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Huntington Bancshares 8-K Report, Financial Results (Jan 19, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 19, 2024
Period End
January 19, 2024
In the record · 2016–202610-K1110-Q338-K254

HBAN filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 254 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’16Aug ’16
  2. Leadership change8-K · May ’22May ’22
  3. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed January 19, 2024. Cited figures are marked; the original filing is the authoritative source.

Huntington Bancshares Incorporated reported net income attributable to Huntington of $243 milliona, or $0.15 per diluted common share, for the fourth quarter of 2023, down $402 million, or $0.27, from the year-ago quarter.

Excluding $0.12b per common share of after-tax Notable Items, primarily the FDIC Deposit Insurance Fund special assessment ($214 million pre-tax), adjusted EPS was $0.27 versus $0.43 excluding $0.01 of Notable Items a year earlier. The mark-to-market loss on the pay-fixed swaptions hedging program reduced pre-tax income by $74 million, or $0.04 per share. Net interest income fell 10% year over year to $1.316 billion, with net interest margin at 3.07%, down 45 basis points, while noninterest expense rose 25% to $1.348 billion, reflecting the special assessment.

Balance sheet and credit metrics showed continued growth and strengthening capital. Ending total deposits rose $3.3 billionc, or 2%, year over year, and cash and available contingent borrowing capacity totaled $93 billion, representing 206% of uninsured deposits. Average total loans and leases were $121.2 billion.

Net charge-offs were 0.31% of average loans, up from 0.17% a year ago, and the nonperforming asset ratio was 0.58%. The CET1 ratio rose 15 basis points to an estimated 10.25%, helped by a synthetic credit risk transfer on an approximately $3 billiond prime indirect auto loan portfolio that reduced risk-weighted assets by approximately $2.4 billion. The tangible common equity ratio increased to 6.14%.

Management said the operating environment is generally more constructive than last quarter and that Huntington is positioned to accelerate its 2024 loan growth forecast. The company is a $189 billion asset regional bank holding company headquartered in Columbus, Ohio. The filing furnishes a news release (Exhibit 99.1) and a Quarterly Financial Supplement (Exhibit 99.2) for the quarter ended December 31, 2023.

02—Key points

Key Highlights

  1. Q4 2023 net income attributable to Huntington was $243 million, or $0.15 per diluted share, down $0.27 from the year-ago quarter.
  2. Adjusted EPS was $0.27, excluding $0.12 per share of after-tax Notable Items, primarily the $214 million pre-tax FDIC Deposit Insurance Fund special assessment.
  3. Net interest margin declined 45 basis points year over year to 3.07%, and net interest income fell 10% to $1.316 billion.
  4. Noninterest income fell 20% sequentially to $405 million, including a $74 million unfavorable mark-to-market on the pay-fixed swaptions program.
  5. Ending total deposits grew $3.3 billion, or 2%, year over year, and cash and contingent borrowing capacity of $93 billion equaled 206% of uninsured deposits.
  6. CET1 ratio rose to an estimated 10.25%, aided by a synthetic credit risk transfer on about $3 billion of prime indirect auto loans that reduced risk-weighted assets by about $2.4 billion.
  7. Net charge-offs rose to 0.31% of average loans from 0.17% a year ago, and the nonperforming asset ratio was 0.58%.

03—Questions

Frequently Asked Questions

  1. Why did Huntington's earnings fall so sharply in the fourth quarter of 2023?

    The decline was driven mainly by Notable Items, primarily the $214 million pre-tax FDIC Deposit Insurance Fund special assessment, which reduced after-tax earnings by $0.11 per share. Additionally, a $74 million unfavorable mark-to-market on the pay-fixed swaptions program reduced pre-tax income by $0.04 per share. Net interest income also declined 10% year over year as net interest margin compressed.

  2. How did the net interest margin and net interest income trend?

    Net interest margin was 3.07% in the fourth quarter, down 45 basis points from the year-ago quarter and 13 basis points from the third quarter. Management attributed the decline primarily to higher cost of funds in a higher rate environment and increased deposits held at the Federal Reserve Bank, partially offset by higher loan and investment security yields. Net interest income was $1.316 billion, down 10% year over year.

  3. How is Huntington's liquidity and capital position?

    Cash and cash equivalents plus available contingent borrowing capacity totaled $93 billion at December 31, 2023, representing 206% of uninsured deposits. The CET1 risk-based capital ratio rose to an estimated 10.25%, and the tangible common equity ratio increased to 6.14%. Management described the company as entering the new year from a position of strength with robust liquidity and capital.

  4. What is management's outlook for 2024?

    CEO Steve Steinour said the operating environment is generally more constructive than last quarter, with attractive growth opportunities. He said Huntington is positioned to accelerate its loan growth forecast and expects continued growth of revenue and profitability over the course of 2024 and beyond. The filing does not provide specific numerical guidance.

04—Continue

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