HUNTINGTON BANCSHARES INC /MD/ (HBAN) Q4 2024 Earnings Summary

Executive Summary

Solid quarter with EPS of $0.34, up $0.01 QoQ and $0.19 YoY, driven by record fee income, accelerating loan growth, and lower deposit costs; NII rose 3% QoQ and 6% YoY, and NIM expanded 5 bps QoQ to 3.03% .
Credit remained stable: NCOs at 0.30%, ACL at 1.88%, and NPAs at 0.63%; CET1 improved to 10.5% (Adjusted CET1 8.7%) .
2025 outlook: loans +5–7%, deposits +3–5%, NII +4–6%, noninterest income +4–6%, expense +3.5–4.5%, NIM approximately flat around 3%, NCOs 25–35 bps; Q1 guide includes NII -2% to -3% QoQ and fees ≈$500M before re-accelerating thereafter .
Potential catalysts: record capital markets revenue ($120M), continued deposit cost tailwind (total deposit cost down 24 bps QoQ to 2.16%), and tangible operating leverage in 2025 as investments scale .

What Went Well and What Went Wrong

What Went Well
- Record fee revenue; capital markets delivered a quarterly record ($120M), while payments and wealth grew YoY; CEO: “exceptional fourth quarter results… record fee income, accelerated loan growth, and sustained deposit gathering” .
- Funding costs fell; total deposit cost declined 24 bps QoQ to 2.16%, supporting a 5 bps QoQ NIM expansion to 3.03% amid higher NII; CFO highlighted active “down beta” execution .
- Balanced growth momentum; average loans +3% QoQ/+6% YoY to $128.2B and average deposits +2% QoQ/+7% YoY to $159.4B, with noninterest-bearing balances up QoQ .
What Went Wrong
- Securities repositioning weighed on GAAP; sale of ~$1B corporate securities created a pretax loss of $21M (≈$0.01 EPS) in Q4 .
- Tangible common equity ratio dipped to 6.1% (from 6.4% in Q3) on AOCI movement and asset growth (though YoY flat), and Adjusted CET1 of 8.7% remains below the targeted 9–10% operating range near term .
- Q1 seasonal reset embedded in guide: NII to decline ~2–3% QoQ, fees to normalize around $500M, and modestly lower NIM before resuming upward trend later; investors may see this as a near-term headwind .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Diluted EPS ($)	$0.15	$0.33	$0.34
Total Revenue - FTE ($MM)	$1,732	$1,887	$1,968
Net Interest Income - FTE ($MM)	$1,327	$1,364	$1,409
Noninterest Income ($MM)	$405	$523	$559
Net Interest Margin (%)	3.07%	2.98%	3.03%
Efficiency Ratio (%)	77.0%	59.4%	58.6%

Fee revenue mix (selected lines):

Fee Category ($MM)	Q4 2023	Q3 2024	Q4 2024
Payments & Cash Management	$150	$158	$162
Wealth & Asset Management	$86	$93	$93
Customer Deposit & Loan Fees	$80	$86	$88
Capital Markets & Advisory	$69	$78	$120
Mortgage Banking	$23	$38	$31
Insurance Income	$19	$18	$22
Leasing Revenue	$29	$19	$19
Net (Losses) Gains on Securities	$(3)	$0	$(21)
Other Noninterest Income	$(48)	$33	$45

KPIs, balance sheet and risk:

KPI	Q4 2023	Q3 2024	Q4 2024
Average Earning Assets ($B)	$171.36	$181.891	$185.222
Average Loans & Leases ($B)	$121.229	$124.507	$128.158
Average Total Deposits ($B)	$149.654	$156.488	$159.405
Total Deposit Cost (%)	2.14%	2.40%	2.16%
NCOs (% Avg Loans)	0.31%	0.30%	0.30%
ACL (% of Loans)	1.97%	1.93%	1.88%
NPA Ratio (%)	0.58%	0.62%	0.63%
CET1 (%)	10.2%	10.4%	10.5%
Adjusted CET1 (% incl. AOCI)	8.6%	8.9%	8.7%
Tangible Common Equity / TA (%)	6.1%	6.4%	6.1%

