8-K: Huntington Bancshares Reports Record Fee Income and Loan Growth in Q4 2024

Huntington Bancshares Incorporated announced strong fourth-quarter 2024 results, driven by record fee income, accelerated loan growth, and sustained deposit growth.

Summary

• Huntington Bancshares reported a net income of $530 million, or $0.34 per common share, for the fourth quarter of 2024.
• This represents an increase of $13 million from the prior quarter and $287 million from the year-ago quarter.
• The company's earnings per share (EPS) for the quarter were $0.34, which is $0.01 higher than the prior quarter and $0.19 higher than the year-ago quarter.
• Net interest income increased by $44 million, or 3%, from the prior quarter and $79 million, or 6%, from the year-ago quarter.
• Noninterest income rose by $36 million, or 7%, from the prior quarter to $559 million, and by $154 million, or 38%, from the year-ago quarter.
• Average total loans and leases increased by $3.7 billion, or 3%, from the prior quarter to $128.2 billion, and by $6.9 billion, or 6%, from the year-ago quarter.
• Average total deposits increased by $2.9 billion, or 2%, from the prior quarter and $9.8 billion, or 7%, from the year-ago quarter.
• The Common Equity Tier 1 (CET1) risk-based capital ratio was 10.5% at the end of December 2024, up from 10.4% in the prior quarter.
• The tangible book value per share was $8.33, down $0.32 from the prior quarter but up $0.54 from a year ago.

Sentiment

Score: 8

Explanation: The document presents a very positive outlook with strong financial results, record fee income, and robust growth. While there are some minor negatives, the overall tone is optimistic and indicates a healthy financial position.

Positives

• The company's core businesses and investments in new geographies and commercial verticals are performing well.
• Huntington successfully managed overall funding costs lower and increased fee revenues from payments, wealth management, and capital markets.
• The capital markets team delivered record revenue during the quarter.
• Huntington delivered peer-leading organic growth across both loans and deposits in 2024.
• The company has a strong liquidity, capital, and credit position.
• Credit quality remains stable, supported by a positive economic environment.
• The company expects the momentum from its core businesses and strategic investments to continue into 2025 and beyond.

Negatives

• The sale of approximately $1 billion of corporate debt investment securities decreased pre-tax income by $21 million.
• The tangible common equity (TCE) ratio decreased from 6.4% to 6.1% in the quarter.
• Tangible book value per share decreased by $0.32 from the prior quarter.
• The adjusted Common Equity Tier 1, including the effect of AOCI, decreased from 8.9% to 8.7% in the prior quarter.
• Nonperforming assets increased by $38 million, or 5%, from the prior quarter.

Risks

• Changes in general economic, political, or industry conditions could impact results.
• Deterioration in business and economic conditions, including inflation and supply chain issues, could pose challenges.
• The impact of pandemics and other catastrophic events could affect the global economy and financial markets.
• Bank failures and other volatility could lead to increased regulatory requirements and costs.
• Unexpected outflows of uninsured deposits could require the sale of investment securities at a loss.
• Changing interest rates could negatively impact the value of the investment portfolio.
• Cybersecurity risks and uncertainty in U.S. fiscal and monetary policy could pose challenges.
• Competitive pressures on product pricing and services could affect profitability.
• Changes in policies and standards for regulatory review of bank mergers could impact growth strategies.

Future Outlook

The company expects the momentum from its core businesses and strategic investments to carry it through 2025 and beyond, with a robust growth outlook and expanded profitability.

Management Comments

• We delivered exceptional fourth quarter results highlighted by record fee income, accelerated loan growth, and sustained deposit gathering, said Steve Steinour, chairman, president, and CEO.
• Our results reflect the success of our core businesses and investments in new geographies and commercial verticals.
• Our teams have executed very well, managing overall funding costs lower and increasing fee revenues from payments, wealth management, and capital markets.
• Additionally, our capital markets team delivered record revenue during the quarter.
• During 2024, we delivered peer-leading organic growth, across both loans and deposits, supported by the combination of existing and new businesses.
• We believe we have a multi-year opportunity to leverage our investments and momentum.
• Our credit continues to perform well, consistent with our aggregate moderate-to-low risk appetite.

Industry Context

The results reflect a positive trend in the banking sector, with Huntington demonstrating strong performance in key areas such as loan and deposit growth, and fee income generation. This is in line with the broader industry focus on organic growth and strategic investments.

Comparison to Industry Standards

• Huntington's loan growth of 6% year-over-year is strong compared to the average growth rate of regional banks, which is estimated to be around 3-5%.
• The deposit growth of 7% year-over-year also exceeds the industry average, indicating a strong ability to attract and retain customer deposits.
• The CET1 ratio of 10.5% is within the range of regulatory requirements and is comparable to other well-capitalized regional banks such as KeyCorp and Fifth Third Bancorp.
• The return on average tangible common equity (ROTCE) of 16.4% is a strong performance metric, indicating efficient use of capital, and is higher than many of its peers.
• The efficiency ratio of 58.6% is also a positive indicator, suggesting effective cost management compared to some peers with efficiency ratios above 60%.

Stakeholder Impact

• Shareholders will benefit from the strong financial performance and increased profitability.
• Employees will benefit from the company's growth and success.
• Customers will benefit from the company's continued investment in products and services.
• Creditors will benefit from the company's strong capital position and credit quality.

Next Steps

• Huntington's senior management will host an earnings conference call on January 17, 2025, at 9:00 a.m. (Eastern Time).
• The company will continue to leverage its investments and momentum to drive growth in 2025 and beyond.

Key Dates

Keywords

Huntington Bancshares, financial results, earnings, loan growth, deposit growth, net interest income, noninterest income, capital ratios, credit quality, banking