UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Huntington Bancshares Incorporated

(Exact name of registrant as specified in its charter)

Maryland	1-34073	31-0724920
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

Registrant’s address: 41 South High Street, Columbus, Ohio 43287

Registrant’s telephone number, including area code: (614) 480-2265

Securities registered pursuant to Section 12(b) of the Act

Title of class	Trading Symbol(s)	Name of exchange on which registered
Depositary Shares (each representing a 1/40th interest in a share of 4.500% Series H Non-Cumulative, perpetual preferred stock)	HBANP	NASDAQ
Depositary Shares (each representing a 1/1000th interest in a share of 5.70% Series I Non-Cumulative, perpetual preferred stock)	HBANM	NASDAQ
Depositary Shares (each representing a 1/40th interest in a share of 6.875% Series J Non-Cumulative, perpetual preferred stock)	HBANL	NASDAQ
Common Stock—Par Value $0.01 per Share	HBAN	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    x  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐  Yes    x  No

There were 1,452,432,838 shares of the registrant’s common stock ($0.01 par value) outstanding on June 30, 2024.

HUNTINGTON BANCSHARES INCORPORATED

INDEX

Glossary of Acronyms and Terms	3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	38
Consolidated Balance Sheets at June 30, 2024 and December 31, 2023	38
Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023	39
Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023	40
Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023	41
Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	43
Notes to Unaudited Consolidated Financial Statements	45
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Executive Overview	5
Discussion of Results of Operations	8
Risk Management and Capital:	15
Credit Risk	15
Market Risk	22
Liquidity Risk	25
Operational Risk	28
Compliance Risk	29
Capital	29
Business Segment Discussion	31
Additional Disclosures	34
Item 3. Quantitative and Qualitative Disclosures about Market Risk	83
Item 4. Controls and Procedures	83
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	83
Item 1A. Risk Factors	83
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 5. Other Information	84
Item 6. Exhibits	85
Signatures	86

2 Huntington Bancshares Incorporated

Glossary of Acronyms and Terms

The following listing provides a comprehensive reference of common acronyms and terms used throughout the document: 

ACL	Allowance for Credit Losses
AFS	Available-for-Sale
ALCO	Asset-Liability Management Committee
ALLL	Allowance for Loan and Lease Losses
AOCI	Accumulated Other Comprehensive Income (Loss)
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
AULC	Allowance for Unfunded Lending Commitments
Basel III	Refers to the final rule issued by the FRB and OCC and published in the Federal Register on October 11, 2013
C&I	Commercial and Industrial
CDs	Certificates of Deposit
CDS	Credit Default Swap
CECL	Current Expected Credit Losses
CET1	Common Equity Tier 1 on a Basel III basis
CFPB	Bureau of Consumer Financial Protection
CLN	Credit Linked Note
CME	Chicago Mercantile Exchange
CMO	Collateralized Mortgage Obligations
CODM	Chief Operating Decision Maker
CRE	Commercial Real Estate
DIF	Deposit Insurance Fund
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act
EOP	End of Period
EVE	Economic Value of Equity
FDIC	Federal Deposit Insurance Corporation
Federal Reserve	Board of Governors of the Federal Reserve System
FFIEC	Federal Financial Institutions Examination Council
FHLB	Federal Home Loan Bank
FICO	Fair Isaac Corporation
FRB	Federal Reserve Bank
FTE	Fully-Taxable Equivalent
FTP	Funds Transfer Pricing
FVO	Fair Value Option
GAAP	Generally Accepted Accounting Principles in the United States of America
GDP	Gross Domestic Product
HTM	Held-to-Maturity
IRS	Internal Revenue Service
LIBOR	London Interbank Offered Rate
LIHTC	Low Income Housing Tax Credit
MBS	Mortgage-Backed Securities
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
MSR	Mortgage Servicing Right
NAICS	North American Industry Classification System
NALs	Nonaccrual Loans
NCO	Net Charge-off

2024 2Q Form 10-Q 3

NII	Net Interest Income
NIM	Net Interest Margin
NM	Not Meaningful
NPAs	Nonperforming Assets
OCC	Office of the Comptroller of the Currency
OCI	Other Comprehensive Income (Loss)
OLEM	Other Loans Especially Mentioned
REIT	Real Estate Investment Trust
ROC	Risk Oversight Committee
RPS	Retirement Plan Services
RV	Recreational Vehicle
SBA	Small Business Administration
SCB	Stress Capital Buffer
SEC	Securities and Exchange Commission
SOFR	Secured Overnight Financing Rate
SPE	Special Purpose Entity
TBA	To Be Announced
U.S. Treasury	U.S. Department of the Treasury
VIE	Variable Interest Entity
XBRL	eXtensible Business Reporting Language

