Core Insights - Crista Gilmore has been promoted to Managing Director at Capstone Partners, reflecting her dedication and expertise in the Building Products & Construction Services Group [1][6] - Gilmore has over 15 years of experience in mergers & acquisitions advisory, public accounting, valuation, and corporate finance, specializing in sell-side transactions within the Architecture, Engineering, and trades sectors [2][4] - She has been recognized as an Emerging Leader by The M&A Advisor in 2021, highlighting her significant achievements in the industry [5] Company Overview - Capstone Partners is a middle market investment banking firm with over 20 years of experience, providing a range of investment banking and financial advisory services tailored to middle market companies [7] - The firm has more than 175 professionals across the U.S. and operates with 12 dedicated industry groups, delivering sector-specific expertise [7] - Capstone is a subsidiary of Huntington Bancshares Incorporated, listed on NASDAQ under the ticker HBAN [7]

Core Insights - Capstone Partners released its Annual Industrials M&A Report, providing insights into public market valuations, macroeconomic conditions, M&A activity, and a 2025 outlook for the industry [1] Economic Overview - The U.S. Industrials industry faced a complex macroeconomic environment in 2024, with real GDP growth at 2.8%, down from 2.9% in 2023, primarily due to a slowdown in business investment [2] - Consumer spending remained robust, with the Personal Consumption Expenditure (PCE) Price index increasing by 5.3% year-over-year, driven by rising incomes and improved labor market conditions [2] - Construction spending rose by 4.3% year-over-year to $2.2 trillion, supported by the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) [2] M&A Activity - Private equity firms were active in the Industrials M&A market, with strategic transactions making up 58.6% of deals in 2024, while private equity buyers accounted for 41.4% of deal activity, down from 43.7% in 2023 [2] - A valuation gap due to sellers' slow adjustment of pricing expectations contributed to stalled transactions [2] Valuation Trends - M&A valuations averaged 9.0x EV/EBITDA in 2024, a decrease from the previous year, while the Dow Jones Industrial Average ended at 16.4x EV/EBITDA, up from 14.7x in 2023 [3] - High-demand segments like Engineered Products (18.1x) and HVAC (17.1x) performed well, while cyclical segments such as Environmental Health & Safety (11.6x) and commodity-based manufacturing like Metals (7.5x) and Chemicals (7.3x) faced pressure [3]

Core Viewpoint - Huntington Bancshares, Inc. (HBAN) has shown strong stock performance, gaining 10.6% over the past six months, outperforming its industry growth of 9.5% [1]. Company Overview - HBAN has a market capitalization of $23.3 billion and is focusing on growth strategies and financial performance to enhance its market position [3]. Growth Strategies and Initiatives - The company is implementing a multi-faceted growth strategy that includes geographic expansion, strengthening commercial banking, and enhancing its wealth management business [4]. - HBAN plans to expand its banking franchise in North and South Carolina, aiming to hire over 350 employees and open around 55 retail branches by 2030 [5]. - The bank is also expanding its commercial banking capabilities, with a focus on middle market, SBA, and healthcare lending in the Carolinas and Texas [7][8]. - In wealth management, HBAN aims to double its business in the next five years by deepening customer relationships and expanding advisory services [10]. Financial Performance - The Federal Reserve's rate cuts are expected to support HBAN's net interest income (NII), which recorded a four-year CAGR of 10.5% from 2019 to 2024 [12][13]. - For 2025, HBAN projects NII to rise by 4-6% from $5.34 billion in 2024, driven by an increase in earning assets [14]. - As of December 31, 2024, HBAN's liquidity totaled $13.3 billion, with total debt of $16.6 billion, indicating a solid financial position [15]. Dividend and Valuation - HBAN currently pays a dividend of 62 cents per share, yielding 3.87%, with a payout ratio of 50% [16]. - The stock is trading at a forward price/earnings (P/E) ratio of 11.16X, which is a discount compared to the industry average of 11.36X and peers [18][21]. Sales and Earnings Estimates - Zacks Consensus Estimates project sales growth of 7.23% for the current quarter and 5.90% for the current year [24]. - However, the company faces rising non-interest expenses, which recorded a CAGR of 10.9% over the last five years, potentially impacting profitability [26].

