HUNTINGTON BANCSHARES INC MD
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
HBANL$24.77+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-29.
0000049196-24-000095
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsExecutive OverviewDiscussion of Results of OperationsRisk Management and Capital:Credit RiskMarket RiskLiquidity RiskOperational RiskCompliance RiskCapitalBusiness Segment DiscussionAdditional DisclosuresCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0000049196-25-000038
Intro ductionExecutive OverviewDiscussion of Results of OperationsRisk ManagementCredit RiskMarket RiskLiquidity RiskOperational RiskCompliance RiskCapitalBusiness Segment DiscussionAdditional DisclosuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 280 previous paragraphs and 269 current paragraphs.
127 unchanged; 91 reworded; 49 added; 58 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 22 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
Noninterest income was $494 million, an increase of $27 million, or 6%, from the year-ago quarter, primarily due to increases in wealth and asset management revenue and capital markets and advisory fees. Noninterest expense was $1.2 billion, an increase of $15 million, or 1%, from the year-ago quarter, primarily due to higher personnel costs that were partially offset by lower deposit and other insurance expense.
Current report
•Deliver our Culture, Purpose, and Vision through a Differentiated Operating Model;
Current report
•Deliver top quartile performance through sustainable long-term profitable growth;
Current report
•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;
Current report
•Leverage our regional banking model and national franchise to drive scale, growth, and expansion;
Current report
•Anticipate evolving customer needs to drive profitable growth;
Current report
We are entering a period of heightened economic uncertainty as markets have been adjusting to changes in tariff policies. Through the 2025 first quarter, the Federal Reserve has held rates steady as inflation remains above its 2% target. Tariffs have the potential to increase inflation, and it is unknown if that would be a transitory or longer lasting impact. On the national employment side, the data has held up well, although unemployment has ticked up modestly to 4.2%. Federal Reserve speakers, including Chairman Powell, have stated they can be patient at current inflation and unemployment levels to see how policy changes start to impact the data.
Current report
Economic data remains mixed. Manufacturing continues to contract while the services sector expands, albeit at a slower pace than the previous two quarters. U.S. consumer spending appears to be slowing down. Focusing on backwards looking data, there are signs of a slowdown. Coupling that with forward looking expectations based on the uncertainty from tariffs, more economists are expecting the U.S. to enter a recession in the back half of 2025. The severity of the recession is likely dependent on tariff rates and a potential trade war escalation.
Current report
On April 17, 2025, the Federal Reserve issued a notice of proposed rulemaking to amend its capital planning and stress testing framework applicable to large banking organizations, including Huntington. The proposal would average stress test results over two consecutive years to reduce volatility in the SCB requirement that results from the stress test. The proposal would also modify the annual effective date of the SCB requirement from October 1 to January 1 of the following year to provide banking organizations with additional time to incorporate the results of the stress test into capital planning and management. We are in the process of evaluating this proposed rulemaking and assessing its potential impact on the Company if adopted as proposed.
Current report
Net interest income for the first quarter of 2025 increased $139 million, or 11%, from the first quarter of 2024. FTE net interest income, a non-GAAP financial measure, for the first quarter of 2025 increased $141 million, or 11%, from the first quarter of 2024. The increase in FTE net interest income primarily reflects a $14.5 billion, or 8%, increase in average earning assets and a 9 basis point increase in the FTE NIM to 3.10%, partially offset by a $15.1 billion, or 11%, increase in average interest-bearing liabilities. The higher NIM was driven by lower cost of funds, the impact of hedging, and the benefit of higher interest recoveries and other activity, partially offset by a decrease in yields on earning assets.
Current report
The provision for credit losses for the first quarter of 2025 was $115 million, an increase of $8 million, or 7%, compared to the first quarter of 2024.
Current report
Noninterest income for the first quarter of 2025 was $494 million, an increase of $27 million, or 6%, from the year-ago quarter. Wealth and asset management revenue increased $13 million, or 15%, primarily due to increases in trust and management account fees. Capital markets and advisory fees increased $11 million, or 20%, primarily due to commercial loan production related capital market activities.
Current report
Noninterest expense for the first quarter of 2025 was $1.2 billion, an increase of $15 million, or 1%, from the year-ago quarter. Personnel costs increased $32 million, or 5%, primarily due to higher incentive compensation and salary expense. Partially offsetting this increase, deposit and other insurance expense decreased $17 million, or 31%, primarily due to a $29 million expense reduction attributable to the FDIC DIF special assessment, partially offset by non-recurring adjustments to FDIC insurance expense.
Current report
Credit risk is the risk of financial loss if a counterparty is not able to meet the agreed upon terms of the financial obligation. The majority of our credit risk is associated with lending activities, as the acceptance and management of credit risk is central to profitable lending. A number of other products expose the Company to credit risk, including investment securities and derivatives. The credit exposure of our derivatives is limited to the aggregate sum of net asset values with counterparties in which we are in a net asset position. Potential credit losses are mitigated by derivatives through central clearing parties, careful evaluation of counterparty credit standing, selection of counterparties from a limited group of high quality institutions, collateral agreements, and other contract provisions.
Current report
The following table presents the detail of our NALs and NPAs.
Current report
Our ACL is comprised of two different components, the ALLL and the AULC, both of which in our judgment are appropriate to absorb lifetime expected credit losses in our loan and lease portfolio. We utilize an independent third-party baseline forecast that projects future economic conditions and considers multiple macroeconomic scenarios. These macroeconomic scenarios contain certain variables that are influential to our modeling process, the most significant being unemployment rates and GDP.
Current report
The most significant risk profiles the Company maintains at March 31, 2025 relate to business banking loans within the C&I portfolio and office loans within the CRE portfolio. The business banking risk profile addresses a modestly upward trend in default rates resulting from higher interest rates and inflationary impacts on business banking customers. The office portfolio risk profile addresses concerns relating to higher interest rates, upcoming maturities, falling property values, and uncertainty about demand for office space.
