Huntington Bancshares (HBAN) 23 Jul 202020 Q2 Earnings call transcript

Greetings, and welcome to the Huntington Bancshares Second Quarter Earnings Call [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mr. Mark Muth, Director of Investor Relations. Thank you, sir.

begin. may You

our Welcome. a for Michelle. reviewing Muth, of from will of section Director be is close This Thank recorded the starting being Copies I'm about of Relations and of Relations Investor Huntington. on available be call. site, the Investor www.huntington.com. found call as you, be the Mark Web rebroadcast slides the can hour we'll one

Rich Wasserman, are today President Steinour, Chief Chief Financial Steve and Zach presenters Our and Officer; Chairman, Pohle, Officer. Credit CEO;

Slide noted update differ Q&A and assumptions risks are As We materially. statements. on statements discussion, period, and will X, obligation changes, to and on today's are uncertainties, assume no including which contain available information such Such time to the at may this forward-looking to cause statements. subject results based actual

a of For including XX-Q this please slide the refer most material uncertainties, and recent to and SEC, filed forms XX-K, with filings. our discussion and risks X-K complete

now to me it over opening Steve turn remarks. Let for

implementing down well fourth rates. were program implemented in are helping the Thanks took solid of essentially the XXXX today. reflect Expenses in ago to We're quarter environment. of and expense was over deposit our Mark, XXXX. are our we operating joining the the with a actions mortgage impact bank the which along we 'XX, with results, headwinds. to call costs from the you strategy challenging second quarter actions quarter reduce as we new related we've proactive across an and as year The incredibly the pleased the Revenue result lower in despite hedging offset dynamic for year with record offset income level execution everyone as thank as year pandemic taken to

between commercial diversification is this where performance balance of offsetting Our provides consumer revenue and challenges. model business

consistent year over year PPNR strategies. reflects execution our increased of Our

my proud times. colleagues efforts to these each has our Our communicate our actions other. and people support extremely as with purpose of continued guided I'm well during and of difficult looking after as their customers

past and volume $X bank or through customers businesses Protection more and communities the small our XX,XXX recognized year our focused app positioned JD are month, second more being technology with our than Power Huntington Paycheck the the satisfaction the well and score well for the Program banks, our is SBA forward. going across liquidity than sized Power, we've remain row regional medium footprint. Huntington received total by and XXXX Over billion investments funded that PPP, a supportive evidence in mobile study robust the loans, this been to received is by providing JD capital highest the a in of of customers.

outlook The businesses, our of the our second stimulus individuals marine stability brought guardedly in supported In consumer levels to financial appear with market. for saw exceeding both many and businesses RV rose economy, origination more X.X% optimistic and U.S. consumer that the economic quarter. sentiment unprecedented homebuilder, activity levels. pre-pandemic assess record mortgage as resumed economic we have we for and we sales retail As recovery. headlines that in June positive generally and gradual are auto sales companies, government has Recent support operations.

to past activity during the with future have becoming second Our pandemic manufacturing pre levels back the two our many commercial year. pipelines the improved more be are for half over the of expected optimistic and customers to weeks customers

will of be that uneven. Our recovery hold, outlook the taking reflects but consensus view progress economists is

outcomes The remains optimism, for to range vigilant signs see key to our and possible do of metrics few we we remain on potential next the visibility limited is wide. risks months. While generally

economic our businesses. managing data monitoring We and and tightly are customer closely

describe. further economy expenses other previously we manage rate strength as of of technology past making DFAST result the Zach interest on business in filing. company We cycle. discussed And strategic growth over remain changed a expense the levels, this during demonstrate fifth and disciplined we're taking to compared as results consecutive for a actions recovers. year, as initiatives As Huntington’s management, to prior further weakness will lower a credit the while now decade, the which fundamentally enterprise it’s our performance Most risk we recent superior DFAST investments have

our remain stress Our the modeled [fed’s] adverse peer group, severely in percent. the established of the losses the in minimum X.X% at among level capital scenario [accumulative] loan buffer best while

results. aggregate Our DFAST low an to illustrated the through commitments moderate to is risk profile

and address gas as portfolio the Our we oil credit With have the we fully remain the quarter loss our provision, we in and our issues portfolio. reserved. believe in metrics gas oil second sound exposure quarter second

