've terrific fee income growth and we got to the same that bottom line but right that was us thinking with what's going on the middle east it may be changing yep if anything i want to be on the too conservative side versus miss the movie yep and we're we're a top 10 shareholder bank management colleagues and directors and so we're trying to to take this uh you know risk uh um management of the enterprise into a constant forward stance so we're scanning we're using different forums we've got great directors who give us insight and advice some of whom operate global networks um so and and kind of bringing some a lot of this together as you've grown the bank gotten bigger invested built for the future cyber technology a couple of partners and deals built in um how do you think about what's changed in terms of execution risk at huntington and and how you manage that differently today versus uh versus historically well the the the geography uh alone is a um is a factor it gets more complicated so um we're a big believer uh fundamentally that we're a people business it's about relationships it starts with our colleagues knowing each other so we're spending more time with our senior colleagues not just our executive team senior colleagues getting around there are more meetings than than we used to have so people get to colleagues get to know each other that's one we like to spend time with customers and listen to them and so there's a you know i would say 60 of my time is on the road and and you know our our revenue executives i don't want to see them in the office um and so the fact that they're out and about with other colleagues and customers prospects is uh is a very strong signal to me that gives us insight uh into perhaps what we have opportunities to do better or more of and and we try to dynamically adjust.

One question that's come in I think is relevant in this point is as you get bigger and prepare to cross the at least current barrier for Category 3, what do you have to consider in terms of once you get past the deals and move forward, either in terms of preparation for that, if any, that you've already not done, whether that's costs or whether that's infrastructure, as you get to the bank to a bigger stage?

Yeah, great question. We articulated this a couple of years ago. We were investing for Category 3, recognizing we would cross it someday. Now, that may get redefined with the current administration, but we're substantially good to go as of this quarter as a result of prior investment.

Yeah, okay. So let's talk a little bit more just about credit and the credit environment. So you talked already about just obviously the relatively low risk profile of the company. are anything they're being just incrementally watchful for i know we touched on the lower end consumer and i know you know where you guys stand in terms of that that high quality on the on the consumer side but as you just amass um again these anecdotes what if anything does you just keep your eyes open for well there's more micro views you know um what's the multi-family housing market in austin doing for example and it's slow yeah meaningfully um you know things that we wouldn't have historically so there's there's a deeper view uh into um uh different markets than than

we would have had historically so our our first second and third lines are are are doing more they're doing more with risk correlation they're doing more sensitivity analysis and uh and we're using it more than we we would have just a couple of years ago uh as as examples um there's a lot of effort to make sure the credit culture of the company is commonly understood and embraced and you know if it's not then that generally means there's an exit there's a lot of accountability in the company yeah yeah um a broader topic on the commercial side has been everything that circulates uh the private credit environment private capital and dfi you and others have

given good disclosures have expressed your confidence how do you think any differently if at all just about how the private markets evolve and banks interaction with it from a Huntington perspective?

Well, I think that the sectors we've chosen to play and there are a number of things we chose not to be involved with. And we're you know, we think we're in pretty good shape as a consequence of that. You know, so the strategy before we do something new, there's strategy. There's a risk assessment with that. And so as we look at the end, you know, we like we're what we're seeing with the reits we like what we're seeing in a number of the areas ndfi that we're involved with and we're going to grow those um and um uh uh but this these fundamental disciplines will will will stay in place i think the private credit market as it cycles out of its you know, retail, deposit, investor-led focus. There's clearly a market for it. I don't know what size. It's smaller. That's an opportunity for the banks, maybe an opportunity for us as well. And yet there's a role for it to play.

And so one question from your perspective, as the regulatory environment has been obviously pretty beneficial for banks. And the capital rules have recently gotten proposed. Basel III, you guys have talked about it being a nice benefit for you guys, presuming it goes through as planned. Anything in either the proposal or in other things coming down the pike in terms of the regulatory front that you'd like to see either altered or changed, or are you generally okay with what's on the table?

Well, we'd like to see B3 complete, right? This has been overhang since Dodd-Frank almost right the liquidity rules you know the the ISL the ILST needs to be tailored in I think all of us would agree with that right so some of the mandatory assumptions like no access to the Fed window for 30 days or other limits just don't make sense and and having said that is obviously got to be conscious of liquidity and stress when you think back to Silicon on valley but i think we've over corrected a number of things and uh and i think this administration's intending to adjust those yeah and um and have you know in my career since four and a half almost half a century the banks have never been stronger better capital better discipline in terms of credit risk management and overall risk management uh much much more um uh uh board challenge So the self-governance side is very strong, it appears to me. So naturally, the regulators should be backing off because it can be an economic engine for America if we're less fettered.

Got it. So last question coming full circle to kind of where we started. We started talking about a little bit of the stock's recent underperformance, and we talked through a lot of the fundamental issues. So one thing that kind of comes back as a debate on the stock is you guys have talked a couple of times about, you mentioned the growth to get out to 27, $1.90 to $1.93 of EPS. How confident in you that you will continue to plan to achieve that outcome?

Look, we have a lot of levers. We talked about a number of them here. We have more than that. And we're off to a very good start. We're getting this conversion behind us this quarter. That'll start the revenue momentum. As we indicated, it looks really good for this year and the build. So as I sit here today with everything, you know, the change in interest rates, everything else on the horizon, I feel really good about we're going to get to 190, 192, which is what we committed to for 27. And I really think we've got great potential beyond that. It's exciting to see what's, you know, how we're positioning ourselves in Texas and the South, how these specialty business are coming on, and the core performance has not lagged. And, you know, that was one of the issues we touched on early on. Can we do both? And we're demonstrating we're doing both. And so just feel very fortunate to work with a great group of colleagues, highly committed, obviously a lot of work getting done, a lot of pressure, but there's a lot to go for as well. If we're a leader in AI, which we are positioned to be one of the bank leaders, Coming through what we've just achieved, we're 16 and a half on equity today, take the expenses out, that's 17 plus, you know, 18 to 19 is the target. We should be able to get there. And then we have AI on top of it. And, you know, we don't see a lot of demand for stablecoin or digital assets right now. But if that happens, we'll be positioned for that as well. that we will seek to find an opportunity. And that's the benefit of the great team I get to work with. For sure, there are challenges, but there are also opportunities. And just as we've proven with Silicon Valley in that moment where most banks took diets, that was a breakout moment for us. We find opportunities because we have this deeply ingrained aggregate, moderate to low-risk appetite. and we're very, very clear with our customer focus and it comes through with trust and these other awards. So the franchise is reasonably well positioned. We're at like a screaming buy moment from my perspective. I hope some others agree with that. Great to be with you, Ken. Thank you very much. Great.

Thanks, Steve. Thanks, Steve, for joining us today and for presenting with us. Really appreciate it.