Huntington Bancshares (HBAN) 22 Apr 212021 Q1 Earnings call transcript

Greetings, and welcome to the Huntington Bancshares First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mark Muth, Director of Investor Relations.

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

Wasserman, Officer today presenters will for Q&A session. Zach join Steinour, Officer; Rich and CEO; Chairman, us Our Financial President Pohle, Steve and are Chief Chief Credit the

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

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

it me now Steve. Let turn over to

overview the in Thanks provides X Mark. strategy an powered bank Huntington's morning, digitally build everyone. Good the people-first of to nation. Slide leading

continue us, to We ahead at against opportunities are and our significant see progress vision of with hand. strategic our we for pleased the to-date. position businesses recovery We as this execute

plan past based and revenue updated we the multi-year a industry-leading customer our our our long-term businesses. increasing Over on focus on our driving growth, strategic build year, to products continuing with brand best-in-class across satisfaction

mobile the invest provide expense will market investments and TCF the the in our Due of quarter. other digital encouraged first The more will our growth takeouts. to investments and powerful provide accounts time vision active of adoption and This presence double-digit grow customer to and while digitally half which expected for we've expand is deposit with acquisition become Financial, as the will We were to areas. also the our of we increase similarly digital trends. We efficient engagement encouraging. planned digital strategic new in already are our announced opportunities to digital our made, originated last capacity investments significant in accelerated over our revenue, combination increasing part and scale the businesses by

ahead, strong economic significantly about look recovery. across we Unemployment decreased footprint. our we're As has a optimistic

labor inflation. from confidence We’re again, our has leveraged regarding meaningfully a Consumer of and average, consumers less wage crescendo improved. commentary customers and liquid. constraints On hearing are more

trends past also as Our spending year several the posted in to debit growth industries expected for card be loan Consumer is have year-over-year continues quarters. returns. rates Consumer consistently accelerate service production broadly strong. to double-digit this demand

encouraging. On side, the is sentiment commercial

later up commercial confidence pipelines in increasing across of the our loan Our are recovery board, demand this year.

constraints will While of orders are supply some challenge the visibility progress the causing strengthen. shortages such and near-term, manufacturers into chain growing recovery as in to the customer semiconductor outlooks likely

results, the level Let building. loan a to which start and quarter our share performance strong originations also included some line first year in from me expectations. our solid momentum Commercial with were core remarks high provided with

and auto However, Both mortgage, floorplan overall of originations strong growth produced continued are line both PPP utilization. Deposit unprecedented dealer and by headwinds of in seasonally was which to consumer Growth temporary RV/Marine challenges. tight forgiveness of was and exceed in loans levels of continues balances growth in consistently following rounds stimulus. two constrained of inventory. expectations. commercial loan face recent the obscured paydowns by Residential

the update this on the the opportunities growth combination. not on dovetails We Finally, TCF could strengthening recovery like be by better X, I'd an and timing presented as believe pending Slide acquisition. with scale the to give

and quarter. late plan our the approved March, on integration in progress the In good anticipated make and closing systems Huntington to TCF quarter, second the late continue the toward majority of our in and the complete is third shareholders We to transaction and conversions in XX Meijer required anticipate the become of plan completed of the closure weeks. We major the quarter. components branches approvals, coming management this reduction the including key branch including of the divestiture cost regulatory later track. selection receiving We've outstanding

our Zach let turn financial performance. Now more on over detail me it to for

and Slide augmented common for on Steve, the on good X provides X.XX% reported earnings and assets $X.XX. notable quarter. Bottom first We of highlights two items. financial line XX.X%. share morning, equity common Thanks was average results everyone. per tangible average Return return the were was by

increased rate market The driven first benefit our yield curve on million steepening mark-to-market $XXX the caps, volatility. interest was a by and

broken or significant with The are X% from Partially outlook credit second the acquisition-related in $XX provided and as expenses, granularity of reserve these TCF release, million the in metrics. a item improving million resulting was offsetting release Table out $XXX which economic were earnings X.

in to turn more results to detail. X let's Slide our review Now

in $XX a continue NIM, which quarter. by Net interest increase to income mark-to-market quarter. point that sustained the revenue earnings, were XX XX% our of which in pre-provision PPP management solid points by growth growth Deposit forward expenses pleased remain of secondary ago in recovery versus strong, growth the percentage of in derivatives marketing aided loan pre-tax elevated best from benefited the year-over-year three investment Total or of market basis ago record line. gain been acquisition. this deposit spreads quarter XX% We of approximately with of our substantial increased quarter, the level quarter be XX% positively to There loan from the to items a and the approximately mentioned to respect the or set balances account were otherwise year its I and the $XX its of with service percentage Similarly, from million as increased first growth pull expenses consistent be in first million record banking this by by year with year have payments impacted also higher underlying driven experienced ago of related interest the these grew approximately expenses that moderate the $XX accretion. growth remained also XX resulting and the to Total prior income, would and can over elevated. seven Fee incurred accelerated asset attributed consumer was flows rate the wealth million significant performance to XX% the X% for quarter continue ever months. as our and Card originations below three own of mortgage net $XXX growth positive fee businesses and charges saleable growth. equity million TCF year-over-year XX% cap future. continue were mortgage points income post

