Core Insights - The regulatory environment under the Trump administration has led to an increase in mergers and acquisitions (M&A) activities, with 26 bank deals announced in July, the highest monthly total since June 2021 [1][10] - The total deal value in July reached $10.83 billion, marking the largest amount since December 2021 [1][10] Group 1: Reasons Behind M&A Upsurge - The rebound in M&A activities in the banking sector is a response to market challenges, driven by pent-up demand, improving bank stock valuations, and the desire for competitive advantage [2] - Renewed optimism for bank consolidations is fueled by proposed easing of criteria for banks to be deemed "well managed," which is crucial for M&A eligibility [3] - Faster regulatory approval timelines are encouraging larger and regional banks to explore potential deals [4] Group 2: Notable M&A Deals - Pinnacle Financial Partners and Synovus Financial Corp announced an all-stock merger deal valued at $8.6 billion, expected to close in Q1 2026, marking the largest U.S. bank M&A deal since 2021 [5][10] - The merger is projected to be 21% accretive to Pinnacle's estimated operating EPS in 2027 and is expected to be tax-free for shareholders of both companies [6] - Huntington Bancshares announced an agreement to acquire Veritex Holdings for $1.9 billion, expected to close in Q4 2025, representing the third-largest U.S. bank M&A deal announced in 2025 [7][10] Group 3: Benefits of Increased M&A Activities - Increased M&A activities are expected to lead to technology upgrades as banks combine digital platforms, which may result in temporary service disruptions but ultimately help banks grow faster and improve profitability [12] - Larger balance sheets from M&A will enable banks to compete more effectively with national players, while branch consolidation and shared technology systems can significantly lower operating costs [12] - For banks reliant on investment banking, the rise in M&A activity will boost advisory revenues, supporting overall fee income growth [13]

[Glossary of Acronyms and Terms](index=4&type=section&id=Glossary%20of%20Acronyms%20and%20Terms) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=6&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a comprehensive review of Huntington Bancshares Incorporated's financial condition, results of operations, and cash flows for the quarter and six months ended June 30, 2025, compared to the prior year [Introduction](index=6&type=section&id=Introduction) Huntington Bancshares Incorporated is a multi-state diversified regional bank holding company providing full-service commercial and consumer banking and financial services across 13 states, with a history dating back to 1866 - **Huntington Bancshares Incorporated** is a multi-state diversified regional bank holding company, organized under Maryland law in 1966 and headquartered in Columbus, Ohio[14](index=14&type=chunk) - As of June 30, 2025, the company operates **971** full-service branches and private client group offices across **13 states**, including Ohio, Colorado, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina, West Virginia, and Wisconsin, with a local banking presence in Texas[14](index=14&type=chunk) [Executive Overview](index=6&type=section&id=Executive%20Overview) Huntington announced a definitive merger agreement with Veritex Holdings, Inc., valued at approximately $1.9 billion, expected to close in Q4 2025 - Huntington announced a definitive merger agreement with Veritex Holdings, Inc. on July 14, 2025, in a **100%** stock transaction valued at approximately **$1.9 billion**, expected to close in the fourth quarter of 2025[16](index=16&type=chunk) Selected Financial Data (Q2 2025 vs. Q2 2024) | Metric (amounts in millions, except per share data) | June 30, 2025 | June 30, 2024 | Change Amount (millions) | Change Percent | | :--------------------------------- | :--------------------------------: | :--------------------------------: | :---------------------------------: | :---------------------------------: | | Total earning assets | $191,092 | $178,062 | $13,030 | 7 % | Selected Financial Data (YTD June 30, 2025 vs. YTD June 30, 2024) | Metric (amounts in millions, except per share data) | June 30, 2025 | June 30, 2024 | Change Amount (millions) | Change Percent | | :--------------------------------- | :--------------------------------: | :--------------------------------: | :---------------------------------: | :---------------------------------: | | Total earning assets | $189,703 | $175,913 | $13,790 | 8 % | - The second quarter of 2025 net income was impacted by an approximately **$900 million** investment securities repositioning, which decreased pre-tax net income by **$58 million**, or **$46 million** after tax[22](index=22&type=chunk) - Total assets at June 30, 2025, were **$207.7 billion**, an increase of **$3.5 billion** (**2%**) compared to December 31, 2024, primarily driven by increases in loans and leases (**$4.9 billion**, **4%**) and investment securities (**$1.1 billion**, **2%**)[26](index=26&type=chunk) - The **tangible common equity to tangible assets ratio** increased to **6.6%** at June 30, 2025, from **6.1%** at December 31, 2024, while the **CET1 risk-based capital ratio** remained at **10.5%** for both periods[27](index=27&type=chunk) - General Business Objectives: * Deliver Culture, Purpose, and Vision through a Differentiated Operating Model * Build on the vision to be the leading People-First, Customer-Centered bank * Deliver top quartile performance through sustainable long-term profitable growth * Differentiate culture, brand, and customer experience through expanded product offerings and leveraging partnerships/technology * Leverage regional banking model and national franchise to drive scale, growth, and expansion * Anticipate evolving customer needs to drive profitable growth * Maintain positive operating leverage and execute disciplined capital management * Provide stability and resilience through disciplined risk management, maintaining an aggregate moderate-to-low risk appetite - The market remains challenging with fluid tariff impacts, and the Federal Reserve held rates steady in H1 2025 due to inflation above **2%**, though some officials discuss restarting rate cuts. Economic data is mixed, with slowing services and stabilizing manufacturing sectors, and geopolitical risks have increased[30](index=30&type=chunk)[31](index=31&type=chunk) - The **One Big Beautiful Bill Act (OBBBA)** was signed into law on July 4, 2025, increasing the debt ceiling and relieving short-term market pressure, with no material impact expected for Huntington[32](index=32&type=chunk) - The **CFPB's** December 2024 final rule on overdraft fees was overturned in May 2025, and **67** guidance documents were rescinded, requiring financial institutions to reassess compliance programs[33](index=33&type=chunk)[34](index=34&type=chunk) - Federal banking agencies proposed rescinding the October 2023 **CRA** final rule and reinstating the prior framework, which would have materially changed **CRA** assessment and imposed additional costs[35](index=35&type=chunk) [Discussion of Results of Operations](index=9&type=section&id=Discussion%20of%20Results%20of%20Operations) Huntington's Q2 2025 net interest income increased by 12% YoY, driven by a 7% increase in average earning assets and a 12 basis point rise in Net Interest Margin (NIM) to 3.11% Consolidated Quarterly Average Balance Sheet and Net Interest Margin Analysis (Q2 2025 vs. Q2 2024) | (dollar amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change in Average Balances (Amount) | Change in Average Balances (Percent) | | :--------------------------------- | :--------------------------------: | :--------------------------------: | :---------------------------------: | :---------------------------------: | | Total earning assets | $191,092 | $178,062 | $13,030 | 7 % | Consolidated YTD Average Balance Sheets and Net Interest Margin Analysis (YTD June 30, 2025 vs. YTD June 30, 2024) | (dollar amounts in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change in Average Balances (Amount) | Change in Average Balances (Percent) | | :--------------------------------- | :--------------------------------: | :--------------------------------: | :---------------------------------: | :---------------------------------: | | Total earning assets | $189,703 | $175,913 | $13,790 | 8 % | Net Interest Income and Margin (Q2 2025 vs. Q2 2024) | Metric (amounts in millions) | June 30, 2025 | June 30, 2024 | Change Amount (millions) | Change Percent | | :--------------------------- | :------------ | :------------ | :------------ | :------------- | | Net interest income | $1,467 | $1,312 | $155 | 12 % | | FTE net interest income | $1,483 | $1,325 | $158 | 12 % | | FTE Net interest margin (NIM) | 3.11 % | 2.99 % | 0.12 % | - | Net Interest Income and Margin (YTD June 30, 2025 vs. YTD June 30, 2024) | Metric (amounts in millions) | June 30, 2025 | June 30, 2024 | Change Amount (millions) | Change Percent | | :--------------------------- | :------------ | :------------ | :------------ | :------------- | | Net interest income | $2,893 | $2,599 | $294 | 11 % | | FTE net interest income | $2,924 | $2,625 | $299 | 11 % | | FTE Net interest margin (NIM) | 3.11 % | 3.00 % | 0.11 % | - | Provision for Credit Losses (Q2 2025 vs. Q2 2024 & YTD) | Metric (amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total provision for credit losses | $103 | $100 | $218 | $207 | Noninterest Income (Q2 2025 vs. Q2 2024 & YTD) | Metric (amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Percent (QoQ) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Percent (YTD) | | :--------------------------- | :------------------------------- | :------------------------------- | :------------------- | :------------------------------- | :------------------------------- | :------------------- | | Total noninterest income | $471 | $491 | (4)% | $965 | $958 | 1 % | | Net gains (losses) on sales of securities | $(58) | $— | NM | $(58) | $— | NM | | Leasing revenue | $10 | $19 | (47)% | $24 | $41 | (41)% | | Wealth and asset management revenue | $102 | $90 | 13% | $203 | $178 | 14% | | Customer deposit and loan fees | $95 | $83 | 14% | $181 | $160 | 13% | | Payments and cash management revenue | $165 | $154 | 7% | $320 | $300 | 7% | | Capital markets and advisory fees | $84 | $73 | 15% | $151 | $129 | 17% | Noninterest Expense (Q2 2025 vs. Q2 2024 & YTD) | Metric (amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change Percent (QoQ) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change Percent (YTD) | | :--------------------------- | :------------------------------- | :------------------------------- | :------------------- | :------------------------------- | :------------------------------- | :------------------- | | Total noninterest expense | $1,197 | $1,117 | 7% | $2,349 | $2,254 | 4% | | Personnel costs | $722 | $663 | 9% | $1,393 | $1,302 | 7% | | Outside data processing and other services | $182 | $165 | 10% | $352 | $331 | 6% | | Deposit and other insurance expense | $20 | $25 | (20)% | $57 | $79 | (28)% | Provision for Income Taxes and Effective Tax Rate (Q2 2025 vs. Q2 2024 & YTD) | Metric (amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Provision for income taxes | $96 | $106 | $218 | $192 | | Effective tax rate | 15.0 % | 18.2 % | 16.8 % | 17.5 % | [Risk Management](index=18&type=section&id=Risk%20Management) Huntington's risk management program is guided by its Risk Governance Framework and Board-approved Risk Appetite Statement, covering seven key risk categories: credit, market, liquidity, operational, compliance, strategic, and reputation - Huntington's **Risk Governance Framework** and **Risk Appetite Statement** define its risk management program, covering seven key risk categories: credit, market, liquidity, operational, compliance, strategic, and reputation[65](index=65&type=chunk) [Credit Risk](index=18&type=section&id=Credit%20Risk) Huntington's credit risk management focuses on early identification, monitoring, and mitigation through policies, portfolio diversification, and quantitative measurements - **Credit risk** is the risk of financial loss if a counterparty cannot meet its financial obligations, primarily associated with lending activities, investment securities, and derivatives[66](index=66&type=chunk) - Huntington's disciplined portfolio management processes aim to maintain an aggregate moderate-to-low risk appetite, focusing on product design, origination policies, and solutions for delinquent borrowers[67](index=67&type=chunk)[70](index=70&type=chunk) Loan and Lease Portfolio Composition (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | % of Total | At December 31, 2024 | % of Total | | :--------------------------- | :--------------- | :--------- | :------------------- | :--------- | | Total loans and leases | $134,960 | 100 % | $130,042 | 100 % | | Commercial | $76,937 | 57 % | $73,341 | 56 % | | Consumer | $58,023 | 43 % | $56,701 | 44 % | - The **Commercial Real Estate (CRE)** portfolio totaled **$10.7 billion** at June 30, 2025, a **3%** decrease from December 31, 2024, with an associated allowance coverage of **3.9%**. The office portfolio, predominantly suburban and multi-tenant, was **$1.5 billion** (**1%** of total loans and leases) with **ACL** reserves of approximately **11%**[79](index=79&type=chunk)[80](index=80&type=chunk) Nonaccrual Loans and Leases (NALs) and Nonperforming Assets (NPAs) (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total nonaccrual loans and leases | $842 | $783 | | Total nonperforming assets | $852 | $822 | | NALs as a % of total loans and leases | 0.62 % | 0.60 % | | NPA ratio | 0.63 % | 0.63 % | Allowance for Credit Losses (ACL) (June 30, 2025 vs. December 31, 2024) | Metric (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :---------------------------------- | :--------------- | :------------------- | | Total ACL | $2,515 | $2,446 | | Total ACL as % of Total loans and leases | 1.86 % | 1.88 % | - The baseline economic scenario for **ACL** determination assumes tariffs weaken the U.S. economy, with unemployment rising to **4.4%** by Q4 2025 and **4.9%** by Q4 2026, and the Federal Reserve restarting rate cuts in H2 2025. Management maintains risk profiles for business banking and office **CRE** loans to address uncertainties[88](index=88&type=chunk)[94](index=94&type=chunk) Net Charge-off Analysis (Q2 2025 vs. Q2 2024 & YTD) | Metric (dollar amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Total net charge-offs | $66 | $90 | $152 | $182 | | Net charge-offs as a % of average loans and leases (annualized) | 0.20 % | 0.29 % | 0.23 % | 0.30 % | [Market Risk](index=25&type=section&id=Market%20Risk) Huntington is primarily exposed to interest rate risk, managed through financial simulation models and derivative instruments like interest rate swaps and floors - Huntington is primarily exposed to interest rate risk and secondarily to price risk from trading securities, foreign exchange positions, and equity investments[105](index=105&type=chunk) - Market risk exposure is measured using financial simulation models, including **Net Interest Income at Risk (NII at Risk)** and **Economic Value of Equity at Risk (EVE at Risk)** modeling sensitivity analysis[106](index=106&type=chunk)[109](index=109&type=chunk) Net Interest Income at Risk (NII at Risk) (June 30, 2025 vs. December 31, 2024) | Basis point change scenario | NII at Risk (%) At June 30, 2025 | NII at Risk (%) At December 31, 2024 | | :-------------------------- | :------------------------------- | :--------------------------------- | | +200 | 1.5 % | 2.0 % | | +100 | 0.6 % | 0.8 % | | Base | — | — | | -100 | -0.7 % | -0.5 % | | -200 | -1.9 % | -1.3 % | Economic Value of Equity at Risk (EVE at Risk) (June 30, 2025 vs. December 31, 2024) | Basis point change scenario | At June 30, 2025 | At December 31, 2024 | | :-------------------------- | :--------------- | :------------------- | | -200 | 0.7 % | 5.9 % | | -100 | 2.0 % | 4.3 % | | +100 | -3.9 % | -5.8 % | | +200 | -9.0 % | -12.6 % | - The balance sheet is asset-sensitive at both June 30, 2025, and December 31, 2024, with changes in sensitivity driven by balance sheet composition and market rates[113](index=113&type=chunk)[116](index=116&type=chunk) - Huntington uses derivative instruments (**interest rate swaps**, **swaptions**, floors, forward contracts) to manage interest rate risk and credit derivatives (e.g., **Credit Default Swaps**) to manage credit risk within the portfolio[117](index=117&type=chunk)[124](index=124&type=chunk) - Capitalized **Mortgage Servicing Rights (MSRs)** totaled **$567 million** at June 30, 2025, representing the right to service **$33.9 billion** in mortgage loans. **MSR** fair values are sensitive