Current report
Sources of wholesale funding include non-customer brokered deposits, short-term borrowings, and long-term debt. Our wholesale funding totaled $26.0 billion at March 31, 2025, an increase of $2.4 billion compared to $23.6 billion at December 31, 2024. The increase from year end was primarily due to a $1.7 billion increase in long-term debt resulting from the issuance of $1.5 billion of senior bank notes and a $415 million CLN transaction completed during the 2025 first quarter.
Current report
A summary of the Bank’s primary contingent liquidity sources is presented in the following table.
Current report
Credit ratings represent evaluations by rating agencies based on a number of factors, including financial strength and the ability to generate earnings, as well as factors not entirely within our control, including conditions affecting the financial services industry, the economy, and changes in rating methodologies. Credit ratings are subject to change at any time. Our credit ratings impact our availability and cost of financing, as well as collateral requirements for certain derivative instruments and deposit products. A downgrade to our credit ratings could adversely affect our access to capital, increase our cost of funds, or trigger additional collateral or funding requirements.
Current report
The following table presents our credit ratings and rating agency outlooks.
Current report
(1) Standard & Poor’s does not provide a depositor rating. The Bank’s issuer credit rating is A-.
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Removed paragraphs (58)
Previous report
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
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.
Previous report
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.
Previous report
Noninterest income was $523 million, an increase of $14 million, or 3%, from the year-ago quarter, primarily due increases in capital markets and advisory fees, wealth and asset management revenue, and mortgage banking income, partially offset by the $33 million favorable mark-to-market on pay-fixed swaptions recognized in the year-ago quarter. Noninterest expense was $1.1 billion, an increase of $40 million, or 4%, from the year-ago quarter, primarily due to increases in personnel costs and outside data processing and other services, partially offset by decreases in deposit and other insurance expense and net occupancy.
Previous report
•Drive sustainable long-term revenue growth and efficiency;
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•Deliver a Category of One customer experience through our distinguished brand and culture;
Previous report
•Extend our digital leadership with focus on ease of use, access to information, and self-service across products and services;
Previous report
•Leverage expertise and capabilities to acquire and deepen relationships and launch of select partnerships;
Previous report
The rate cutting cycle began with the Federal Reserve cutting the federal funds rate by 50 basis points at the September FOMC meeting. Inflation is still not to the Federal Reserve’s 2% target, however, it has been continuing to move lower. On the other side of the Federal Reserve’s dual mandate, employment data has deteriorated recently. The unemployment rate has increased from a cyclical low of 3.4% to 4.1% at September 30, 2024, including reaching 4.3% during the quarter. While the unemployment rate is still low by historical standards, the Federal Reserve has mentioned that risks have shifted to be more balanced and thus should likely warrant a less restrictive monetary policy. The Federal Reserve maintains that economic data will continue to drive their decision making process for rates.
Previous report
The recent economic data has been mixed. Core manufacturing continues to contract, but the services sector is still slowly expanding. Overall U.S. consumer spending continues to be resilient defying expectations of a slowdown, although personal savings rates have been trending down over the course of 2024, which helps explain some of the resiliency. In addition, overall U.S. credit card balances and delinquency rates are both increasing. While overall risks are increasing, most economists still expect either a soft landing or a short and shallow recession.
Previous report
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 became effective October 1, 2024 and the deadline for the first resolution plan submission is July 1, 2025.
Previous report
(4)Includes consumer certificates of deposit of $250,000 or more.
Previous report
Net interest income for the third quarter of 2024 decreased $17 million, or 1%, from the third quarter of 2023. FTE net interest income, a non-GAAP financial measure, for the third quarter of 2024 decreased $15 million, or 1%, from the third quarter of 2023. The decrease in FTE net interest income primarily reflected a 22 basis point decrease in the FTE NIM to 2.98% and a $14.4 billion, or 11%, increase in average interest-bearing liabilities, partially offset by a $10.9 billion, or 6%, increase in average earning assets. The lower NIM was primarily driven by higher cost of funds given the higher interest rate environment and a $12.3 billion, or 11%, increase in interest-bearing deposits, partially offset by higher loan and lease and investment security yields.
Previous report
(4)Includes consumer certificates of deposit of $250,000 or more.
Previous report
Net interest income for the first nine-month period of 2024 decreased $173 million, or 4%, from the year-ago period. FTE net interest income, a non-GAAP financial measure, for the first nine-month period of 2024 decreased $165 million, or 4%, from the year-ago period. The decrease in FTE net interest income reflected a 24 basis point decrease in the FTE NIM to 3.00% and a $11.3 billion, or 9%, increase in interest-bearing liabilities, partially offset by a $6.3 billion, or 4%, increase in average total earning assets. The NIM compression was primarily due to the higher rate environment driving higher cost of funds, partially offset by an increase in loans and lease and investment security yields.
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Year to Date Average Balance Sheet
Previous report
Average assets for the first nine-month period of 2024 were $194.4 billion, an increase of $7.0 billion, or 4%, from the year-ago period, primarily due to increases in average loans and leases of $2.4 billion, or 2%, interest-earning deposits with banks of $2.0 billion, or 23%, and total securities of $1.7 billion, or 4%. The increase in average loans and leases included growth in average consumer loans of $1.7 billion, or 3%, and average commercial loans and leases of $764 million, or 1%.
Previous report
Average liabilities for the first nine-month period of 2024 increased $6.1 billion, or 4%, from the year-ago period, primarily due to an increase in average deposits. Total average deposits increased $7.0 billion, or 5%, due to an increase in average interest-bearing deposits of $12.5 billion, or 11%, partially offset by a decrease in noninterest-bearing deposits of $5.5 billion, or 16%. The increase in average interest-bearing deposits was driven by increases in average money market deposits and certificates of deposits, partially offset by a decrease in savings and other domestic deposits.
