Huntington Bancshares (HBAN) 19 Jan 242023 Q4 Earnings call transcript

Greetings, and welcome to Huntington Bancshares 2023 Fourth Quarter Earnings Review. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Tim Sedabres, Director of Investor Relations. Please go ahead.

Thank you, operator. morning. good and everyone, Welcome, Copies of be our reviewing can will www.huntington.com. slides on the we found of be Investor today the Relations website, section

As the close and the call. being available call about of a will starting from replay be recorded, hour one reminder, this a is

non-GAAP Our are documents, statements join will us Chairman, the Q&A. Earnings Steve are President Zach forward-looking CEO; and information Officer, presenters Chief Chief Financial the and section Credit include on today which disclaimer our our Wasserman, of Officer. Steinour, Investor and Brendan available Lawlor, for Relations website.

let turn me With to that, now Steve. over it

These Thanks, call are our by across and today. better, everyone, fourth we again welcome. the the to colleagues live thrive our lives we people's bank pleased as for help later. serve. announce strengthen day our joining businesses Zach Tim. purpose and results Good We're communities make which every quarter supported Thank morning, results, who you detail the will

There Now to on to Slide today. are X you with leave messages want we key X.

First, position and strategic our on of initiatives. we our executing growth strength leveraging are

accelerate key We during continued Banking during positioned to to these. and the like managed XXXX and capital specialty Carolinas. added verticals well into levels in enable growth. expanded us times We our support to are We benefit initiatives Commercial

Second, we outperformed on both throughout the deposits and year. loans

deepening customer relationships. existing customers our Our colleagues acquiring and new are

delivered managing this deposit we Importantly, growth effectively while beta. our

increased income revenues. net cycle modestly interest to manage rate and expect we Third, interest fee we of driving the expand as challenges are the

to we cycle. through trends and to on industry across aggregate are will low Credit outperform our appetite. the are portfolios, believe credit the continue consistent moderate Fourth, expected, we normalizing we as our rigorously risk managing credit with

execution, emerging continuing and our core disciplined Finally, we resilient into We we XXXX, beyond. and earnings through of over the Huntington strategies. the XXXX expect one course the intently maintained grow of strongest our of banks. and to events focused regional as remains remain XXXX on

will solid our X to us challenging the to Huntington XXXX. delivered over move results course a on of recap I against Slide the backdrop. performance in year

faced billion bolstering year, Huntington winner, $X growth in While emerged of and the over gaining early as capital. secular deposit customers, new adding further banking sector a our the headwinds

$X.X We year the also capital increased loans driving for X%, higher. while full by billion or ratios

pace to year. We primarily full our added growth as by expect in interest increased We the income of accelerate revenue XXXX. base, loan for net X.X% to the

growing focused for capabilities #X We maintained We categories. been awarded remain our leadership both digital and in satisfaction on again X%. bank J.D. by our having executing strategies, customer Power the relationships ranking including by primary consumer

Additionally, business segments. we completed realignment of the

adding including past Accelerate, opportunistic, specialty the commercial were banking We talent on consolidations. retirement nimble and Operation real and program, addition process X offshoring year also staffing verticals. and efficiency delivered initiatives, with the efficiencies We branch voluntary estate and other this of business key new

also We regional bank the and and in markets. teams experienced attractive into these Carolinas, adding expanded high-growth our commercial

over year. course we drove Additionally, our balance ratios and strengthened the sheet of capital the higher further

credit was finally, exceptionally basis year charge-offs XX We And net managed of industry are with proposed of ahead well getting requirements. full points.

X. Moving Slide to

Looking ahead clear have set to of objectives. XXXX, we a

our in opportunities. This growth strength management hedging our fee and and coupled by dynamic growth higher backdrop, expand GDP both a profitability to This increase of sheet beyond. bolstered and and is the improving hard growth We benefit accelerated and XXXX probability further avoidance aligns of will with landing. macro further XXXX the the revenue outlook will balance is position leverage loans. outlook deposits the continued of programs and of expected This for and into result posture to with revenue

While our to aggregate risk moderate-to-low maintain continue will appetite. we this we deliver accelerated growth,

detail on more to provide over you Zach, financial to our performance.

provides X $X.XX. of million Slide reported common good highlights quarter notable and The Thanks, EPS by earnings $X.XX of fourth included common everyone. quarter impacted primarily which EPS special our adjusted per of share. GAAP $X.XX items, of share We results. to FDIC Steve, the assessment, $XXX per and morning, related

swaption $X.X highest of was Additionally, X%. basis Credit is or share. Return loan $XX in normalizing points. of program impacted or growth totaled equity, termination the tangible fourth million net charge-offs year-end. the their increasing average beta Loan hedging for the pay as the pretax by credit strong. XX balances and at Allowance our deposits consistent deposit we to notable Adjusted totaled on ROTCE, quarter pace the into quarter, trend fixed for billion by on XX% per items, or income losses continue came X.X% at ended million continued by common the $X.XX ROTCE quarter. growth remains through capital. with X.XX%. expectations, for quality $XXX the increased of Cumulative return drive optimize trend to The XX.X%, and