to interest rate movements, and hedging strategies are employed to reduce risk[126](index=126&type=chunk)[127](index=127&type=chunk) [Liquidity Risk](index=28&type=section&id=Liquidity%20Risk) Huntington manages liquidity risk to ensure timely fulfillment of financial obligations by maintaining a large, stable customer deposit base and diversified wholesale funding sources - Liquidity risk is managed to ensure adequate, stable, reliable, and cost-effective funding sources for loan demand, deposit withdrawals, investment opportunities, and other obligations[130](index=130&type=chunk) - Liquidity risk is mitigated by a large, stable customer deposit base, diversified wholesale funding sources (**FHLB**, **FRB**, capital markets), and liquid assets (cash, cash equivalents, securities)[130](index=130&type=chunk) Deposit Composition (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | % of Total | At December 31, 2024 | % of Total | | :--------------------------- | :--------------- | :--------- | :------------------- | :--------- | | Total deposits | $163,380 | 100 % | $162,448 | 100 % | | Insured deposits | $115,386 | 71 % | $112,394 | 69 % | | Uninsured deposits | $47,994 | 29 % | $50,054 | 31 % | - Wholesale funding totaled **$24.9 billion** at June 30, 2025, an increase of **$1.3 billion** from December 31, 2024, primarily due to **$1.5 billion** in senior bank notes and a **$415 million** **CLN** transaction[140](index=140&type=chunk) Selected Contingent Liquidity Sources (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Unused secured borrowing capacity: FRB | $67,776 | $70,020 | | Unused secured borrowing capacity: FHLB | $15,924 | $15,524 | | Unpledged investment securities (at market value) | $10,917 | $5,786 | | Interest-earning deposits held at FRB | $8,583 | $11,162 | | Primary contingent liquidity sources | $103,200 | $102,492 | - The Board of Directors declared a quarterly cash dividend of **$0.155** per common share, payable October 1, 2025, requiring approximately **$226 million** per quarter. Preferred stock dividends are expected to be approximately **$27 million** per quarter[152](index=152&type=chunk) Credit Ratings and Outlook (June 30, 2025) | | Moody's | Standard & Poor's | Fitch | DBRS Morningstar | | :-------------------------- | :------ | :---------------- | :---- | :--------------- | | Huntington Bancshares Incorporated Senior unsecured notes | Baa1 | BBB+ | A- | A | | Ratings outlook | Stable | Stable | Stable| Stable | [Operational Risk](index=32&type=section&id=Operational%20Risk) Operational risk, encompassing human error, system failures, noncompliance, and external influences, is managed through a robust governance framework - Operational risk is defined as the risk of loss due to human error, third-party performance failures, inadequate internal systems/controls, noncompliance with laws/regulations, and external influences[160](index=160&type=chunk) - Huntington utilizes various committees, including the Operational Risk Committee, Legal, Regulatory, and Compliance Committee, and Artificial Intelligence Risk Committee, to govern and monitor operational risks[161](index=161&type=chunk) - Cybersecurity is actively managed through operations designed to detect, contain, and respond to threats, employing defense-in-depth strategies, internal training, and third-party testing[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Compliance Risk](index=33&type=section&id=Compliance%20Risk) Huntington is subject to extensive federal and state laws and regulations, including those related to anti-money laundering, lending limits, client privacy, fair lending, and community reinvestment - Financial institutions are subject to numerous federal and state laws and regulations, including anti-money laundering, lending limits, client privacy, fair lending, and community reinvestment[167](index=167&type=chunk) - Huntington utilizes a team of compliance experts and provides colleague training to ensure conformance with applicable laws, rules, and regulations, aiming for continuous enhancement of compliance management[167](index=167&type=chunk) [Capital](index=33&type=section&id=Capital) Huntington's primary capital objective is to maintain appropriate capital levels to support operations, absorb losses, protect depositors, and fund growth while providing shareholder returns - Huntington's capital objective is to maintain appropriate levels to support operations, absorb losses, protect uninsured depositors and debt holders, fund organic growth, and provide shareholder returns[168](index=168&type=chunk) Regulatory Capital Data (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Consolidated CET1 risk-based capital ratio | 10.5 % | 10.5 % | | Consolidated Tier 1 risk-based capital ratio | 11.8 % | 11.9 % | | Consolidated Total risk-based capital ratio | 14.1 % | 14.3 % | | Consolidated Tier 1 leverage ratio | 8.5 % | 8.6 % | | Bank CET1 risk-based capital ratio | 11.4 % | 11.6 % | | Bank Tier 1 risk-based capital ratio | 12.2 % | 12.4 % | | Bank Total risk-based capital ratio | 13.9 % | 14.1 % | | Bank Tier 1 leverage ratio | 8.8 % | 8.9 % | - Shareholders' equity totaled **$20.9 billion** at June 30, 2025, a **6%** increase from December 31, 2024, primarily due to an improvement in accumulated other comprehensive income and earnings, net of dividends[176](index=176&type=chunk) - The Board approved a **$1.0 billion** common share repurchase authorization on April 16, 2025, with no shares repurchased under this authorization as of June 30, 2025[178](index=178&type=chunk) [Business Segment Discussion](index=34&type=section&id=Business%20Segment%20Discussion) Huntington operates through two business segments: Consumer & Regional Banking and Commercial Banking, with unallocated items reported in Treasury / Other - Huntington's business segments are Consumer & Regional Banking and Commercial Banking, with unallocated items in Treasury / Other[179](index=179&type=chunk) - Segment reporting uses revenue sharing, a two-phase expense allocation (activity-based and overhead), and a centralized **Funds Transfer Pricing (FTP)** methodology to attribute net interest income and manage interest rate risk[181](index=181&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) Net Income (Loss) by Business Segment (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | Change Amount (millions) | Change Percent | | :--------------------------- | :------------ | :------------ | :------------ | :------------- | | Consumer & Regional Banking | $616 | $716 | $(100) | (14)% | | Commercial Banking | $552 | $526 | $26 | 5 % | | Treasury / Other | $(105) | $(349) | $244 | 70 % | | Net income attributable to Huntington | $1,063 | $893 | $170 | 19 % | - Consumer & Regional Banking net interest income decreased slightly, while provision for credit losses increased by **$63 million** (**52%**) due to higher net charge-offs and loan growth. Noninterest income increased by **6%**, driven by wealth and asset management and payments revenue[188](index=188&type=chunk) - Commercial Banking net interest income decreased by **2%** due to a **37 basis point** decrease in **NIM**, despite an **8%** increase in average loans and leases. Provision for credit losses decreased by **$52 million** (**61%**) due to lower net charge-offs and **ACL** coverage ratio. Noninterest income increased by **10%**, driven by capital markets, customer deposit/loan fees, and payments revenue[190](index=190&type=chunk) - Treasury / Other's net loss improved by **$244 million** (**70%**) due to a **$324 million** decrease in net interest loss and a **$25 million** decrease in noninterest expense, partially offset by lower noninterest income and a reduced tax benefit[196](index=196&type=chunk) [Additional Disclosures](index=38&type=section&id=Additional%20Disclosures) This section includes forward-looking statements, non-GAAP financial measures, critical accounting policies, and recent accounting pronouncements - Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, including changes in economic conditions, interest rates, competitive pressures, regulatory actions, and the pending merger with Veritex[197](index=197&type=chunk)[199](index=199&type=chunk) - Non-GAAP financial measures, such as **Fully-Taxable Equivalent (FTE)** basis for net interest income and non-regulatory capital ratios (e.g., tangible common equity to tangible assets), are used to provide