a The million Columbus the which contribution first of Foundation. was to $XX

timing from Second, we moved our historical the in annual grants to March May. incentive long-term

otherwise savings the rate balance of the retimed These incurred remaining communicating investment would accounts, expense together have several Third, in XX.X% to two the have past primarily for related some quarters. been $XX colleagues’ we our driven been related by in underlying approximately items growth growth was we XXXX. accelerated The compensation strategic initiatives, approximately expense million. health which which totaled

the Turning basis slide, to linked-quarter Slide the of FTE point interest in in reflected margin XX% net as increased income year-over-year XX basis as primarily interest the was caps. rate side X.XX%, linked-quarter X, expansion. to growth increased net On points net the earning XX a on asset the with basis, change the increased right interest NIM coupled reconciliation shown

low of levels. balance net the on interest underlying both we're interest to environment, actions near inherent sides current pressure caused core the the offset we've sheet rate margin margin As discussed the prolonged taking managing previously, by

impact from caps, aspect significant strategy. interest provides of rate Given NIM information the our additional hedging on on X the Slide comprehensive this

this higher reduce on As billion an tenor with new In subsequently quarter. This and expected we impacts from the of dampen recovered price disclosed years, of action seven create capital $X premium approximately half well mark-to-market average on initial majority of $X impacts while in to further capital interest interest collar billion maintaining rate to caps like at rates. the we hedging the physician. a rising position. protection of paid purchased December, the This to we rate sold strike very the caps, is March, caps performed from a of

primarily XX% increased in the Average X%, PPP C&I Slide by linked-quarter loans increase industrial year $X earning loans of to the assets dealer ago $X quarter, and year the forgiveness $XX of loans Average in PPP X. reflecting XX% PPP deposits the On commercial and decreased the decline ago basis, floorplan utilization. quarter, Fed. reflecting a the the billion increased of billion primarily or loans compared and to the from loans. billion Turning driven

RV as As we loan year loan a indicated March, commercial the reflected posted or and in balances we earning the and the to production. ago, new manifest more mortgage, quarter. On as the deploy X% purchase stimulus-related a in in RBC average our of consumer at increase liquidity the that offset securities significantly growth strong up loan securities through conference Average paydowns announced linked-quarter asset all previous quarter. in year-over-year in new billion marine, during excess $X primarily Residential plan pipelines production. from than seeing new sequentially declined executed basis, commercial we're growth remain average production

XX. Slide to Turning

will the deposit program. for of consumer stimulus, approved provides and liquidity total, in downturn, of our and PPP by program, approved to and total $X amount the we congressional to the growth Slide reach production and increased PPP driven attrition. has consumer the related reduced forgiveness to We current billion. sequentially, light round activity, loans the funding. original current an update extension an related of and additional current X% recent in the growth program. program increased XX% core review on now of XX Huntington loans billion Average and deposits increased for $X.X billion current the $X.X year-over-year levels application the expectations largely In approximately In anticipate account

from be March, to of and during those program tranche billion forgiven. balances we the ultimately the program new expect will forgiven Through the XX% original end second from be have approximately been to continue and forgiven, quarter. of anticipate original $X.X of billion We approximately loans the $X.X the

prudent capital the down The of current going half expect It X.XX%, basis X the up to X% tangible quarter opportunities ratio investment The our points forward. common the ended particularly strength modestly illustrates operating second levels or we program, ended the basis and to the well majority year, it's into quarter sequentially. growth to maintain of CETX The at XX equity going this feel us occur of year. we strong last TCF CETX up capital and continued forgiveness our ratios. five quarter. also ratio, the points on was liquidity initiatives above from ratio execute acquisition. XX% the equity XX common Tier the Slide our positions TCE, at guideline, to the in and XX.XX%, or For the

have of lock our XX a As TCF allowance we and acquisition repurchases provides credit we've share Slide completed substantially the we for previously paused communicated, until have losses. integration.