X. to Turning Slide

quarter-over-quarter were X% by increased and As year-over-year. noted, loan I higher balances average

of growth distribution which shipments categories seasonality future XXXX. to increased build We million course accelerate loan million, and continue to due plan $XXX all over loans the benefited as highest million, finance, to impact and of included of expect and payoffs by towards $XXX as net optimization increased returns. commercial amortization the increased quarter commercial inventory drive and decreased the winter the Total manufacturer other we the by increased for $XXX Auto CRE $XXX which by pace including balances, normal by declined normal floor products. million of by

the balances In $XXX RV which quarter. Consumer, declined million, by which $XXX led Marine, in mortgage, residential million auto increased by growth increased was for by while loan

as Turning $X.X noted, prior by X% or to quarter. the increased X, billion deposits in Average from we fourth consistently quarter. the deposits gather continued to Slide

cycle. month rate XX. the the would throughout the our of Total ended expectations in maintained and trend. XX%, fourth line to each deposit Slide rate expect at reflecting point Growth continuing recent year Turning the quarter, the change was this decelerating beta cumulative with at in we

past, cycle in level in rate a the the game ultimately of peak decrease. and timing be the the of any of the before extended terms noted duration we've will pause end where function and out for tops the of beta As a

to start see from When expectations for have cycle. when the and outlook sometime and with beta cuts a way remains higher beginning interest we fall we points market deposit rate rate the on down Fed. rate commence, unchanged, Given our discipline trending increasing to rate manage cuts XXXX, if as for current then we to expect revert few the in betas percentage cuts during the same and

quarter Slide to shift expect The by the decreased to and noninterest-bearing mix stabilize Turning we this track sequential closely Noninterest-bearing during changes. deceleration continues XX and to moderate of continue to mix our percentage points from XX. third with shift forecast to XXXX. basis

Slide XX. to On

Net of decreased quarter, interest benefited from our the net at interest revenues years. expansion asset the X.X% For the income CAGR in forecast. margin net interest X $XX declined X.XX% with to to sequentially and Cumulatively over we our $X.XXX past sensitivity million billion. margins line growing over or the have by X% cycle, with an

point change stock for point with hedging. QX, XX primarily negative from due we in decrease impact lower basis accounted of FHLB of dividends points, from a spread funds, basis NIM Reconciling saw to which basis X along reduction points. free net X basis a a the X lower from and This was

Slide XX. to Turning

will rate. a of a fully X-year rate. and a fixed XX% average is arms in of XX% life life life. average which XX% average indirect auto, with remainder is approximately longer approximately X-year in term. The shorter over our The few around me benefit half the us thoughts variable approximately construct rate opportunity the Let share sheet balance that added moderate repricing fixed loan is

We have seen portfolio notable thus the increases in in far cycle. fixed asset yields rate

lower short-term of in forecasts substantial fixed to $XX rate forecast XXX many the rate loan repricing Even opportunity rates, basis with our $XX We billion approximately fixed some time loan curve billion as upside portfolios approximately of repricing forward yield an retain benefit to estimated opportunity XXXX of for come. points.

spread our of growth. drivers revenue the provides XX Slide

and As includes continues Fed's plans cuts plot assumes cuts of on XXXX. for year-end. a rate and action X scenario to be stay potential of central with longer The to by The in is dot for a This in continue higher scenario bounded the end that scenarios. higher analyze X range tracks and basis closely interest assumes planning scenario XXXX. the lower our a which rates wide from guidance a those economic reminder, and of rate set we scenarios develop

at a equate Should pass, We XX be longer year the to continue lower margin rate net the see a March margin corridor. that each and range basis that play in in a up level within we the scenario on of XXXX. expect is If in scenario rate X% to above quarter. out to of fourth the that. focused and we tight expand will X.X% This between result a the to near a managing early margin and course net saw points interest as we margin over for the likely as the higher for would quarter comes to level interest cuts

saw outlook. rate There we rates the outlook of lower lower market a for December, As significantly. also were interest moved from longer-term benefits in this number

levels, loan growth resulted which accelerated it capital outlook in higher our First, accretion, AOCI given now. supports

rates. for deposit support in for long-term credit provides competition it Second, with over the lower borrowers easing locking for potential provides time. It

dollar expect the of Net forecasted we outlook trough to basis including seen than quarter income had revenue in more of first level spread December. the year. our on items, rate levels that full guidance interest these pace net of over sequentially year growth, before However, a course the incrementally in is from we now for the underlying the challenging the expanding loan

Turning to Slide XX.

available end, billion to insured a continue robust granular deposit quarter and liquidity quarter-over-quarter. benefit diverse contingent we has continues XX% $XX with at base be highly grown and deposits. Our At to and from

of of available liquidity XXX% Our appear represented leading deposits uninsured coverage. total pool