as metrics point Our this the portfolio underlying reflect board the today, commercial more has And our maintain growth the the of cycle. expects year This the dividend per through loans to commercial process based cleared management quarter. unchanged XXXX common from for share to expectation board's normal about us quarterly we out on approval morning of over continue restrained quarterly seasoned We and given our X.X%, subject a in you'll which the dividend lending well. portfolio fourth from the fourth more third gives at announced of average year cycle. in performance with quarter the that quarter what rate in $X.XX the to rate Zach prior cash hear quarter we know

you performance now So and of forward. overview carry an ask the provide financial I’ll Zach,

significantly million tangible was X.X%. expense on the provision everyone. on equity return $X.XX, during X% the the Slide average impacted by Thanks of return level $XXX share Steve XXXX the from reserve assets common morning credit was good second average elevated Clearly, on highlights common earnings points, quarter. we reported was the results average as added X equity and quarter. basis We were of to and common XX provides return per

rate of earnings the interest growth year, quarter spread was on Now in environment fee the decline pre-provision term to light revenues to our the X%. review offset relatively pretax detail. date. let's solid was is short turn of to nearly Total this Slide the in pressure was more rates year as Year We income. challenges revenue rapid in by year believe X performance growth in flat versus results and over ago

Specifically the were fees income by to current payment partially offset the our and balance XX by from the to customers, XXX the impact rate, deposit adapt of we branches, year was actions and items. in reduction as positions million closure in account record the million quarter a X% environment, well or in quarter. technology of have reflects actions $XX $XX reduce continued waivers expense mortgage banking the cards levels store of Total reduce expense run reduced activity and the of to assist This took consumer of higher capabilities. charges balances our we expenses XXXX the lower that and deposit line service customer ago fourth discipline to against investment our including as taken the overhead

interest that comparisons appendix. can non-interest found I our the income like net size normal fee income, would expense and Finally, note the for to be in

down margin the basis Turning linked was to Slide Morgan guidance line net provided points the in X, in Stanley quarter at X.XX% XX June. for the conference we with interest quarter,

This dollars late several NIM management balances X for have the the been loan auto negatively like basis first the highlight. that was the quarter. NIM impact points bank I relationship by held quarter. larger would at deposits active to unusual but non-primary Elevated compressed basis NIM impacted would during versus to quarter quarter second our in three a the primarily fed billion points. sheet by off our account during by The of Reduced few fees, items portfolio, reduced

Additionally, points basis in was negatively quarter of item. of impacted positive the XX Thus, QX was points compression driven mark, quarter derivative mark QX to basis by X ineffectiveness in basis the points. NIM was X while by basis X this NIM point

well Our industry the underlying despite performed NIM challenging quite environment.

our liquidity position, we of funds. manage to actively strong Given continue down our cost

cost of average month interest further deposits opportunity in for the was Our of modest we some reduction. XX basis and points continued see June bearing

interest actions second going had quarter, starting of impacts lower In become to reduce billion we the interest hedging $X.X environment. the asset unfavorable volatility benefit NIM and providing continue Our rate the active, of forward. hedges rate forward

to billion in XX% average compared the quarter. and average industrial increased from XX% forward $X.X increased and Moving ago loans to Average linked billion XX% PPP assets quarter commercial ago $X.X Slide of earning year X, year the addition quarter, or loans. the reflecting

the XX% sold of million exposure from in non continue the PPP due Average in to growth PPP to attrition. in inventory growth quarter. the driven XX% of and auto related the sold to over elevated quarter first Slide growth. mortgage actively remains solid new in the interest in Outside or Turn robust to $XXX this as of deposits portfolio, the over Offsetting loan held loan and was consumer line secondary core of $X related to lack four As year primarily total we end, balance line seven, levels reduced residential quarters. in OEMs. we portfolio our the just and quarter, utilization loans down, will at Consumer of under billion. government contract the quarter. manage growth, reflecting the be Also, saw plan was suppressed material deposit increase focused floor commercial past deposit core oil by loan year versus PPP result we the fed. quarter, finance deposits bearing health stimulus commercial and asset care the we increased over loans growth draws, the and growth a saw originations in review gas being And to including account lending,

XX% opening dramatic deposit quarter online to we environment. year. adapted business consumer retail year customers saw in During increase account trends saw quarter, over and XX% over of COVID channels We utilization the banking as shifts and the the quarter acquisition

liquidity down equity quarter acquisition year, consistent mortgage common equity total at and of the or strength spend, the card seeing CETX ended continued down loans, ended ratio X.XX%, We over ratios. the we tangible X disclosed points X, commercial what basis from TCE XX levels, Morgan the at year approaching X.XX%, tier common Slide deposits, Conference. basis month’s debit Slide one are based The salable with illustrates ratio ago. trends which is year X or quarter traditional a now our last Stanley the branch in and pre-COVID points capital highlights at originations

to Rich Rich? it cover turn to me now over credit. Let

Thanks, Zach.

