Higher Expenses to Hurt Huntington (HBAN) in Q2 Earnings?

Core Viewpoint - Huntington Bancshares (HBAN) is expected to report a decline in both revenues and earnings for the second quarter of 2024, with analysts showing bearish sentiments reflected in revised estimates [1][3][18]. Financial Performance Estimates - The Zacks Consensus Estimate for HBAN's second-quarter earnings is 28 cents per share, indicating a 20% decline year-over-year [3]. - The consensus estimate for total revenues is $1.81 billion, suggesting a year-over-year drop of 2.1% [18]. - The estimate for average interest-earning assets is $177.29 billion, reflecting a 2% rise from the previous quarter [4]. - The estimate for net interest income (NII) is pegged at $1.31 billion, suggesting a 1.9% rise sequentially [21]. Loan Demand and Non-Interest Income - Demand for commercial and industrial loans has improved, which may positively impact average interest-earning assets [4]. - Mortgage rates have decreased slightly, leading to a modest rise in mortgage demand, although origination volumes remain lower due to home price appreciation [6]. - The consensus estimate for total non-interest income is $493.8 million, indicating a 5.7% sequential rise [9]. - Capital market fees are expected to reach $64.6 million, reflecting a 15.4% growth sequentially [7]. Expenses and Asset Quality - Adjusted non-interest expenses are expected to be higher sequentially, nearly reaching $1,130 million [10]. - Total non-performing assets are estimated at $750.2 million, suggesting a 1.6% increase from the prior quarter [11]. - The company is likely to have set aside substantial reserves for potential delinquent loans, particularly in commercial loans, due to anticipated economic slowdown [26]. Market Conditions - Despite an inverted yield curve, stabilizing funding costs and decent loan demand are expected to support the company's NII [5]. - The overall lending activities are likely to have been moderate, with a decline in consumer loan demand and softer demand for commercial real estate loans [19].