XX. Slide to Turning

year-end to investment at our the portfolio cash the time. during unhedged Our approach level lower to over is increased and manage quarter. the strategy begun cash continue we've portfolio fourth flows of This duration of reinvest as consistent securities to with

to reduced We years months. X.X the of years the duration X.X portfolio XX over past overall have hedge from

recapture our to forecast Slide We we've Turning XX. of AOCI. for the updated

of Using peak would of we've estimated incremental recapture total AOCI year-end, XX% we at market an at XX. rates X recaptured over from of years. the the AOCI year-end level As next XX% September

Slide XX. to Turning

be program. continue in dynamic hedging to We positioning our

As protect the we were reduced incrementally over the intended on our the objective capital scenarios. in downrate actively NIM of to rate in that quarter, course of instruments changed focused uprate outlook scenarios and fourth protection the

announced program decreased. [indiscernible] in As terminated the probability the we as late we of swaptions our pay-fixed assessment for moves December,

protection course that worked significant as up QX this a with through for modest risk program intended, of cost insurance. the Over providing against possible overall tail QX, moves rate

Additionally, adding spreads. floor of which forward We down rate strategies, fixed were quarter, we collars, the expiration. during received $X $X.X $X to exited protection billion starting of billion adding of swaps NIM added our near and billion

remains activities range unchanged support hedging Our the as downgrade of respect possible. to objective with in margin interest tighter management a to our net

Slide on Moving to XX.

strategies Our quarter markets, align fee more more our Note, of areas: growth strategic manage remain in X focus clearly the order updated earnings payments the we and closely of we've key business. our this centered presentation capital to the areas our income materials way in categories and to highlight noninterest management. on wealth

the sequentially. line further we're expanded Slide market item. Capital appendix fee XX% bank of key These the revenues X Markets, noninterest XX total growth each provides the of In on grew each components that areas. products We're in advisory underlying core for growth of pleased in seeing capital detail positive and in collectively areas income. Both represents these quarter. focus

to XXXX, and over remain revenue for we term. expect constructive is a markets key medium fee growth driver capital outlook the for Our

Cash includes treasury revenue credit management along merchant card revenues, debit with and Management processing. Payments and and

one revenues asset payments which and fee over total private our together opportunity substantial, retail XX% with benefited reflecting growth realignment time. management today, of potential bank from businesses this is under advisory year, significant the and Wealth for revenue the earlier has brought Our umbrella.

of penetration assets up wealth households to customer grown XX% ago. as XX% increase the continues management have Our under and from year-over-year base rate year are advisory advisory a

$XXX level, the an decreased million $XXX Moving quarter. on XX. On overall noninterest million income GAAP to for to fourth Slide

CRT $X the mark-to-market million on the increased quarter-over-quarter. fix the and pay fees premium, by swaptions Excluding

GAAP Moving XX by noninterest to expense by increased million. $XX on and on expenses. core expenses million underlying Slide increased $XXX

to and primarily during As incurred portion insurance estate consolidations. costs the related expenses FDIC special our quarter. fund I assessment mentioned, of $XXX program also of deposit efficiency real staffing last included to related we million corporate notable item the It the

investments we've we across of course amount is are seasonally saw by Excluding company. over incentives of included and inclusive personnel the quarter these Difficulty] largely higher as The driven expense items, previously efficiencies consistent core we as fourth discussed services, with expect higher the sustained is as expenses. as [Technical expense XXXX. quarterly in of the the benefits dollar professional driving expenses level the well we This well

XX to sequentially Reported increased position. quarters. increased Slide X Tier and X recaps common for has capital our XX.X% equity

Our well than as the This assessment. the credit compared prior adjusted CETX offset XX December, points special announced quarter, ratio, transaction earnings net to metric inclusive adjusted of dividends as the by AOCI, the driven was increased FDIC more the transfer X.X%. risk from benefit which from we impact of basis in

We a AOCI also recapture during in saw from benefit the move given significant quarter. the rates

capital management focused to inclusive We while fund operating our higher growth. Our loan of X% intend capital AOCI XX%. on priority drive into to to strategy driving adjusted range our remains ratios high-return top maintaining CETX of

full consistent continues points in higher the charge-offs charge-offs aligned expectations. net for with of change of net credit XX, XX charge-offs a XX QX outlook Gross fourth than XX XX Slide points. with result basis were between well the of X of points overall with the was outcome This was charge-offs, net in year basis were of quality points XX basis quarter at our to recoveries. through and by for relatively low flat with year to target the and full very range metrics quarter. largely charge-offs basis This cycle end resulted charge-offs lower and basis a Net points. net for our our perform On in the normalization XX

be previous asset assets Allowance component. ACL increased XXXX the within remaining quarter-over-quarter, the the quarter, quartile commercial for real risk increased to the our point ongoing credit ratio below prior higher among with X criticized in Given normalization, The losses basis changes the level. being largest was to estate rating top nonperforming from loans, group. peer total while ratio of by and X.XX% continues coverage