ACL XX represents of in overall million loans believe The uncertainty metrics to included metrics $XXX is quarter. PPP. prudent We this while reserve reflecting consumer, and excluding from quarter X.XX% economic while provides the X.XX% outlook. a key economic quarter Slide credit a of the primarily first quality and snapshot improved remaining for a release, the level credit address loans,

XX to annualized basis and points. range low target Our of our average slightly an XX Net overall the of basis through represented credit continued points end of XX cycle strengthen. the performance charge-offs below loans average leases, to

criticized Our were relatively NPA both and asset stable. ratios

As by and and the investments additional minute want digital ongoing portfolio on package always, we I have slides. a provided engagement the granularity and on progress to origination. our analyst spend in

Slide invest differentiation. strategic of and set initiatives in drive revenue acceleration XX, to at continue we a to competitive focused Looking

personnel product and in and finance digital administration strategic of investments, markets, we small variety a core specialty business adding banking, revenue-generating capital support are growth businesses. roles vehicle and to our addition to In

Slide We key digital illustrates levels engagement have back marketing launches Showing prepandemic XX to related some new promote expense the ongoing investments. also fair to to benefits and our of several trends. tech origination banking. play and increased of

the digital slide slide, new levels side digital growth the trends and The can usage over of in banking. as business they right uptake business of side show consumer introduced the the strong monthly on On the last continued capabilities and customer are of left you particularly see origination course the of digital we and origination consumer in the year. engagement encouraging

across We are customer our technology business that lines retention acquisition, road sustainable executing deepening. maps momentum via and drive revenue robust improved will

expectations XXXX the reflect down to a of year a and from delayed floorplan expect Finally, single-digit modestly and stand-alone result higher of Slide the We basis. loan X%, as year recovery a average These now XX our provides PPP consumer line growth commercial of of Huntington full updated expectations and growth levels elevated prior to paydowns low slightly X% for in loans inclusive utilization. expectations full of vehicle flat loans. on commercial

expect to would we see low Excluding single-digit PPP, both. growth in

stronger-than-anticipated For quarter now previous expectations the overall which for balance to several than average first deposit we in persist core higher deposits, of expect and X% deposits, levels year we given XX%, quarters. the elevated the of expect full inflows growth to more

We for revenue total higher are also our range expectations year of growth full X%. to X.X% to adjusting a

the of increase be underlying X% We to by to discussed expected expense first expect higher be our in to quarter compensation between to year the expectation net excluding full previously. we increases year. X%. driven mid-single the for and by driven noninterest as modestly I items significant and to growth majority now the prior our for the be of interest the in revenue On basis, X% digits, This relative donation between previously, initiatives lower The noninterest growth the while million in and investments $XX increase, continues income income is related is growth expense strategic expect expectations X%. noninterest to expense a growth non-GAAP for expectations, Full discussed large in year. expenses foundation we've are

the While expense expected is commitment to outstrip remains operating over the long-term. near-term, growth to our over revenue positive leverage growth

to to plan bring rate the growth half of second levels and is during expectation normalized XXXX. expense more Our the back

year remains conditions points, stable recovery basis in XX reserve to performance. between expect improving on credit the dependent XX reflecting related sound. fundamentally commercial economic releases Further full Finally, We economic now and and net and XXXX charge-offs to portfolios. consumer credit remain both be charge-offs

for expectations the of acquisition not consideration all are TCF. pending do As include for a made and Huntington reminder, stand-alone

let turn can back me get questions. Mark, Now to we so your it

into we And or one add then that as peers and has he Zack. your take can that will you, courtesy a additional person related you. she Thank ask if Daryl, We back queue. now Thank one questions. ask questions, to person themselves each question follow-up. the only

a be you. session. At Thank conducting Thank Instructions] we you. will question-and-answer this time, [Operator

proceed Ken Our questions. first with Zerbe come Please with Stanley. question is Morgan from line the of your

great, All Good you. right, morning. thank

morning, Good Ken.

this we the caps, one just it you fair the be basis don't short how $XX the of this may seems the – how rate on could is who exposure Can should NII. could up – just mean, you quarter, that time? start $XXX-plus or we you that to on have sort amount a not added volatility Why get for not are down? And million but $XX volatility expect over last terms cap be million still swings outstanding. I mark-to-market sort in interest about our it any of given probably I right didn't I that long that in appreciate you meaningful be maybe only of NII a position, assume swings, of talk million, long does but we looking at in

corner around take for the to to that Hi here I as Zach. was and smart substantially. goal I'll to Ken, dynamic it a by this question. saying capital benefited it, really the it is start you the was and risk – and look look, strategy our think manage of this I And would proactive move, And our position that. we us do protect and thought to be saw priority to

so decision to to also the this as discussed that foreseeable somewhat And for our colored future. maintain position, underlies continue we albeit

of the post These position the have ultimately, go quarter. believe what it happens. forward market the last the day. we'll we to every very And we as result so we then, And at extent get is marked here. see to But that's right day

for our it's over the you keep see. to we'll capital. we So smart have think a really posted. long-term, position We'll protect us to But

the what Remember the in rates quarter. into we well be – add, the would fourth through just executed I'll XXXX. was flat these outlook Ken,