additional insight into financial performance and capital adequacy[201](index=201&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - The **Allowance for Credit Losses (ACL)** is a critical accounting estimate, determined by projecting probability of default, loss given default, and exposure at default, conditional on economic parameters like unemployment rates and **GDP**[208](index=208&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk) - A hypothetical sensitivity analysis, applying a **100%** weighting to an adverse economic scenario, would result in an approximate **$0.7 billion** increase in the quantitative **ACL** at June 30, 2025[213](index=213&type=chunk)[214](index=214&type=chunk) - Huntington adopted **ASU 2023-07** on Segment Reporting, which did not materially impact financial statements, and expects no material impact from **ASU 2023-09** on Income Taxes, effective for fiscal years beginning after December 15, 2024[231](index=231&type=chunk)[232](index=232&type=chunk) [Item 1. Financial Statements (Unaudited)](index=44&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Huntington Bancshares Incorporated's unaudited consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet) and June 30, 2025, and 2024 (for income, comprehensive income, changes in shareholders' equity, and cash flows) [Consolidated Financial Statements](index=44&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements provide a snapshot of Huntington's financial position, performance, and cash flows Consolidated Balance Sheets (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total assets | $207,742 | $204,230 | | Net loans and leases | $132,629 | $127,798 | | Total deposits | $163,380 | $162,448 | | Total liabilities | $186,772 | $184,448 | | Total Huntington shareholders' equity | $20,928 | $19,740 | Consolidated Statements of Income (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions, except per share data) | June 30, 2025 | June 30, 2024 | | :-------------------------------------------------- | :------------ | :------------ | | Total interest income | $5,045 | $4,856 | | Total interest expense | $2,152 | $2,257 | | Net interest income | $2,893 | $2,599 | | Provision for credit losses | $218 | $207 | | Total noninterest income | $965 | $958 | | Total noninterest expense | $2,349 | $2,254 | | Net income attributable to Huntington | $1,063 | $893 | | Net income per common share—diluted | $0.68 | $0.56 | Consolidated Statements of Cash Flows (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Net cash provided by operating activities | $1,067 | $779 | | Net cash used in investing activities | $(4,645) | $(4,454) | | Net cash provided by financing activities | $1,090 | $6,092 | | (Decrease) increase in cash and cash equivalents | $(2,488) | $2,417 | | Cash and cash equivalents at end of period | $10,359 | $12,546 | [Notes to Unaudited Consolidated Financial Statements](index=52&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures supporting the unaudited consolidated financial statements [Note 1 - Basis of Presentation](index=52&type=section&id=Note%201%20-%20Basis%20of%20Presentation) The interim unaudited consolidated financial statements are prepared in accordance with SEC rules and GAAP, reflecting all necessary recurring accruals - Interim Unaudited Consolidated Financial Statements are prepared according to **SEC** rules and **GAAP**, including normal recurring accruals[229](index=229&type=chunk) - Certain information and footnote disclosures normally included in annual financial statements have been omitted, and these statements should be read in conjunction with the 2024 Annual Report on Form 10-K[229](index=229&type=chunk) [Note 2 - Accounting Standards Update](index=52&type=section&id=Note%202%20-%20Accounting%20Standards%20Update) Huntington adopted ASU 2023-07 on Segment Reporting, effective for the year ended December 31, 2024, with retrospective application, which did not result in a material impact Accounting Standards Adopted | Standard | Summary of guidance | Effects on financial Statements | | :------- | :------------------ | :------------------------------ | | ASU 2023-07 - Segment Reporting (Topic 280): Improvement to Reportable Segments | Requires disclosure of CODM position/title, significant segment expenses, and allows multiple segment profit/loss measures. | Adopted effective for year ended December 31, 2024; no material impact; applied retrospectively. | Accounting Standards Not Yet Effective | Standard | Summary of guidance | Effects on financial Statements | | :------- | :------------------ | :------------------------------ | | ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures | Requires tabular rate reconciliation, disclosure of net income taxes paid by jurisdiction, and disaggregation of pre-tax income and income tax expense. | Effective for fiscal years beginning after December 15, 2024; not expected to result in a material impact. | [Note 3 - Pending Acquisition](index=54&type=section&id=Note%203%20-%20Pending%20Acquisition) On July 14, 2025, Huntington announced a definitive merger agreement with Veritex Holdings, Inc., a Dallas, Texas-based bank holding company - Huntington entered a definitive merger agreement with Veritex Holdings, Inc. on July 14, 2025, in a **100%** stock transaction[233](index=233&type=chunk) - Huntington will issue **1.95 shares** for each outstanding Veritex share, valuing the consideration at approximately **$1.9 billion** based on Huntington's July 11, 2025 closing price[233](index=233&type=chunk) - As of June 30, 2025, Veritex had **$12.5 billion** in assets, **$9.5 billion** in loans, and **$10.4 billion** in deposits[233](index=233&type=chunk) - The merger is expected to close in the fourth quarter of 2025, subject to regulatory approvals and Veritex stockholder approval[233](index=233&type=chunk) [Note 4 - Investment Securities and Other Securities](index=55&type=section&id=Note%204%20-%20Investment%20Securities%20and%20Other%20Securities) Huntington classifies debt securities as held-to-maturity (HTM) or available-for-sale (AFS), and other securities Investment Securities and Other Securities (June 30, 2025) | (dollar amounts in millions) | Amortized Cost (millions) | Gross Gains (millions) | Gross Losses (millions) | Fair Value | | :--------------------------- | :------------- | :---------- | :----------- | :--------- | | Total available-for-sale securities | $31,081 | $44 | $(2,795) | $28,330 | | Total held-to-maturity securities | $15,965 | $24 | $(1,900) | $14,089 | | Total other securities | $878 | $— | $— | $878 | - At June 30, 2025, the duration of the investment securities portfolio, net of hedging, was **4.1 years**[144](index=144&type=chunk) - Huntington expects to receive all contractual cash flows from its **AFS** and **HTM** debt securities portfolio, with no allowance for securities credit losses at June 30, 2025, or December 31, 2024[245](index=245&type=chunk) [Note 5 - Loans and Leases](index=59&type=section&id=Note%205%20-%20Loans%20and%20Leases) Huntington's total loans and leases reached $135.0 billion at June 30, 2025, an increase from December 31, 2024, with commercial loans comprising 57% and consumer loans 43% Loan and Lease Portfolio (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total loans and leases | $134,960 | $130,042 | | Commercial loan and lease portfolio | $76,937 | $73,341 | | Consumer loan portfolio | $58,023 | $56,701 | Nonaccrual Loans and Leases by Loan Class (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total nonaccrual loans and leases | $842 | $783 | Aging Analysis of Loans and Leases (June 30, 2025) | (dollar amounts in millions) | 30-59 Days | 60-89 Days | 90 or more days | Total Past Due | | :--------------------------- | :--------- | :--------- | :-------------- | :------------- | | Total loans and leases | $566 | $214 | $675 | $1,455 | Gross Charge-offs by Loan and Lease Type (Six Months Ended June 30, 2025) | (dollar amounts in millions) | Total (millions) | | :--------------------------- | :---- | | Commercial and industrial | $118 | | Commercial real estate | $4 | | Lease financing | $8 | | Residential mortgage | $2 | | Automobile | $36 | | Home equity | $3 | | RV and marine | $18 | | Other consumer | $55 | | Total | $244 | Loans Modified for Financial Difficulty (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Total loans to borrowers experiencing financial difficulty in