HUNTINGTON BANCSHARES INC MD

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.

To align with our strategic priorities, during the second quarter of 2023, we completed an organizational realignment and now report on two business segments: Consumer & Regional Banking and Commercial Banking. The Treasury / Other function includes technology and operations, and other unallocated assets, liabilities, revenue, and expense. Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The organizational realignment primarily involved consolidating our previously reported Consumer and Business Banking, Vehicle Finance and RBHPCG, into one new business segment called Consumer & Regional Banking.

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

2024 1Q Form 10-Q 5

Financial Performance Review

Selected Financial Data

(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.

For the first quarter of 2024, we reported net income of $419 million, or $0.26 per diluted common share, compared with $602 million, or $0.39 per diluted common share, in the year-ago quarter. The first quarter of 2024 reported net income was negatively impacted by the recognition of additional FDIC DIF special assessment expense totaling $32 million, or $25 million after tax ($0.02 per common share), based on updated FDIC estimates to recover the costs associated with the 2023 bank failures, and staffing efficiency related expense of $7 million, or $5 million after tax. The year-ago quarter reported net income was positively impacted by the sale of our RPS business resulting in a $57 million gain, or $44 million after tax ($0.03 per common share), and negatively impacted by voluntary retirement program and organization realignment expense of $42 million, or $34 million after tax ($0.02 per common share).

6 Huntington Bancshares Incorporated

Net interest income was $1.3 billion for the first quarter of 2024, a decrease of $122 million, or 9%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, decreased $118 million, or 8%, from the year-ago quarter. The decrease in FTE net interest income primarily reflected a 39 basis point decrease in the FTE NIM to 3.01% and a $11.8 billion, or 10%, increase in average interest-bearing liabilities, partially offset by a $4.7 billion, or 3%, increase in average earning assets.

The provision for credit losses increased $22 million, or 26%, from the year-ago quarter to $107 million in the first quarter of 2024. The ACL increased $116 million from the year-ago quarter to $2.4 billion in the first quarter of 2024, or 1.97% of total loans and leases, compared to $2.3 billion, or 1.90% of total loans and leases. 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 and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative reserve.

Noninterest income of $467 million, decreased $45 million, or 9%, from the year-ago quarter, primarily due to the $57 million gain associated with the sale of the RPS business recognized in the year-ago quarter included within other noninterest income, and a decrease in capital markets and advisory fees, partially offset by increases in payments and cash management revenue and wealth and asset management revenue. Noninterest expense of $1.1 billion, increased $51 million, or 5%, from the year-ago quarter, primarily due to the aforementioned $32 million of FDIC DIF special assessment expense and an increase in outside data processing and other services.

Total assets at March 31, 2024 were $193.5 billion, an increase of $4.2 billion, or 2%, compared to December 31, 2023. The increase in total assets was primarily driven by increases in interest-earning deposits with banks of $2.5 billion, or 28%, total investment securities of $1.2 billion, or 3%, and loans and leases of $785 million, or 1%. Total liabilities at March 31, 2024 were $174.1 billion, an increase of $4.2 billion, or 2%, compared to December 31, 2023. The increase in total liabilities was primarily driven by increases in long-term debt of $2.5 billion, or 20%, and total deposits of $2.0 billion, or 1%, partially offset by a decrease in short-term borrowings of $438 million, or 71%.

The tangible common equity to tangible assets ratio decreased slightly to 6.0% at March 31, 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 10.2% at both March 31, 2024 and December 31, 2023, as an increase in risk-weighted assets, driven by loan growth, and the CECL transitional amount, was offset by current period earnings, net of dividends.

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.

Economy

Inflation remained high in the first quarter of 2024 while the labor market showed some signs of slowing, but remained strong overall. The Federal Reserve reiterates that data drives its interest rate policy. Until the data demonstrates that inflation will near the Federal Reserve’s 2% target, the Federal Reserve indicated that it is unlikely to take action to lower interest rates. The economy as a whole is doing well and consumer spending continues to surprise to the upside. Equity markets rallied in the first quarter of 2024 as the soft landing scenario looks more likely. Further banking regulation has been delayed with clarity on proposed amendment to the regulatory capital rule and long-term debt requirements for banks anticipated later in 2024.

The consensus economic outlook assumes a soft landing in the second half of 2024 to early 2025. Inflation expectations have risen, which has pushed expectations for the first Federal Reserve rate cuts to late 2024 or early 2025. The delay in rate cuts could eventually lead to lower GDP growth and higher unemployment.

2024 1Q Form 10-Q 7

Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, delivered through sustained organic deposit and loan growth. 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 well positioned to perform well through the dynamic environment. We remain focused on delivering profitable growth and driving value for our shareholders.