I in to loan of Before results, cumulative Reserve's our second severely the peers attention losses credit relative the the quarter Slide I to scenarios DFAST turn and for illustrates of want Federal XX, exercise. Huntington into XXXX which the get modeled rankings your adverse

achieve to Steve of, risk credit to of and management true aggregate comparison for decade across the implementing time, profile. this over an we've we risk mentioned that and independent it discipline has sector over the been a validation credit us now of As risk is moderate know low only provides practices

us exercise group DFAST our the XXXX been of pure quartile result since Our at a each puts performer XXXX. top top peer DFAST and in we've

diversification split periods and stress, DFAST as evenly businesses composition numbers in commercial between portfolio Our gives and much. consumer of our us reflect economic

results. for credit allowance Turning the now to a walk losses or XXXX quarter. year credit the provides end second our and to Slide metrics from of XX ACL

see X.XX% dollars to increasing can is more You double under this by than period, during billion our of just loans. ACL $X

PPP loan be balances, as of would the June our Excluding X.XX% XXth. ACL

XXXX growth of recovers XQ X.X% the the peak second from XX% and GDP down was against decline includes the unemployment by recovery there X% reserve in of portfolio allowance within main in forecast. for scenario XXXX second used primary half from of X% build first scenario we a and The QX. portfolio, most quarter. assumes gas the and quarter, followed fully and oil full loss our occurring by besides to points expense end slow million reserved. ACL demonstrates quarter fourth XX%, last estimation X.X% multiple in process represents reserve data rebound of were the our Like XXXX XXXX believe Moody's almost The we now the content in year. the the with to a The QX to the $XXX year economic QX quarter and a this the first baseline XXXX. by have in provision end This XX%

representing this into gas portion just of bifurcated core oil the and and have non We core with under core portfolio borrowings. XX% segments the non

Slide our Our reserve XX it gas and NPAs. against and impact oil had X% of coverage ratio the NPAs loans. core portfolio. a that our about has and against overall of XX% on portfolio Recall non portfolio XX% coverage the demonstrates gas our core and and portfolio represents our level X% the TDRs oil includes shows total

prices oil Commodity to NPAs our significant industry. quarters over with commercial this current hospitality of a NPA not outside several we for levels and Slide discussed to end. as the other respect overall gas have our are represent our see NPAs businesses, of this interest additional to waivers. additional of we customers. QX we've relief. contributor gas commercial to the our NPAs graduating need and for and range and XX are widespread and details continue to for XX% amendments portfolio. do with economical referrals related We pay and Notably, also challenges XX% below were provided the build. of now see financial around quarter travel principal provides a payment And accommodations The Oil

periods to their periods larger strong commercial customers, deferral for and two is shape, our as news well. dealers in limited nearly exiting have XX shows those run the are in expect well. QX. deferrals of restaurant portfolios deferrals early additional auto franchise we To good and in here users course Slide the those Our referral our other date been as and requests deferral both all consumer

Our with auto deferral modest RV portfolios post Marine have performing are and as delinquencies. expected we HELOC would

Our from losses somewhat mortgage us job upon agreement on high the as two the new have of first. accommodations necessary step process forbearance customers The a seen. are is expiration shielded the focus here FICO we’ve

have result, to industries provides visibility date. here. Slide the an by we update XX the limited to a hardest As resolution hit COVID-XX to

have reviewed We commercial existing and loan since identified of well these April believe our and appropriately have risks managed. as we'd thoroughly portfolio total XX% as portfolios, the

period primary for of them this last through sponsors most these have five We the the long-term on flexibility way sponsors term financial through the industry. liquidity are centered recovery believe exposure and we including their hotel relationships, Our see downturn. forecast to longer

