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.

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

2024 2Q 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.

6 Huntington Bancshares Incorporated

Summary of 2024 Second Quarter Results Compared to 2023 Second Quarter

For the second quarter of 2024, we reported net income of $474 million, or $0.30 per diluted common share, compared with $559 million, or $0.35 per diluted common share, in the year-ago quarter.

Net interest income was $1.3 billion for the second quarter of 2024, a decrease of $34 million, or 3%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, decreased $32 million, or 2%, from the year-ago quarter. The decrease in FTE net interest income primarily reflected a 12 basis point decrease in the FTE NIM to 2.99% and a $7.8 billion, or 6%, increase in average interest-bearing liabilities, partially offset by a $3.2 billion, or 2%, increase in average earning assets.

The provision for credit losses increased $8 million, or 9%, from the year-ago quarter to $100 million in the second quarter of 2024. The ACL increased $81 million from the year-ago quarter to $2.4 billion in the second quarter of 2024, or 1.95% of total loans and leases, compared to $2.3 billion, or 1.93% of total loans and leases, for the year-ago quarter. 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.

Noninterest income was $491 million, a decrease of $4 million, or 1%, from the year-ago quarter, primarily due to the $18 million favorable mark-to-market on pay-fixed swaptions recognized in the year-ago quarter included within other noninterest income, partially offset by an increase in capital markets and advisory fees. Noninterest expense was $1.1 billion, an increase of $67 million, or 6%, from the year-ago quarter, primarily due to increases in personnel costs and outside data processing and other services.

Consolidated Balance Sheet and Capital Ratios as of June 30, 2024 Compared to Prior Year End

Total assets at June 30, 2024 were $196.3 billion, an increase of $6.9 billion, or 4%, compared to December 31, 2023. The increase in total assets was primarily driven by increases in interest-earning deposits with banks of $2.7 billion, or 31%, loans and leases of $2.4 billion, or 2%, and total investment securities of $1.5 billion, or 4%. Total liabilities at June 30, 2024 were $176.7 billion, an increase of $6.8 billion, or 4%, compared to December 31, 2023. The increase in total liabilities was primarily driven by increases in long-term debt of $4.1 billion, or 33%, and total deposits of $3.1 billion, or 2%.

The tangible common equity to tangible assets ratio decreased slightly to 6.0% at June 30, 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 10.4% at June 30, 2024, compared to 10.2% at December 31, 2023. The increase in CET1 is primarily due to current period earnings, net of dividends, partially offset by the CECL transitional amount and a modest increase in risk-weighted assets. The increase in risk-weighted assets was driven by loan growth, partially offset by the impact of a CLN transaction. Huntington completed a $478 million CLN transaction during the second quarter of 2024 related to an approximately $4 billion reference pool of on-balance sheet prime indirect auto loans as part of the Company's capital optimization strategy.

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.

2024 2Q Form 10-Q 7

Economy

The Federal Reserve has repeatedly stated that economic data will drive their decision making process for rates, and there are signs that the data is beginning to shift. After persistent inflation in the first quarter, recent data has shown a slow but steady decrease in inflation. On the other side of the Federal Reserve’s dual mandate, employment data has deteriorated recently, with job openings per unemployed person dropping to pre-pandemic levels (from 2.0 to 1.3). The unemployment rate has also increased from a cyclical low of 3.4% to 4.1%, the highest level since late 2021, although still at a historically low level. The market is currently pricing in the first rate cut at the September Federal Open Market Committee meeting.

There are more signs of the economy cooling, with economic growth expected to decline in the near future. Consumer spending, which defied expectations for much of the last two years, has waned. Credit card balances have increased as have delinquency rates. Core manufacturing continues to contract, and the service sector, which has been the main driver of the better than expected economic performance since 2022, is showing signs of slowing down. While risks are increasing, most economists still expect either a soft landing or a short and shallow recession.

Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, delivered through increasing deposit and loan balances, in addition to expanding net interest income and noninterest income. 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 positioned to perform well through the dynamic environment. We remain focused on delivering profitable growth and driving value for our shareholders.

Other Recent Developments

In June 2024, the FDIC adopted a final rule to modify the required frequency and informational content of resolution plan submissions applicable to insured depository institutions with $50 billion or more in total assets, which describe the insured depository institution’s strategy for a rapid and orderly resolution in the event of material financial distress or failure. As a result of the final rule, the Bank will be required to submit to the FDIC full resolution plans every three years and interim targeted information between full resolution plan submissions. In addition, the final rule introduces a new credibility standard that will be used to evaluate full resolution plan submissions, which would be subject to potential FDIC enforcement action. The final rule is effective beginning October 1, 2024.