Huntington(HBAN)2025-01-17 17:29Financial Data and Key Metrics Changes - The company reported earnings per common share of 7 billion or 5.7% year-over-year, while average deposits rose by 120 million, a 74% increase from the previous year [12][32] - Wealth management fees increased by 8% year-over-year, with assets under management (AUM) growing by 16% [32] - Payments revenue grew by 8% year-over-year, driven by a 16% increase in commercial payment revenues [32] Market Data and Key Metrics Changes - The company experienced strong credit performance, with net charge-offs stable at 30 basis points [18][35] - The criticized asset ratio improved to 3.76%, while the non-performing asset ratio remained stable at 63 basis points [36] Company Strategy and Development Direction - The company is focused on executing organic growth strategies, driving revenues higher, and maintaining a consistent approach to risk management [15] - Investments in new geographies and capabilities are expected to deliver robust organic growth in future years [10] - The company plans to maintain a loan growth target of 5% to 7% for 2025, with deposit growth expected between 3% and 5% [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage net interest margin (NIM) within a dynamic interest rate environment [48] - The outlook for 2025 includes expectations for record net interest income and fee revenues, with a focus on key fee revenue areas [37] - Management noted positive borrower sentiment and confidence in growth post-election, contributing to strong loan production [104] Other Important Information - The company lowered its overall cost of deposits by 24 basis points to 2.16% [24] - Non-interest income increased by $154 million from the prior year, with core underlying fee revenues up by 20% [30] Q&A Session Summary Question: Can you talk about the confidence around the NII guidance range? - Management expressed confidence in driving revenue growth within the guidance range, despite uncertainties in the macro environment [46][48] Question: Can you discuss the loan growth versus deposit growth? - Management indicated that loan growth is expected to outpace deposit growth, allowing for flexibility in deposit costs [50][54] Question: What is the new money loan production yield? - Management stated that yields are consistent with overall spread levels, benefiting from fixed asset repricing [60] Question: How do you see capital return and buybacks? - Management indicated that capital generation forecasts will influence the timing of share repurchases, with a focus on maintaining high-return loan growth [62][66] Question: What are your expectations around the incremental margin and cost of deposits? - Management noted that the loan-to-deposit ratio provides an opportunity to drive loan growth faster than deposit growth, with expectations for NIM to rise over time [72][74] Question: Can you elaborate on the NIM outlook for the full year? - Management expects NIM to remain flat throughout 2025, with potential for increases in 2026 and beyond [117][123] Question: What is the outlook for provisioning and reserve build? - Management indicated that while reserves may remain stable or increase in dollars due to loan growth, the allowance for credit losses (ACL) coverage ratio may decline [148][152]