Previous report
The provision for credit losses for the third quarter of 2024 was $106 million, an increase of $7 million, or 7%, compared to the third quarter of 2023. Provision for credit losses for the first nine-month period of 2024 was $313 million, an increase of $37 million, or 13%, compared to the year-ago period. The increase over the prior year-to-date period reflects increased charge-off activity in the current year partially offset by a slightly higher allowance build in the year-ago period. Overall coverage ratios remain reflective of the current macroeconomic environment including recognition of near-term recessionary risks.
Previous report
Noninterest income for the third quarter of 2024 was $523 million, an increase of $14 million, or 3%, from the year-ago quarter. Capital markets and advisory fees increased $26 million, or 50%, primarily due to higher underwriting and interest rate derivative fees. Wealth and asset management revenue increased $14 million, or 18%, reflecting an increase in assets under management and higher fixed annuity commissions. Mortgage banking income increased $11 million, or 41%, primarily due to higher saleable spreads. Payments and cash management revenue increased $6 million, or 4%, primarily reflecting higher card and merchant acquiring transaction revenue. Customer deposit and loan fees increased $6 million, or 8%, primarily due to higher loan commitment fees. Partially offsetting these increases, other noninterest income decreased $43 million, or 88%. Other noninterest income in the third quarter of 2023 included a $33 million favorable mark-to-market on pay-fixed swaptions, while the third quarter of 2024 included $8 million of contra-revenue related to premium costs and mark-to-market associated with credit risk transfer transactions. Leasing revenue also decreased $13 million, or 41%, driven by lower income from terminated leases.
Previous report
Noninterest income for the first nine-month period of 2024 decreased $35 million, or 2%, from the year-ago period. Other noninterest income decreased $127 million, or 88%, primarily due to a $57 million gain on the sale of our RPS business and an $18 million favorable mark-to-market on pay-fixed swaptions recognized in the first nine-month period of 2023, and $19 million of contra-revenue related to premium costs and mark-to-market associated with credit risk transfer transactions recognized in the first nine-month period of 2024. Leasing revenue decreased $23 million, or 28%, driven by lower income on terminated leases and operating lease income. Partially offsetting these decreases, wealth and asset management revenue increased $29 million, or 12%, reflecting higher fixed annuity commissions and an increase in assets under management. Capital markets and advisory fees increased $28 million, or 16%, primarily due to higher underwriting fees. Payments and cash management revenue increased $23 million, or 5%, reflecting higher commercial treasury management and card transaction revenue. Customer deposit and loan fees increased $14 million, or 6%, primarily reflecting higher deposit fees. Mortgage banking income increased $13 million, or 15%, primarily reflecting increases in net servicing income and saleable spreads.
Previous report
Noninterest expense for the third quarter of 2024 was $1.1 billion, an increase of $40 million, or 4%, from the year-ago quarter. Personnel costs increased $62 million, or 10%, primarily due to higher salary, benefit, and incentive compensation expense. Outside data processing and other services increased $18 million, or 12%, reflecting higher technology and data expense. Partially offsetting these increases, other noninterest expense decreased $15 million, or 17%, largely due to a gain from the call of subordinated debt and lower franchise and other taxes, deposit and other insurance expense decreased $10 million, or 40%, primarily due to $7 million of expense reduction attributable to the FDIC DIF special assessment, and net occupancy expense decreased $10 million, or 15%, primarily due to a decrease in corporate real estate consolidation expense.
Previous report
Noninterest expense for the first nine-month period of 2024 increased $158 million, or 5%, from the year-ago period. Personnel costs increased $102 million, or 5%, primarily due to increases in salary, incentive compensation, and benefit expense, partially offset by a $31 million decrease in severance expense related to staffing efficiencies. Outside data processing increased $50 million, or 11%, primarily due to higher technology and data expense. Deposit and other insurance expense increased $26 million, or 38%, primarily due to $31 million of additional expense attributable to the FDIC DIF special assessment. Partially offsetting these increases, lease financing equipment depreciation expense decreased $10 million, or 45%.
Previous report
Risk awareness, identification and assessment, reporting, and active management are key elements in overall risk management. Controls include, among others, effective segregation of duties, access management, and authorization and reconciliation procedures, as well as staff education and a disciplined assessment process. We use a multi-faceted approach to risk governance. It begins with the Board of Directors, which has defined our risk appetite as aggregate moderate-to-low, through-the-cycle.
Previous report
Credit risk is the risk of financial loss if a counterparty is not able to meet the agreed upon terms of the financial obligation. The majority of our credit risk is associated with lending activities, as the acceptance and management of credit risk is central to profitable lending. We also have credit risk associated with our investment securities portfolios (see Note 3 - “Investment Securities and Other Securities” of the Notes to the Unaudited Consolidated Financial Statements). We engage with other financial counterparties for a variety of purposes including investing, asset and liability management, mortgage banking, and trading activities. A variety of derivative financial instruments, principally interest rate swaps, caps, swaptions, swaption collars, floors, forward contracts, and forward starting interest rate swaps, are used in asset and liability management activities to protect against the risk of adverse price or interest rate movements. We also use derivatives, principally loan sale commitments, in hedging our mortgage loan interest rate lock commitments and mortgage loans held for sale. While there is credit risk associated with derivative activity, we believe this exposure is minimal.
Previous report
Commercial loans and leases are placed on nonaccrual status at 90-days past due, or earlier if repayment of principal and interest is in doubt. Of the $549 million of commercial related NALs at September 30, 2024, $267 million, or 49%, represented loans and leases that were less than 30-days past due, demonstrating our continued commitment to proactive credit risk management.
