UPDATE: This article includes comments from a conference call with executives, an interview with the CEO and from analyst research notes.
It was October 2023 when Huntington Bancshares CEO Steve Steinour announced the $201 billion-asset company would
A year later, Steinour likes Huntington's prospects. "We're ahead of where we expected to be with some of our investments, they're all performing at least as well as we expected," he said Thursday in an interview. "That has created a momentum. A year ago, we did not expect to be making a branch [expansion] announcement in 2024. Our performance has allowed us to do that."
In September, the $201 billion-asset Huntington said it planned to
The Columbus, Ohio-based company, which reported third-quarter earnings Thursday, said average loans and leases, which totaled $124.5 billion on Sept. 30, were up nearly $4 billion from a year ago. Of that increase, about $700 million came from the Carolinas, Texas, and the new business lines, Chief Financial Officer Zach Wasserman said on a conference call with analysts.
"We're meaningfully ahead of where we thought we would be in the original plan," Steinour said. "It's given us the confidence to continue to invest."
Huntington reported net income of $517 million for the three months ended Sept. 30, down about 5% from the same period last year as net interest income eased and expenses rose.
Net interest income fell 1% from a year ago to $1.36 billion, which the bank attributed to a 22-basis-point decrease in its net interest margin to 2.98%. Huntington's margin has declined four consecutive quarters. But now, with the loan book growing and
Net interest income rose 3% from the second quarter. Management said the upward trend has legs, predicting spread income for the second half of 2024 would eclipse the $2.63 billion Huntington reported for the first six months of the year. Management also forecast record net interest income in 2025.
Huntington's spread income forecast echoes
Huntington's net interest margin too is expected to resume growth soon, according to Wasserman. He forecast "nice upward drift in NIM from the fourth-quarter level throughout the course of 2025" on the conference call.
Some of Huntington's more mature business lines — auto lending, Small Business Administration lending and capital markets — posted solid numbers, contributing to the company's momentum during the third quarter.
Auto lending has long been a core activity for Huntington. It originated car loans totaling $2.4 billion in the three months ended Sept. 30, up $1 billion from the same period last year. In SBA lending, Huntington ranked as the nation's No. 1 lender by number of loans for the seventh straight year, making more than 7,500 7(a) loans during the agency's just-finished 2024 fiscal year.
"This is important to us,' Steinour said of SBA lending. "A lot of employment that gets created in communities are small businesses … We're helping solidify businesses, or in some cases create businesses. I think it's a really big deal for our society. We're proud to do it."
Capital markets, a business line that performed well for a number of banks, including PNC and
"Capital markets is sitting with pipelines in a very good position … so that will set up more activity," Steinour said.
While third-quarter net charge-offs of $93 million increased $20 million from the same period in 2023, they remained manageable, amounting to 0.3% of total loans and leases. Nonperforming assets totaled 0.62% of end-of-period loans and leases, up from the 0.52% Huntington reported at Sept. 30, 2023. Provisions for credit losses rose to $106 million from $99 million a year ago.
Huntington "is confident from a credit perspective," Wedbush Securities Analyst David Chiaverini, wrote Thursday in a research note. "Credit quality weakened modestly but remains at a strong level."
"Credit remains a hallmark of Huntington with stable charge-offs and improved non-performing and criticized assets," Steinour said on the conference call.
Huntington reported average third-quarter deposits of $156.5 billion, up 5.6% from last year. The company also reported a Common Equity Tier 1 capital ratio of 10.4% at Sept. 30, in line with the second-quarter result and higher than the 10.1% ratio reported a year ago.
The third-quarter results put Steinour in a bullish mood. "We thought we could do this when we announced a year ago. We don't take anything for granted, but we're very pleased with the extraordinary progress to date."