monitor to Our pizza drive seating. the and that in maintained up in-house brands we'll but continue book the this sandwich restaurant risk exposure closely operations portfolio. We shape open primarily been other is overall service be and in decline names location to single franchise a national to have for and believe in non good in heightened in offset our the have quick customers service takeout the

restaurant, sectors, leading guidance have second the quarter. As us level actions those portfolio exit $XXX and criticized COVID of million the $X.X lender on resulted management of we downgrade our required childcare, in over other our for guarantees to in In the practices provides This severely quarter the as across a country, impacted process, evaluated all additional impacts also we related which credits review recoveries. status. portfolios part physician of increase SBA took opportunities and in appropriate regulatory the by to to an criticized asset as billion

the industries a criticized our As it and longer they auto in move you felt hospitality, credits we The industries referenced to suppliers. would retail, those chart, auto on for expect, setted recovery prudent affected status. in these and the airport parking except were to back to customers would path have full

see these customers. working to approach patient content. We a a with currently loss take will significant We do not

COVID, metrics quarter. attributed of our of did that a in XX% Slide the the not snapshot the we On provides most portfolio. for gas to oil downgrades was and credit key XX quality of

demonstrating exposure as the our credit portfolio total we offs gas resulted during point these out that on and whole basis points of made charge XX well sale down contracted up excluding offs commercial was an reduced the XX% in our charge demonstrating for in Consumer net were basis QX. would were Net and Our offs basis all industry. perform offs sales commercial oil offs represented offs. nearly of oil the and the performance related approximately charge The oil average XX portfolio, or consumer centered continue total I our this charge charge gas points, strong. loans losses of the XX to in to the in loan strong and continued gas balance Annualized also points charge prudently which closed leases. to quarter, net that annualized were portfolio. QX,

basis basis quarter the linked the granularity we due earlier. the in points non always, over asset and analyst points to portfolio XX provided have XX oil and described I to increased additional slides. year ratio package impact XX As basis performing year by points The gas in

Let Zach. me back turn it over

Thank you, Rich.

expectations Turning third our the XX, provide to quarter. I'll for Slide

we it's quarter case the around current the was to to guidance As due our last the feel prudent quarter, ongoing uncertainty economic outlook. limit to the

alluded the are Steve given to the quarter. have our with As earlier that results in confidence we our second and quarter businesses headwinds pleased

from improved better bank due to for the we've recent and success XX-days trends Our actions sentiment to the has we're going ago seeing position taken forward. the

to we is and sheet average quarter the driven by for approximately be mortgage approximately commercial quarter, Consumer dealer continued expected are X% to linked loans average and loan growth more Commercial continued floor expected impact a expect the at X%, marine basis. offset quarter balance on full RV utilization loans increase to as residential rates. and third lending. plan are PPP in the flat decrease by of Looking the reductions in loans than approximately

Our current balance of the PPP on balances will majority through the projections the remain end assume the sheet the of year.

concern stage optimism in of the infection of the of weeks, within of have balance customer building early several that latter upward this the economy could trend supporting Our recovery. acknowledgement of the expectation the the commercial pace the past economic pipelines year. accelerating over current part the fluidity growth dampen We the been and recent the some in

are inflows to expected linked approximately deposits of stimulus. government approximately assuming decrease We deposit from to X%, the quarter. X% total decrease expect deposits Commercial usage average gradual

total linked to the to income quarter interest approximately X% X%. expect net X% We with increase revenue increasing

the basis quarter, second which notable of points negatively the loan and fees of X to X quarter approximately expand strategy NIM versus X.XX% elimination the of impacted ineffectiveness basis basis XX hedging as reduced namely We result points items, X derivative expect the points of of GAAP and rate points NIM second a mark. to basis

does not NIM third PPP repayment of from forgiveness include of quarter. loans those of the benefit material acceleration the Our expectation in the from fees

and impacted are charges. card slight in fee given mortgage related to approximately Deposit elevated revenue to of on the a expect gains plan million contain deposits plan activity volumes expected quarter. These consumer account a service to are income keeping fees robust offset flat expect pandemic be the not we in retirement deposit business pickup third $XX second in card rebound. as other expect income activity remains by Yes, debit as a We health full would services quarter the annuitization trends, increases of we do increasing. recovery banking related the lines retiree Based level sale. reduced of record the and be the

earlier, benefiting expense fourth XXXX. the mentioned the quarter of I in from we As took we are actions

