01—Abstract
Summary
Summary of the 10-Q filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Huntington Bancshares Incorporated, a multi-state diversified regional bank holding company headquartered in Columbus, Ohio, reported first-quarter 2024 net income attributable to Huntington of $419 milliona, or $0.26 per diluted common share, compared with $602 million, or $0.39 per diluted share, in the year-ago quarter.
Results were pressured by a $32 millionb FDIC DIF special assessment expense and lower net interest income of $1.3 billion, which fell $122 million, or 9%, as net interest margin declined to 3.01% from 3.40% amid higher funding costs. The year-ago quarter also included a $57 million gain on the sale of the RPS business. Balance sheet growth was modest.
Total assets were $193.5 billionc at March 31, 2024, up $4.2 billion, or 2%, from December 31, 2023, while total loans and leases reached $122.8 billion, up 1%. Total deposits rose to $153.2 billion, and core deposits were $147.3 billion, or 96% of total deposits. Credit quality metrics moved higher: net charge-offs were $92 million, or 0.30% of average loans and leases annualized, versus 0.19% a year earlier, and nonaccrual loans rose to $716 million.
The ACL was $2.4 billiond, or 1.97% of total loans and leases. Capital remained stable, with the CET1 risk-based capital ratio at 10.2% at both March 31, 2024 and December 31, 2023.
Shareholders' equity totaled $19.3 billion, and the company did not repurchase any shares during the quarter under its $1.0 billion authorization, which it does not expect to use through 2024. The Board declared a quarterly common dividend of $0.155 per share.
02—Key points
Key Highlights
- Net income attributable to Huntington was $419 million ($0.26 per diluted share), down from $602 million ($0.39 per diluted share) a year earlier, a decrease of 30%.
- Net interest income fell $122 million, or 9%, to $1.3 billion, as FTE net interest margin declined 39 basis points to 3.01%, reflecting higher cost of funds.
- Noninterest expense rose $51 million, or 5%, to $1.1 billion, including a $32 million FDIC DIF special assessment expense.
- Net charge-offs increased to 0.30% of average loans and leases annualized from 0.19%, with commercial NCOs at 0.32% versus 0.17%.
- Total assets reached $193.5 billion, up $4.2 billion, or 2%, from year-end 2023, while total deposits were $153.2 billion.
- CET1 risk-based capital ratio held steady at 10.2%, and shareholders' equity totaled $19.3 billion at March 31, 2024.
- The company repurchased no shares in the quarter and does not expect to use its $1.0 billion repurchase authorization through 2024.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 30, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $336.00M$377.00M | −10.9% |
| Interest Expense | $1.09B$619.00M | +76.6% |
| Net Income | $419.00M$602.00M | −30.4% |
| EPS (Basic) | $0.26$0.40 | −35.0% |
| EPS (Diluted) | $0.26$0.39 | −33.3% |
| Shares Outstanding (Basic) | 1.45B1.44B | +0.4% |
| Shares Outstanding (Diluted) | 1.47B1.47B | +0.3% |
05—Questions
Frequently Asked Questions
Why did Huntington's net income decline in the first quarter of 2024?
Net income attributable to Huntington fell to $419 million from $602 million, mainly because net interest income dropped $122 million, or 9%, as the net interest margin compressed to 3.01% from 3.40% due to higher cost of funds. The year-ago quarter also benefited from a $57 million gain on the sale of the RPS business, and this quarter included $32 million of additional FDIC DIF special assessment expense.
How did credit quality trend in the quarter?
Net charge-offs were $92 million, or 0.30% of average loans and leases annualized, up from $57 million, or 0.19%, a year earlier, primarily driven by commercial charge-offs. Nonaccrual loans and leases increased to $716 million from $667 million at December 31, 2023. The total ACL was $2.4 billion, or 1.97% of total loans and leases.
Is Huntington's capital position stable?
Yes. The CET1 risk-based capital ratio was 10.2% at both March 31, 2024 and December 31, 2023, and the consolidated Tier 1 leverage ratio was 8.9%, compared with 9.3% at year-end. Shareholders' equity was $19.3 billion, a decrease of $31 million from December 31, 2023, primarily due to accumulated other comprehensive income changes driven by interest rates.
What is Huntington's dividend and share repurchase outlook?
On April 17, 2024, the Board declared a quarterly common stock dividend of $0.155 per share, payable July 1, 2024, with estimated cash demands of approximately $225 million per quarter. No shares were repurchased during the first quarter under the $1.0 billion authorization, and management does not expect to use the repurchase program through 2024, though it may resume repurchases at its discretion.
How did deposits and funding change during the quarter?
Total deposits increased to $153.2 billion from $151.2 billion, and core deposits rose to $147.3 billion, representing 96% of total deposits. Wholesale funding increased to $21.0 billion from $18.8 billion, mainly from higher collateralized borrowings and senior notes. Long-term debt rose to $14.9 billion from $12.4 billion.
06—Continue