Previous report
The following table reflects period-end NALs and NPAs detail:
Previous report
NCOs were an annualized 0.30% of average loans and leases for the first nine-month period of 2024, up from 0.20% in the year ago period. NCOs for the commercial loans and leases and consumer loans were higher, with annualized commercial loan and lease NCOs of 0.32% in the current period, compared to 0.20% in the year-ago period, and annualized consumer loan NCOs of 0.27% in the current period, compared to 0.20% in the year-ago period.
Showing the first 40 of 58 passages. Open the source sections for the rest.
Reworded paragraphs (91)
Previous wording
We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through the Bank, we are committed to making people’s lives better, helping businesses thrive, and strengthening the communities we serve, and we have been servicing the financial needs of our customers since 1866. Through our subsidiaries, we provide full-service commercial and consumer deposit, lending, and other banking services. These include, but are not limited to, payments, mortgage banking, automobile, recreational vehicle and marine financing, investment banking, capital markets, advisory, equipment financing, distribution finance, investment management, trust, brokerage, insurance, and other financial products and services. As of September 30, 2024, we have 975 full-service branches and private client group offices which are located in Ohio, Colorado, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, North Carolina, Pennsylvania, West Virginia, and Wisconsin. Select financial services and other activities are also conducted in various other states.
Current wording
We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through the Bank, we are committed to making people’s lives better, helping businesses thrive, and strengthening the communities we serve, and we have been servicing the financial needs of our customers since 1866. Through our subsidiaries, we provide full-service commercial and consumer deposit, lending, and other banking and financial services. These include, but are not limited to, payments, mortgage banking, direct and indirect consumer financing, investment banking, capital markets, advisory, equipment financing, distribution finance, investment management, trust, brokerage, insurance, and other financial products and services. As of March 31, 2025, our 968 full-service branches and private client group offices are located in Ohio, Colorado, Florida, Illinois, Indiana, Kentucky, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina, West Virginia, and Wisconsin. We also maintain a local banking presence in Texas, along with conducting select financial services and other activities in other states.
Previous wording
This MD&A provides information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows. The MD&A included in our 2023 Annual Report on Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2023 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements, and other information contained in this report.
Current wording
This MD&A provides information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows. This MD&A provides only material updates to the MD&A included in our 2024 Annual Report on Form 10-K, and therefore, should be read in conjunction with that report. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements, and other information contained in this report.
Previous wording
For the reporting updates discussed above, prior period results have been adjusted to conform to the current presentation.
Current wording
During the fourth quarter of 2024, we 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.
Previous wording
(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.
Current wording
(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 taxes and calculated assuming a 21% tax rate.
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Summary of 2024 Third Quarter Results Compared to 2023 Third Quarter
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Summary of 2025 First Quarter Results Compared to 2024 First Quarter
Previous wording
For the third quarter of 2024, we reported net income of $517 million, or $0.33 per diluted common share, compared with $547 million, or $0.35 per diluted common share, in the year-ago quarter.
Current wording
For the first quarter of 2025, we reported net income of $527 million, or $0.34 per diluted common share, compared with $419 million, or $0.26 per diluted common share, in the year-ago quarter. The first quarter of 2025 reported net income was negatively impacted by $3 million, or $2 million after tax, of expense attributable to the FDIC DIF special assessment. The year-ago quarter reported net income was negatively impacted by additional expense attributable to the FDIC DIF special assessment totaling $32 million, or $25 million after tax ($0.02 per common share), and $7 million, or $5 million after tax, of expense from staffing efficiencies.
Previous wording
Net interest income was $1.4 billion for the third quarter of 2024, a decrease of $17 million, or 1%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, decreased $15 million, or 1%, from the year-ago quarter. The decrease in FTE net interest income primarily reflected a 22 basis point decrease in the FTE NIM to 2.98% and a $14.4 billion, or 11%, increase in average interest-bearing liabilities, partially offset by a $10.9 billion, or 6%, increase in average earning assets.
Current wording
Net interest income was $1.4 billion for the first quarter of 2025, an increase of $139 million, or 11%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, increased $141 million, or 11%, from the year-ago quarter. The increase in FTE net interest income primarily reflected a $14.5 billion, or 8%, increase in average earning assets and a 9 basis point increase in the FTE NIM to 3.10%, partially offset by a $15.1 billion, or 11%, increase in average interest-bearing liabilities. The NIM increase was primarily due to a decrease in cost of funding, the impact of hedging, and the benefit of higher interest recoveries and other activity, partially offset by a decrease in yields on interest earning assets.
Previous wording
The provision for credit losses increased $7 million, or 7%, from the year-ago quarter to $106 million in the third quarter of 2024. The ACL increased $68 million from the year-ago quarter to $2.4 billion in the third quarter of 2024, or 1.93% of total loans and leases, compared to $2.4 billion, or 1.96% of total loans and leases, for the year-ago quarter.
Current wording
The provision for credit losses increased $8 million, or 7%, from the year-ago quarter to $115 million in the first quarter of 2025. The ACL increased $63 million from the year-ago quarter to $2.5 billion, or 1.87% of total loans and leases, in the first quarter of 2025, compared to $2.4 billion, or 1.97% of total loans and leases, for the year-ago quarter.
Previous wording
Total assets at September 30, 2024 were $200.5 billion, an increase of $11.2 billion, or 6%, compared to December 31, 2023. The increase in total assets was primarily driven by increases in loans and leases of $4.4 billion, or 4%, total investment securities of $3.5 billion, or 8%, and interest-earning deposits with banks of $2.4 billion, or 27%. Total liabilities at September 30, 2024 were $179.9 billion, an increase of $9.9 billion, or 6%, compared to December 31, 2023. The increase in total liabilities was primarily driven by increases in total deposits of $7.1 billion, or 5%, and long-term debt of $3.3 billion, or 26%.