in economic previewed both XXXX management expense the given significant of challenges addition, In our strategic identified initiatives we being some process, the and we executing the program for calls. the prior now ongoing on are sell you to fund of compelling desire planning have

business financial XXXX, expected outlook, that expenses, year. allow these operating I is costs of of annual expenses, our level program. given compensation We've exists is to the prudently the optimization and of modeled plan forecasts and approximately program generate the of level of the lastly, related $XX including achieving management of discretionary in on In size and restructuring savings bank the outlook the $XX XXXX, to structural XXXX the sized categories investments this to majority expenses. expense rationalization to economic and and this This of for uncertainty expenses, facilities, for corporate approximately numerous previously, the XXXX. manage organization, focused XXXX marketing four million mentioned As million cost other the inclusive of leverage positive scenarios this primarily our branch will

been time be and market for on recovery ready growth opportunities we've that positioning some Importantly, economic the drive solidify. to to will to when capitalize to the company revenue begins share accelerated arise

year, these efficiency while next differentiation term Thus potentially in stabilization and purpose into digital continue we and the other capabilities, and XXXX is to maintaining the still full amount in economic will process, to these product accelerate current our in fund a the While signs expectation our of this of calendar up strong opportunity technology for XXXX that investments initiatives, generally level initiatives expense strategic for this regrowth, of utilizing work longer is part to in a XXXX. positive see XXXX. program latter we year savings provides planning in

this expenses restructuring third basis. approximately outlook growth increase on million in third quarter. associated Focusing to by activity expense return that non-interest driven million we as total the $XX of for customer $XX the the expense costs technology pre approximately sales Approximately quarter well we actions approximately on to marketing, linked as of by levels. X% is quarter, the a management X% The expect and the is recognized driven of with the investments the in X% pandemic remaining and closer

points. we portfolio, remains in reflective quarter net our the considerations. in third charge of is the This broader expect credit offs and as be well Fundamentally, near to Finally, oil as the sound. offs basis charge XX gas potential economic

back or and uncertain remains elevated we peers, have question one take XXXX. your economic the additional Thank and you. We of as outlook ask person questions, that see to he queue. remainder each we're provisions questions. if expense through into likely courtesy a can that only add now ask themselves person the related follow-up. she then the And Michelle, any one to will However,

Thank [Operator instructions]. you

first comes Our Arfstrom of with with proceed RBC Capital. Jon from question line Please question. the your

and to in out done portfolio? from but a gas oil way. what's $XXX away noise let's your When you done There's call go maybe million Longer get core start you QX million? are there? it to to or this down portfolio? it of or if places in to And the you does get QX? to project, lot plan What just could you're the just the $XXX talk term, of Is go, that is

of have. getting methods we’ve sector, is to kind that the With and the portfolio piece whatever and bifurcated and gas non of core core the respect it, core we into piece on and through really down oil non of focus a

that got credit than in saw extent If is sold a million what be. that. got we we've price certainly would think we the the trouble, that about to do the into better where QX opportunities sale $XXX might we You recovery

As loans the space for we're think, new ongoing the we're strategy, now. over risks it year we just in really we relates to any on portfolio have now not I focused haven't and the that a originating And managing there.

metrics this got going see last probably ourselves because the out quarter the gas around course reporting that, we like need box don't is and we've a oil quarter overtime. fully the we up reserved. we we're feel picking this like Jon, to now believe the call with distinguish core have this, and to to out and non it And maximize, look will is while you normal in we’ll particularly

a from looks you it And us much a fourth think build you need still X.XX% then quarter question quarter, think up, ACL metrics. the you credit do clean want the provisions provision it reserve of guess how talked so about perspective. is, of the And and how tame quarter level? just third elevated. fourth rest third quarter, you to credit I Zach do follow relatively and see I that through remaining

thought like. in quarter third the We would what build a haven't look really about

process. through the it seasonal work point time is you As in a methodology,

QX. did same And to we do similar so, process the will in in what we QX,

look into to We'll condition race to think we'll another of take behaving to two day those where have to look available factors, will and outlook also the We're anything quarter. that going we at end earlier the for ought what expectations. how economic based see to We the the the portfolio see. quarter in might at every the the certainly on forecast the going relative in is We're activity be to of change economic look our portfolio at we not we have provision be. September. And