years, benefit It short-term So of after we position But in obviously, this protection we capital time. of protection rapidly to thought be and capital the intent the this this outlook when interest would rate five, over of it. out of kind four, the some very wasn't our view it originated plus six sort as was election. changed

related Got Is that. question. worked in a definitely sort about out My the weeds. follow-up little of quarter. it well this it. second doubt it incredibly No, No more

on went would at just it call $XX actually the of, change $XX quarter, $XXX think back the down to your by the income Am that implies all missing interest And way income clarification backed from this million I'm interest the we in it, and I we understand out I calculation? something, equal we it, in PPP if net then income, positive. If net this. I on but love missing change another change an million else last basis. quarter million something look the only – the in sort change of to caps in out that

I right. it think you got

by we pressure the we're loans was line in – the we the that think on a headwinds of bit I that noted in saw just as from quarter underlying in but commentary, quarter. seeing a to utilization, offset cap growth the during strong strip really was The of NIM, fee gain if to you margin. you sense that interest out net give the $X.XX were income

also at you if of the dollars. the you're Ken, day count, looking And had impact

a sequential correct. On basis,

Got you it, right, okay. All perfect. much. very Thank

Thank you.

question proceed line come with the your Matt Deutsche from Bank. of Please next Our questions. with O’Connor is

morning. Good

Matt. morning, Good

digital. of higher spend talked summarize what know as there. is that I your specifically just past we it initiatives increased in think if about bigger was spend this and investment that's I kind of investment the wondering the on a here year? this you But the you year, spend technology about couple and could driving that

Yes.

focused, lines. key incredibly each I'll across I to really on our and may is strategic and it's by think business about take it's we of what – tack as But Steve initiatives like here. well want that, this Zach. driven plan is our

tool much around of And line, have investment around capabilities. that origination focused business, and as significant certainly for and new specialty client client the new which, wealth client capital of and client consumer product talked over now relationship focus as onboarding, point-of-sale last servicing. driving pleased a example, investment investment as of while, how that business both on in about last and adviser incorporate We management investments teams years working people, investment mixture omnichannel for origination. for personalization areas management around sets improving relationship with also and hires three commercial account I in a year. script, manager to sort select our as well within digital best mentioned the and technology of the the amount interaction well use ease increased really our about would in last relationship sales managers, into to our the of new lot and we've really in is we to with is, is our and we business. putting client growth we're my as well again banking completed We're are finance. optimize improve In people engagement deepening we talked digital within major a performance. lastly, And business, I the highlight several as which So engagement substantial digital process year, experience focus digital vehicle Also, largely bring through of as and the tools as markets which

to in the last the that's to really as business talk that? we've that geographic customer of continue Steve, want several been well do to a way you digitize expand about as For constructive. the years, working footprint experience

a very summary. helpful That's

five high good three outlook I we expense half is might year think long-term And a growth. the loans, that you Like NIM think underlying what efficiency be on coming it, be? super understand if ratio, growth? hopefully, what somewhat mentioned with expense for would range saves the deal, the about As to expense it you'd associated cost dependent. growth on revenue But aren't most call good TCF expansion, a things growth from revenue

both see growth forecast years, question. going And TCF the quite by that that, acquisition, of on for expense levels substantially to the high integration in growth note the Yes. be levels that of lower incorporate next a But of I impacted kind great for line revenue your nominal our It's and goal I what's you're growing would based we and growth. overall with and driving the and will reported we're or business of as the which positive top measure that than year-over-year expectation underlying basis, revenue is that the operating basis know GDP, and question, above an leverage. at my several

are over I stronger of stronger growth my X.X% sort But that. long-term, that's broad expectation. inflationary like than is something the And is X.X% expenses revenue think if logical. to generally, than perhaps

timing, positive I the the we long-term, initiatives we economic off the year to to just playing years, position leverage year got nine strategic exactly expected this positive and because want recovery. are that terms to we're elected And particularly and will us reiterate make growth operating We've right. that after revenue of We think but last we executing. for the with commitment Ken, in this operating we've a investments that volatility near-term saw of of the the coming plan virus will to leverage. series back be

Thank you.