Current wording
Total assets at March 31, 2025 were $209.6 billion, an increase of $5.4 billion, or 3%, compared to December 31, 2024. The increase in total assets was primarily driven by increases in interest-earning deposits with banks of $2.7 billion, or 23%, and loans and leases of $2.5 billion, or 2%. Total liabilities at March 31, 2025 were $189.1 billion, an increase of $4.7 billion, or 3%, compared to December 31, 2024. The increase in total liabilities was primarily driven by increases in total deposits of $2.9 billion, or 2%, and long-term debt of $1.7 billion, or 11%.
Previous wording
The tangible common equity to tangible assets ratio increased to 6.4% at September 30, 2024, compared to 6.1% at December 31, 2023, primarily due to an improvement in AOCI driven by changes in interest rates, and an increase in tangible common equity from current period earnings, net of dividends, partially offset by an increase in tangible assets. CET1 risk-based capital ratio was 10.4% at September 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 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 the second quarter 2024 CLN transaction.
Current wording
The tangible common equity to tangible assets ratio increased to 6.3% at March 31, 2025, compared to 6.1% at December 31, 2024, primarily due to an improvement in AOCI driven by changes in interest rates, and an increase in tangible common equity from current period earnings, net of dividends, partially offset by an increase in tangible assets. The CET1 risk-based capital ratio was 10.6% at March 31, 2025, compared to 10.5% at December 31, 2024. The increase in our CET1 risk-based capital ratio was primarily due to current period earnings, net of dividends, partially offset by the CECL transition adjustment and an increase in risk-weighted assets. The increase in risk-weighted assets was driven by loan growth, partially offset by the impact of a first quarter 2025 CLN transaction.
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•Build on our vision to be the country’s leading people-first, digitally powered bank;
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•Build on our vision to be the leading People-First, Customer-Centered bank in the country;
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•Provide stability and resilience through risk management, maintaining an aggregate moderate-to-low, through-the-cycle risk appetite.
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•Provide stability and resilience through disciplined risk management, while maintaining an aggregate moderate-to-low risk appetite.
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Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, delivered through increasing loan and deposit balances, in addition to expanding net interest income and noninterest income. We have continued our disciplined and proactive approach to managing credit quality consistent with our through the cycle 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.
Current wording
Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, highlighted by growth in loan and deposit balances, expansion of our net interest income, and continued strong performance in fee revenue. We have continued our disciplined approach to managing credit quality 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 well positioned to manage through the evolving economic outlook.
Previous wording
The following tables detail the change in our average balance sheet and the net interest margin.
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The following table details the change in our average balance sheet and the net interest margin.
Previous wording
Average assets for the third quarter of 2024 were $198.3 billion, an increase of $11.7 billion, or 6%, from the third quarter of 2023, primarily due to increases in average total securities of $4.2 billion, or 10%, average loans and leases of $3.7 billion, or 3%, and average interest-earning deposits with banks of $3.0 billion, or 31%. The increase in average loans and leases was driven by growth in average consumer loans of $2.1 billion, or 4%, and average commercial loans and leases of $1.7 billion, or 2%.
Current wording
Average assets for the first quarter of 2025 were $205.1 billion, an increase of $14.8 billion, or 8%, from the first quarter of 2024, primarily due to increases in average loans and leases of $8.9 billion, or 7%, average total securities of $3.6 billion, or 9%, and average interest-earning deposits with banks of $1.9 billion, or 19%. The increase in average loans and leases was driven by growth in average commercial loans and leases of $5.8 billion, or 8%, and average consumer loans of $3.1 billion, or 6%.
Previous wording
Average liabilities for the third quarter of 2024 increased $10.3 billion, or 6%, from the third quarter of 2023, primarily due to increases in average deposits of $8.3 billion, or 6%, and in total borrowings of $2.1 billion, or 14%. Average deposits increased due to an increase in average interest-bearing deposits of $12.3 billion, or 11%, partially offset by a decrease in noninterest-bearing deposits of $4.0 billion, or 12%. The increase in average interest-bearing deposits was primarily due to increases in average money market deposits and certificates of deposits, partially offset by decreases in savings and other domestic deposits. The increase in total borrowings was primarily due to the addition of auto securitization trust in the first quarter of 2024 and the normal management of funding needs.
Current wording
Average liabilities for the first quarter of 2025 increased $14.0 billion, or 8%, from the first quarter of 2024, primarily due to increases in average deposits of $10.9 billion, or 7%, and in total borrowings of $3.3 billion, or 22%. Average deposits increased due to an increase in average interest-bearing deposits of $11.8 billion, or 10%, partially offset by a decrease in noninterest-bearing deposits of $1.0 billion, or 3%. The increase in average interest-bearing deposits was primarily due to increases in average money market and interest-bearing demand deposits, partially offset by decreases in average time and savings deposits. The increase in average total borrowings was driven by an increase in long-term FHLB advances used to support asset growth, the first quarter 2024 auto loan securitization, and CLN transactions.
Previous wording
Average shareholders’ equity for the third quarter of 2024 increased $1.4 billion, or 7%, from the third quarter of 2023, primarily due to the benefit from a decrease in average accumulated other comprehensive loss and earnings, net of dividends.
Current wording
Average shareholders’ equity for the first quarter of 2025 increased $784 million, or 4%, from the first quarter of 2024, primarily due to earnings, net of dividends, and the benefit from a decrease in average accumulated other comprehensive loss driven by changes in the interest rate environment, partially offset by the fourth quarter 2024 redemption of series E preferred stock.
Previous wording
The components of the provision for credit losses were as follows:
Current wording
The following table presents the components of the provision for credit losses.