Let's our outlook XXXX. for turn to

of expect between and we to X% X% solid drive continue and X%. mentioned, full the X% growth growth to year. their loan are we trend expected As Deposits accelerated for likewise between

the we declining see a result and the drive the scenario loan earlier, the by approximately of I actually between the X% net loan net range to growth higher top we year expected longer tracks coupled to end of could interest rate for shared scenario plays X%. fruition to The rate to is we out percentage full see the loan revenue. will of for our growth range, play up points. the with growth comes income pace If income and As loan growth, scenario grow margin end and outlook the to to tracks If spread of of range lower spread expect X range, down interest revenue X%. lower our growth out

Noninterest Fee management. to to payments expected expected reflects revenue the discussed XXXX be the driven wealth notable our excludes interest impacts. In level which growth CRT additional by loan rate tax earlier, primarily Expenses trough finalization as core before markets, by of year. X.X%. revenues, tied full program core to have expenses both as of expense fee-based scenarios, fluctuate incremental the and fix and is to the including from some compensation level. growth and first capital will budget baseline capital be approximately associated Core income I increase in are The markets. level throughout primarily a This items, the to we could expanding is the net depending of compensation, for revenue-driven with swaption The XX% mark-to-market impact our production. the well on expected includes basis X% quarter from pay that increase X%. expected is between underlying income expect on to

basis XX and XX full expect the net year charge-offs to be We points. between for

to With to we'll and prepared our Tim, questions remarks and move over answers. conclude you. that,

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

question of the Stanley. with Instructions] from line coming [Operator Manan Morgan Gosalia Our first is today

X.X%, expense wanted similar are X% was also if to And it side elaborate the on XXXX. I than I expense guide it's your on that? for on I what's revenues. is going into some of a small could flex is more guiding from to off start a hoping the to there know but change peers -- you on change higher the

in for So number get if drive the as cuts. well? NII with little Does you instance, to of down side your flex more X% bit rate that a expense

for Zach, view designed primarily an is The that. and Manan, question, October had this take be December guidance that in back you. early Great to I'll given in really was we

decisions insight the And was of we're before. an some really growth reflects associated be is discuss million that the that So just we get well budget our to you X% That the can quarter, and finalization up small. key detail. so us, into able added The about discussed sense, we've making. $X give for additional now as to the of that we're To a what approximate it's you loan difference the plan a relatively X.X%. to represents [indiscernible] in revenues

think are before. that we the underlying discussed you what drivers have unchanged -- I of from are

automation on of in the to core efficiencies incremental with of initiatives. attractive regulations strategic a opportunities and before. on and We'll of growth we'll number programs. execute build discussed growth continue news the to We'll invest We'll drive get execute based ahead significant our we've in the continue really data coming on commercial capabilities expenses to and

number growth me, into that more we expectation excuse no normalized to and to change our levels. that rate in reducing as go included back XXXX, about that's XXXX, of All as well

of kind react marginal in to ]. [ As will terms just Certainly, be your sensitivity. under the it that of relates question

in of revenues. generally the the so to think growth got ranges middle we've calibrated in is I the on expense guidance

the if of hit and the [indiscernible]. of some the were end all potential likewise, [indiscernible] some so opportunity if upside And high revenue revenues expenses

my next Great. on franchise. deposit question was And the

consumer strong pretty a franchise. have You deposit

your peers some upward there. there's have lagged still that highlighted some And of deposits in repricing

you rates? talk and how expect quarters then about begins . can few Fed to as those cut over to behave next So you the deposits the

What we've as consumer expectations. a with for been seeing commercial trending across we're us changes cost to the both of to going broadly and deposit and in marketplace deceleration sequential both much the deposit expect and very our is to beta, aligned highly respect

are deposit for beginning terms select change all, you market price a soon signs marketplace firms As you'd different environment testing time points for we which be segments constructive is expect will likely data what well, and moves. I preparing a of of the in and ultimately money down-rate will tell be to promotional terms what see of to a of initial presage will of that our example, shortening, series fairly down geographies a for of unique with

With respect build that on to sort your specific and of trend. question consumer

which until case rate September, The in down quickly. out That's March, testing we that we to the not pretty somewhat have in cut as we'll possible, a I as is in lower period as along pricing quarter somewhat of the momentum holds through somewhat continue answer such yes. consistent, reduction. very time a here, embedded case deposit if see expectation our longer of until And Do the an upward but of we'll environment generally will all period rate which pricing is say aggressive saying we for course, terms in of drift. trend think pause a go-to-market kind see. of there's, of been costs rate of at there of beta What the well. rate price get the out and and out sort view points, is then begins pause rate our for is decelerating bias least

question Najarian Our of from next line coming with the Erika is UBS.

