Huntington (HBAN) Q2 Earnings & Revenues Beat, NII Drops

Core Viewpoint - Huntington Bancshares Incorporated reported a decline in net income and revenues, primarily due to falling net interest income and rising non-interest expenses, despite improvements in average loans and deposits [11][12][17]. Financial Performance - Net interest income (NII) on a fully taxable-equivalent basis was $1.33 billion, down 2% year over year, attributed to a decline in net interest margin (NIM), which contracted 12 basis points to 2.99% [2]. - Total revenues decreased by 2% year over year to $1.82 billion, slightly surpassing the consensus estimate of $1.81 billion [12]. - Non-interest income fell by 1% year over year to $491 million, mainly due to lower other non-interest income and a decline in gains from loan sales [13]. Expense Analysis - Non-interest expenses rose by 6% year over year to $1.12 billion, driven by higher personnel costs and increased spending on outside data processing and other services [3]. - The efficiency ratio increased to 60.8%, up from 55.9% in the prior year, indicating reduced profitability [14]. Credit Quality - Net charge-offs were $90 million, or an annualized 0.29% of average total loans and leases, up from $49 million or 0.16% in the prior year [5]. - Total non-performing assets increased to $780 million as of June 30, 2024, compared to $557 million in the prior year [15]. - The company recorded a provision for credit losses of $100 million, up from $92 million in the year-ago quarter [15]. Capital Ratios - The common equity tier 1 risk-based capital ratio was 10.4%, compared to 9.8% in the prior year, while the regulatory Tier 1 risk-based capital ratio rose to 12.1% from 11.6% [16]. Market Position - Huntington's inorganic expansion strategies are expected to support revenue growth in the near term, although elevated non-interest expenses may pressure profitability [17].