which modifications were made | $575 | $528 | - As of June 30, 2025, **$108.3 billion** in loans and leases were pledged to the **FRB** and **FHLB** for access to contingent funding sources[273](index=273&type=chunk) [Note 6 - Allowance for Credit Losses](index=67&type=section&id=Note%206%20-%20Allowance%20for%20Credit%20Losses) The Allowance for Credit Losses (ACL) increased by $69 million to $2.5 billion at June 30, 2025, compared to December 31, 2024, primarily due to loan and lease growth, partially offset by a modest reduction in overall coverage ratios Allowance for Credit Losses (ACL) Activity (Six Months Ended June 30, 2025) | (dollar amounts in millions) | Commercial | Consumer | Total (millions) | | :--------------------------- | :--------- | :------- | :---- | | ALLL balance, beginning of period | $1,484 | $760 | $2,244| | Loan and lease charge-offs | $(130) | $(114) | $(244)| | Recoveries of loans and leases previously charged-off | $55 | $37 | $92 | | Provision for loan and lease losses | $139 | $100 | $239 | | ALLL balance, end of period | $1,548 | $783 | $2,331| | AULC balance, beginning of period | $144 | $58 | $202 | | Provision (benefit) for unfunded lending commitments | $(20) | $2 | $(18) | | AULC balance, end of period | $124 | $60 | $184 | | ACL balance, end of period | $1,672 | $843 | $2,515| - The **ACL** increased by **$69 million** to **$2.5 billion** at June 30, 2025, from **$2.4 billion** at December 31, 2024, driven by loan and lease growth, with a coverage ratio of **1.86%** of total loans and leases[277](index=277&type=chunk) - The baseline economic scenario for **ACL** determination assumes tariffs weaken the U.S. economy, leading to weak near-term **GDP** growth and increasing unemployment (**4.4%** by Q4 2025, **4.9%** by Q4 2026), with the Federal Reserve projected to restart rate cuts in H2 2025[279](index=279&type=chunk) [Note 7 - Mortgage Loan Sales and Servicing Rights](index=68&type=section&id=Note%207%20-%20Mortgage%20Loan%20Sales%20and%20Servicing%20Rights) Huntington sold $2.18 billion in residential mortgage loans with servicing retained during the first six months of 2025, generating $42 million in pretax gains Residential Mortgage Loan Sales with Servicing Retained (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Residential mortgage loans sold with servicing retained | $2,177 | $1,794 | | Pretax gains resulting from above loan sales | $42 | $32 | Mortgage Servicing Rights (MSRs) Fair Value (June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Fair value, end of period | $567 | $543 | | Related loans serviced for third parties, unpaid principal balance, end of period | $33,925 | $33,404 | Key Assumptions for MSR Valuation (June 30, 2025) | Metric | Actual | | :---------------------------------- | :----- | | Constant prepayment rate (annualized) | 8.31 % | | Spread over forward interest rate swap rates | 566 bps | [Note 8 - Borrowings](index=69&type=section&id=Note%208%20-%20Borrowings) Huntington's short-term borrowings totaled $576 million at June 30, 2025, primarily from other borrowings and securities sold under repurchase agreements Short-term Borrowings (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total short-term borrowings | $576 | $199 | Long-term Debt Composition (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total long-term debt | $17,467 | $16,374 | | The Parent Company: Senior Notes | $5,503 | $5,836 | | The Bank: Senior Notes | $3,185 | $1,654 | | FHLB Advances | $4,715 | $4,696 | | Credit Linked Notes | $1,014 | $821 | - During Q1 2025, the Bank issued **$1.5 billion** of senior notes (fixed-to-floating and floating rate) and completed a **$415 million** **Credit Linked Note (CLN)** transaction, transferring credit risk on an initial **$3.5 billion** reference pool of auto-secured loans[293](index=293&type=chunk)[294](index=294&type=chunk) [Note 9 - Other Comprehensive Income](index=70&type=section&id=Note%209%20-%20Other%20Comprehensive%20Income) Other Comprehensive Income (OCI) for the three months ended June 30, 2025, was $187 million, and for the six months ended June 30, 2025, was $620 million Other Comprehensive Income (Loss) (Three Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Other comprehensive income (loss), net of tax | $187 | $(32) | Other Comprehensive Income (Loss) (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Other comprehensive income (loss), net of tax | $620 | $(235) | Accumulated Other Comprehensive Income (AOCI) Activity (Six Months Ended June 30, 2025) | (dollar amounts in millions) | Unrealized gains (losses) on available-for-sale securities, net of hedges | Net change related to cash flow hedges on loans | Translation adjustments, net of hedges | Unrealized losses for pension and other post retirement obligations | Total (millions) | | :--------------------------- | :-------------------------------------------------------- | :-------------------------------------------- | :----------------------------------- | :-------------------------------------------------- | :---- | | Balance, beginning of period | $(2,365) | $(267) | $(12) | $(222) | $(2,866)| | Period change | $352 | $260 | $7 | $1 | $620 | | Balance, end of period | $(2,013) | $(7) | $(5) | $(221) | $(2,246)| [Note 10 - Shareholders' Equity](index=72&type=section&id=Note%2010%20-%20Shareholders'%20Equity) Huntington's total preferred stock outstanding remained at 877,500 shares with a carrying amount of $1,989 million at June 30, 2025 Preferred Stock Outstanding (June 30, 2025 vs. December 31, 2024) | Series | Shares Outstanding | Carrying Amount At June 30, 2025 (millions) | Carrying Amount At December 31, 2024 (millions) | | :----- | :----------------- | :------------------------------- | :----------------------------------- | | Total | 877,500 | $1,989 | $1,989 | Preferred Dividends Declared (Three and Six Months Ended June 30, 2025 vs. 2024) | (amounts in millions) | Three Months Ended June 30, 2025 (Amount) | Three Months Ended June 30, 2024 (Amount) | Six Months Ended June 30, 2025 (Amount) | Six Months Ended June 30, 2024 (Amount) | | :-------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Total | $27 | $35 | $54 | $71 | - All remaining **$405 million** of outstanding Series E Preferred Stock was redeemed during the fourth quarter of 2024[306](index=306&type=chunk) [Note 11 - Earnings Per Share](index=73&type=section&id=Note%2011%20-%20Earnings%20Per%20Share) Basic earnings per common share for the three months ended June 30, 2025, was $0.35, and diluted EPS was $0.34 Earnings Per Share Calculation (Three and Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions, except per share data) | June 30, 2025 (3 Months) | June 30, 2024 (3 Months) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | | :-------------------------------------------------- | :----------------------- | :----------------------- | :----------------------- | :----------------------- | | Net income available to common shareholders | $509 | $439 | $1,009 | $822 | | Basic earnings per common share | $0.35 | $0.30 | $0.69 | $0.57 | | Diluted earnings per common share | $0.34 | $0.30 | $0.68 | $0.56 | | Average common shares—diluted (thousands) | 1,480,996 | 1,474,259 | 1,481,541 | 1,473,797 | - Potentially dilutive common shares include incremental shares from stock options, restricted stock units, performance share units, and shares held in deferred compensation plans[307](index=307&type=chunk) [Note 12 - Revenue from Contracts with Customers](index=74&type=section&id=Note%2012%20-%20Revenue%20from%20Contracts%20with%20Customers) Revenue from contracts with customers, recognized primarily within noninterest income, is disaggregated by operating segment Net Revenue from Contracts with Customers by Segment (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Net revenue from contracts with customers | $728 | $696 | | Consumer & Regional Banking | $573 | $545 | | Commercial Banking | $157 | $152 | | Treasury / Other | $(2) | $(1) | - Most Huntington contracts with customers are cancelable or short-term (less than one year), with deferred revenue expected to be earned within one year[313](index=313&type=chunk) [Note 13 - Fair Value of Assets and Liabilities](index=75&type=section&id=Note%2013%20-%20Fair%20Value%20of%20Assets%20and%20Liabilities) Huntington measures certain assets and liabilities at fair value on a recurring basis, including trading account