Q4 Results Highlighted by Sustained Deposit
and Loan Growth, Capital Expansion, and Strong Credit
Quality
2023 Fourth-Quarter Highlights:
- Earnings per common share (EPS) for the quarter were
$0.15, lower by $0.20 from the prior quarter, and were lower by
$0.27 from the year-ago
quarter. Excluding the after tax impact of Notable Items,
primarily related to the FDIC Deposit Insurance Fund special
assessment, adjusted earnings per common share were $0.27. Additionally, the mark-to-market of the
pay-fixed swaptions hedging program during the quarter reduced
pre-tax income by $74 million, or
$0.04 on an EPS basis.
- Net interest income decreased $52
million, or 4%, from the prior quarter, and decreased
$146 million, or 10%, from the
year-ago quarter.
- Noninterest income decreased $104
million, or 20%, from the prior quarter, to
$405 million. Noninterest
income in the fourth quarter was reduced by $74 million, compared to an increase of
$33 million in the third quarter due
to the mark-to-market on pay-fixed swaptions. Excluding the
impact of mark-to-market on pay-fixed swaptions, noninterest income
increased $3 million compared to the
prior quarter.
- Cash and cash equivalents and available contingent borrowing
capacity totaled $93 billion at
December 31, 2023, and represented 206% of uninsured
deposits.
- Average total deposits increased $1.5
billion, or 1%, from the prior quarter and $4.0 billion, or 3%, from the year-ago quarter.
- Ending total deposits increased $2.4 billion, or 2%, from the prior quarter
and $3.3 billion, or 2%, from
the year-ago quarter.
- Ending core deposits increased $1.2 billion, or 1%, from the prior quarter
reflecting continued momentum in consumer deposit gathering and
ongoing focus on acquiring and deepening primary bank
relationships.
- Average total loans and leases increased $445 million from the prior quarter to
$121.2 billion, and increased
$2.3 billion, or 2%, from the
year-ago quarter.
- Average total consumer loans increased $320 million and average total commercial loans
and leases increased $125 million
from the prior quarter.
- Net charge-offs of 0.31% of average total loans and leases for
the quarter.
- Nonperforming asset ratio of 0.58%.
- Allowance for credit losses (ACL) of $2.4 billion, or 1.97%, of total loans and leases
at quarter end.
- Common Equity Tier 1 (CET1) risk-based capital ratio increased
15 basis points to 10.25%, continuing the trend of capital
expansion. Adjusted Common Equity Tier 1, including the effect of
AOCI, was 8.58%, an increase of 58 basis points from the prior
quarter.
- Tangible common equity (TCE) ratio increased 44 basis points
from the prior quarter to 6.14% and increased 59 basis points from
a year ago.
- As previously announced, Huntington completed a synthetic
Credit Risk Transfer ("CRT") transaction during the fourth quarter
related to an approximately $3
billion portfolio of on-balance sheet prime indirect auto
loans as part of the company's capital optimization strategy.
The transaction reduced risk-weighted assets by approximately
$2.4 billion, with the risk-weight
moving from 100% to 20% on the selected pool of assets.
COLUMBUS, Ohio, Jan. 19,
2024 /PRNewswire/ -- Huntington Bancshares
Incorporated (Nasdaq: HBAN) reported net income for the 2023 fourth
quarter of $243 million, or
$0.15 per common share, a decrease of
$402 million, or $0.27, from the year-ago quarter. Adjusted
earnings per common share were $0.27,
excluding $0.12 per common share of
after-tax Notable Items, in the 2023 fourth quarter compared to
$0.43, excluding $0.01 of after-tax Notable Items, in the year-ago
quarter.
Return on average assets was 0.51%, return on average common
equity was 5.2%, and return on average tangible common equity
(ROTCE) was 8.4%.
CEO Commentary:
"We are pleased to deliver fourth quarter results highlighted by
the continuation of our organic growth efforts with sustained
deposit and loan growth as well as the further expansion of common
equity tier 1 capital," said Steve
Steinour, chairman, president, and CEO. "We are entering the
new year from a position of strength with robust liquidity and
capital, which allows us to remain focused on executing our growth
strategy and serving our customers. We are maintaining our
disciplined approach to managing credit quality, consistent with
our aggregate moderate-to-low risk appetite, and believe Huntington
is well-positioned as we operate through this dynamic
environment.
"2023 was marked by the successful execution of key strategic
initiatives, as Huntington outperformed during a dynamic
environment for the banking sector. The company delivered
sustained deposit growth over the course of the year, bolstered
capabilities across our payments and other fee revenue areas, and
completed the re-alignment of business segments to enhance our
focus on the customer and drive efficiencies. Additionally,
we bolstered our specialty banking expertise through the addition
of new teams and expanded our commercial and regional bank into the
Carolinas.
"While the macro outlook continues to play out, we believe the
operating environment today is generally more constructive compared
to last quarter. Customers are generally well positioned and
are continuing to invest in their businesses.
"As a result, we are seeing attractive growth opportunities as
we move into 2024, and are positioned to accelerate our loan growth
forecast given these dynamics. We are leveraging our leading
brand and trust metrics, to build on our growth momentum. We
intend to capitalize on our position of strength and to further
acquire and deepen customer relationships. These efforts will
result in continued growth of revenue and profitability over the
course of the year and beyond."
The fourth quarter 2023 earnings materials, including the
detailed earnings press release, quarterly financial supplement,
and conference call slide presentation, are available on the
Investor Relations section of Huntington's website,
http://huntington.com/ In addition, the financial results will be
furnished on a Form 8-K that will be available on the Securities
and Exchange Commission website at www.sec.gov.
Conference Call / Webcast Information
Huntington's senior management will host an earnings conference
call on January 19, 2024, at 9:00 a.m.
(Eastern Time). The call may be accessed via a live
Internet webcast at the Investor Relations section of Huntington's
website, www.huntington.com, or through a dial-in telephone number
at (877) 407-8029; Conference ID #13743211. Slides will
be available in the Investor Relations section of Huntington's
website about an hour prior to the call. A replay of the
webcast will be archived in the Investor Relations section of
Huntington's website. A telephone replay will be available
approximately two hours after the completion of the call through
January 27, 2024 at (877) 660-6853 or
(201) 612-7415; conference ID #13743211.
Please see the 2023 Fourth Quarter Quarterly Financial
Supplement for additional detailed financial performance
metrics. This document can be found on the Investor Relations
section of Huntington's website, http://www.huntington.com.
About Huntington
Huntington Bancshares Incorporated is a $189 billion asset regional bank holding company
headquartered in Columbus,
Ohio. Founded in 1866, The Huntington National Bank and its
affiliates provide consumers, small and middle‐market businesses,
corporations, municipalities, and other organizations with a
comprehensive suite of banking, payments, wealth management, and
risk management products and services. Huntington operates
approximately 1,000 branches in 11 states, with certain businesses
operating in extended geographies. Visit Huntington.com for
more information.
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