Group 1 - Huntington Bancshares Incorporated will participate in the RBC Capital Markets Financial Institutions Conference on March 5, 2025, with presentations by CFO Zach Wasserman and Chief Enterprise Payments Officer Amit Dhingra [1] - The presentation will cover business trends, financial performance, and strategic initiatives, including forward-looking statements [1] - Interested investors can access the live audio webcast on Huntington's investor relations website, with a replay available afterward [2] Group 2 - Huntington Bancshares is a regional bank holding company with $204 billion in assets, headquartered in Columbus, Ohio [3] - Founded in 1866, Huntington provides a comprehensive suite of banking, payments, wealth management, and risk management products and services to various clients [3] - The company operates 978 branches across 12 states, with some businesses extending into additional geographies [3]

Branch Operations and Market Presence - As of December 31, 2024, the company operates 978 full-service branches across multiple states, including Ohio, Colorado, and Florida[18]. - The company holds a 43% market share in Columbus, OH, with deposits totaling $44.814 billion[35]. Banking Segments and Services - The Consumer & Regional Banking segment offers a wide array of financial products, including deposits, lending, and investment management, aimed at both consumer and business customers[20]. - The Commercial Banking segment serves mid-market to large corporates, providing a comprehensive set of product offerings, including treasury management and capital markets[26]. Customer Experience and Innovation - The company emphasizes a "Fair Play" banking philosophy, which includes features like 24-Hour Grace® and Asterisk-Free Checking® to enhance customer experience[33]. - The company is actively investing in technology and innovation to remain competitive against FinTechs and other financial service providers[37]. - The company has developed unique payment solutions, such as Huntington ChoicePay, to cater to diverse client segments[26]. Regulatory Environment and Capital Requirements - Regulatory scrutiny has increased following the banking turmoil in early 2023, impacting merger and acquisition activities[40]. - The company is subject to extensive regulation by various federal and state agencies, including the Federal Reserve and OCC[38]. - Huntington's CET1 risk-based capital ratio was 10.5% as of December 31, 2024, exceeding the minimum requirement of 4.5%[70]. - The Tier 1 risk-based capital ratio for Huntington was 11.9% as of December 31, 2024, surpassing the minimum requirement of 6.0%[70]. - The total risk-based capital ratio for Huntington was 14.3% as of December 31, 2024, well above the minimum requirement of 8.0%[70]. - Huntington is subject to a stress capital buffer (SCB) of 2.5% effective October 1, 2024[68]. - The Bank's Tier 1 leverage ratio was 8.9% as of December 31, 2024, exceeding the well-capitalized standard of 5.0%[70]. - Huntington's regulatory capital ratios were above the well-capitalized standards and met applicable capital buffer requirements as of December 31, 2024[72]. - The U.S. banking agencies proposed a rule to implement the Basel III endgame agreement, which aims to significantly increase capital requirements for large banks[73]. - Huntington is required to submit an annual capital plan to the Federal Reserve, which includes an assessment of expected uses and sources of capital[75]. - The Federal Reserve has not yet revised the well-capitalized standard for BHCs to reflect the higher capital requirements imposed under the U.S. Basel III capital rules[66]. - Huntington has the ability to provide additional capital to the Bank to maintain the Bank's risk-based capital ratios at well-capitalized levels[71]. - Huntington's indicative SCB requirement for its 2024 Capital Plan is set at a minimum of 2.5%, down from the previous 3.2%[78]. - Huntington is authorized to make capital distributions without prior Federal Reserve approval, provided it complies with capital rules[79]. - The Bank submitted its most recent resolution plan to the FDIC on November 30, 2022, with the next submission due by July 1, 2025[85]. - Huntington's ability to declare dividends is limited by federal banking law and Federal Reserve regulations, requiring sufficient net income[81]. - The Federal Reserve may require Huntington to provide financial assistance to the Bank in times of financial distress[86]. - Huntington's capital distributions depend on receiving dividends from its subsidiaries, which are subject to various federal limitations[80]. - The Federal Reserve evaluates Huntington's capital planning process through regular supervisory reviews[77]. - Huntington must maintain applicable capital buffer requirements to avoid restrictions on capital distributions[82]. Cybersecurity and Compliance - The Bank is subject to extensive cybersecurity and data privacy regulations, including the GLBA and its amendments[96]. - Huntington's compliance programs are in place to adhere to the Volcker Rule, which restricts certain trading activities[84]. - The CISA law allows companies to monitor their own systems and carry out defensive measures against cyber-attacks[98]. - The CCPA imposes civil penalties