script, whoever great. the wrote be so guidance any that clearer, by way, the could And not that was

imply been telling up those the loan that and a software set got said, few you've average certainly this perhaps past would you've that pretty opportunities is being particularly And and of that Huntington up which you've outperform. think outlook, guidance loan the indicative a remind consensus opportunities growth questions. that The notable is back for is through chance. yourself why few Just differently of I set maybe the follow-up year. and of this your from macro to us differently is peers a Clearly, growth us number good unique opportunity growth yourself is for years versus go peers perhaps

is Erika, a history. that asked I'll broader with start Steve. [indiscernible]. And you've this then because

risk on we've So been and first, has what think we has the helped in business our it what years, now been place decided pursue low do to us appetite, a has to discipline And which governor. aggregate XX as for not to see. moderate

been specialty mind, of at about With like banking. that growing these we've strategic mid-teens businesses. you And purposeful saw Investor very and rate Day in the the growth

banking we So strong market very a have of middle set capabilities. core

tremendous a small and have We of capabilities business capacity. amount

that other We market states. in have small and now business on Ohio achieving in density we're

they're year, them. core the way, that the then to ones So in we've put specialties franchise sort just may starts. Charlotte new the more, a performing very, very of see that place, and off to we last regional add like you opportunities, by for And all in And been have well. X we or decade which pursue the banking when been Dallas expansion terrific

in were Carolinas, got to years not, We fanatic moment These were it people is group a us we've the and of investing, some just are that and coming outstanding dynamic. others for with following we've came where be been some we believe new example together. An there that teams. was colleagues to of all

we those opportunities But to those like markets. have each incredibly markets. in Chicago, of I what Denver. stage In Twin markets, say Cities we're early Michigan. would and addition that, TCF the in we still well We're And in doing still

with that's about of regional asset didn't lots business. few investments with got talk opportunity. specialty And the potential growth I banking, well made the of believe We've we in we in core the performing years. the finance the So with bank next --

year. horse the last year Our they a had phenomenal finance business distribution is

We've teams is that one in well business done businesses. very, of really well. of auto very in our of has area. terrific Floorplan one growth best terms its Our as got our

of lots finance and options equipment in options, the more broadly, through that, of the So seeing growth we're cycle. that growth a lot

And years. so so to colleagues do the to budgeted believe we're outperform have and in expect poised we and our coming

want just to on I things. talk X

and the worry you higher earnings growth. recognized that expense want contrarian as really than than took was automation buster of Investor terms ratcheted our and First we But across it and other the board. growth to of Relations importantly, the is just splitting want to so discussed that of of top view And length, terrific that more would is credit we something have was all a in staying long-term because investments in purposely would investment add than certainly the growth the that purposeful team. certainly financial recognize the expenses. significantly relative in advantageous It core that to would that, resources all, our overall staying was revenue thing back to and capabilities including we we the and compliment about that we're thanks I some have know. one putting were result growth, net would against of the we target and pretty potential terms on growth outcome But for an opportunities higher in view much things we our do that at and to data it of typically on of in

leverage earnings earnings the short-term as significantly through and And of course bit better so well. strong exceptionally very trajectory growth respect yield challenge to with XXXX will of looks operating outlook a XXXX

I So just to to [indiscernible] is tack Steve's whole think the really point, on working system and

And had sure. the capital. you For

of so all moving terms question. could you just of us you Zach, if as outlook. management? about at makes in rate cut. wonder give balance update your for your [Technical in beta terms a give sheet bit follow-up the XX/XX I way rate maybe and discipline basis on of also, many And in sensitivity if little a betas terms could maybe So the us on it more a rate deposit And your if mean what expectations points But the Again, sense. of pieces managing XXX first Difficulty] us of you similar detail on the down

Great lot questions, both. to in There's unpack. there a

I ] that sensitivity or address and the come end Q we sensitivity reported both we out roughly in that K. see saw to December, was with the [ be So those the of expect October asset it consistent the outlined you for asset in

over business is asset As we've naturally sensitive. discussed time, the

And asset so clearly, you're the just significantly thinking the of terms way with in as porting segment benefited something is our note on expansion up rate to will to assess margin well, in growth. I be in interest sensitivity revenue securities as very about portfolio.

XXXX the swaps will second thereafter. XX-month roll on example, As of starting a of we most to sensitivity you the sensitivity for the off and Those sensitivity from capital off impact a variable And course portion large protecting which yields in will scenario, it XX next about additional of the swaps. percentage of begin in hedged significantly period to point securities, those in about months. higher ramp our on the over for-sale of continuing of for a XX terms benefited represents that rising know, has asset metric in dollar half undergrad

whether pretty as top lots important the from an ramped say of With just across metrics also point those is I'll those assumptions but significant, forward the not academic sensitivity point. just are beta curve they're being of start the are whether analyses a of the most and standardized or industry. on

the on top ramp a forward is curve. Ours of

metrics those in strictly to assumptions support those assess I comparing if certainly, pretty across firms. So

opportunity of downside rate Back -- terms to see in reduction hedges. from to our I so [indiscernible] management add posture, here, the incrementally