4 Huntington Bancshares Incorporated

PART I. FINANCIAL INFORMATION

When we refer to “we,” “our,” “us,” “Huntington,” and “the Company” in this report, we mean Huntington Bancshares Incorporated and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, Huntington Bancshares Incorporated. When we refer to the “Bank” in this report, we mean our only bank subsidiary, The Huntington National Bank, and its subsidiaries.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through the Bank, we are committed to making people’s lives better, helping businesses thrive, and strengthening the communities we serve, and we have been servicing the financial needs of our customers since 1866. Through our subsidiaries, we provide full-service commercial and consumer deposit, lending, and other banking services. These include, but are not limited to, payments, mortgage banking, automobile, recreational vehicle and marine financing, investment banking, capital markets, advisory, equipment financing, distribution finance, investment management, trust, brokerage, insurance, and other financial products and services. As of June 30, 2024, we have approximately 970 full-service branches and private client group offices which are primarily located in Ohio, Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Pennsylvania, West Virginia, and Wisconsin. Select financial services and other activities are also conducted in various other states.

This MD&A provides information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows. The MD&A included in our 2023 Annual Report on Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2023 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements, and other information contained in this report.

EXECUTIVE OVERVIEW

Reporting Updates

During the fourth quarter of 2023, we updated the presentation of our noninterest income categories to align product and service types more closely with how we strategically manage our business. For a description of each updated noninterest income revenue stream, refer to Note 15 - “Revenue from Contracts with Customers” of the Notes to Consolidated Financial Statements appearing in Huntington’s 2023 Annual Report on Form 10-K.

During the fourth quarter of 2023, we revised our FTP methodology for non-maturity deposits, which has been enhanced to consider the internally modeled weighted average life by non-maturity deposit type. In general, the impact of the FTP methodology revision resulted in a net higher cost of funds allocation as compared with the previous method.

For the reporting updates discussed above, prior period results have been adjusted to conform to the current presentation.

2024 2Q Form 10-Q 5

Financial Performance Review

Selected Financial Data

Table 1 - Selected Quarterly and Year to Date Income Statement Data
	Three Months Ended										Six Months Ended
(amounts in millions, except per share data)	June 30, 2024			June 30, 2023			Change				June 30, 2024			June 30, 2023			Change
							Amount		Percent								Amount		Percent
Interest income	$	2,476		$	2,225		$	251	11	%	$	4,856		$	4,253		$	603	14	%
Interest expense	1,164			879			285		32		2,257			1,498			759		51
Net interest income	1,312			1,346			(34)		(3)		2,599			2,755			(156)		(6)
Provision for credit losses	100			92			8		9		207			177			30		17
Net interest income after provision for credit losses	1,212			1,254			(42)		(3)		2,392			2,578			(186)		(7)
Noninterest income	491			495			(4)		(1)		958			1,007			(49)		(5)
Noninterest expense	1,117			1,050			67		6		2,254			2,136			118		6
Income before income taxes	586			699			(113)		(16)		1,096			1,449			(353)		(24)
Provision for income taxes	106			134			(28)		(21)		192			278			(86)		(31)
Income after income taxes	480			565			(85)		(15)		904			1,171			(267)		(23)
Income attributable to non-controlling interest	6			6			—		—		11			10			1		10
Net income attributable to Huntington	474			559			(85)		(15)		893			1,161			(268)		(23)
Dividends on preferred shares	35			40			(5)		(13)		71			69			2		3
Net income applicable to common shares	$	439		$	519		$	(80)	(15)	%	$	822		$	1,092		$	(270)	(25)	%
Average common shares—basic	1,451			1,446			5		—	%	1,450			1,445			5		—	%
Average common shares—diluted	1,474			1,466			8		1		1,474			1,468			6		—
Net income per common share—basic	$	0.30		$	0.36		$	(0.06)	(17)		$	0.57		$	0.76		$	(0.19)	(25)
Net income per common share—diluted	0.30			0.35			(0.05)		(14)		0.56			0.74			(0.18)		(24)
Return on average total assets	0.98		%	1.18		%					0.93		%	1.25		%
Return on average common shareholders’ equity	10.4			12.7							9.8			13.6
Return on average tangible common shareholders’ equity (1)	16.1			19.9							15.1			21.5
Net interest margin (2)	2.99			3.11							3.00			3.25
Efficiency ratio (3)	60.8			55.9							62.2			55.7
Revenue and Net Interest Income—FTE (non-GAAP)
Net interest income	$	1,312		$	1,346		$	(34)	(3)	%	$	2,599		$	2,755		$	(156)	(6)	%
FTE adjustment (2)	13			11			2		18		26			20			6		30
Net interest income, FTE (non-GAAP) (2)	1,325			1,357			(32)		(2)		2,625			2,775			(150)		(5)
Noninterest income	491			495			(4)		(1)		958			1,007			(49)		(5)
Total revenue, FTE (non-GAAP) (2)	$	1,816		$	1,852		$	(36)	(2)	%	$	3,583		$	3,782		$	(199)	(5)	%

