Financial Performance - For Q2 2025, Huntington reported net income of $536 million, or $0.34 per diluted common share, compared to $474 million, or $0.30 per diluted common share in Q2 2024, reflecting a 13% increase in net income year-over-year[22]. - Net interest income for Q2 2025 was $1.5 billion, an increase of $155 million, or 12%, from the previous year, driven by a $13.0 billion increase in average earning assets[23]. - Noninterest income decreased by $20 million, or 4%, to $471 million in Q2 2025, primarily due to a $58 million loss on the sale of investment securities[25]. - Net interest income for the first six months of 2025 increased by $294 million, or 11%, compared to the same period last year, with FTE net interest income also rising by 11%[48]. - Net income attributable to Huntington for the six months ended June 30, 2025, was $1.063 billion, an increase from $893 million for the same period in 2024[186]. Asset and Liability Management - Total assets as of June 30, 2025, were $207.7 billion, an increase of $3.5 billion, or 2%, compared to December 31, 2024, driven by a $4.9 billion increase in loans and leases[26]. - Total liabilities increased to $186.8 billion, up $2.3 billion, or 1%, compared to December 31, 2024, primarily due to a $1.1 billion increase in long-term debt[26]. - Average assets for Q2 2025 were $207.9 billion, an increase of $13.3 billion, or 7%, from Q2 2024, primarily due to an increase in average loans and leases of $9.8 billion, or 8%[41]. - Average liabilities for Q2 2025 increased by $12.0 billion, or 7%, from Q2 2024, mainly due to a $9.9 billion, or 6%, increase in average deposits[42]. - Total average assets for Consumer & Regional Banking increased by $4.961 billion, or 7%, to $78.511 billion[188]. Credit Quality and Losses - The provision for credit losses increased by $3 million, or 3%, to $103 million in Q2 2025, with the allowance for credit losses rising to $2.5 billion, or 1.86% of total loans and leases[24]. - Nonaccrual loans and leases (NALs) increased to $842 million at June 30, 2025, from $783 million at December 31, 2024[85]. - Net charge-offs (NCOs) for the second quarter of 2025 were $66 million, or 0.20% of average total loans and leases, down from $90 million, or 0.29%, in the same quarter last year[83]. - Provision for credit losses for the first six months of 2025 was $218 million, an increase of $11 million, or 5%, compared to the previous year[52]. - The company's Allowance for Credit Losses (ACL) at June 30, 2025, reflects the estimated lifetime credit losses from its loan and lease portfolio and unfunded lending commitments[209]. Capital and Equity - The tangible common equity to tangible assets ratio improved to 6.6% as of June 30, 2025, compared to 6.1% at the end of 2024[27]. - Shareholders' equity totaled $20.9 billion at June 30, 2025, an increase of $1.2 billion, or 6%, compared to December 31, 2024, primarily driven by improved accumulated other comprehensive income[176]. - As of June 30, 2025, consolidated CET1 risk-based capital ratio was 10.5%, unchanged from December 31, 2024, while total risk-based capital ratio decreased to 14.1% from 14.3%[170]. - The Bank maintained capital ratios above the well-capitalized standards established by the Federal Reserve, with a Tier 1 leverage ratio of 8.5% as of June 30, 2025[173]. - The Bank's total risk-weighted assets increased to $148.602 billion as of June 30, 2025, from $143.650 billion at December 31, 2024[170]. Economic Environment and Outlook - The Federal Reserve has held rates steady for the first half of 2025, with inflation remaining above the 2% target, impacting the overall economic outlook[30]. - The unemployment rate is projected to rise to 4.4% by Q4 2025, with GDP growth starting at 0.4% in Q2 2025[88]. - In a hypothetical adverse scenario, the unemployment rate is projected to reach 7.2% by the end of 2025, which is approximately 280 basis points higher than the baseline scenario[213]. - The adverse scenario also predicts GDP declines of 3.0% in the second half of 2025 and 1.7% for the full year of 2026, contrasting with growth of 1.4% and 1.5% in the baseline scenario[213]. Mergers and Acquisitions - Huntington announced a definitive merger agreement with Veritex Holdings, valued at approximately $1.9 billion, expected to close in Q4 2025[16]. Operational Efficiency - Noninterest expense rose by $80 million, or 7%, to $1.2 billion in Q2 2025, primarily due to higher personnel costs[25]. - The average number of full-time equivalent employees increased by 2% to 20,242 in the second quarter of 2025 compared to 19,889 in the same quarter of 2024[60]. - The operational risk management framework includes multiple committees to monitor and mitigate risks, ensuring compliance with laws and regulations[161]. Investment and Funding - Total deposits increased by $932 million, or 1%, to $163.4 billion at June 30, 2025, compared to $162.4 billion at December 31, 2024[135]. - Insured deposits comprised approximately 71% of total deposits at June 30, 2025, up from 69% at December 31, 2024[136]. - Wholesale funding totaled $24.9 billion at June 30, 2025, an increase of $1.3 billion compared to $23.6 billion at December 31, 2024[140].
HUNTINGTON BANCS(HBANL) - 2025 Q2 - Quarterly Report