a incrementally be protection to gradually a that strategies on QX, prepared down production capital in strategy shifting as And would we'll discussed protection, focus time, of into in adding rate downside I over the those hedging which Our is some added to incrementally we from continue on focus suspect down remarks. sensitivity. we reduce asset

at to In the extended sense, and rates to where roughly so late period to X your over the down I'm the you less give X-quarter was about our beta to than expect of little of you have basis first and then we If deposit to a it's course, would begin sense there points, we beta expecting in looking that. for would the of of pause in scenario period. But summertime a your give be in sort end terms just the cuts be fact, them, a fall a what question. see by XXXX in in XX% sensitivity would, a scenario, through March x that an more of

of the is John next line from ISI. Pancari with Our question Evercore

On know [indiscernible] your to about front, nicely, points the in CETX fourth I quarter. basis the capital increased XX

look at thinking up -- and how about and capital capital the earnings generation, and here capital buybacks Just you ramping your potentially organic you return trajectory overall. outlook as for are

pleased the of CETX loan of fourth that decision wins allows significantly been growth X.X%, very and of us -- over of as has balance importantly, us action discussed want we've around that's we XXXX capital additional XX% driving the recapture loan from accelerate the do discussed see respect lot significant range a we yet posture now for the growth plan us is on opportunity growth. overall front future, that which clearly at we've there also the which even benefited earlier. rising term with operating to and the outcomes had is of managing course to loan in a is And sheet with to on again, a capital talked important into ACI, in it in value-creating revenue with the capital quarter to the capital foreseeable with pace pace about have accreting is our modulating balance drive adjusted actively And priorities the the We're our throughout most per to that the that, higher X% for to time. us continuing I fund we most and to

share posture So our I Once the into on think with we range XX% we'll to respect reassess the with future, that we'll with continue CETX, X% adjusted to get repurchases. for plan. foreseeable

to going repurchases back for those actually time, model creation And part have. them. company, through point, as of us possibly are to get drive I soon value a Over share we're important to we the really as the outcomes expect and a

quarter Zach in call, shared if you with And capital pending advancing as on are John, requirements are the we third the as place.

be capital will those that they adopted. requirements building we're meet should now So

role in And the How industry view outlook? regulators. pickup also year's actually the just the scale for now the you if what's see in earliest so the the requirements failures Great. debate I the within in for to from and talk need you right banks think as to bank look perspective, whole regional related whole that, you, And maybe guess regulatory about at Difficulty] think around we M&A All you last Huntington's going as on bank you for whole that's right. [Technical not a for backdrop need could M&A evolution and term you then the scale Steve, do an given do Huntington a can for compete. the potential necessarily that longer

is is This and you miss that's failed. Well, don't back banks one a of strength in of adopt on adjust for you've seen the and rest idiosyncratic question quickly. had to up sort respond of the but I I them, the And may moment, industry, think very questions, answer poor aspect. industry And series of the X try now. a I'll John.

those disciplined us, it to as we this build the of broadly posture a having we've us diversified of been and achieve half year. has and that to year last believe businesses, in very, and well served very a continuing and set second For seen in very we've able and focused,

our very continue our expect, that. do that's ability we're to focus. on to bullish grow We'll and and So organically

may continue advance. announcement moves agile, as to growth of to terms expect and continue we will contrarian, we be in organic see but that strong I this You year further

have. tremendous We lines already opportunities that business in think we we the have

investing in So expectations about how should. of in scale, in industry terms is banks risk will they to regulatory I much those time. clearly think will our tailoring reaction response the and platform. industry management X benefit The the over from as questions we are have increased raising failures is the in

intraday I near think this visibility I of things that will much as addressing. third quarter better the are for in we're have There the flows a like call, on deposit example, on term a shared series we consequence.

banks. XXXX, other I we've been in don't the since how investing know [indiscernible] I management Now compared know really risk to don't we so compare --

portfolio always a even the test of was think top looks I quartile good the point. leading where we've as like terms measure, results And it in very viewed by stress this the or regulators stretches that a we've been barometer. at least at

in So same be a future, we're there has opportunities sense have to compelled that do not risk-adjusted see anticipating take makes we in activity somewhere don't a change in 'XX. and in don't to time, it context but And something. look, should posture that a the that feel at at this I the we stage. yet be We

I that. think amount we're excited we've to growth got core deliver, a about tremendous of and

JPMorgan. line Our from the Steven question of next with Alexopoulos is

you that picture. I big for want to start

historically, So margins for curve yield has earning. a been and steep bank positive a catalyst

much stable hedges, potential balance to right, [ essence Given position you sheet, of use NIM a today? how traded of do ] . you or the the that benefit more even away with have

Great question, Steve.