really you by process. for to of step hand wouldn't CECL build, kind us by step So here quarter additional really a it's and forecast sit it's really hard quarter

criticized at But substantial feel Jon, of and the looked amount if thus not which the lens in has portfolio generally in the quarter the fourth performance and and at expected of a loan we've good. There's round happen. have we the reflected like But during the how like viruses the here. to is Having be do the metrics lot tried going increase. on commercial we performance looks like a to some very core. a depth far was portfolio But better it to don’t it slightly the the have of would know coming is got a recurrence it, for unknowns of than conservative we when realistic quarter

difficult very not very, felt where this project is it's So yet. to

you. Thank

comes proceed your next line with Evercore John Our Pancari from question of Please the with ISI. question.

you right On behavior providing of at how loss dynamic each actually been your comment expectations. that under your you're mentioned now just CECL Isn't at you a behaving look expectation? terms the credits what because mentioned a in versus the reserves versus are modeled, looking credits there should have of quarter, you already just to factored about into reserve the Jon that you lifetime your the

portfolio, that the That's end if QX to we look in QX. meant the are right, from end to changes the portfolio will was mean comment my at of how of the there

then the So about underlying versus credit? what the growth

go growth, to could the gets mean, in underlying that be be modeled extent It would further outputs way in also into credit. portfolio what could in I it deterioration that there reflected for the QX. changes either the or is improvement

you And the reserve lifetime stimulus recent amount portfolio. you're you of your so run ratio do it that if factoring difference all the estimate most and assumptions best PPP now, expectation does of did? loans right your loan How in? between and that that excluding attribute Does company of the the loss then content guess, DFAST I the come represent macro your X.XX% down to

we we're just our the DFAST into, running going that in run provided models. will company through to certainly, forecast of you factors disclosed what know, number haven't be what But versus a the scenarios. there's We go

in And in to XXXX? want and a to I talk talk of then just timing you million. the out? cadence the expect rest lastly ask then how, the Could cost about about that play know of Could XXXX about saves we the $XX of how mentioned you portion just can you the

$XX So said many past, want mentioned, a revenue about based the as I in like both over years. it's outlook. the times in And we on million time, save we've the manage expense base to

my net of to a not expect XXXX very neutral back we therefore, bottom specifically $XX and for third remarks, and we kind accrued to up forward. pace to just to to of benefit more flow go improving to to in that But of rev the in around even expect million potentially the question ‘XX, have your that XXXX come that reinvested from save that as or forward that we it modest QX quarter be of the a any chunk go million the the $XX second level would before was less we QX. economy investment so, the and recovery to the would becomes and gross left basis $XX start and prepared a mentioned acceleration see on investments, million we in year I in And in line as extent and certain substantial half restructuring and around before costs back of as

you. Thank

your with Ken the from proceed of question. comes Jefferies. question next Usdin Please Our with line

to the But added impact help you was walk it is on you're forward? wondering know are you And I the anticipating built that us the you into seeing in Thanks. go of forgiveness terms I just NII? forecast. going not it how said generally what yield if through portfolio, that of could PPP to Zach,

to Let you. for this me some behind try math put

was in on what loan. by X% of was as the amortization the first an life about in seeing the accretive the over made starting we is was those yield. of portfolio around X% our for underlying in which points net placement loans that drives the the margin. noted, PPP, June were based of of then size for quarter it X And on up interest yield mix loans the we basis of to loan accrual yield, June, X.XX% of PPP basis what with rate of us Just fee Really was that the our second

$XX about around QX things million June and in additive X X.XX% in as So, NIM two the It basis points. to for of combination was overall revenue was those the by well. hence

As our X QX, think we around points I accretive it's from perspective, a NIM basis go estimate. forward by current is into

pretty quarter a a basis it's point quarter. the but tiny of drag X in that basis respect third on So, down, quarter neutral to into

of you think the the This be is that is forgiveness, the process to loans forgiven. the around our In a The of timing. your XX% point continues other it around I function terms estimates roughly as But part the at driving outstanding was this estimate of that be will question. thing that's uncertainty of planning imagine. most the might

the that assuming than each, is we're be less the loans, fast now, and XX% planning say for right greater loans million remaining forgiveness And on Thus, $XXX,XXX fourth loans $X likely billion track in our in which will the so the a, quarter. process of of around around $X forgiven the hence than $XXX,XXX assumption be will And forgiven QX. let’s then, that. likely on are

to of remainder in the going XX% with in which would QX of quarter forgiven QX. forgiven, one billion be So, forgiven make the about $X total of what’s