Notes: Q4 included a $21M pretax loss on sale of ~$1B corporate securities (reinvested into 0% RWA securities; expected earn-back <2 years) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Loan Growth	FY 2025	Accelerating, peer-leading growth; no numeric range disclosed	+5% to +7%	New explicit range
Deposit Growth	FY 2025	Sustained growth, core-funded; near-term flattening in Q4’24	+3% to +5%	New explicit range
Net Interest Income	FY 2025	“Record NII in 2025”	+4% to +6% (record level)	Range specified
Noninterest Income	FY 2025	Continued growth in payments/wealth/cap markets	+4% to +6%	Range specified
Net Interest Margin	FY 2025	Above 3% in 2H’25; sustained expansion from Q4’24 level	~3.0% flat across 2025; up into 2026+	Flatter near term, still ~3%
Expenses	FY 2025	Lower growth vs 2024; drive positive op leverage	+3.5% to +4.5% (positive op leverage)	Range specified
Net Charge-offs	FY 2025	Stable around 30 bps; through-cycle 25–45 bps	25–35 bps	Narrowed
Tax Rate	FY 2025	Q4’24: ~18–19%	~19%	2025 level provided
Q1 Setup	Q1 2025	N/A	Avg loans +~2% QoQ, avg deposits ~flat; NII -2% to -3% QoQ; fees ≈$500M; expenses -~2% QoQ	Seasonal reset detail
Dividend	Ongoing	$0.155/share quarterly (unchanged)	$0.155/share declared 1/17/25	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2’24, Q3’24)	Current Period (Q4’24)	Trend
Loan Growth & New Initiatives	Q2: ramping geographies/verticals (Carolinas, TX, Funds, ABL, NAFS), accelerating loans; Q3: pipelines strong; peer-leading growth	Avg loans +2.9% QoQ; new initiatives contributed ~$1.1B in Q4 growth; strong mix and pipelines	Improving
Deposit Beta/Costs	Q2: executing down-beta plan; Q3: costs decelerating, down QoQ within-quarter	Total deposit cost down 24 bps QoQ to 2.16%; continued beta tailwind expected in 2025	Improving
NIM & NII Outlook	Q2/Q3: NIM ~3% near-term, expansion in 2025; record 2025 NII outlook	2025 NIM ~flat around 3%; 2025 NII +4–6%; rising into 2026+ with curve steepening	Mixed near term, positive LT
Fee Growth	Q2/Q3: focus on payments, wealth, cap markets; merchant insourcing; cap markets ramp	Record capital markets ($120M); payments +8% YoY; wealth +8% YoY	Improving
Hedging & Securities	Q2/Q3: reduce asset sensitivity; hedges to protect NIM/capital	Hedge drag reduced; tactical $1B securities sale for RWA/capital optimization; reinvested, <2-year payback	Stable/positive
Capital & Buybacks	Q2/Q3: drive Adj. CET1 to 9–10% before buybacks	Adj. CET1 8.7%; CFO: likely little 2025 buyback capacity until within range	Steady progress
Credit Quality	Q2/Q3: stable NCOs ~30 bps; criticized assets trending down	NCOs 30 bps; NPA 0.63%; 2025 NCOs 25–35 bps guide	Stable
Macro/Regulatory	Q3: down-rate scenario planning; SCB at 2.5%	CEO sees pro-business policy tailwinds; Basel III uncertainty easing; SCB at 2.5%	Constructive

Management Commentary

CEO: “We delivered exceptional fourth quarter results highlighted by record fee income, accelerated loan growth, and sustained deposit gathering… Our capital markets team delivered record revenue during the quarter.”
CEO: “We believe we have a multi-year opportunity to leverage our investments and momentum.”
CFO: “We expect to continue to drive robust loan growth… NII… growing between 4% and 6% this year… noninterest income growth between 4% and 6%… expense growth between 3.5% and 4.5%… positive operating leverage for full year 2025.”
CFO: On NIM: “Approximately 3%… pretty flat throughout the course of this year [2025]… rising as we go into ’26 and beyond.”
CFO: On capital and buybacks: “Adjusted CET1… 8.7%… expect… low 9s throughout 2025… relatively little capacity to do share repurchases in the near term.”

Q&A Highlights

NII and NIM path: Confidence in NII +4–6% 2025 on loan growth and stable ~3% NIM; hedge drag abates near term and deposit costs decline; NIM expected to be modestly lower in Q1 before stabilizing .
Capital return: Priority on funding high-return growth and lifting Adjusted CET1 into 9–10% operating range; limited buyback capacity in near term until within range .
Deposit/loan dynamics: Loan growth expected to outpace deposits in 2025 given low L/D starting point (~79% exit Q4), enabling further deposit pricing reductions .
Securities/hedging: $1B corporate securities sale optimized RWA and capital with <2-year earn-back; no plan for large additional repositionings given prior hedging effectiveness .
CECL/Reserves: Expect ACL coverage ratio to gradually decline if macro and credit remain favorable, even as dollars may hold or grow with loans .
M&A stance: Focus remains on organic growth; selective bolt-ons possible but priority is executing internal investments/geographic expansion/verticals .

Estimates Context

We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 and near-term quarters, but the request could not be fulfilled due to an API rate-limit; as a result, explicit beats/misses versus consensus cannot be reported here (consensus data unavailable at time of analysis) [GetEstimates error].
Implications: In lieu of consensus comparisons, we note that HBAN delivered QoQ/YoY increases in NII and total revenue, record fee income (notably capital markets), and a NIM improvement, while reducing deposit costs—factors that are typically supportive of revisions to revenue and fee expectations, with management’s 2025 guidance providing specific growth ranges .

Key Takeaways for Investors

Operating momentum: Three straight quarters of NII growth with fee engines firing (record cap markets) and NIM stabilization; cost of deposits down 24 bps QoQ, supporting profitability .
2025 visibility: Clear numeric guide (loans +5–7%, deposits +3–5%, NII +4–6%, noninterest income +4–6%, NIM ~3%, expenses +3.5–4.5%, NCOs 25–35 bps) sets expectations and underpins positive operating leverage .
Balance sheet flexibility: Low L/D and ongoing deposit growth enable continued pricing actions to manage funding costs amid dynamic rates .
Capital trajectory: CET1 at 10.5% and Adjusted CET1 8.7%; buybacks unlikely near term until Adjusted CET1 reaches 9–10% operating range, but organic earnings and RWA optimization (e.g., credit-linked transactions) support progress .
Credit steady: NCOs at 30 bps and ACL 1.88% with stable NPAs; guidance implies continued benign loss content within cycle ranges .
Near-term trading setup: Q1 seasonality/guide (NII -2% to -3% QoQ, fees ≈$500M) may temper short-term sentiment, but reacceleration through 2025 and strong fee momentum offer medium-term upside narrative .
Strategic growth: Investments in new geographies/verticals are scaling, driving peer-leading organic growth across loans/deposits while diversifying fee sources (payments, wealth, capital markets) .

Citations

8-K and Financial Supplement:
Q4 2024 Earnings Call:
Prior Quarters for Trend: Q3 2024 call ; Q2 2024 call .
Press Releases (other): Dividend 1/17/25 .
S&P Global Consensus: Unavailable due to API rate-limit at time of request (GetEstimates error).