Financial Performance - Net income for Q2 2023 was $559 million, or $0.35 per diluted common share, compared to $539 million, or $0.35 per diluted common share in Q2 2022[18]. - Net income attributable to Huntington increased by 16% to $1,161 million compared to $999 million in the previous year[36]. - Net income for the six months ended June 30, 2023, was $1,171 million, an increase from $1,003 million in the same period of 2022, representing a growth of approximately 16.8%[211]. - The company declared common dividends of $0.155 per share, totaling $228 million for Q2 2023[209]. - Cash dividends declared for common stock were $456 million in 2023, consistent with the previous year, maintaining a dividend of $0.31 per share[210]. Income and Revenue - Net interest income increased to $1.3 billion, up $85 million, or 7%, from the year-ago quarter, driven by an 8% increase in average earning assets to $13.7 billion[19]. - Interest income for the six months ended June 30, 2023, was $4,253 million, an increase of 68% compared to $2,526 million in 2022[36]. - Total noninterest income rose by 2% to $1,007 million, with significant growth in capital markets fees by 21% to $116 million[36]. - Total noninterest income for Q2 2023 was $495 million, a 2% increase from $485 million in Q2 2022, driven by a $28 million increase in other noninterest income, primarily from favorable mark-to-market on pay-fixed swaptions[60]. Credit Losses and Provisions - The provision for credit losses rose by $25 million to $92 million, reflecting a modest deterioration in the macro-economic environment[20]. - Provision for credit losses increased by 92% to $177 million, reflecting a more cautious outlook on credit quality[36]. - The provision for credit losses in Q2 2023 was $92 million, compared to $67 million in Q2 2022, indicating a 37% increase[207]. - Provision for loan and lease losses increased to $84 million in Q2 2023 from $64 million in Q2 2022, and for the six months ended June 30, 2023, it was $162 million compared to $71 million in the same period of 2022[59]. Assets and Liabilities - Total assets reached $188.5 billion, an increase of $5.6 billion, or 3%, compared to December 31, 2022, primarily due to a 92% increase in interest-bearing deposits at the Federal Reserve Bank[22]. - Total liabilities increased to $169.7 billion, up $4.5 billion, or 3%, mainly due to a 52% increase in long-term debt[22]. - Average total assets grew by 8% to $190,746 million from $176,561 million year-over-year[39]. - Total deposits reached $148.0 billion, a marginal increase from $147.9 billion, representing a growth of about 0.1%[205]. Efficiency and Cost Management - The efficiency ratio improved to 55.9%, down from 57.3% in the previous year, indicating better cost management[33]. - Total noninterest expense for Q2 2023 was $1.05 billion, a 3% increase from $1.018 billion in Q2 2022, with personnel costs rising by $36 million, or 6%[62]. - Personnel costs for the first six months of 2023 increased by $105 million, or 9%, compared to the same period in 2022, primarily due to voluntary retirement program expenses and merit increases[63]. Economic Outlook - The company expects a slowdown in economic growth over the next 12 months, with a return to modest growth anticipated in 2024[25]. - The unemployment rate is forecasted to peak at 4.2% by the end of 2024, with GDP expected to be 2.3% by the fourth quarter of 2024[89]. - The unemployment rate is projected to rise to 7.1% by the end of 2023, which is 3.3% higher than the baseline scenario[201]. Capital and Equity - Shareholders' equity totaled $18.8 billion at June 30, 2023, an increase of $1.1 billion, or 6%, compared to December 31, 2022[158]. - The consolidated CET1 risk-based capital ratio increased to 9.82% at June 30, 2023, from 9.36% at December 31, 2022[155]. - The total risk-based capital ratio for the consolidated entity was 13.82% at June 30, 2023, compared to 13.09% at December 31, 2022[152]. Loan and Lease Portfolio - The total loan and lease portfolio as of June 30, 2023, was $121.225 billion, up from $119.523 billion at the end of 2022, with commercial loans comprising 56% of the total[74]. - Commercial and industrial loans increased to $49.834 billion, representing 41% of the total loan portfolio as of June 30, 2023[74]. - Net loans and leases rose to $119.0 billion, up from $117.4 billion, indicating an increase of about 1.4%[205]. Risk Management - The bank's net interest income at risk for a -200 basis point change scenario was -5.4% as of June 30, 2023, compared to -4.1% at the end of 2022, indicating increased sensitivity to interest rate changes[105]. - The bank's interest rate risk management strategy includes the use of derivatives such as interest rate swaps and caps to mitigate fluctuations in earnings due to market interest rate changes[111]. - The company maintains a contingency funding plan to address liquidity crises, ensuring adequate sources of funds for various financial obligations[126].
HUNTINGTON BANCS(HBANL) - 2023 Q2 - Quarterly Report