Thanks Matt.

you. Thank

Our with line next with Please Ken come from question your Usdin of proceed is questions. Jefferies. the

morning. thanks. Hey, Good

Just one expense side. the on follow-up

just, you growth which half second So in the things quarter, to first first excess of here growth. the half continuing also to revenues then But rate all from through how understand, embedded first? to the would helpful. traject you expenses, in growth to can have to just helped a the us that's by increment different the sense Thank want expected kind the going Zach, last try show on be you. swaps if due expense in in and items walk is expense the rate new part year expense you Just and a I you're half growth clearly, that mentioned between accelerate. this cadence makes higher the

say clarify. approximately in were appreciate what saw through to come Yes, the for question. three the I thanks I incremental of quarters Ken, we the QX. expenses chance would

of through front-loading plan that but key it year, these And So saw there's first investments our thing half as of the in come with is of the a what into we're small lift most the we QX. the the balance QX, XXXX. was in

our before, growth approximately X% on the And kind coming rate year. to long-term And is investments. so things additional you expectation is five And of T&E natural basis normal the the as to expense expense, sort strategic in of X% I in was revenue, some first expenses company-wide percentage costs a points same of and like the second the medical of other really it remarks. levels that really to that expect run programs core is some might down and inflation expense noted additional the X% the X% my merit of as elevated and underlying normalization and a of this nature half to of in prepared more half and that core support

front-end those just than back-end levels talked other I back no factors really loaded, to historical and about. So change

the then on NII process $XXX outlook And Helpful. NII million. of side. thoughts the helped same just Obviously, kind the by

on Just as NII look talk Thanks. underneath to your changes you fees about prior the views just versus that, just well? underlying the can

the I Overall, digits for full year. interest Yes. expect income mid-single

think and I part assets spread full the NIM in indicated we've roughly it the between X% will – year. but that by driven be in – flat for modest growth X%. overall, And in spread, guidance by our

for NIM on touching a just second. think I

the is continued our Fed X.XXs NIM, cash elevated across liquidity Next which QX. couple the about of by the here somewhat down likely quarters mid levels biggest to hedges, beginning expectations on some terms in degree, just cycle, the be be will and, basis in impact, the our of changing will folks roll-off have elevated of X many points driven in earnings of commented levels the into system of that

next or term, So still with like looks But long still off, QX pulling trough XXXX NIM be the will quarters. of NIM and a over X.XX and to levels forecasting those rising a FY mid-X.XXs at longer-term. to the several to maintain better for stable

it. you, Thank Zach. Got

You’re welcome.

you. Thank

from line with next come Scott proceed Please questions. with Sandler. Piper the of Siefers your question Our has

you taking rate I the Thank Hey, question. to a the for cap. follow-up guys. just on guess, ask, wanted morning, Good

the and of billion of first sort quarter $X the you March. caps in then in So – sale what the between captured new the

more adjusting sort rate rate the So really sensitivity? think, as of does hedges forward your than to of – this anything sort do I've your Zach, I sheet protection thought about sensitivity. your balance

So dynamic? is change to there any that

So was The around on I you saw got of OCI the I protected protecting was And right. offset position capital. slide by you think think this. the securities a mark it XX% on

Derek you asset So our Derek, that little Why it's on in to comment want don't, one. in the sensitivity room. really Treasurer, Meyer good. bit your and We've a got for outlook

you. Thank Yes.

So we've already our to effect that. knock-on protection Obviously, look the a is of we've much thinking earnings Most downside our comes to was it There at because primarily margin. continued retain capturing play. of capital upside. the decisionings to on been as this stated has while

downside our without opportunity. up is even have moves protect these next these rates giving to have made evaluating As and that that upside in obviously that up, caps gone are us more sensitive that hedging we respect,

another of view. So thinking part into forward to what but we're have TCF, change our big it that positioning with which set is about also posture. separate levers decisions, we our a is incorporate a of set That's as does of evaluate the we that

a just that, in to like strategy pulling hedge over and the of kind as more where a likely is interest well. will become position exposed slowly gradually time, think going I sensitivity really asset trend what speaking, Broadly rate as second, rolls be our more increasing Yes. existing environment will off, back we and

think over it's that way years. as several rise to to in begin so well-timed exposed next sort for rates the And be us of

the follow-up, to sort And you'd up have that guess rig impacts. we I how of Zach, sort speak quarter, you. Thank point, at the protection to new of a a the billion, this a should $X against think, helpful. saw way like down? dampen and That’s future mark-to-market you there volatility mentioned as Is much both it. then, Got of I caps, the sale

between It's We and a Yes. XX% estimate good XX% dampening. it's impact on question.

But So maintain moves go wanted and net a be curve, substantially of think, kind of do the extent likely long you as is between because dampening higher. off importantly, to sort we forward XX% that XX% there's the to it's we that forward. probability a of exposure there to

very thank All much. it. right, Got Appreciate guys it. you

you. Thank

Our the Winter questions. proceed next question Peter from with Securities. your with come has Wedbush line of Please

draw you was Good – your I'm can mine on could liquidity hearing delaying what credit if wondering, kind using versus drawdowns? morning. strong. and appetite the from you're just about about talk you of I versus that of making customers about talk loan lines pipelines excess you wondering mentioned investments to and are – the very down maybe

Peter, this is Steve.