securities, available-for-sale securities, and derivatives Fair Value Measurements at Reporting Date Using Level 1, 2, and 3 (June 30, 2025) | (dollar amounts in millions) | Level 1 | Level 2 | Level 3 | Total (millions) | | :--------------------------- | :------ | :------ | :------ | :---- | | Assets: Trading account securities | $368 | $113 | $— | $481 | | Assets: Available-for-sale securities | $7,384 | $16,820 | $4,126 | $28,330 | | Assets: Loans held for investment | $— | $110 | $62 | $172 | | Liabilities: Long-term debt | $— | $1,014 | $— | $1,014| Level 3 Fair Value Measurements Rollforward (Six Months Ended June 30, 2025) | (dollar amounts in millions) | MSRs | Derivative instruments | Municipal securities | Private label CMO | Asset-backed securities | Loans held for investment | | :--------------------------- | :--- | :--------------------- | :------------------- | :---------------- | :---------------------- | :------------------------ | | Opening balance | $573 | $2 | $3,954 | $21 | $49 | $61 | | Closing balance | $567 | $7 | $4,067 | $21 | $38 | $62 | Assets and Liabilities under Fair Value Option (June 30, 2025) | (dollar amounts in millions) | Fair value carrying amount | Aggregate unpaid principal | | :--------------------------- | :------------------------- | :------------------------- | | Loans held for sale | $867 | $840 | | Loans held for investment | $172 | $184 | | Long-term debt | $1,014 | $1,005 | Estimated Fair Values of Financial Instruments (June 30, 2025) | (dollar amounts in millions) | Total Carrying Amount (millions) | Estimated Fair Value (millions) | | :--------------------------- | :-------------------- | :------------------- | | Financial Assets | $187,710 | $187,710 | | Financial Liabilities | $181,899 | $181,925 | [Note 14 - Derivative Financial Instruments](index=83&type=section&id=Note%2014%20-%20Derivative%20Financial%20Instruments) Huntington uses derivative financial instruments for asset and liability management, mortgage banking activities, and customer-related services Fair Values and Notional Values of Derivative Instruments (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | Notional Value (June 30, 2025) | Asset (June 30, 2025) | Liability (June 30, 2025) | Notional Value (Dec 31, 2024) | Asset (Dec 31, 2024) | Liability (Dec 31, 2024) | | :--------------------------- | :----------------------------- | :-------------------- | :------------------------ | :---------------------------- | :------------------- | :----------------------- | | Derivatives designated as Hedging Instruments | $45,991 | $147 | $59 | $45,634 | $24 | $— | | Derivatives not designated as Hedging Instruments | $56,107 | $420 | $550 | $49,578 | $566 | $663 | | Total contracts | $102,163 | $568 | $609 | $95,461 | $610 | $668 | - Huntington uses **interest rate swaps** and floors as cash flow hedges for **$26.3 billion** of variable-rate commercial loans at June 30, 2025, with expected net losses of **$23 million** to be reclassified into earnings within the next **12 months**[367](index=367&type=chunk)[368](index=368&type=chunk) - Mortgage loan origination hedging activity uses derivatives (e.g., loan sale commitments) to hedge interest rate lock commitments and mortgage loans held for sale. **MSR** hedging activity uses derivatives (e.g., forward interest rate agreements, **TBA** securities) to manage **MSR** asset value and mitigate risks[369](index=369&type=chunk)[370](index=370&type=chunk) - **Credit default swaps** are used to hedge credit risk associated with certain loans and leases, with a total notional value of **$187 million** at June 30, 2025[377](index=377&type=chunk) - Derivative balances are presented on a net basis, considering legally enforceable master netting agreements and collateral exchanged with counterparties[379](index=379&type=chunk) [Note 15 - Variable Interest Entities](index=88&type=section&id=Note%2015%20-%20Variable%20Interest%20Entities) Huntington consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, such as an auto loan securitization SPE and Low Income Housing Tax Credit (LIHTC) operating entities Consolidated VIEs Assets and Liabilities (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Total assets | $1,126 | $1,386 | | Total liabilities | $885 | $1,132 | - Consolidated **VIEs** include an auto loan securitization **SPE** and **LIHTC** operating entities where Huntington serves as general partner and manager[390](index=390&type=chunk)[392](index=392&type=chunk) Unconsolidated VIEs Assets, Liabilities, and Maximum Exposure to Loss (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | Total Assets (June 30, 2025) | Total Liabilities (June 30, 2025) | Maximum Exposure to Loss (June 30, 2025) | | :--------------------------- | :--------------------------- | :-------------------------------- | :--------------------------------------- | | Affordable housing tax credit partnerships | $2,595 | $1,140 | $2,595 | | Trust preferred securities | $14 | $248 | $— | | Other investments | $1,128 | $179 | $1,128 | | Total | $3,737 | $1,567 | $3,723 | Net Affordable Housing Tax Credit Investments and Unfunded Commitments (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Net affordable housing tax credit investments | $2,595 | $2,382 | | Unfunded commitments | $1,140 | $1,065 | [Note 16 - Commitments and Contingent Liabilities](index=90&type=section&id=Note%2016%20-%20Commitments%20and%20Contingent%20Liabilities) Huntington has various off-balance sheet commitments, including $41.2 billion in commercial and industrial credit commitments, $20.7 billion in consumer loan commitments, and $2.4 billion in commercial real estate commitments at June 30, 2025 Commitments to Extend Credit (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | At June 30, 2025 | At December 31, 2024 | | :--------------------------- | :--------------- | :------------------- | | Commercial and industrial | $41,208 | $37,422 | | Consumer loan portfolio | $20,651 | $19,993 | | Commercial real estate | $2,369 | $2,089 | | Standby letters of credit and guarantees on industrial revenue bonds | $772 | $725 | - Huntington provides guarantees to third-party investors in syndicated affordable housing tax credits, with a maximum guaranteed amount of approximately **$201 million** at June 30, 2025[405](index=405&type=chunk) - For legal and regulatory matters where an estimate of possible loss is feasible, management estimates the aggregate range of reasonably possible loss is **$0** to **$15 million** at June 30, 2025, in excess of any accrued liability[409](index=409&type=chunk) [Note 17 - Segment Reporting](index=92&type=section&id=Note%2017%20-%20Segment%20Reporting) Huntington's two reportable business segments are Consumer & Regional Banking and Commercial Banking, with unallocated items in Treasury / Other - Huntington reports on two business segments: Consumer & Regional Banking and Commercial Banking, with other items in the Treasury / Other function[412](index=412&type=chunk) Net Income (Loss) by Business Segment (Six Months Ended June 30, 2025 vs. 2024) | (dollar amounts in millions) | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Consumer & Regional Banking | $616 | $716 | | Commercial Banking | $552 | $526 | | Treasury / Other | $(105) | $(349) | | Net income (loss) attributable to Huntington | $1,063 | $893 | Assets and Deposits by Business Segment (June 30, 2025 vs. December 31, 2024) | (dollar amounts in millions) | Assets (June 30, 2025) | Assets (Dec 31, 2024) | Deposits (June 30, 2025) | Deposits (Dec 31, 2024) | | :--------------------------- | :--------------------- | :-------------------- | :----------------------- | :---------------------- | | Consumer & Regional Banking | $80,225 | $78,841 | $111,926 | $111,390 | | Commercial Banking | $70,380 | $66,919 | $43,691 | $43,366 | | Treasury / Other | $57,137 | $58,470 | $7,763 | $7,692 | | Total | $207,742 | $204,230 | $163,380 | $162,448 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=94&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the detailed market risk disclosures provided in the 'Market Risk' section of Item 2, which includes updates on market risk exposures compared to the 2024 Annual Report on Form 10-K - Quantitative and qualitative disclosures about market risk are provided in the 'Market Risk' section of Item 2, including changes in market risk exposures from the 2024 Annual Report on Form 10-K[416](index=416&type=chunk) [Item 4. Controls and Procedures](index=94&type=section&id=Item%204.