of up to $2,500 for each violation and up to $7,500 for intentional violations[101]. - Huntington's cybersecurity practices are integrated into its overall Enterprise Risk Management (ERM) approach, with cybersecurity risks identified as core enterprise risks[214]. - The company conducts ongoing assessments and testing of its cybersecurity processes, including third-party evaluations and independent reviews[215]. - Huntington maintains a global cybersecurity threat operation aimed at promptly detecting and responding to cybersecurity incidents[215]. - The company has established incident response plans that are tested at least annually to address potential cybersecurity incidents[215]. - The Technology Committee of the Board oversees the management of cybersecurity risks and receives regular updates on the threat environment and vulnerability assessments[216]. - The Chief Information Security Officer provides quarterly updates to the Technology Committee on cybersecurity matters, ensuring the Board is informed of any material incidents[216]. - Huntington employs technical safeguards such as firewalls and intrusion detection systems to protect its information systems from cybersecurity threats[215]. - The company emphasizes collaboration with public and private entities to identify and assess cybersecurity risks[215]. - Ongoing training is provided to personnel regarding cybersecurity threats, tailored to their roles and responsibilities[215]. Community Commitment and Social Responsibility - Huntington Bancshares has committed $40 billion over five years to strengthen small businesses and foster opportunities within its footprint[124]. - The Lift Local Business® program has exceeded its commitment by funding $153 million in loans through September 30, 2024[124]. - Huntington committed to providing $24 billion in affordable housing financing and consumer lending, having reached $18.2 billion of this commitment by October 31, 2024[125]. - Huntington expanded its Small Business lending programs with a commitment of $10 billion, achieving $8.2 billion by October 31, 2024[125]. - The company committed $6.5 billion in community development loans and investments, exceeding this with $7.8 billion funded by October 31, 2024[125]. - A $16 billion commitment to diverse borrowers and communities has reached $14.7 billion by October 31, 2024, aimed at advancing systemic change[125]. - The Bank received the highest possible CRA rating of "Outstanding" in its most recent examination[110]. - The CRA final rule, effective April 1, 2024, is expected to significantly increase the thresholds for large banks to receive "Outstanding" ratings in future evaluations[111]. Economic and Operational Risks - Economic uncertainties, including inflation and rising interest rates, could adversely affect Huntington's business and financial condition[145]. - Changes in interest rates could reduce net interest income and negatively impact the value of loans and securities, affecting cash flows and financial results[148]. - Inflation could negatively impact profitability and stock price, potentially leading to increased default rates and credit losses[155]. - The company operates in a highly competitive environment, facing pressure from larger competitors and non-bank entities that may have greater flexibility[156]. - Liquidity is primarily sourced from a large supply of deposits, which is dependent on customer confidence and regulatory conditions[158]. - Access to capital markets is crucial for meeting cash flow requirements and funding corporate activities; disruptions could adversely affect operations[161]. - A reduction in credit ratings could increase the cost of funds and limit access to liquidity and capital[164]. - Global economic instability and geopolitical matters may adversely impact financial condition and operational results[165]. - Operational risks include potential failures or breaches of internal and third-party systems, which could disrupt business operations[166]. - Cybersecurity risks are significant, with potential for data breaches that could harm business reputation and lead to legal exposure[170]. - The company may need to invest significantly in updating systems to mitigate operational risks and ensure compliance with regulations[169]. - Regulatory changes could impact the availability of dividends from subsidiaries, affecting the company's liquidity and ability to pay dividends[160]. - The reliance on third-party service providers introduces risks that could adversely affect the ability to deliver products and services[182]. - Climate change poses physical and transition risks that could disrupt operations and increase expenses, necessitating a formal climate risk program[187]. - The introduction of AI into business operations may expose the company to new legal, regulatory, and reputational risks, potentially impacting operational efficiency[188]. - The company may not have adequate insurance coverage to compensate for losses from a major cyber-attack or information breach[174]. - Negative public opinion resulting from cybersecurity incidents could damage the company's reputation and customer relationships[176]. - The integration of acquired businesses may face challenges, including retaining customer relationships