them and four, meeting that for low encouraging A is consequence wage some And turnover next last some it They conversations. of the the their it they in high for virtually including all be least on supply the this from automation backlogs, very of – a small experienced, supply being inflation the years the economic that, pipelines, through outlook more virtual investment chain. very by adequate five of positive the positive. So in these all in and of by have is I outlook get curtailment I've number to at about in weeks, chips. XX their into will companies constraints, think, have of very, a part end. chain packaging. labor, very mundane But CEOs by had of also there's items, about year, at situations, very couple clear many about way Universally, overall inability talk them

TCF, equipment we very we'll position in And us year. fair we a largest have amount should that company there'll with this equipment country, the seventh, well. activity combine finance So a finance of expect eighth when be

care are care peak the finance team will diminished to doing factory The uptick. activity during side, a We have on health health sustain seeing able well product a strong and health technology with that automation the even been the reopen we're side. better, was very that haven't systems But in virus. of play good care, the

So we people talking are forward. we're – going the CEOs who that generally confident very, in very the arena, to,

companies, have demand them but the So commercial be they're we're second XX% we – reflective up And liquidity other are its first, what of pipelines the and inflation opposed through we low half cost strong think of these whole wood is we're side or very years part pipeline Inventories think of just in further borrowing year-over-year as as many the of many engender of push. than that their soaked year, I chain, supply areas probably where had using that this the and the because its in about of as to will seeing, demand, gets more lumber, good line some host liquidity up. go commodity some of in but will there's on and significant a liquidity utilizations things.

conversations, half. improvement these optimistic from especially – seen second the in we're So we're about the continuing

ask just Okay. PPP. Thanks, if then follow-up on can Steve. a I the And

for You gave Slide of But PPP? the disclosure pretty from outlook, good XX. the rest some year net what's Zach, on income to interest the

Yes.

have see million additional the substantial a is and you give of total for and think, I QX $XX preponderance million, is million we second very that and to – know year. revenues $XX I yield of this probably I think, as QX during the and of for modeling probably now. go quarter, the the in that, program. you PPP the half comments The PPP call in much have That and the a acceleration. of from more the We $XX the around X, sense, billion was details represent will $X underlying analyst we'll a but And the think We'll accelerated around tail – first amount of million said, which XX%. into we bit which total the can My for about $XX expectation forgiveness in forgiven was right billion, add was high-level around that is balance little basically see mentioned, to the of is ADB the revenue this, the into revenue, revenue of it will estimate an $X.X as and around of double-click yield. accelerated a after we we XXXX. Round we've year. half we'll between of of I expectation million $XX

Got it. Thanks for taking my questions.

Thanks. Welcome.

you. Thank

Research. Wolfe has your line from with with Bill next proceed Carcache Please questions. question come Our the of

Steve good Thanks, morning; and Zach.

compared is investors this you over risk can HBAN to internal to happen. you thinking vehicles lose obviously, to risk, around Some what value that how when expressed they speak will around take as that's about But concern electronic vehicles combustion have and there's the going engine like role well. you play of a of about helping in doing on the and if to as book, which declining comment well are as standpoint for collateral guys QX fund risk extent the expect from you your it that debate consumers to values as existing repurchases could

is Bill, belief There's but in Good well. a – to very that And as thank the country, the EV believe of question, transition rate. Steve. here. at building is So it's be I an you. this We think building going industry is slow extended

and reasons, Now other Biden awareness But of environmental that in climate for Administration posture change with around may demand. to engines, we consumer including think, going and are combustion accelerate the decade terms Having the fully demand production. that, we're us, of not lender. terms said a through be the there, of super and here impact prime through substantially in of if in

engine we of default EV, very it's with or whether a view a hybrid low So combustion work rates. or a

anyway have And we're might rates values because probably for loss use. terms so a of highs marginal in and increase would record bit bluebook at

don't we event. a but it – So as see big

In terms areas billions and at. in of hybrids the as actively something it's sensitive us, or are be back we're we of – an may that where environmentally financing dollars. of And as forward. unique do to one looking we engaged in a we're look of with EVs go areas for over other time the us of credit extending opportunity for the There series opportunity there

year. maybe follow-up, color opportunity the ground of most of thinking integration of running give is Or Any color insurance around in Steve, synergy next the revenue you to well? as focus TCF ahead just some as the down the be things And that more initial move you're it is sure you would a too helpful. Is is very mix on about hit a helpful. closing the to the just road? doing versus that be early that That's bit on the make can

talked synergies. So alluded also we to expense revenue definitive, about and fairly when we synergies, but we're we announced,

with, than consumer TCF. our both start to extensive offerings, – Our and business, are much more

it on, sell, So we been we what to working referred cross and something as customer up sets it relationships. a we've optimal caught

for been a So we've doing this decade.