Previous wording
The provision for income taxes in the third quarter of 2024 was $116 million, compared to $136 million in the third quarter of 2023. The provision for income taxes for the nine-month periods ended September 30, 2024 and September 30, 2023 was $308 million and $414 million, respectively. All periods included the benefits from general business credits, tax-exempt income, tax-exempt bank owned life insurance income, and investments in qualified affordable housing projects. The effective tax rate for the third quarter of 2024 and third quarter of 2023 was 18.2% and 19.7%, respectively. The effective tax rates for the nine-month periods ended September 30, 2024 and September 30, 2023 were 17.8% and 19.4%, respectively. The variances between the third quarter of 2024 compared to the third quarter of 2023 related primarily to lower pretax income and capital losses. The variances between the nine-month period ended September 30, 2024 compared to the nine-month period ended September 30, 2023 related primarily to lower pretax income, stock-based compensation, and discrete tax benefits.
Current wording
The provision for income taxes in the first quarter of 2025 was $122 million, compared to $86 million in the first quarter of 2024. Both periods included the benefits from general business credits, tax-exempt income, tax-exempt bank-owned life insurance income, and investments in qualified affordable housing projects. The effective tax rate for the first quarter of 2025 and first quarter of 2024 was 18.6% and 16.8%, respectively. The increases in both the provision for income taxes and effective tax rate in the first quarter of 2025, compared to the first quarter of 2024, related primarily to higher pretax income and lower discrete tax benefits.
Previous wording
The net federal deferred tax asset was $515 million, and the net state deferred tax asset was $80 million at September 30, 2024.
Current wording
The net federal deferred tax asset was $598 million, and the net state deferred tax asset was $91 million at March 31, 2025.
Previous wording
We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax audits have been completed for tax years through 2016. Also, with few exceptions, the Company is no longer subject to state and local income tax examinations for tax years before 2019.
Current wording
We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax audits have been completed for tax years through 2019. The 2020-2023 tax years remain open under the statute of limitations. Also, with few exceptions, the Company is no longer subject to state, city, or foreign income tax examinations for tax years before 2020.
Previous wording
We classify / aggregate risk into seven risk pillars: credit, market, liquidity, operational, compliance, strategic, and reputation. More information on risk can be found in Item 1A Risk Factors below, the Risk Factors section included in Item 1A of our 2023 Annual Report on Form 10-K and subsequent filings with the SEC. The MD&A included in our 2023 Annual Report on Form 10-K should be read in conjunction with this MD&A, as this discussion provides only material updates to the 2023 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements, and other information contained in this report. Our definition, philosophy, and approach to risk management have not materially changed from the discussion presented in the 2023 Annual Report on Form 10-K.
Current wording
Our Risk Governance Framework and Risk Appetite Statement are foundational to our risk management program. The Risk Governance Framework defines the three lines of defense structure, roles, responsibilities, and requirements. The Risk Appetite Statement is approved by our Board and defines the level and types of risks we are willing to assume to achieve our corporate objectives through defined risk limits for the seven key risk categories to which we are exposed: credit, market, liquidity, operational, compliance, strategic, and reputation. More information on our risk management can be found in Item 1A Risk Factors, the Risk Factors section included in Item 1A of our 2024 Annual Report on Form 10-K, and subsequent filings with the SEC. Our definition, philosophy, and approach to risk management have not materially changed from the discussion presented in the 2024 Annual Report on Form 10-K.
Previous wording
We focus on the early identification, monitoring, and management of all aspects of our credit risk. In addition to the traditional credit risk mitigation strategies of credit policies and processes, market risk management activities, and portfolio diversification, we use quantitative measurement capabilities that utilize external data sources, enhanced modeling technology, and internal stress testing processes. Our disciplined portfolio management processes are central to our commitment to maintaining an aggregate moderate-to-low, through-the-cycle risk appetite. In our efforts to identify risk mitigation techniques, we have focused on product design features, origination policies, and solutions for delinquent or stressed borrowers.
Current wording
We focus on the early identification, monitoring, and management of all aspects of our credit risk. In addition to the traditional credit risk mitigation strategies of credit policies and processes, market risk management activities, and portfolio diversification, we use quantitative measurement capabilities that utilize external data sources, enhanced modeling technology, and internal stress testing processes. Our disciplined portfolio management processes are central to our commitment to maintaining an aggregate moderate-to-low risk appetite. In our efforts to identify risk mitigation techniques, we have focused on product design features, origination policies, and solutions for delinquent or stressed borrowers.
Previous wording
At September 30, 2024, our loans and leases totaled $126.4 billion, representing a $4.4 billion, or 4%, increase compared to $122.0 billion at December 31, 2023.
Current wording
At March 31, 2025, our loans and leases totaled $132.5 billion, representing a $2.5 billion, or 2%, increase compared to $130.0 billion at December 31, 2024.
Previous wording
Our loan and lease portfolio is a managed mix of consumer and commercial credits. We manage the overall credit exposure and portfolio composition via a credit concentration policy. The policy designates specific loan types, collateral types, and loan structures to be formally tracked and assigned maximum exposure limits as a percentage of capital. Commercial lending by NAICS categories, specific limits for CRE project types, loans secured by residential real estate, large dollar exposures, and designated high risk loan categories represent examples of specifically tracked components of our concentration management process. There are no identified concentrations that exceed the assigned exposure limit. Our concentration management policy is approved by the ROC and is used to ensure a high quality, well-diversified portfolio that is consistent with our overall objective of maintaining an aggregate moderate-to-low, through-the-cycle risk appetite. Changes to existing concentration limits, incorporating specific information relating to the potential impact on the overall portfolio composition and performance metrics, require the approval of the ROC prior to implementation.