%20Controls%20and%20Procedures) Huntington's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures as of June 30, 2025, concluding they were effective - Huntington's disclosure controls and procedures were evaluated by management, including the **CEO** and **CFO**, and concluded to be effective as of June 30, 2025[417](index=417&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[418](index=418&type=chunk) [PART II. OTHER INFORMATION](index=94&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=94&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 16 – 'Commitments and Contingent Liabilities' in the Notes to Unaudited Consolidated Financial Statements, specifically under the 'Litigation and Regulatory Matters' caption - Information on legal proceedings is incorporated by reference from Note 16 – 'Commitments and Contingent Liabilities' under the 'Litigation and Regulatory Matters' caption[420](index=420&type=chunk) [Item 1A. Risk Factors](index=94&type=section&id=Item%201A.%20Risk%20Factors) Readers are directed to carefully consider the risk factors discussed in Part I, 'Item 1A. Risk Factors' of Huntington's 2024 Annual Report on Form 10-K, as these factors could materially affect the company's business, financial condition, or results of operations - Readers should consider the risk factors discussed in Part I, 'Item 1A. Risk Factors' in the 2024 Annual Report on Form 10-K, as they could materially affect the company's business, financial condition, or results of operations[421](index=421&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item indicates that there were no unregistered sales of equity securities or use of proceeds during the three months ended June 30, 2025 Share Repurchase Activity (April 1, 2025 to June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Maximum Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs | | :-------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------------- | | April 1, 2025 to April 30, 2025 | — | $— | $1,000,000,000

Core Insights - Huntington Bancshares reported Q2 2025 earnings per share (EPS) of $0.34, with average loans and deposits increasing by $2.3 billion (1.8%) and $1.8 billion (1.1%) respectively, leading to an upward revision of full-year loan growth guidance to 6% to 8% [1] Financial Performance - On an adjusted basis, pre-provision net revenue (PPNR) grew 15% year over year, while expense growth for 2025 is forecasted at 5% to 6%, primarily due to higher incentive compensation [2] - Operating leverage is more positive than initially budgeted, enhancing tangible book value and return on equity [3] Strategic Acquisition - The acquisition of Veritex will add over 30 branches to Huntington's Texas operations, significantly expanding its presence in the Dallas-Fort Worth and Houston areas, making Texas the company's third-largest deposit market post-acquisition [4][5] Credit and Funding Profile - Net charge-offs decreased to 20 basis points, with the allowance for credit losses rising to 1.86%, indicating a cautious risk posture [6] - Adjusted CET1 capital reached 9%, at the lower end of the targeted operating range, with strong liquidity reflected by 2 times coverage of uninsured deposits [7] Future Outlook - Management has raised the full-year loan growth outlook to 6% to 8%, while net charge-off guidance for 2025 has been lowered to 20 to 30 basis points [8] - Expectations for Q3 2025 include approximately 1% sequential loan growth and stable net interest income, with expenses projected at about $1.2 billion [8]

Core Viewpoint - Huntington Bancshares (HBAN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - The recent upgrade reflects an improvement in Huntington Bancshares' underlying business, suggesting that investors may respond positively by driving the stock price higher [5][10]. Earnings Estimate Revisions - Analysts have raised their earnings estimates for Huntington Bancshares, with the Zacks Consensus Estimate for the fiscal year ending December 2025 projected at $1.46 per share, showing no year-over-year change. Over the past three months, estimates have increased by 4.8% [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates into five groups, with only the top 20% receiving a "Strong Buy" or "Buy" rating. Huntington Bancshares' upgrade places it in this top tier, indicating potential for market-beating returns [7][10].

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Core Insights - Huntington Bancshares Incorporated (HBAN) reported second-quarter 2025 adjusted earnings per share (EPS) of 38 cents, matching the Zacks Consensus Estimate and up from 30 cents in the prior-year quarter [1][7] - The company experienced a $58 million decrease in pre-tax earnings due to securities repositioning, impacting EPS by 4 cents [1] Financial Performance - Net income attributable to common shareholders (GAAP basis) was $536 million, an increase from $474 million in the prior-year quarter [2] - Total quarterly revenues increased 10.8% year over year to $2.01 billion, surpassing the Zacks Consensus Estimate of $1.98 billion [3] - Net interest income (NII) rose 12% year over year to $1.48 billion, driven by higher average earning assets and a net interest margin (NIM) increase of 12 basis points to 3.11% [3][7] - Non-interest income decreased 4% year over year to $471 million, while non-interest expenses rose 7% to $1.19 billion, primarily due to higher personnel and marketing costs [4][7] Loans and Deposits - Average loans and leases increased 2% sequentially to $133.2 billion as of June 30, 2025 [5] - Average total deposits rose 1% to $163.4 billion [5] Credit Quality - Net charge-offs were $66 million, down from $90 million in the prior-year quarter, with a net charge-off ratio of 0.20%, down from 0.29% [6] - The allowance for credit losses increased 3.8% to $2.52 billion, while total non-performing assets rose 9.2% to $852 million [6] Capital Ratios - The common equity tier 1 risk-based capital ratio was 10.5%, up from 10.4% in the prior-year period [9] - The regulatory Tier 1 risk-based capital ratio decreased to 11.8% from 12.1% in the comparable period in 2024 [9] - The tangible common equity to tangible assets ratio increased to 6.6% from 6% in the prior-year quarter [9] Strategic Outlook - The company's inorganic expansion efforts are expected to bolster revenue growth in the near term, with a focus on enhancing commercial banking capabilities in key growth markets [10]

Core Insights - Huntington Bancshares (HBAN) reported $2.01 billion in revenue for Q2 2025, a year-over-year increase of 10.8%, with EPS of $0.38 compared to $0.30 a year ago, exceeding the Zacks Consensus Estimate of $1.98 billion by 1.6% [1] - The company has shown strong performance metrics, with an efficiency ratio of 59%, net interest margin of 3.1%, and net charge-offs at 0.2%, all outperforming analyst estimates [4] Financial Performance - Revenue: $2.01 billion, up 10.8% year-over-year, compared to $1.98 billion estimate [1] - EPS: $0.38, matching the consensus estimate [1] - Total Non-Interest Income: $471 million, below the $513.55 million estimate [4] - Mortgage Banking Income: $28 million, below the $31.36 million estimate [4] - Customer Deposit and Loan Fees: $95 million, above the $88.58 million estimate [4] - Payments and Cash Management Revenue: $165 million, slightly above the $163.16 million estimate [4] - Wealth and Asset Management Revenue: $102 million, slightly below the $103.81 million estimate [4] - Capital Markets and Advisory Fees: $84 million, above the $73.97 million estimate [4] Market Performance - Shares of Huntington Bancshares have returned +8% over the past month, outperforming the Zacks S&P 500 composite's +5.4% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for near-term outperformance [3]

