Huntington Bancshares ((HBAN)) has held its Q1 earnings call. Read on for the main highlights of the call.
Huntington Bancshares’ recent earnings call showcased a strong performance, with notable growth in loans and deposits, revenue, and profits, alongside effective strategic execution. Despite some caution regarding economic uncertainty and a rise in criticized assets, the overall sentiment was positive, reflecting confidence in the company’s future prospects.
Strong Loan and Deposit Growth
Huntington Bancshares reported impressive growth in both loans and deposits, with average loans increasing by $9 billion and average deposits by $11 billion year over year. The company also saw a rise in primary bank relationships, with a 3% increase in consumer banking and a 4% increase in business banking compared to the previous year.
Robust Fee Revenue Increase
The company experienced a 6% year-over-year increase in fee income, driven by strong performances in payments, wealth management, and capital markets. This growth in fee revenue highlights Huntington’s ability to diversify its income streams and capitalize on various financial services.
Improved Capital Levels
Huntington Bancshares improved its capital position, with an adjusted CET1 increase of 20 basis points from the previous quarter, reaching 8.9%. The company also approved a $1 billion multiyear share repurchase authorization, demonstrating confidence in its financial stability and commitment to returning value to shareholders.
Significant Revenue and PPNR Growth
The company achieved a 10% year-over-year revenue growth and a 24% increase in pre-provision net revenue (PPNR). Earnings per common share were reported at $0.34, with a return on tangible common equity (ROTCE) of 16.7% for the quarter, underscoring Huntington’s strong financial performance.
Continued Credit Performance
Huntington maintained strong credit quality, with net charge-offs decreasing by four basis points during the quarter. The allowance for credit losses stood at 1.87%, reflecting the company’s prudent risk management practices.
Successful Execution on Strategic Initiatives
Investments in new verticals and geographic expansion in North and South Carolina and Texas significantly contributed to Huntington’s growth. These strategic initiatives highlight the company’s focus on expanding its market presence and enhancing its service offerings.
Economic Uncertainty
While the earnings call reflected overall positive sentiment, there was acknowledgment of increased economic uncertainty, particularly regarding the outlook for 2025. Potential headwinds from various economic scenarios were noted as factors that could impact future performance.
Criticized Asset Ratio Increase
The criticized asset ratio rose to 3.98%, indicating a slight increase in assets that may pose potential risks. This increase calls for careful monitoring as the company navigates economic uncertainties.
Commercial Real Estate Balances Decline
Huntington Bancshares reported a decline in commercial real estate balances by $261 million, reflecting a cautious approach in this sector amidst broader economic concerns.
Guidance
Looking forward, Huntington Bancshares provided robust guidance for 2025, expecting loan growth of 5% to 7%, deposit growth of 3% to 5%, and net interest income growth of 5% to 7%. Fee revenue is projected to grow within the 4% to 6% range. The company plans to sustain growth through disciplined expense management, continued investments in fee revenue, and strong credit performance, while remaining prepared for potential economic uncertainties.
In conclusion, Huntington Bancshares’ earnings call conveyed a strong performance with significant growth across various metrics. Despite some concerns about economic uncertainty and a rise in criticized assets, the overall sentiment was positive, reflecting confidence in the company’s strategic direction and future growth prospects.