HUNTINGTON BANCSHARES INC MD

Acquisitions and Divestitures

In March 2023, Huntington completed the sale of the RPS business and entered into an ongoing partnership with the purchaser. The sale of our RPS business resulted in a $57 million gain recorded within other noninterest income.

In June 2022, Huntington completed the acquisition of Capstone Partners, a top tier middle market investment bank and advisory firm. The transaction brought a national scale to serve middle market business owners throughout the corporate lifecycle, building on Huntington’s regional banking foundation. Capstone Partners related revenue, including mergers and acquisitions, capital raising, and other advisory-related fees, is recognized within capital markets and advisory fees in the Consolidated Statements of Income.

In May 2022, Huntington completed the acquisition of Digital Payments Torana, Inc., now known as Huntington ChoicePay, a digital payments business focused on business to consumer payments. This acquisition, along with the formation of our enterprise-wide payments group, reflects one of our strategic priorities to accelerate our payments capabilities and expand the services provided to our customers.

Reporting Update

During the fourth quarter of 2024, Huntington updated the presentation of our reported deposit categories to align more closely with how we strategically manage our business. As a result, we now report our deposit composition in the following categories: (1) demand deposits - noninterest bearing, (2) demand deposits - interest bearing, (3) money market, (4) savings, and (5) time deposits. Prior period results have been adjusted to conform to the current presentation.

46 Huntington Bancshares Incorporated

2024 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 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.

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Summary of Results

In 2024, we reported net income of $1.9 billion, or $1.22 per diluted common share, compared with net income in 2023 of $2.0 billion, or $1.24 per diluted common share. The current year reported net income was negatively impacted by additional expense attributable to the FDIC DIF special assessment totaling $28 million, or $23 million after tax ($0.02 per common share), and $20 million, or $16 million after tax ($0.01 per common share), of expense from staffing efficiencies and corporate real estate consolidation expense. The prior year’s reported net income was negatively impacted by the initial recognition of the FDIC DIF special assessment totaling $214 million, or $169 million after tax ($0.11 per common share), and $69 million, or $55 million after tax ($0.04 per common share), of expense from staffing efficiencies and corporate real estate consolidation expense.

Net interest income was $5.3 billion in 2024, a decrease of $94 million, or 2%, from 2023. FTE net interest income, a non-GAAP financial measure, decreased $83 million, or 2%, from 2023. The decrease in FTE net interest income reflected a 19 basis point decrease in the FTE NIM to 3.00% and a $12.2 billion, or 9%, increase in average interest-bearing liabilities, partially offset by a $8.2 billion, or 5%, increase in average earning assets. The NIM compression was primarily due to the higher rate environment driving a higher cost of funds, partially offset by an increase in loans and leases and investment security yields.

The provision for credit losses increased $18 million, or 4%, to $420 million for 2024. The ACL was $2.4 billion, or 1.88% of total loans and leases, at December 31, 2024, compared to $2.4 billion, or 1.97% of total loans and leases, at December 31, 2023. The modest increase in the total ACL was driven by a combination of loan and lease growth and increased net charge off activity in 2024, mostly offset by a decrease in the overall coverage ratios in 2024 that is reflective of the current macroeconomic environment.

Noninterest income of $2.0 billion, increased $119 million, or 6%, from the prior year, primarily due to increases in capital markets and advisory fees, wealth and asset management revenue, payments and cash management revenue, customer deposit and loan fees, and mortgage banking income, and $24 million of unfavorable mark-to-market on the pay-fixed swaptions program recognized in 2023, partially offset by a decrease in leasing revenue and a $57 million gain on the sale of our RPS business recognized in 2023. Noninterest expense of $4.6 billion, decreased $12 million from the prior year primarily due to a reduction in the FDIC DIF special assessment of $186 million and lower staffing efficiencies and corporate real estate consolidation expense, partially offset by current year increases in personnel expense and outside data processing and other services.

Consolidated Balance Sheet and Capital Ratios

Total assets at December 31, 2024 were $204.2 billion, an increase of $14.9 billion, or 8%, compared to December 31, 2023. The increase in total assets was primarily driven by increases in loans and leases of $8.1 billion, or 7%, interest-earning deposits with banks of $2.9 billion, or 33%, and total securities of $2.6 billion, or 6%. Total liabilities at December 31, 2024 were $184.4 billion, an increase of $14.5 billion, or 9%, compared to December 31, 2023. The increase in total liabilities was primarily driven by increases in total deposits of $11.2 billion, or 7%, and long-term debt of $4.0 billion, or 32%.

The tangible common equity to tangible assets ratio was 6.1% at both December 31, 2024 and December 31, 2023, with an increase in tangible common equity offset by an increase in tangible assets. The CET1 risk-based capital ratio was 10.5% at December 31, 2024, up from 10.2% at December 31, 2023. The increase in CET1 was 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 increase in risk-weighted assets was driven by loan growth, partially offset by the capital benefit of two CLN transactions completed during 2024.

48 Huntington Bancshares Incorporated

Business Overview

General

Our general business objectives are to:

•Deliver our Culture, Purpose, and Vision through a Differentiated Operating Model;

•Build on our vision to be the leading People-First, Customer-Centered bank in the country;

•Deliver top quartile performance through sustainable long-term profitable growth;

•Differentiate our culture, brand, and customer experience through expanded product offerings to drive digital acquisition, deepening, and retention, and leveraging partnerships and technology to grow customers and market share;

•Leverage our regional banking model and national franchise to drive scale, growth and expansion;

•Anticipate evolving customer needs to drive profitable growth;

•Maintain positive operating leverage and execute disciplined capital management; and

•Provide stability and resilience through disciplined risk management, while maintaining an aggregate moderate-to-low risk appetite.

Our 2024 results reflect strong organic growth, across both loans and deposits, supported by the combination of existing and new businesses. Driven by our strong liquidity, capital, and credit, we invested in building existing business relationships, while expanding capabilities and expertise through both geographic expansion and the addition of new commercial verticals. Credit continues to perform well, consistent with our aggregate moderate-to-low risk appetite. We remain focused on delivering profitable growth and driving value for our shareholders, and believe Huntington is positioned to perform well through the dynamic environment.

Economy

The rate cutting cycle began in 2024, with a September 50 basis point cut and two fourth quarter 25 basis point cuts, bringing the cumulative amount of rate cuts to 100 basis points since the September FOMC meeting. Inflation is still not within the Federal Reserve’s 2% target and has recently stopped trending lower. Employment data has stabilized after showing notable deterioration in early and mid-2024. The unemployment rate started the year at 3.8% and ended at 4.1%, holding relatively flat throughout the second half of 2024. Taking these factors into consideration, recent commentary from Federal Reserve members has been more neutral and suggesting it may be appropriate for the Federal Reserve to hold interest rates at current levels, with limited rate cuts expected in 2025.

Recent economic data has been mixed. The services sector continues to expand and prices paid for services remains high, which has been the main driver to overall inflation remaining elevated. Retail sales have held up well, while manufacturing remains weak and is generally still slowly contracting. Expectations are for the economy to hold up well for the first half of 2025, with more risks of a potential slowdown in the back half of the year.

Legislative and Regulatory

A comprehensive discussion of legislative and regulatory matters affecting us can be found in Item 1: Business - “Regulatory Matters” section of this Form 10-K.

2024 Form 10-K 49