I to yield continues Obviously, think funding us. The of better indicative against is that's -- would asset the that costs, short answer represent are margins would to than are. be steeper no. which which yields question your environment where solid curve

of quick environment a strange I inverted forecasted dramatic really here. with think reduction with curves kind pretty of this yield more

how the incremental beyond. not see repricing. 'XX all that to significantly asset puts in that NIM out. We presentation the only but 'XX, I very fixed provide the [indiscernible] takes for from see to clarity But try XXXX. remarks in continue benefit point yield the move to categories, portfolio in to we'll benefit and XXXX we'll plays overall respect to continue the us and in outlook modern think prepared in going we're So some about key basis us, with One, it

short in X really executing rates in where likely we'll us, beginning of total, we'll our [indiscernible] essentially variable from you curve see that back a to down Funding terms data. earlier. kind our the scenario end we'll QX to to for points Another yield have that negative the us believe of new by relative of over carry thing steeper our again, is around down. if to XX if about for less negative start about environment fallen, in pretty the come reduction bps costs, next basis the the Erika's drag. way, see question protection was offset We've we'll it the and becomes of curve on those inverted, us of And things as reduced XX program when here see We're us in the comes yield carry talked align impact, in actually hedge downgrade benefit the short curve quarters. forward

kind is last sloping believe I here, of try the a done say of supportive as upward curve NIM nice is fit I So think while, a to The is same, is is don't goal about indication well. that, for color And [indiscernible] scenario that positive. expansion a say that to And [indiscernible] modeling it it we yield an question NIM we've sort got a and to floor under the it. again the which opportunities, really have upward of really of XXXX, the so highlights margins your Goldilocks that the to accretive put position and for really

played for higher be the longer-term because XXXX, -- higher the a would what's the we've we your what's forward question [indiscernible] where XXXX, basis, said But a term Huntington? you be longer, and And there's XX in stay clear NIM versus rolling out, helpful. off, move assuming earlier Fed could as on it. you for for XXXX cutting. points benefit rates if That's long about beyond NIM like us Are to able given basis Okay. on curve the to quantify the

and longer, on short of longer. scenario I much say [indiscernible] to note X- Sure. will balance of sort sheet of the for point not the our yields only tide also It's end curve, The range. key the I'd the X-year the NIM scenario Yes. off belly a higher that where that longer and

terms that's to Xs at the north the Look And consider. see longer over we level. think a so term, into a in of sustainable good X NIMs low point I of

to business the course, mix Of shift. continues

to we of bps that in 'XX see we'll XXX then to I the be are another higher it's they our modeling. hard reduction than to XXX I to [indiscernible] would [indiscernible] if continue So into range scenario, precise out, maybe have about over think sort years several that. rate that rates see future, step-up much quicker of But as as through And 'XX. longer XX foreseeable really the do

Our Arfstrom next line is from Capital RBC question John the of with Markets.

to deep you, Zach. for you say for lower start, A net how income is do want is trough? interest XQ couple where I trough, How guess, When that much us XQ. of clarifications you guidance a

the is lower other mix day by way, seasonally just Good with items. just QX, question. typically and count

QX, on end growth, which X% trajectory above I you heavily be difference for growing you NIM, i.e. a The potentially QX likely same we range. then from guidance but saw really would accelerating average lowest the just about and the back growth pretty I and terms there's of low sort the the year of to X% we'll And around amount the year if NIM there at, think in dependent unexpected. think pull lower from likewise, that I that [indiscernible] so is be of ending should first that grow in quarter by the probably as during kind level I general then there there the on be in year. discussed, in trajectory it's steadily from the that kind the high that's than begin And the of sure the then given likely look to will expect and than year-on-year loan range, QX scenario will QX a really the the that's and in was same of around the see it's lower rising QX the X%. trajectory And

lot pressures hand in quarter expenses fair? that the XXXX, you've of Is on don't . expense all that you today 'XX the are a rate saying up. of and quarterly when things you for when your in essentially And line it's meaning lot that these wringing consistent, expense and run as progresses? on say investments done flat see important consistent, you set basically expenses, last you that then to a are and think I there's say guide

of a the to are mind, I kind you, of It's of bit pretty this represents I additional overall other overall, got that picture in dollar a -- for variety to of answer there's expenses during rate, core chance [indiscernible] ramp-up is a similar investments doing. an incremental illustrate we dollar the that. saw and our little There's we've of some Broadly we're quarters run within my would XXXX. speaking, try on basis offsetting still the each amounts capability The forecast for factors budget of that. driving excellent say yes. in in amount QX, each clarify there's the that of

dollars these then tuning commercial initiative Likewise, the with of of in accelerates. programs, business. of like the additional overall these bit are over impact modestly pretty which time. little consistent result some from range way, a operation that new process process their accumulating our we've and also which, business pretty quite a you've are factors time offshoring the been that cumulating, call lastly, for The in sort it that. is netting ramp-up it QX. offset in And of but reengineering by tight got so growing, investments We're some initiatives together, there's strategic are a also internally The efficiency driving series initiative, actively is to of business basically

turn Instructions] And may questions. any if Beth, X to for [Operator ask fresh follow-up. return, you have you please queue