and achieving anticipated efficiencies[177]. - Changes in accounting policies and standards could affect the financial reporting and condition of the company[184]. - The banking industry is highly regulated, with supervision from various federal and state regulators, including the Federal Reserve and OCC, which imposes minimum capital requirements and limits on business activities[191]. - Compliance with laws and regulations can be costly, and failure to comply may result in fines, penalties, and restrictions on business activities, adversely affecting financial results[190]. - The Federal Reserve conducts the CCAR assessment process to evaluate capital adequacy, which may require higher capital levels and impact the ability to pay dividends or repurchase stock[209]. - Regulatory scrutiny has increased regarding consumer practices, leading to potential investigations and enforcement actions that could significantly impact revenue and increase compliance costs[192]. - The company faces legal risks, with high volumes of claims and potential substantial legal liabilities that could adversely affect financial results and reputation[197]. - Changes in regulatory frameworks, particularly concerning AI and data privacy, may require significant adjustments to business practices and incur additional costs[201]. - The company must maintain a capital conservation buffer (CCB) of 2.5% and may face higher capital requirements based on size and risk profile, impacting operational flexibility[210]. - The evolving regulatory environment may lead to increased compliance costs and operational complexities, potentially affecting profitability and business opportunities[193]. - The company is subject to heightened scrutiny regarding anti-money laundering compliance, with significant penalties for violations that could lead to financial losses[199]. - The competitive landscape is intensifying due to the rise of FinTech companies, necessitating continuous adaptation of products and services to meet changing consumer preferences[205].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Huntington Bancshares (HBAN) - HBAN currently holds a Momentum Style Score of A, indicating strong momentum potential [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Performance Metrics - Over the past week, HBAN shares increased by 6.18%, outperforming the Zacks Banks - Midwest industry, which rose by 5.45% [6] - In the last quarter, HBAN shares rose by 11.11%, and over the past year, they increased by 31.8%, compared to the S&P 500's gains of 5.33% and 26.85%, respectively [7] - The average 20-day trading volume for HBAN is 15,305,741 shares, indicating strong trading activity [8] Earnings Outlook - In the past two months, 8 earnings estimates for HBAN have been revised upwards, while none have been lowered, raising the consensus estimate from $1.34 to $1.40 [10] - For the next fiscal year, there have been 3 upward revisions and 2 downward revisions in earnings estimates [10] Conclusion - Considering the strong performance metrics and positive earnings outlook, HBAN is identified as a solid momentum pick with a Momentum Score of A and a Zacks Rank of 2 (Buy) [12]

Group 1 - Huntington Bancshares Incorporated will host an Investor Day in New York City on February 6, 2025, with presentations from the chairman, president, and CEO, Stephen Steinour, along with the management team [1] - Attendance is by invitation only for institutional investors and analysts, with presentations scheduled to start at 8:30 a.m. ET and conclude around 1 p.m. ET [1] - A live audio webcast of the conference and presentation slides will be available to the public on Huntington's Investor Relations website, with a replay accessible after the event [2] Group 2 - Huntington Bancshares Incorporated is a regional bank holding company with $204 billion in assets, headquartered in Columbus, Ohio [3] - The company was founded in 1866 and provides a comprehensive suite of banking, payments, wealth management, and risk management products and services to various clients, including consumers and businesses [3] - Huntington operates 978 branches across 12 states, with some businesses extending into additional geographies [3]

Financial Data and Key Metrics Changes - The company reported earnings per common share of $0.34, with a return on tangible common equity (ROTCE) of 16.4% for the quarter [17] - Average loan balances increased by $7 billion or 5.7% year-over-year, while average deposits rose by $9.7 billion or 6.5% year-over-year [17] - Common equity Tier 1 (CET1) ended the quarter at 10.5%, up approximately 30 basis points from the previous year [18] - Tangible book value per share increased by 6.9% year-over-year [18] Business Line Data and Key Metrics Changes - Fee revenue businesses performed exceptionally well, with capital markets setting a new quarterly record for revenue at $120 million, a 74% increase from the previous year [12][32] - Wealth management fees increased by 8% year-over-year, with assets under management (AUM) growing by 16% [32] - Payments revenue grew by 8% year-over-year, driven by a 16% increase in commercial payment revenues [32] Market Data and Key Metrics Changes - The company experienced strong credit performance, with net charge-offs stable at 30 