HUNTINGTON BANCSHARES INC MD

11. BORROWINGS

Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following:

As of December 31, 2023, the carrying value of assets pledged as collateral against repurchase agreements totaled $840 million. Assets pledged as collateral are reported in available-for-sale securities and held-to-maturity securities on the Consolidated Balance Sheets. The repurchase agreements have maturities within 60 days. No amounts have been offset against the agreements.

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Huntington’s long-term debt consisted of the following:

(1)Variable effective rate at December 31, 2023, based on three-month SOFR +0.96%.

(2)Variable effective rate at December 31, 2023, based on three-month SOFR +0.866%.

(3)Variable effective rate at December 31, 2023, based on three-month SOFR +1.66%.

(4)Variable effective rate at December 31, 2023, based on three-month SOFR +2.00%.

(5)Variable effective rate at December 31, 2023, based on three-month SOFR +2.60%.

(6)Variable effective rate at December 31, 2023, based on three-month SOFR +3.10%.

(7)Represents the outstanding amount of debentures issued to each trust and related trust-preferred securities. Refer to Note 21 - “Variable Interest Entities” for trust-preferred securities details.

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Amounts above are net of unamortized discounts and adjustments related to hedging with derivative financial instruments. We use interest rate swaps to hedge interest rate risk of certain fixed-rate debt by converting the debt to a variable rate. See Note 20 - “Derivative Financial Instruments“ for more information regarding such financial instruments.

During the 2023 third quarter, Huntington issued $1.3 billion of fixed-to-floating senior notes. The fixed-to-floating senior notes are due August 21, 2029 and bear an initial fixed interest rate of 6.208%. Commencing August 21, 2028, the interest rate will reset to a floating rate equal to a benchmark rate based on the Compounded SOFR Index Rate plus 202 basis points.

On January 26, 2024, Huntington issued $1.3 billion of fixed-to-floating senior notes. The fixed-to-floating senior notes are due February 2, 2035 and bear an initial fixed interest rate of 5.709%. Commencing February 2, 2034, the interest rate will reset to a floating rate equal to a benchmark rate based on the Compounded SOFR Index Rate plus 187 basis points.

Long-term debt maturities, based upon the par values of the long-term debt, for the next five years and thereafter are as follows:

The terms of certain long-term debt obligations contain various restrictive covenants including limitations on the acquisition of additional debt, dividend payments, and the disposition of subsidiaries. As of December 31, 2023, Huntington was in compliance with all such covenants.

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12. OTHER COMPREHENSIVE INCOME

The components of Huntington’s OCI were as follows:

(1)Foreign investments are deemed to be permanent in nature and, therefore, Huntington does not provide for taxes on foreign currency translation adjustments.

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Activity in accumulated OCI were as follows:

(1)AOCI amounts at December 31, 2023, 2022, and 2021 include $58 million, $66 million, and $27 million, respectively, of net unrealized losses (after-tax) on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized losses will be recognized in earnings over the remaining life of the security using the effective interest method.

13. SHAREHOLDERS’ EQUITY

Preferred Stock

The following is a summary of Huntington’s non-cumulative, non-voting, perpetual preferred stock outstanding.

(1)Redeemable at Huntington’s option on the date stated or on a quarterly basis thereafter.

(2)Series B, H, and J preferred stock have a liquidation value and redemption price per share of $1,000, plus any declared and unpaid dividends.

(3)Series B dividend rate converted to 3-month CME Term SOFR +26 bps LIBOR spread adjustment +270 bps effective July 15, 2023. Prior to July 15, 2023, the dividend rate was 3-month LIBOR +270 bps.

(4)Series E, F, and G, preferred stock have a liquidation value and redemption price per share of $100,000, plus any declared and unpaid dividends.

(5)Series E dividend rate converted to 3-month CME Term SOFR +26 bps LIBOR spread adjustment +288 bps effective July 15, 2023. Prior to July 15, 2023, the dividend rate was 3-month LIBOR +288 bps.

(6)Series I preferred stock has a liquidation value and redemption price per share of $25,000, plus any declared and unpaid dividends.

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The following table presents the dividends declared for each series of Preferred shares.

During the fourth quarter of 2023, $90 million of outstanding Series E Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, was repurchased.

On October 15, 2021, all $100 million of outstanding Series C Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, was redeemed.

On July 15, 2021, all $600 million of outstanding Series D Non-Cumulative Perpetual Preferred Stock, par value $0.01 per share, was redeemed.

14. EARNINGS PER SHARE

Basic earnings per share is the amount of earnings (adjusted for preferred stock dividends and the impact of preferred stock repurchases and redemptions) available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, restricted stock units and awards, and distributions from deferred compensation plans. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive.

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The calculation of basic and diluted earnings per share is as follows:

(1)Reflects the total number of shares related to outstanding options that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.