Financial Data and Key Metrics Changes - Earnings per common share were reported at $0.34, with an adjusted EPS growth of 27% year over year [17][18] - Average loan balances increased by $2.3 billion or 1.8% from the prior quarter, while average deposits rose by $1.8 billion or 1.1% [19][20] - Adjusted common equity tier one (CET1) was 9%, up 40 basis points from last year, while tangible book value per share increased by 16% year over year [10][19] Business Line Data and Key Metrics Changes - Loan balances grew by 7.9% year over year, driven by strength in commercial loans and contributions from new initiatives [21] - New initiatives accounted for approximately 40% of total loan growth, with significant contributions from Texas and North and South Carolina regions [21][22] - Average deposit growth was driven by household growth and deepening primary bank relationships, with a 46% increase year over year in consumer and business banking [10][23] Market Data and Key Metrics Changes - The company maintained a strong liquidity position with two times coverage of uninsured deposits [11] - Credit performance remained stable with net charge-offs at 20 basis points, reflecting proactive management of loan portfolios [11][20] - The criticized asset ratio was reported at 3.82%, indicating stable credit quality [32] Company Strategy and Development Direction - The company is focused on core growth strategies and recently announced the acquisition of Veritex, which is expected to accelerate growth in Texas [6][12] - The acquisition is seen as financially attractive and aligned with the company's model of delivering broad-based capabilities through local relationships [14][15] - The company aims to expand its consumer franchise in Texas and enhance commercial lending and capital markets opportunities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, noting signs of improving sentiment and strong growth momentum [32][34] - The company raised its loan growth outlook to 6% to 8% and deposit growth to 4% to 6% for the remainder of the year [33][34] - Management highlighted the importance of maintaining a disciplined approach to deposit pricing while expanding primary bank relationships [10][34] Other Important Information - The company reported a 12% year-over-year growth in net interest income, with a net interest margin of 3.11% for the second quarter [24][20] - Non-interest income increased by 7% year over year, with key areas of focus such as payments, wealth management, and capital markets growing by 11% [26][29] - The company plans to unveil a new branding campaign to enhance customer acquisition and deepen relationships [37] Q&A Session Summary Question: Concerns about net interest income guidance - Management indicated that they are on track to potentially hit the higher end of the net interest income guidance range, with economic stability being a key factor [45][46] Question: Feedback on Veritex acquisition - Positive feedback was received from shareholders and employees, with expectations of synergies and growth opportunities in Texas [48][49][60] Question: Deposit trends and competition - Management noted strong deposit performance and a stable competitive environment, with expectations for continued solid deposit growth [52][54] Question: Changes in expense guidance - The increase in expense guidance was primarily driven by higher revenue and profit outlook, with a focus on maintaining positive operating leverage [64][66] Question: Loan growth and competitive landscape - Management acknowledged a strong loan growth trajectory, with expectations for continued contributions from new initiatives despite some competitive pressures [68][70] Question: Outlook for North and South Carolina - The company remains optimistic about growth in these regions, with ongoing investments in branch openings and hiring new bankers [75][76] Question: Funding strategy and deposit growth - Management emphasized optimizing funding and loan growth, with expectations for deposit growth to match loan growth over the long term [82][84] Question: Efficiency ratio outlook - Management indicated that while the efficiency ratio has been stable, they expect improvements over time as they continue to invest in growth opportunities [97][100]

Financial Data and Key Metrics Changes - Earnings per common share were reported at $0.34, with EPS excluding notable items growing 27% year over year [14] - Average loan balances increased by $2.3 billion or 1.8% from the prior quarter, while average deposits rose by $1.8 billion or 1.1% [15][20] - Adjusted common equity tier one (CET1) was 9%, up 40 basis points from last year, and tangible book value per share increased 16% year over year [8][15] - Return on tangible common equity (ROTCE) was 16.1% for the quarter, adjusted ROTCE was 17.6% [14][15] Business Line Data and Key Metrics Changes - Average loans grew by almost $10 billion year over year, with significant contributions from commercial loans and new initiatives [7][17] - New initiatives accounted for approximately 40% of total loan growth, with $900 million in growth [17] - Fee income in strategic areas such as payments, wealth, and capital markets grew by 11% year over year [8][23] Market Data and Key Metrics Changes - The company reported strong deposit growth, with primary bank relationships increasing by 46% year over year in consumer and business banking [8] - The overall cost of deposits declined by one basis point, reflecting disciplined deposit pricing [20][52] Company Strategy and Development Direction - The company is focused on organic growth and has announced the acquisition of Veritex to accelerate growth in Texas [5][10] - The acquisition is expected to enhance commercial lending and capital markets opportunities, as well as expand the consumer franchise in Texas [12][13] - The company aims to maintain a moderate to low risk appetite while delivering strong performance [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, noting improving sentiment and strong growth momentum [29] - The outlook for loan growth has been increased to 6% to 8%, and net interest income guidance has been raised to 8% to 9% for the full year [30][31] - Management remains focused on driving long-term shareholder value and believes the acquisition will contribute to future growth [36][109] Other Important Information - The company is maintaining a strong liquidity position with two times coverage of uninsured deposits [9] - Credit performance remains stable, with net charge-offs at 20 basis points and an allowance for credit losses at 1.86% [15][28] Q&A Session Summary Question: Concerns about net interest income guidance - Management indicated that they are on track to potentially hit the higher end of the net interest income guidance range, with economic stability being a key factor [42][43] Question: Feedback on the Veritex acquisition - Positive feedback was received from both internal and external partners, with excitement about the opportunities the acquisition presents [45][46][48] Question: Deposit trends and competition - Management noted strong deposit performance and expects continued solid growth, with stable deposit costs anticipated [50][52] Question: Changes in expense guidance - The increase in expense guidance is primarily due to higher incentive compensation linked to better revenue outlook [62][63] Question: Loan growth and competitive environment - Management acknowledged a slowdown in growth from new initiatives but remains optimistic about future contributions [65][66] Question: Outlook for North and South Carolina - The company continues to invest in these markets, with plans for new branch openings and hiring [72][73] Question: Capital levels and future distributions - Management is focused on maintaining a strong capital position and plans to begin regular capital distributions post-acquisition [108][109]

Financial Performance - GAAP EPS was $0.34, including a $0.04 impact from a $58 million decrease in pre-tax earnings due to securities repositioning and Notable Items that decreased pre-tax earnings by $3 million[27] - ROTCE was 16.1%, or 17.6% on an adjusted basis[21] - Total revenue (FTE) grew by 8% YoY[29] - Pre-Provision Net Revenue (PPNR) grew by 8% YoY, or 15% on an adjusted basis[29] Loan and Deposit Growth - Average loans increased by $2.3 billion QoQ, representing a 1.8% increase[27] - Average loans increased by 7.9% YoY[20] - Average deposits increased by $1.8 billion QoQ, representing a 1.1% increase[27] - Average deposits increased by 6.4% YoY[20] Capital and Credit Quality - Tangible book value per share grew by 16% YoY[20] - Adjusted CET1 increased by 40bps over the last 4 quarters[21] - Net charge-offs were 0.20%[20] - Uninsured deposit coverage was 2x[20] Strategic Initiatives - Consumer primary bank relationship (PBR) grew by 4% YoY, and business PBR grew by 6% YoY[21] - Key Strategic Fee areas grew by 11% YoY[21] - The company announced the acquisition of Veritex in Texas[21]