So, year. to the I coming around we QX next QX, $X.X quarter see an end year, the PPP fourth down basis billion still we by think of expect by $XXX in to expect of million of in around average the on

And follow it it but you I XQ. terms? that a know the ballparking recognized into? you to terms put turn terms million of full just are quarter a you QX in NIM dollar in when $XX get directionally, in you of in up What

QX. $XX million roughly

JP Alexopoulos Our question. from next your line with Please Steve proceed Morgan. with the comes question of

This I question a is for energy. Janet Lee follow-up have Steve. on on

of reserved content. for baked the key of a Can into from reserve charge underlying trying this levels trajectory being oil level, energy some going and energy as you with the are at offs, fully this share of to factors you loss just XX% where your price like assumptions exposure total and us as the up? is some such Thanks. the NPLs as here, head criticized think well macro of So

When long base went as there. We whether hedges its and, portfolios, big factors kind reserve as lasts build factors is core the into we as looked size and there we took at designation, a of coverage a that borrowing that the of of piece lasts. number and that of were the that non but core liquidity a number

there's prices to to going with we to in And book are and and more the price important on of commodity think drilling so, our off, exposure pretty is as to general what is where view just just challenge uneconomical our more roll hedges a go level capital. the support support

second So, kind the relative redeterminations off decisions big loans base what a the spring we a the advances are we two and And driver flowing over oil our other the quarter, second of And out expect of getting look in borrowing the at charge some redetermination we the There in gas in seasonality fall where that's would of the the sold In deals through. spring of to four credits. are you was of collateral. book. of of part NPA. kind of and terms fresh were the business saw results will quarter the in drive as were to and of structural very two them then we proactive felt

growth know, relates base I a around largely borrowing base to you charge be will also areas. and borrowing really that as based it of NPA The So, determinations. will opportunities be further around our more sale redetermination offs function think

comprised of number last And and leverage you a exposure think different $X quarter, industries. disclosed billion of I funding

the in this want seeing Thanks. just of you're Some peers funding I at the how offs experienced leverage performing your like see is anything some to credit front. on normal charge portfolio. portfolio

lending, to went due new grew the the originations. as to falling really quarter, to X% the in to anything did leverage relates As it up angel more up activity X% it modestly second relates than portfolio

loans. got X.X leverage as to a times. X we've recall, for modest threshold did leverage most might times opposed fairly It's you people as So senior

that extent first any the angels offs with fell falling all it originated of we these lending was charge us did that on to have leverage We QX. not in designated leverage So, criteria kind quarter bucket. into credits in lending the

downgrades class might them book from but expect nothing as We are you a significant. an that were prep within keeping on some standpoint. There eye

you. Thank

Stephens comes question Please us next Our from with the Inc. line give your of Terry question. McEvoy

auto could last if discuss I wondering I portfolio, dealer was quarter. of just of area an is know health you the focus the

inventory second quarter? was in mentioned and there are here the levels build on an lower incremental that the call You earlier reserve

the shape. good in it floorplan is business very is actually auto back Yes, bouncing

of We is deferred are were deferrals, book. have all down, the inventories about fact third across roll that demand in that very and results in car a half P&I going billion the quarter. that book to our off strong notwithstanding new June dollars dealer of There's the very,

back further their to like pretty lots is be before sector The just we challenge things think full any that or and on end shutdowns that quickly. for back book that to year. the the So, of levels inventory, expect don't they'll bounce barring they getting that inventory

there it was all the want to way as you of much indirect, the about floorplan. tell the at to So, build do relates in And not it? reserve them

is performing well. indirect very The

of the of You X% And start out deferral. payment piece was can of about We've of as with coming rates deferral I'm fairly X%. the sorry the paying to got out strong. see very are about that XX% the coming book. the modest agreed deferral,

the book. that's of like consumer that the a portfolios watching on overall FICO But all the we're book. high watching given are the impact we So, just deferrals