basis points [18][35] - The criticized asset ratio improved to 3.76%, while the non-performing asset ratio remained stable at 63 basis points [36] Company Strategy and Development Direction - The company is focused on executing organic growth strategies, driving revenues higher, and maintaining a consistent approach to risk management [15] - Investments in new geographies and capabilities are expected to deliver robust organic growth in future years [10] - The company plans to maintain a loan growth target of 5% to 7% for 2025, with deposit growth expected between 3% and 5% [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage net interest margin (NIM) within a dynamic interest rate environment [48] - The outlook for 2025 includes expectations for record net interest income and fee revenues, with a focus on key fee revenue areas [37] - Management noted positive borrower sentiment and confidence in growth post-election, contributing to strong loan production [104] Other Important Information - The company lowered its overall cost of deposits by 24 basis points to 2.16% [24] - Non-interest income increased by $154 million from the prior year, with core underlying fee revenues up by 20% [30] Q&A Session Summary Question: Can you talk about the confidence around the NII guidance range? - Management expressed confidence in driving revenue growth within the guidance range, despite uncertainties in the macro environment [46][48] Question: Can you discuss the loan growth versus deposit growth? - Management indicated that loan growth is expected to outpace deposit growth, allowing for flexibility in deposit costs [50][54] Question: What is the new money loan production yield? - Management stated that yields are consistent with overall spread levels, benefiting from fixed asset repricing [60] Question: How do you see capital return and buybacks? - Management indicated that capital generation forecasts will influence the timing of share repurchases, with a focus on maintaining high-return loan growth [62][66] Question: What are your expectations around the incremental margin and cost of deposits? - Management noted that the loan-to-deposit ratio provides an opportunity to drive loan growth faster than deposit growth, with expectations for NIM to rise over time [72][74] Question: Can you elaborate on the NIM outlook for the full year? - Management expects NIM to remain flat throughout 2025, with potential for increases in 2026 and beyond [117][123] Question: What is the outlook for provisioning and reserve build? - Management indicated that while reserves may remain stable or increase in dollars due to loan growth, the allowance for credit losses (ACL) coverage ratio may decline [148][152]

Core Viewpoint - Huntington Bancshares Incorporated (HBAN) reported strong fourth-quarter 2024 results, with adjusted earnings per share (EPS) of 34 cents, exceeding the Zacks Consensus Estimate of 31 cents, and showing significant improvement from 15 cents in the prior-year quarter [1][2]. Financial Performance - For 2024, adjusted EPS was $1.23, beating the Zacks Consensus Estimate of $1.22, and up from $1.11 in the previous year [2]. - The company reported a net income attributable to common shareholders of $530 million for the quarter, a substantial increase from $243 million in the prior-year quarter [3]. - Total quarterly revenues increased 13.6% year over year to $1.97 billion, surpassing the Zacks Consensus Estimate of $1.9 billion [4]. - Full-year revenues totaled $7.43 billion, showing a slight year-over-year increase and beating the Zacks Consensus Estimate of $7.37 billion [4]. Income and Expenses - Net interest income (NII) on a fully taxable-equivalent (FTE) basis was $1.4 billion, up 6.2% from the prior-year quarter, driven by a rise in average earning assets [5]. - Non-interest income rose 38% year over year to $559 million, supported by increases in various revenue streams including payments, cash management, and mortgage banking [6]. - Non-interest expenses decreased by 12.6% year over year to $1.18 billion, primarily due to reductions in several expense categories [7]. Loans and Deposits - As of December 31, 2024, average loans and leases increased nearly 2.9% sequentially to $128.2 billion, while average total deposits rose 1.9% to $159.4 billion [8]. Credit Quality - Net charge-offs were $97 million, slightly up from $94 million in the prior-year quarter, with the allowance for credit losses increasing 1.9% to $2.45 billion [9]. - Total non-performing assets reached $822 million, up 15.6% from the prior-year quarter [9]. - The provision for credit losses was recorded at $107 million, down 15.1% from the year-ago quarter [10]. Capital Ratios - The common equity tier 1 risk-based capital ratio was 10.5%, up from 10.2% in the year-ago period [11]. - The regulatory Tier 1 risk-based capital ratio was 11.9%, down from 12% in the comparable period in 2023 [11]. - The tangible common equity to tangible assets ratio remained flat at 6.1% [11]. Strategic Outlook - The company's inorganic expansion strategies are expected to enhance revenue growth in the near term, while efforts to expand commercial banking capabilities will support long-term financial performance [12].

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