Huntington(US:HBAN)2023-10-27 17:56Financial Performance - For Q3 2023, the company reported net income of $547 million, or $0.35 per diluted common share, a decrease from $594 million, or $0.39 per diluted common share in Q3 2022[18]. - Net income attributable to Huntington for Q3 2023 was $547 million, down 8% from $594 million in Q3 2022[33]. - Net income applicable to common shares for the nine months ended September 30, 2023, was $1,602 million, representing a 6% increase from $1,508 million in the same period last year[35]. - Net income for the nine months ended September 30, 2023, was $1,723 million, an increase from $1,600 million in the same period of 2022, representing a growth of approximately 7.7%[209]. Revenue and Income Sources - Interest income for Q3 2023 increased to $2,313 million, up 46% from $1,589 million in Q3 2022[33]. - Noninterest income rose to $509 million, an increase of $11 million, or 2%, driven by favorable mark-to-market adjustments and increased card and payments processing[21]. - Total noninterest income for Q3 2023 was $509 million, slightly up from $498 million in Q3 2022, marking a 2.2% increase[204]. - Total noninterest income for the first nine months of 2023 increased by $34 million, or 2%, compared to the same period in 2022, with a significant $111 million increase in other noninterest income[56]. Credit Losses and Provisions - The provision for credit losses decreased by $7 million to $99 million, while the allowance for credit losses increased by $138 million to $2.4 billion, representing 1.96% of total loans and leases[20]. - The provision for credit losses for the third quarter of 2023 was $99 million, a decrease of $7 million from the previous year, while year-to-date provision increased by $78 million, or 39%, to $276 million[53]. - Provision for credit losses increased to $276 million in 2023 from $198 million in 2022, indicating a rise of 39.4%[209]. Asset and Liability Management - Total assets increased by $3.7 billion, or 2%, to $186.7 billion, with significant growth in interest-bearing deposits at the Federal Reserve Bank[22]. - Average assets increased by $7.0 billion, or 4%, to $186.6 billion, driven by a $6.1 billion increase in interest-bearing deposits at the Federal Reserve Bank and a $3.8 billion increase in loans and leases[40]. - Total liabilities increased by $9.4 billion, or 6%, from the year-ago period, reflecting growth in both borrowings and deposits[51]. - The total interest-bearing liabilities increased by $15.2 billion, or 13%, contributing to NIM compression[39]. Capital and Equity - The tangible common equity to tangible assets ratio improved to 5.70%, up 15 basis points from the end of 2022, while the CET1 risk-based capital ratio rose to 10.10%[23]. - Shareholders' equity totaled $18.5 billion at September 30, 2023, reflecting an increase of $752 million, or 4%, compared to December 31, 2022[153]. - The consolidated CET1 risk-based capital ratio increased to 10.10% at September 30, 2023, up from 9.36% at December 31, 2022[147]. Economic Outlook - The economic outlook anticipates a slowdown over the next three quarters, with inflation expected to approach 2% by Q3 2024[25]. - The unemployment rate is projected to peak at 4.2% in mid-2025, with GDP forecasted to be 1.9% by the fourth quarter of 2024[81]. - The company anticipates a potential increase in ACL of approximately $1.1 billion under a hypothetical adverse economic scenario, reflecting sensitivity to unemployment rates[199]. Operational Efficiency - The efficiency ratio for Q3 2023 was 57.0%, compared to 54.4% in Q3 2022, indicating a decline in operational efficiency[33]. - The return on average total assets for Q3 2023 was 1.16%, down from 1.31% in Q3 2022[33]. Loan and Lease Portfolio - The total loan and lease portfolio as of September 30, 2023, was $120.853 billion, a slight increase from $119.523 billion at the end of 2022[69]. - Commercial and industrial loans comprised 41% of the total loan portfolio, amounting to $49.422 billion as of September 30, 2023[69]. - Nonaccrual loans and leases (NALs) totaled $592 million at September 30, 2023, compared to $569 million at December 31, 2022, indicating an increase of 4.0%[79]. Market Risk Management - The company’s market risk management processes focus primarily on interest rate risk, with secondary exposure to price risk from trading securities and foreign exchange positions[95]. - The company utilizes derivative instruments, including interest rate swaps and caps, to manage interest rate risk and minimize earnings fluctuations due to market changes[105]. Dividends and Shareholder Returns - The quarterly common stock cash dividend declared on October 18, 2023, is $0.155 per share, with estimated cash demands of approximately $224 million per quarter[135]. - During the first nine months of 2023, the Bank paid $1.4 billion in common dividends and $34 million in preferred dividends to the parent company[136].