into have base. Firstmerit the good customer cross-sell experience with We very

experiences to we learnings relative as the on of position. and number or directly. manage in or expect which the a based TCF also well even do We products, outsourced better businesses

those. out And so lift we'll expect of

in activity a Minneapolis, of variety have. we there's we've pursuing, revenue which cases, some So an as TCF SBA that initiatives, are already lending activated such didn't

go summary to be in future what we And we've as a expect at revenue these forward, so will them a significant we'll And point, level. upside presented initiatives. share we'll

where conversion on detail committed quarter the front that quarter. to in proceed. get we we'll is we expected this that later expense them business and the order we to and first So as expect a closing But the the of late with the expected takeout execute third to get synergies

it. questions. my you for Got taking Thank

you. Thank

Thanks, Bill.

you. Thank

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

Janet this Lee morning, Alexopoulos. Good for is Steve on

as digging understand commercial more level? customers for loan commercial commercial that around compares And is of to guidance of assumption your Just what XXXX, around your your being also that how higher your utilization modestly growth color pre-pandemic compared deeper the could level C&I provide for guidance, into flat I levels? in current loans like you the to to

retrenchment it. mentioned utilization. expectation Overall, and questions. been the the modest growth the for excluding I'll has low loans market the is year side about expectation in back reset, the expectation. of utilization I'll stand as Janet expectation from is, general plan modest floor I we've improvement. line Likewise, comparisons Thanks, come seen just specifically X.X Zach, middle generally line commercial characterizing you and now. approximately where comments, is to of But Overall, percentage the a speak end we is in what single-digit last as This What is seen we've in more is the asked. baseline Sure. the relatively My that take pre-pandemic some it lines. and PPP, for flat vehicle is, on actually from some

asset we both that, go forward, net with my we under commercial, normalize basis expecting both those as represent you and modest total But As we're go the I even those. level if of Together, X% strong forward. loan consumer we've in growth to think just drive some asset a expectation got do growth. improvement overall on we of across expect accelerated growth production

Just the that go But time continuing in the line elevated point. months expect double-clicking utilization the XX%. them in for the year. those starts high in give lines this flat system to we are been market to they in we're be right across to to well has meeting just more from normalize you back our is publicized, expect those a utilization, of middle It's it I to in it to into into hearing were sort And posture I low clients XXXX rise been start everything a now solely roughly as row. probably liquidity a for financing we're XX%, and ultimately, of late now, line will typical And expectations, back the running pre-pandemic, at will and contributing levels think, before that, a several half would flat not more the But XXXX. later sense.

just we were end the the of floor By to almost have XX% end this levels XX% the utilization. are of precise quarter, gotten you in around a historical of be vehicle we line year, the give December. On to plan XX% side, sense. By at to

into little it tick more to So down bit continues has and April. down tick a even

year. part half late rise relatively longer-term probably and normalize more are supply. flat to expectations the XXXX of it before the next utilizing of very see. back popular the our starts begin in flow at documented rate very we'll is but to Everything manufacturers the shortages. slowly, that that they auto So that months is client and are that the microchip been issue. towards have one historical we're and will vehicle of that hearing, shortages driven to several though, really to specific My general middle the faster the based component manufacturer issues again go expectation surely the press That The with in at on back levels around financing, a that, point away by XXXX of well based they'll have that but into on discussions. in for other well But chipping

That’s securities – to yield turning talk purchase to very yields excess quarters? And on around deploying of deployed securities that next book you. over new want versus being your Thank loan the Thanks. what's rolling new are just how put be off I And production? what several and the the that same helpful. to cash? also, for what's And much plan through could into money new

I'll well. the as first Meyer, crack Yes. in and it room Derek then our is take the at Treasurer

tack as go. me Let on we

and $X yields the feel net billion around level. on about the really came where are good XXX basis point add actually the at security to of during we of what deploy On side, quarter roughly sort the able we with were

so. generally, think modest about many but overly some we other pressure, not yields, new As

lower the to I around points business basis lower, think in auto roughly we commercial QX. around X.XX as CRE, stable. QX basis XX point XX into likewise, went from points

brought some seeing material, Most modest the down but the not of would impacts I pricing. overly been we're into point. So new money, this on say, have drops curve at

and think by elevated time as deposit indicated would likewise, And duration for our until elevated deposits, and that ratcheted begins ratcheted in I normalize. back this the we've As take last our we posture step higher levels of update out a that is phenomenon will the say guidance. around expectation we've liquidity, the about forecast, continued to it as liquidity to

several into quarters start slowly more to all weigh XXXX. it take it go So and in, the will that will for likely to way

be us to structure, Over for really continue bring costs that look sure at best the ways making well. looking to optimize time to in liquidity to So that. cause the primary objective well, do that opportunity to in investment it's we'll discussion. part as securities is the is deploy funding rental that that look to time, clear, at the funding using think I and of appropriate But us that. down managing To gives whether over seen we're also you've our

kind nothing and tack dynamic that step optimizing. at those you leg just to on a can in there. said? into it us continue of looking be basis any Anything, talk we'll phased into we'll watching Derek, working it, trends But and in And moves incremental to on through to about I for and still and so specifically what

think I it. you've No, covered

run money new a equal point have to BAU security or reached of with sort where we We off yields, yields strategy, our X.X. minus our plus need

lot don't shape happen change I in going prepayment a trajectory. curve see So and is. the then big yield to is with speeds it a of what

