Huntington Bancshares: A Beacon of Growth in Q4 2024

Huntington Bancshares Inc (HBAN) reported strong Q4 2024 results, highlighting record fees, loan growth, and sustained deposit gathering. The regional bank, with approximately $200 billion in assets, demonstrated robust performance across key metrics, exceeding analyst expectations. The bank's earnings per share (EPS) of $0.34 surpassed the estimated EPS of $0.31, while revenue reached $1,968 million, exceeding the analyst estimate of $1,888.01 million.

Huntington's strategic execution in Q4 2024 showcased a well-balanced growth approach, with record fee income achievement particularly in payments, wealth management, and capital markets. This diversification allowed the bank to compete more effectively with larger, national banks and strengthen its overall competitive position in the industry. The bank's ability to manage funding costs and increase fee revenues from these diverse business segments contributed to its strong financial performance in the fourth quarter of 2024.

The bank's average total loans and leases grew by $3.7 billion, or 3%, from the prior quarter, reaching $128.2 billion. This growth was driven by a $2.7 billion increase in average commercial loans and a $930 million increase in average consumer loans. Average total deposits increased by $2.9 billion, or 2%, from the prior quarter, supporting the bank's loan expansion and maintaining a healthy loan-to-deposit ratio.

Huntington's net interest income (NII) increased by $44 million, or 3%, from the prior quarter, and by $79 million, or 6%, from the year-ago quarter. The bank's successful deposit management strategy was evident in the 24 basis point reduction in deposit costs to 2.16%. This reduction in funding costs, coupled with the bank's ability to reprice loans at a sufficient pace, helped maintain the bank's net interest margin (NIM) despite the high-rate environment.

The bank's noninterest income increased by $36 million, or 7%, from the prior quarter, and by $154 million, or 38%, from the year-ago quarter. Excluding the impact of mark-to-market on pay-fixed swaptions, credit risk transfer transactions, and the loss on sales of securities, noninterest income increased by $49 million, or 9%, from the prior quarter and $96 million, or 20%, from the year-ago quarter. This growth demonstrates the bank's success in expanding its fee income across various business segments.

Huntington's strong credit quality metrics remained stable throughout the quarter. Net charge-offs remained at 0.30%, and the nonperforming asset ratio was 0.63% at quarter end. The bank's Common Equity Tier 1 (CET1) ratio improved to 10.5%, indicating strengthened capital adequacy. However, the decline in the tangible common equity (TCE) ratio to 6.1% warrants monitoring, as it may indicate potential pressure on capital adequacy.

In conclusion, Huntington Bancshares' Q4 2024 earnings call highlights the bank's strong loan and deposit growth, as well as its successful diversification into new revenue streams. The bank's strategic execution and robust financial performance position it favorably for sustained growth in 2025 and beyond. However, investors should monitor potential risks, such as margin pressure and capital adequacy, to ensure the bank's continued success.