Current wording
Our loan and lease portfolio is a managed mix of consumer and commercial credits. We manage the overall credit exposure and portfolio composition via a credit concentration policy. The policy designates specific loan types, collateral types, and loan structures to be formally tracked and assigned maximum exposure limits as a percentage of capital. Commercial lending by NAICS categories, specific limits for CRE project types, loans secured by residential real estate, large dollar exposures, and designated high risk loan categories represent examples of specifically tracked components of our concentration management process. There are no identified concentrations that exceed the assigned exposure limit. Our concentration management policy is approved by the ROC and is used to ensure a high quality, well-diversified portfolio that is consistent with our overall objective of maintaining an aggregate moderate-to-low risk appetite. Changes to existing concentration limits, incorporating specific information relating to the potential impact on the overall portfolio composition and performance metrics, require the approval of the ROC prior to implementation.
Previous wording
The table below provides our total loan and lease portfolio segregated by industry type:
Current wording
The table below provides our total loan and lease portfolio segregated by industry type. The changes in the industry composition from December 31, 2024 are consistent with the portfolio growth metrics.
Previous wording
(1) Non-real estate secured commercial loans to REITs, which are classified in the C&I loan category, are included in the real estate, finance and insurance, and health care industry types.
Current wording
(1) Includes non-real estate secured commercial loans to REITs, which are classified in the C&I loan category.
Previous wording
(2) Amounts include $4.1 billion and $3.3 billion of auto dealer services loans at September 30, 2024 and December 31, 2023, respectively.
Current wording
(2) Amounts include $3.9 billion and $4.2 billion of auto dealer services loans at March 31, 2025 and December 31, 2024, respectively.
Previous wording
Our CRE portfolio totaled $11.5 billion at September 30, 2024, a decrease of $879 million, or 7%, compared to December 31, 2023, driven by loan pay-offs and low demand for new originations. The CRE portfolio had an associated allowance coverage of 4.4% and 4.2% at September 30, 2024 and December 31, 2023, respectively.
Current wording
Our CRE portfolio totaled $11.0 billion at March 31, 2025, a decrease of $110 million, or 1%, compared to December 31, 2024. The CRE portfolio had an associated allowance coverage of 4.0% and 4.3% at March 31, 2025 and December 31, 2024, respectively.
Previous wording
With remote work options leading to increased vacancy rates and underutilization of office space across the country, the office sector continues to be an area of uncertainty. Our office portfolio, which is predominantly suburban and multi-tenant loans, totaled $1.6 billion, or 1% of total loans and leases, as of September 30, 2024, compared to $1.8 billion, or 1% of total loans and leases, at December 31, 2023. We have established ACL reserves of approximately 11% for our CRE office portfolio as of September 30, 2024, compared to approximately 10% at December 31, 2023. At September 30, 2024, there was $31 million of outstanding balances in the office portfolio that were 30 or more days past due.
Current wording
With declines in demand and property values of office space across the country, the office sector continues to be an area of uncertainty. Our office portfolio, which is predominantly suburban and multi-tenant loans, totaled $1.6 billion, or 1% of total loans and leases, at both March 31, 2025 and December 31, 2024. We have established ACL reserves of approximately 11% for our CRE office portfolio at both March 31, 2025 and December 31, 2024. As of March 31, 2025, there was $15 million of outstanding balances in the office portfolio that were 30 or more days past due.
Previous wording
We believe the most meaningful way to assess overall credit quality performance is through an analysis of specific performance ratios. This approach forms the basis of the discussion in the sections immediately following: NPAs, NALs, ACL, and NCOs. In addition, we utilize delinquency rates, risk distribution and migration patterns, product segmentation, and origination trends in the analysis of our credit quality performance.
Current wording
We believe the most meaningful way to assess overall credit quality performance is through an analysis of specific performance ratios. This approach forms the basis of the discussion in the sections immediately following: NALs and NPAs, ACL, and NCOs. In addition, we utilize delinquency rates, risk distribution and migration patterns, product segmentation, and origination trends in the analysis of our credit quality performance.
Previous wording
Credit quality performance in the third quarter of 2024 reflected NCOs of $93 million, or 0.30% of average total loans and leases, annualized, an increase of $20 million, compared to $73 million, or 0.24%, in the year-ago quarter. The increase reflects an $11 million increase in consumer NCOs to $39 million and a $9 million increase in commercial NCOs to $54 million in the third quarter of 2024. NPAs increased from December 31, 2023 by $73 million, or 10%, primarily driven by a $64 million increase in commercial and industrial NALs.
Current wording
Credit quality performance in the first quarter of 2025 reflected NCOs of $86 million, or 0.26% of average total loans and leases, annualized, a decrease of $6 million, compared to $92 million, or 0.30%, in the year-ago quarter. The decrease reflects an $11 million decrease in commercial NCOs to $44 million, partially offset by a $5 million increase in consumer NCOs to $42 million in the first quarter of 2025. NPAs decreased from December 31, 2024 by $18 million, or 2%, primarily driven by a $44 million decrease in commercial and industrial NALs, partially offset by a $17 million increase in other NPAs.
Previous wording
The baseline scenario used in the September 30, 2024 ACL determination assumes the labor market has softened with the unemployment rate peaking at 4.2% in the third quarter of this year. Marginal improvement is expected moving forward with unemployment returning to 4.0% by 2026. The Federal Reserve is projected to enter into a cycle of rate cuts, with regular cuts forecast throughout the remainder of 2024 through 2026 until reaching 3% by 2027. Inflation is forecasted to approach the Federal Reserve’s target level of 2% by the end of 2024 and stabilize in 2025. The GDP is forecasted to continue to slow from 1.8% in the third quarter to 1.5% by the end of 2024. GDP is then forecasted to show marginal improvement throughout 2025, ending the fourth quarter of 2025 at 1.7%.
Current wording
The baseline scenario used in the March 31, 2025 ACL determination assumes the labor market has softened with the unemployment rate forecasted to remain at 4.1% throughout 2025 before marginally increasing to 4.2% in 2026. The Federal Reserve is projected to continue a cycle of rate cuts that started in September 2024, with further cuts forecast for the second half of 2025 and throughout 2026 until reaching a federal funds rate of 3% by the end of 2026. Inflation is forecast to be 2.8% for the first quarter of 2025 and is expected to remain at similar levels throughout 2025 before approaching 2.5% by the end of 2026. GDP is forecast to decline from the estimated first quarter 2025 level of 2.5%, ending the fourth quarter of 2025 at 1.6% before marginally improving to 1.9% by the end of 2026.
