Huntington(US:HBAN) ZACKS·2025-01-14 18:55Core Viewpoint - Huntington Bancshares Incorporated (HBAN) is expected to report an increase in quarterly revenues and earnings year over year for the fourth quarter of 2024, with earnings per share estimated at 31 cents, reflecting a 14.8% decline from the previous year, while revenues are projected to rise by 9.7% to $1.90 billion [1][4]. Financial Performance - In the last reported quarter, HBAN achieved a positive earnings surprise of 10%, driven by improvements in average loans and deposit balances, alongside a year-over-year rise in fee income, although net interest income (NII) faced a decline [2]. - The bank has a strong earnings surprise history, surpassing the Zacks Consensus Estimate in the last four quarters with an average beat of 8.25% [3]. Key Factors Influencing Q4 Performance - Loans & NII: The Federal Reserve's interest rate cuts are expected to stabilize funding costs, aiding NII, which is projected to be flat to up 1% from $1.4 billion reported in Q4 2023, with a consensus estimate of $1.36 billion, indicating a 3% year-over-year increase [5]. - Demand for commercial and industrial loans, as well as consumer loans, remained solid, likely supporting average interest-earning asset growth [6]. - Average loans are expected to increase by 4-5% from $120.8 million reported in Q4 2023, with total earning assets estimated at $183.7 billion, reflecting a 7.2% rise year-over-year [7]. Non-Interest Income - Despite stable mortgage rates around 6.8%, refinancing and origination activities are expected to support mortgage revenue growth, with mortgage banking income estimated at $33.7 million, a 46.7% increase from the previous year [8][9]. - Capital markets and advisory fees are projected to reach $82.9 million, indicating a 20.2% year-over-year growth, while wealth and asset management revenues are estimated at $94.3 million, reflecting a 9.7% rise [10][11]. - Total non-interest income is expected to be $525.1 million, representing a 26.9% increase from the prior year [13]. Expenses and Asset Quality - Increased expenses are anticipated due to higher costs in data processing, marketing, and expansion efforts in commercial banking, with adjusted non-interest expenses projected to rise 3% to $1.1 billion [14][15]. - The bank is likely to have set aside significant provisions for potential delinquent loans, with total non-performing assets estimated at $784 million, a substantial increase from $317 million reported in the previous year [16]. Earnings Prediction - The quantitative model predicts an earnings beat for HBAN, supported by a positive Earnings ESP of +21.7% and a Zacks Rank of 2 (Buy) [17][18].