Huntington Bancshares Q4 2024: Navigating Contradictions in NIM, Loan Growth, and Capital Strategy

Strong Financial Performance and Growth:
- Huntington Bankshares reported earnings per common share of $0.34 for the fourth quarter and return on tangible common equity (ROTCE) of 16.4%.
- Average loan balances increased by 5.7% year-over-year, with a significant contribution from new initiatives accounting for 30% of total loan growth.
- This growth was attributed to contributions from both existing and new businesses, including funds finance, new geographic expansions, and reduced CRE balances.

fee Revenue Expansion:
- Fee revenues increased by $96 million or 20% on a core underlying basis, primarily driven by the payments, wealth management, and capital markets segments.
- The rise in fee revenues is due to strategic investments in merchant acquiring capabilities, treasury management products, and advisory household expansion.

Deposit and Expense Management:
- Average deposit balances grew by 6.5%, with noninterest-bearing deposits expanding by $800 million.
- The company lowered its overall cost of deposits by 24 basis points to 2.16%.
- This was achieved through disciplined pricing strategies and strategic focus on reducing personnel costs by $42 million.

Capital and Credit Quality:
- Common Equity Tier 1 (CET1) ratio ended the quarter at 10.5%, with adjusted CET1 ratio inclusive of AOCI at 8.7%.
- Net charge-offs were stable at 30 basis points, and the criticized asset ratio improved to 3.76%.
- The strong credit portfolio performance is attributed to Huntington's disciplined risk management approach and moderate-to-low risk appetite.