(1)Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common shareholders’ equity equals average total common shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability and calculated assuming a 21% tax rate.

(2)On an FTE basis assuming a 21% tax rate.

(3)Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains.

6 Huntington Bancshares Incorporated

Summary of 2024 Second Quarter Results Compared to 2023 Second Quarter

For the second quarter of 2024, we reported net income of $474 million, or $0.30 per diluted common share, compared with $559 million, or $0.35 per diluted common share, in the year-ago quarter.

Net interest income was $1.3 billion for the second quarter of 2024, a decrease of $34 million, or 3%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, decreased $32 million, or 2%, from the year-ago quarter. The decrease in FTE net interest income primarily reflected a 12 basis point decrease in the FTE NIM to 2.99% and a $7.8 billion, or 6%, increase in average interest-bearing liabilities, partially offset by a $3.2 billion, or 2%, increase in average earning assets.

The provision for credit losses increased $8 million, or 9%, from the year-ago quarter to $100 million in the second quarter of 2024. The ACL increased $81 million from the year-ago quarter to $2.4 billion in the second quarter of 2024, or 1.95% of total loans and leases, compared to $2.3 billion, or 1.93% of total loans and leases, for the year-ago quarter. The increase in the total ACL was driven by a combination of loan and lease growth and modest builds in overall coverage ratios that are reflective of the current macroeconomic environment.

Noninterest income was $491 million, a decrease of $4 million, or 1%, from the year-ago quarter, primarily due to the $18 million favorable mark-to-market on pay-fixed swaptions recognized in the year-ago quarter included within other noninterest income, partially offset by an increase in capital markets and advisory fees. Noninterest expense was $1.1 billion, an increase of $67 million, or 6%, from the year-ago quarter, primarily due to increases in personnel costs and outside data processing and other services.

Consolidated Balance Sheet and Capital Ratios as of June 30, 2024 Compared to Prior Year End

Total assets at June 30, 2024 were $196.3 billion, an increase of $6.9 billion, or 4%, compared to December 31, 2023. The increase in total assets was primarily driven by increases in interest-earning deposits with banks of $2.7 billion, or 31%, loans and leases of $2.4 billion, or 2%, and total investment securities of $1.5 billion, or 4%. Total liabilities at June 30, 2024 were $176.7 billion, an increase of $6.8 billion, or 4%, compared to December 31, 2023. The increase in total liabilities was primarily driven by increases in long-term debt of $4.1 billion, or 33%, and total deposits of $3.1 billion, or 2%.

The tangible common equity to tangible assets ratio decreased slightly to 6.0% at June 30, 2024, compared to 6.1% at December 31, 2023, primarily due to higher tangible assets and a change in AOCI driven by changes in interest rates, partially offset by current period earnings, net of dividends. CET1 risk-based capital ratio was 10.4% at June 30, 2024, compared to 10.2% at December 31, 2023. The increase in CET1 is primarily due to current period earnings, net of dividends, partially offset by the CECL transitional amount and a modest increase in risk-weighted assets. The increase in risk-weighted assets was driven by loan growth, partially offset by the impact of a CLN transaction. Huntington completed a $478 million CLN transaction during the second quarter of 2024 related to an approximately $4 billion reference pool of on-balance sheet prime indirect auto loans as part of the Company's capital optimization strategy.