Our the line of with Deutsche Bank. from be O'Connor next Matt question will

talk estate seeing . behalf real on credit. And then Commercial estate This Stein the and ask what charge-offs normalize. Matt. in Can this commercial book? on quality what Can continue for side, these you're talk is C&I Nate to about XQ that outlook net the about of versus to wanted I this on touch you drove credit year? also real just just about increased you commercial levels.

is Sure, Nate, Brendan. this that. I'll take

commercial the it X was But really transactions. side. estate increase quarter, For million on basis an of the and the yes, we sort the real see in quarter, point there in want of represented perspective, to did to dollars, I it $XX you charge-offs point is a

for the we've will portfolio. our So the it's is which loss at content, XX% perspective, estate where real That's charge-off is portfolio approximately increased we potential time, view of a to be is there. reserves consistent that office from our focus think why this with which the there in

been what in time. quarter of some is you're that for delivering of manifestation so message we've that the current sort seeing And the

result take a is had But risk Let of the actually house to profile of idiosyncratic our step commercial its and C&I look in back me more the target. our broadly, that pretty on of strength well. we portfolio the the I individual performing is has and general the moderate side strong portfolio low the general, mean, in portfolio issues. management

So I at this feel time. really good about the commercial portfolio

and $X outstanding. occurred, [ QX of pleased for we're all minimal charge-offs, had The Home million has how charge-offs, XX a for the going similar. performance were our was and part. with That very, confident the The the in We're the QX has portfolio losses, very well. very performing is gross The charge-offs question. office ] year. very forward. was bps difference recoveries pre is portfolio Thanks

if could ask right. on follow-up I one the And assets. All just criticized

the just Can . about fourth kick drove also that? in quarter. these So what you up talk

is Brendan again, Nate. This

of how signaling Again, rates against came been really have reserve of exactly persisted, Jach real it portfolio. short-term it estate those in portfolio second have last the through overall. higher client results. up. said in reflected solid we of remarks, that's confidence good we out what's selection it expected criticized to and half the year move our As our out. The commercial in that in that prepared we impact And played has that's Again, and

guess more normalization question. Thank credit as across that you portfolio. just for So the I the cast I

is next Ebrahim Our of of America. the line from with question Poonawala Bank

peers. follow to last week Steve. of loan the on does the seen higher wanted your end up over at we've growth It the guide, feel what Just from

guess, and market in that Sorry if sense markets I GDP of expect versus gain give tie how underlying I your this growth? seeing you're missed this much us of you . the growth these to is a expectations, that it, share but

we I the have Fed growth share we'll the banking the that, so will loan had foster growth initiatives position think industry. an If in and specialty Well, further anything, are from we no began capture X%. last and for of pivot year advantaged And we've portfolio. the signal from with Carolinas also they the but in

obviously, stocks. those are But no repayment there's that's groups terrific to and of off net loan risk, growth. all So

We're footprint, banking [indiscernible] Bill And especially core very, our outstanding we've quality in teams well. both our to are lending teams able I'm consumer with deliver in quite very the teams. pleased as that that Huntington. And frankly, been the confident attract the our teams,

to into businesses the achieve continue should come we the year, even cumulatively got that help going we've as in or us momentum, goals. and and exceed invest So to these we're

meaningful going any guess around Got . the stimulus, through the it. cetera, on forward fiscal mention et flowing as was And needle Is I of what chipset, growth? your market. that [indiscernible] moving not

which is in that be The in you're speaking, that broadly year chain will with well think, we towards XX our supply network. made, about as the referring we're commitments markets Columbus, we're opening But in under have year. this states Intel is move talking XX, what construction and the largely here following the with plant, plant they

are a by So Midwest. many region here it the strengthening lot and that one market most just lead we chosen we factors the in here have outlook broader Columbus, and in that very, also share of and unusual have very greater categories. the it'll significant that's some sectors But have be

Greater of will Michigan East of from core is announcements for that's some footprint, value joint a made and year, in generate lot on the and the venture the Arbor here benefit economic investment last battery Columbus of the Columbus of There's all think Honda being including I in front. industry. the which through

So and the Thanks areas. of with for for in position any the us, industry certainly these leadership for question. our

So for investments going as We thank results [indiscernible] this today. made fourth wrap. hitting us much believe joining the the I'm and I you in well drive think we closing, 'XX beyond. we're further of to want revenue environment. I will we're positioned just quarter to growth the with In hour. 'XX we top very pleased we're in

executing and growing our with management on in growth, support aggregate carefully low-risk to Our focus revenue we expenses previously focused to consistent moderate team investments that is on business is appetite. on as The the driving our managing strategies shared. core

as to exceptional deliver creates appreciate very long-term our nearly great and And a Thank having XX,XXX of a and alignment And we're generally. were perennial interest you colleagues colleagues the award day. to all winners shareholders not with reminder, service. your grateful customer Board that strong have results or much. our shareholders executives to these our in outstanding I finally, for

today's Thank you. will conclude conference. This

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