Previous wording
Management uses a probability-weighted approach that incorporates a baseline, an adverse, and a more favorable economic scenario when formulating the quantitative estimate for the allowance. The table below is intended to show how the forecasted path of unemployment and GDP in the baseline scenario has changed since the end of 2023:
Current wording
The table below is intended to show how the forecasted path of unemployment and GDP in the baseline scenario has changed since the end of 2024.
Previous wording
Management continues to assess the uncertainty in the macroeconomic environment, including ongoing risks in the commercial real estate environment, current inflation levels, political uncertainty, and geopolitical instability, considering multiple macroeconomic forecasts that reflect a range of possible outcomes. While we have incorporated estimates of economic uncertainty into our ACL, the ultimate impact that specific challenges will have on the economy remains unknown, including those related to the commercial real estate industry, recent inflation levels, higher interest rates, and the significant conflicts on-going around the world.
Current wording
Management continues to assess the uncertainty in the macroeconomic environment, including ongoing risks in the commercial real estate environment, current inflation levels, the impacts of U.S. trade policies, political uncertainty, and geopolitical instability, considering multiple macroeconomic forecasts that reflect a range of possible outcomes. While we have incorporated estimates of economic uncertainty into our ACL, the ultimate impact that specific challenges will have on the economy remains unknown.
Previous wording
The table below reflects the allocation of our ALLL among our various loan and lease categories as well as certain coverage metrics of the reported ALLL and ACL:
Current wording
The table below reflects the allocation of our ACL among our various loan and lease categories as well as certain coverage metrics of the reported ALLL and ACL.
Previous wording
The ACL was $2.4 billion, or 1.93% of total loans and leases, at September 30, 2024, compared to $2.4 billion, or 1.97% of total loans and leases, at December 31, 2023. The marginal absolute increase in the total ACL was driven by loan and lease portfolio growth during the first nine months of 2024. The reduction in the ACL coverage ratio at September 30, 2024 is reflective of the current macro-economic environment and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative reserve.
Current wording
At March 31, 2025, the ACL was $2.5 billion, or 1.87% of total loans and leases, compared to $2.4 billion, or 1.88%, at December 31, 2024. The increase in the total ACL was driven by loan and lease growth, partially offset by a slight reduction in the ACL coverage ratio. The ACL coverage ratio at March 31, 2025 is reflective of the current macro-economic forecast and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative reserve.
Previous wording
The table below reflects NCO detail for each of the periods presented:
Previous wording
NCOs were an annualized 0.30% of average loans and leases in the third quarter of 2024, up from 0.24% in the year-ago quarter, reflecting the continued normalization of net charge-offs. NCOs for commercial loans and leases and consumer loans were higher, with annualized commercial loan and lease NCOs of 0.31% in the third quarter of 2024, compared to 0.27% in the year-ago quarter, and annualized consumer loan NCOs of 0.28% in the third quarter of 2024, compared to 0.21% in the year-ago quarter.
Current wording
NCOs were an annualized 0.26% of average loans and leases in the first quarter of 2025, down from 0.30% in the year-ago quarter, largely due to the net recoveries in commercial real estate loans. NCOs for commercial loans and leases were lower, with annualized commercial loan and lease NCOs of 0.24% in the first quarter of 2025, compared to 0.32% in the year-ago quarter. Annualized consumer loan NCOs of 0.29% in the first quarter of 2025, increased slightly compared to 0.28% in the year-ago quarter.
Previous wording
Market risk refers to potential losses arising from changes in interest rates, credit spreads, foreign exchange rates, equity prices, and commodity prices, including the correlation among these factors and their volatility. When the value of an instrument is tied to such external factors, the holder faces market risk. We are primarily exposed to interest rate risk as a result of offering a wide array of financial products to our customers and secondarily to price risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity investments, and investments in securities backed by mortgage loans.
Current wording
Market risk refers to potential losses arising from changes in interest rates, credit spreads, foreign exchange rates, equity prices, and commodity prices, including the correlation among these factors and their volatility. When the value of an instrument is tied to such external factors, the holder faces market risk. We are exposed primarily to interest rate risk as a result of offering a wide array of financial products to our customers, and secondarily to price risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity investments, and investments in securities backed by mortgage loans.
Showing the first 40 of 91 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
(7)Forward-starting swaps effective starting from January 2025 to June 2026.
Current report — wording carried from elsewhere
We regularly review our ACL for appropriateness by performing on-going evaluations of the loan and lease portfolio. In doing so, we consider factors such as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. We also evaluate the impact of changes in key economic parameters and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date. Large loan exposures may be addressed through a portfolio heterogeneity reserve. We also consider how significant changes in underwriting policies and procedures could impact the ACL, including consideration of material changes in portfolio growth rates or credit terms. Any changes to management and staffing that could impact lending, collections, or other relevant departments that could increase risk within the allowance process are also contemplated. Observed changes in the quality of the credit review process identified by the second and third line reviews are also given appropriate consideration.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
(1)FTE yields are calculated assuming a 21% tax rate.
Previous report — wording carried elsewhere
(2)Average yield rates include the impact of applicable derivatives. Loan and lease and deposit average yield rates also include impact of applicable non-deferrable and amortized fees.
Previous report — wording carried elsewhere
(3)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
Previous report — wording carried elsewhere
Average shareholders’ equity for the first nine-month period of 2024 increased $922 million, or 5%, from the year-ago period primarily due to earnings, net of dividends, and the benefit from a decrease in average accumulated other comprehensive loss.