Financial Performance - For Q1 2024, net income was $419 million, or $0.26 per diluted common share, down from $602 million, or $0.39 per diluted common share in Q1 2023, reflecting a 30% decrease [22]. - Total noninterest income for Q1 2024 was $467 million, a decrease of $45 million, or 9%, from the previous year, primarily due to a significant drop in other noninterest income [44]. - Comprehensive income attributable to Huntington for Q1 2024 was $216 million, down 77.2% from $945 million in Q1 2023 [182]. - Net income for the three months ended March 31, 2024, was $424 million, a decrease of 30% compared to $606 million in the same period of 2023 [184]. Income and Expenses - Net interest income decreased by $122 million, or 9%, to $1.3 billion in Q1 2024, primarily due to a 39 basis point decrease in the net interest margin (NIM) to 3.01% [24]. - Noninterest expense for Q1 2024 was $1.1 billion, an increase of $51 million, or 5%, from Q1 2023 [46]. - The provision for income taxes in Q1 2024 was $86 million, down from $144 million in Q1 2023, with an effective tax rate of 16.8% compared to 19.2% in the prior year [47]. - Total noninterest income for Q1 2024 was $467 million, a decrease of 8.8% from $512 million in Q1 2023 [181]. Credit Losses and Provisions - Provision for credit losses increased by $22 million, or 26%, to $107 million in Q1 2024, with the allowance for credit losses (ACL) rising to $2.4 billion, or 1.97% of total loans and leases [25]. - The provision for credit losses increased to $107 million in Q1 2024 from $85 million in Q1 2023, reflecting a rise of 25.9% [184]. - Net charge-offs (NCOs) for Q1 2024 were $92 million, or 0.30% of average total loans and leases, an increase from $57 million, or 0.19%, in Q1 2023 [76]. - The allowance for loan and lease losses (ACL) was $2.280 billion, up from $2.255 billion at the end of 2023, indicating a slight increase in provisions for credit losses [179]. Assets and Liabilities - Total assets increased by $4.2 billion, or 2%, to $193.5 billion as of March 31, 2024, driven by a $2.5 billion increase in interest-earning deposits [27]. - Total liabilities also rose by $4.2 billion, or 2%, to $174.1 billion, primarily due to a $2.5 billion increase in long-term debt [27]. - Average assets for Q1 2024 increased by $5.4 billion, or 3%, to $190.3 billion, driven by a $3.4 billion, or 54%, increase in average interest-earning deposits with banks [39]. - Total deposits increased to $153.225 billion at March 31, 2024, up from $151.230 billion at December 31, 2023, representing a growth of 1.3% [109]. Capital and Equity - CET1 risk-based capital for the consolidated entity was $14.283 billion, with a CET1 risk-based capital ratio of 10.2% as of March 31, 2024 [133]. - Total risk-based capital for the consolidated entity was $19.713 billion, with a total risk-based capital ratio of 14.1% [133]. - As of March 31, 2024, shareholders' equity totaled $19.3 billion, a decrease of $31 million compared to December 31, 2023, primarily due to changes in accumulated other comprehensive income from interest rate fluctuations [139]. - The company reported a total shareholders' equity of $19.373 billion, slightly down from $19.398 billion at the end of 2023 [179]. Economic Outlook - The consensus economic outlook anticipates a soft landing in the economy in late 2024 to early 2025, with inflation expectations rising [30]. - The unemployment rate is projected to peak at 4.1% in 2025, with GDP forecasted to be 2.0% by Q4 2025 [67]. - The unemployment rate is projected to rise to 7.2% by the end of 2024, which is about 3.2% higher than baseline projections [173]. - The company anticipates four 25 basis points cuts in the federal funds rate by the end of 2024, with further cuts expected in 2025 and 2026 [67]. Deposits and Funding - Core deposits increased by $1.8 billion, or 1%, to $147.3 billion, representing 96% of total deposits [107]. - Non-core deposits were $6.0 billion, or 4% of total deposits, at March 31, 2024, compared to $5.8 billion at December 31, 2023 [108]. - Total available-for-sale securities amounted to $30,294 million, with a fair value of $26,801 million, indicating unrealized losses of $3,597 million [191]. - The total investment securities pledged to secure various liabilities was $36.2 billion as of March 31, 2024, up from $35.1 billion at December 31, 2023 [200]. Operational Highlights - The average number of employees decreased by 479, or 2%, to 19,719 compared to the previous year [46]. - The company aims to drive sustainable long-term revenue growth and enhance customer experience through digital leadership and disciplined capital management [31]. - The company does not expect to utilize the share repurchase program through 2024, focusing instead on funding loan and lease growth [141]. - The company employs derivative instruments such as interest rate swaps and caps to manage interest rate risk [91].
HUNTINGTON BANCS(HBANL) - 2024 Q1 - Quarterly Report