Huntington targets Carolinas for commercial banking push

Huntington Bancshares
Huntington Bancshares' entry into Native American financial services is an outgrowth of its 2021 acquisition of TCF Financial, which expanded the bank's footprint into Minnesota and Colorado.
Emily Elconin/Bloomberg

Huntington Bancshares isn't about to let a potential economic slowdown go to waste. 

The $187 billion-asset bank on Wednesday laid out some details behind its recent pledge to spend on growth initiatives at a time when tougher economic times may lie ahead.

Huntington plans to expand commercial banking into North Carolina and South Carolina, and to create a unit that specializes in medical asset-based lending. The company also said it recently added a Native American financial services group. 

"The ability at this stage — when other banks may be doing cost programs or reductions, or have a limited appetite for risk-weighted asset growth for capital or other reasons — this is a window," said Huntington Chairman, President and CEO Steve Steinour. "We've been gearing the company for outperformance during a recession … and we're going to deliver that."

"It's a bit of a contrarian play," added Steinour, who was speaking at the Goldman Sachs U.S. Financial Services Conference in New York City. "With strong capital, excellent liquidity, the capabilities of the team, the credit performance, this is our time to move. We intend to do it throughout 2024, as well."

In October, on a conference call to discuss third-quarter earnings, Steinour said that Huntington's noninterest expenses, which totaled $1.1 billion for the three months ending Sept. 30, would increase by 4%-5% in the fourth quarter. He also said that the spending growth would carry over into 2024.

Huntington's Carolinas expansion will be led by commercial banking, according to Steinour. The Columbus, Ohio-based bank plans to offer middle-market corporate specialty banking capabilities, along with treasury management and capital markets services, he said.

Banking teams in the Carolinas will be located in five regions: Charlotte; Raleigh-Durham; the Triad region of Greensboro, Winston-Salem and High Point; Upstate South Carolina; and Coastal South Carolina.

Huntington has already hired many of the bankers it needs to staff its teams, Steinour said, though he stopped short of disclosing precisely how many individuals it has recruited.

"We were able to be opportunistic in identifying teams of experienced bankers who know these markets well," Steinour said. "I'm very enthusiastic about the teams who have recently joined the bank."

While several Huntington specialty lending units, including Small Business Administration lending, have pursued nationwide expansions, commercial banking has heretofore been restricted largely to the company's 10-state footprint in the Midwest and the West.

Huntington's plans for a medical asset-based lending unit should dovetail with an existing health care specialty banking group, Steinour said. The new effort offers the opportunity to "extend the menu" with existing relationships and bring new ones into the company, he said: "It's a natural fit, hand in glove."

The entry into Native American financial services is an outgrowth of Huntington's June 2021 acquisition of TCF Financial, which expanded the bank's footprint into Minnesota and Colorado, according to Steinour. 

"We've got a half dozen very experienced bankers [with] great reputations, and we're prepared to invest," he said.

Huntington joins a small group of companies, including Wells Fargo and the neobank Totem, that are seeking to expand the financial services options available to Native Americans. The move could have a positive impact on deposits, since loans to Native Americans are often part of relationships that feature high deposit-to-loan ratios, in many cases 100%, Steinour said.

"Done well, it's a really good business, and it serves an underserved community. It's in line with our purpose," Steinour said.

Though he provided no details, Chief Financial Officer Zach Wasserman said the moves announced Wednesday will begin to have a positive impact on Huntington's results in the second half of 2024 and into 2025.

"These are really exciting," Wasserman said. "Each in and of themselves is additive and helpful. Cumulatively, they'll be powerful. … We're seeing the highest-caliber talent come to us. That's what enables the fast payback."

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Commercial banking Growth strategies Commercial lending Huntington Bancshares
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