DFASt book through exercises that perform and performed expect to to and well scorecard has custom very the well. continue it we a have We

a thanks thanks volume, X, updating for as for then the that follow-up, just Page bottom And exhibit. the right,

the and are volume to overall? just term that the Just the or short Is the of weeks last couple or increase last you in beginning number decline the in transactions. just maybe COVID volume seeing impact month and cases blip,

you about volume, card the talking Terry? Are debit

Right. Correct, bottom

seen a week reduction prior roughly the over So, year like we've last X% versus it's in XX days. year the

the of about July, in were week, year were So I volumes year. they XX last the days think debit XX% up first on In up XX.X%.

the are little I look is down. I think morning blips, this was the I we're bit about seeing X%. of as seeing restaurants surprisingly, blip as most and even So the industries, where we not studying numbers across the a a we talked And of in substantial one and numbers. not guess I industries bars.

growth degree is seeing year of over that but some So, still seeing of year what the nature, overall. and to terms likely impacted in economic in that robust of some things guidance reopening we're pretty back changing snapping by we're

Thank you instructions]. [Operator

with question comes from your of question. Our next Brock Vandervliet line UBS. the Please with proceed

the performance I seems guess? season. Obviously, a just Can been Thanks, most a year than for spring you the of what longer COVID have about in your and the wondering It's covered. of got year is year. if would expectations I bit selling kind high a change we've of pushed out your talk like remainder the mortgage you points are could rates. sustain massive you normal in was

a market lack of seeing it's in we're strong good, had the sales. We've very What that is inventory. here very

markets, demand not levels a and that flow with you’re pace of is construction I of So should through say. terms number inventory keeping in in number of seeing a of

will on supply housing virus. as a build a front side. we we've constrained the labor or had And performance that So, it's the very the continue think strong on somewhat of and consequence

Do you secondary been the which that would banking in see kind support have income primary, sustainable, the the mortgage fixed juiced up third quarter, the with mortgage in in is markets. or And of that spreads damage here all rapidly more reps? coming

terms points, basis some in Steve's of just tack spread. to tightening the similar QX a as I on pretty for address Generally, points for points and of XX around of continues while. question. QX trend try sort XX basis to think comments the was modest I is outlook and specific of will It spread to that XX basis lower that volumes

continue QX drop I well. to see to for to QX this the similar just assumption for pretty looks planning and seasonally of timing amount a that that QX. is our QX down will spreads and lower typically come as With in in that being think we'll point also are did the volumes QX, or down is things of said, it and fair the pipeline harder Really that based ascertain what on nature. outlook for the QX pipeline at the

So, fact know the happening, I you mark. you think velocity they that with still are noted a which in happen question the is trends

to some And waivers, lighter. deposit of on of due those were quickly back? the come that fees How fees can kind

in that quarter. some the assuming come We're of them back third

used. to the a get to going on it's of quickly the deposits really how start think sheet I function be

some know, phenomenon we've the a is activity own we've just what robust. And industry noted portfolio deposit is the quarter extremely in the of our that gathering that second this XX% think, entire in across I around seen you down was and forward. digit the to government accounts, of only on and estimate go percentage single saved we some benefits other side the per taking employee that's month the degree consumer stimulus as are points being of in

are indicated deposits a So, that's it's overdraft expecting comments With that the QX I is our driver ascertain. be key with being is to harder to then and go say hard modest said, third therefore, of and we going sort happens in we into to overall sort quarter the of what because as activity. increase

answer Thank the you, I'd any have session. our like the over remarks. and for reached closing call end gentlemen, question and turn Steve of we ladies Steinour to back to

in all second So, and we economy. for face. with Obviously, quarter acknowledge the the challenges performance, uncertainty thank volatility guardedly your you today, pleased particularly and Huntington. And the we're questions we given optimistic in interest while

positioned in are initiatives while the With announced continuing to opportunities, expense and growth we we solid actions today, invest performance. deliver to

challenges going to Our on forward. these positioned management And I'm we capitalize our past bank we’ve several provides and to disciplined to about technology excited prospects months, manage invest I’m strategies about our businesses further execute the during on and opportunities our ability present the risk that to us continue themselves. strong face, in our position. and fundamentals confident enterprise to

of between a shareholders. great end we and a sustained that Have Finally, our and are to long day. a colleagues driving are our shareholders among XX you performance. always Board, reminder us our Board high focused Huntington, level Thank largest again. shareholders colleagues alignment on there's to for with The all of our the like the management, appropriately and term collectively

you. today's teleconference. concludes This Thank

and lines participation, have time. at a your day. disconnect for you this You your wonderful may Thank