Fine, thank you.

for you your Thank questions.

you. Thank

Our next line with RBC Please question Jon with proceed Markets. Arfstrom has questions. of come from the Capital your

Good Hey, everyone. thanks. morning,

Jon. morning, Good

Good morning, Jon.

it's of also you TCF saw of how closing, touch you retention about handled. on Steve, that the that thinking can you're been what little Hey. you get from But And – and you And as can XX you're Most a like terms talk retention FirstMerit? synergies retention about a of kind you've bit branches in well? on, got those?

of We have Jon. Thanks, opportunities. set a sorry. I'm

of have more aggregate, of branch about If our factor and one number we XXX We after be there'll for we Michigan think Michigan, divestiture, in by have share will consolidation even a affected set still substantial about opportunities a terms in of XX%. that customers. example, in by than of and branches, consolidations are retaining with branches TCF

distribution. with next larger So we'll the be quite a bit bank than physical

retention Remember, very So high coming that branch other franchise and year consolidations. X% had can us terms set and every opportunities for of average. provides FirstMerit an retention, of on about the enormous in-store out we have of in we of consolidate

also well-defined set, treatment that activities, the glove we remaining now, advantage. us over Combination where distinct retention efforts, we day give to decide retention things grace, those our the XX-hour that's developed. a uniqueness all have deposit, so And a white like of we safety years and zone process product the of drop ATMs call outreach, been

new to the side colleagues, soon that. But to working very starts capabilities consumer, the have of business arts side, go high would actively expect forward. on that medium-sized just the product, customer better more the with substantially minds as businesses. bigger We different, being then as be on of retention beyond. both was we're has the will we and winning of and through we successful retention again, to our with it TCF and this better and many So respects, customers expect be That be in and And consumers, set up will benefit menu conversion base, of small would the Firstmerit. product much and it the

very optimistic. So very, we're

we opportunities of grow and a equipment hand going the specialty business to glove. their hand effective. further we're finance well, Got we almost to a in and that side, the consequence business. finance about company be have excited us glove as in extraordinarily think these combination. finance lines as will do great On stronger great as business. ours their company they a some this is generally, well will We're give people the in as And inventory in combination The team, be

both as So and And very revenue synergies retention expense bullish the synergies this get expectations, largely about the year. forward. we complete we'll on go

I helpful. bag, Zach, kind looks of originations know very the mortgage a touch thoughts expectations but next pretty were of second that’s it what quarter? Okay, kind do you like mixed for it's flat, on can for you quarter? have the

have don't I just the of, but still frankly, Yes. more broadly, robust. very continues to QX be and right expectations, in front just beat thinking

off seen very, you've even association or continue robust. in the full higher you year. ratcheting very – think, the down be if I And for at the to challenge mortgage of But expectations think really an Volumes of basis expecting of the and over at year-over-year half volume XX% probably most to year. level, just, second represented. grow banker the revenues the year, I XXXX between overall, just occurs the be the pace that torrent for XX% industry

is And but salable if could that there's move the above to continues think we're quickly. historical spread. elevated that it carefully something levels, I be watching

well seems far, be But also. it we'll so So holding to see. up relatively

got. So we've the that expectation that's

Okay, Appreciate you good. guys. Thank it.

Thanks, Jon.

question-and-answer Ladies reached and for like call of turn to would the end to gentlemen, back the the we have I Mr. remarks. Steinour closing session.

your pending acquisition. will The us base of optimistic up acquisition, strong well coupled to the and in see important and strategies, on for acquired will in which increasingly of an with our what execution XXXX as be customer integrate we Huntington. existing on I'm resulting execute quartile I'm deepen close beyond, start as Thank set opportunities capitalize Huntington strategic recovery. initiatives the grow for disciplined a with customer performance. ability relationships, for interest our and we from revenue to the pleased our top accelerating larger financial our I'm questions and we year confident economic and you to about as TCF the in

strong deeply for embedded a your which Again, our of a foundation Have aligns great day. and and and interest. mentality, have colleagues. you risk stock thank We enterprise support ownership management management board

today's This concludes conference.

your You may you time. for Thank disconnect your at lines participation. this