HUNTINGTON BANCSHARES INC MD

(This section should be read in conjunction with the “Regulatory Matters” section included in Part I, Item 1: Business and Note 22 - “Other Regulatory Matters” of the Notes to Consolidated Financial Statements.)

Our primary capital objective is to maintain appropriate levels of capital within our Board-approved risk appetite to support the Bank's operations, absorb unanticipated losses and declines in asset values, and provide protection to uninsured depositors and debt holders in the event of liquidation, while also funding organic growth and providing appropriate returns to our shareholders. Both regulatory capital and shareholders’ equity are managed at the Bank and on a consolidated basis. We have an active program for managing capital and maintain a comprehensive process for assessing the Company’s overall capital adequacy, including the monitoring and reporting of capital risk metrics to the Board and ROC that we believe are useful for evaluating capital adequacy and making capital decisions. In addition to as-reported regulatory capital and tangible common equity metrics, which are discussed in more detail below, we also actively monitor other measures of capital, such as tangible common equity including the mark-to-market impact on HTM securities and CET1 inclusive of AOCI excluding cash flow hedges. We believe our current levels of both regulatory capital and shareholders’ equity are adequate.

Regulatory Capital

We are subject to the Basel III capital requirements including the standardized approach for calculating risk-weighted assets in accordance with subpart D of the final capital rule. The following table presents consolidated risk-weighted assets and other financial data necessary to calculate certain financial ratios, including CET1, which we use to measure capital adequacy.

80 Huntington Bancshares Incorporated

(1)Huntington elected to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period which began January 1, 2022 pursuant to a rule that allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. As of December 31, 2024 and December 31, 2023, we have phased in 75% and 50%, respectively, of the cumulative CECL deferral, with the cumulative CECL deferral fully phased in beginning January 1, 2025.

(1)Deferred tax liability related to other intangible assets is calculated at a 21% tax rate.

(2)Tangible equity, tangible common equity, and tangible assets, as well as ratios utilizing these financial measures are non-GAAP financial measures. See Non-GAAP Financial Measures in the Additional Disclosures section.

2024 Form 10-K 81

The following table presents certain regulatory capital data at the consolidated and Bank level.

(1) Huntington and the Bank elected to temporarily delay certain effects of CECL on regulatory capital until January 1, 2022 pursuant to a rule that allowed BHCs and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. As of December 31, 2024 and December 31, 2023, we have phased in 75% and 50%, respectively, of the cumulative CECL deferral, with the cumulative CECL deferral fully phased in beginning January 1, 2025.

At December 31, 2024, Huntington and the Bank maintained capital ratios in excess of the well-capitalized standards established by the Federal Reserve. Our consolidated CET1 risk-based capital ratio of 10.5% at December 31, 2024 increased approximately 30 basis points during the year, primarily due to current period earnings, net of dividends, partially offset by an increase in risk-weighted assets and a reduction in the CECL transitional amount. The Bank CET1 risk-based capital ratio of 11.6% increased approximately 100 basis points during the year driven by net income and a $1.75 billion capital contribution from the parent, partially offset by dividends paid to the parent, an increase in risk-weighted assets, and a reduction in the CECL transitional amount. The increase in risk-weighted assets was driven by loan growth, partially offset by the impact of two CLN transactions completed during 2024. The CLN transactions involved an original aggregate reference pool of approximately $8 billion of on-balance sheet prime indirect auto loans as part of the company's capital optimization strategy, with the transactions reducing the risk-weighting on the reference pool of assets by approximately 75%.

Shareholders’ Equity

We generate shareholders’ equity primarily through the retention of earnings, net of dividends. Other potential sources of shareholders’ equity include issuances of common and preferred stock. Our objective is to maintain capital at an amount commensurate with our risk appetite and risk tolerance objectives, to meet both regulatory and market expectations, and to provide the flexibility needed for future growth and business opportunities.

Shareholders’ equity totaled $19.7 billion at December 31, 2024, an increase of $387 million, or 2%, when compared with December 31, 2023. The increase was primarily driven by earnings, net of dividends, partially offset by the $405 million redemption of Series E preferred stock, and changes in accumulated other comprehensive loss driven by changes in interest rates.

82 Huntington Bancshares Incorporated

Share Repurchases

From time to time the Board of Directors authorizes the Company to repurchase shares of our common stock. Although we announce when our Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Future stock repurchases may be private or open-market repurchases, including block transactions, accelerated or delayed block transactions, forward transactions, and similar transactions. Various factors determine the amount and timing of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and acquisitions, market conditions (including the trading price of our stock), and regulatory and legal considerations.

Huntington did not have any share repurchases during 2024 or 2023. As part of our 2024 capital plan and our

current expectation that organic capital will be used for funding loan and lease growth and increase overall capital levels, we do not expect to have share repurchases through 2025.