General

Our general business objectives are to:

•Build on our vision to be the country’s leading people-first, digitally powered bank;

•Drive sustainable long-term revenue growth and efficiency;

•Deliver a Category of One customer experience through our distinguished brand and culture;

•Extend our digital leadership with focus on ease of use, access to information, and self-service across products and services;

•Leverage expertise and capabilities to acquire and deepen relationships and launch of select partnerships;

•Maintain positive operating leverage and execute disciplined capital management; and

•Provide stability and resilience through risk management, maintaining an aggregate moderate-to-low, through-the-cycle risk appetite.

2024 2Q Form 10-Q 7

Economy

The Federal Reserve has repeatedly stated that economic data will drive their decision making process for rates, and there are signs that the data is beginning to shift. After persistent inflation in the first quarter, recent data has shown a slow but steady decrease in inflation. On the other side of the Federal Reserve’s dual mandate, employment data has deteriorated recently, with job openings per unemployed person dropping to pre-pandemic levels (from 2.0 to 1.3). The unemployment rate has also increased from a cyclical low of 3.4% to 4.1%, the highest level since late 2021, although still at a historically low level. The market is currently pricing in the first rate cut at the September Federal Open Market Committee meeting.

There are more signs of the economy cooling, with economic growth expected to decline in the near future. Consumer spending, which defied expectations for much of the last two years, has waned. Credit card balances have increased as have delinquency rates. Core manufacturing continues to contract, and the service sector, which has been the main driver of the better than expected economic performance since 2022, is showing signs of slowing down. While risks are increasing, most economists still expect either a soft landing or a short and shallow recession.

Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, delivered through increasing deposit and loan balances, in addition to expanding net interest income and noninterest income. We have continued our disciplined approach to managing credit quality consistent with our aggregate moderate-to-low, through-the-cycle risk appetite. With our disciplined and proactive approach, we believe Huntington is positioned to perform well through the dynamic environment. We remain focused on delivering profitable growth and driving value for our shareholders.

Other Recent Developments

In June 2024, the FDIC adopted a final rule to modify the required frequency and informational content of resolution plan submissions applicable to insured depository institutions with $50 billion or more in total assets, which describe the insured depository institution’s strategy for a rapid and orderly resolution in the event of material financial distress or failure. As a result of the final rule, the Bank will be required to submit to the FDIC full resolution plans every three years and interim targeted information between full resolution plan submissions. In addition, the final rule introduces a new credibility standard that will be used to evaluate full resolution plan submissions, which would be subject to potential FDIC enforcement action. The final rule is effective beginning October 1, 2024.

DISCUSSION OF RESULTS OF OPERATIONS

This section provides a review of financial performance on a consolidated basis. Key unaudited interim consolidated balance sheet and unaudited interim income statement trends are discussed. All earnings per share data are reported on a diluted basis. For additional insight on financial performance, please read this section in conjunction with the “Business Segment Discussion.”

8 Huntington Bancshares Incorporated

Average Balance Sheet / Net Interest Income

The following tables detail the change in our average balance sheet and the net interest margin.

Table 2 - Consolidated Quarterly Average Balance Sheets and Net Interest Margin Analysis
	Three Months Ended June 30, 2024						Three Months Ended June 30, 2023
	Average		Interest Income		Yield/		Average		Interest Income		Yield/		Change in Average Balances
(dollar amounts in millions)	Balances		(FTE) (1)		Rate (2)		Balances		(FTE) (1)		Rate (2)		Amount		Percent
Assets:
Interest-earning deposits with banks	$	11,116	$	154	5.55	%	$	11,281	$	146	5.17	%	$	(165)	(1)	%
Securities:
Trading account securities	143		2		5.10		34		1		4.92		109		NM
Available-for-sale securities:
Taxable	24,184		322		5.33		20,920		252		4.82		3,264		16
Tax-exempt	2,684		34		5.07		2,745		33		4.87		(61)		(2)
Total available-for-sale securities	26,868		356		5.30		23,665		285		4.83		3,203		14
Held-to-maturity securities—taxable	15,211		93		2.44		16,762		102		2.42		(1,551)		(9)
Other securities	776		10		5.21		1,263		11		3.47		(487)		(39)
Total securities	42,998		461		4.29		41,724		399		3.82		1,274		3
Loans held for sale	572		10		6.81		559		8		6.05		13		2
Loans and leases: (3)
Commercial:
Commercial and industrial