HUNTINGTON BANCSHARES INC /MD/

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. Credit exposure is limited to the sum of the aggregate fair value of positions

that have become favorable to us, including any accrued interest receivable due from counterparties. 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.

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 utilizing 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.

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Loan and Lease Credit Exposure Mix

Refer to the “Loan and Lease Credit Exposure Mix” section of our 2025 Annual Report on Form 10-K for a

description of each port folio segment.

At March 31, 2026, our loans and leases totaled$188.8 billion, representing a$39.2 billion, or 26%, increase

compared to$149.6 billion at December 31, 2025. The increase was driven by a combination of the Cadence

acquisition and organic growth. As of the Cadence acquisition date, acquired loans totaled$36.9 billion, including

$17.4 billion of commercial and industrial loans,$9.4 billion of commercial real estate loans,$131 million of lease

financing loans,$8.2 billion of residential mortgage loans,$1.5 billion of home equity loans, and$264 million of

other consumer loans.

The table below provides the composition of our total loan and lease portfolio.

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. As of March 31, 2026, there were 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 and 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.

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The table below provides our total loan and lease portfolio segregated by industry type. The changes in the

industry composition from December 31, 2025 are consistent with the portfolio growth metrics.

(1)Amounts include$4.4 billion and$4.3 billion of auto dealer services loans at March 31, 2026 and December 31, 2025, respectively.

The following tables present our commercial real estate portfolio by property type and geographic location.

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(1)Geographic location based on location of underlying collateral.

Our CRE portfolio totaled$24.3 billion at March 31, 2026, anincrease of$9.1 billion, or 60%, compared to

December 31, 2025, driven by$9.4 billion of loans acquired as a result of the completion of the Cadence acquisition.

The CRE portfolio had an associated allowance coverage of 3.4% and 3.7% at March 31, 2026 and December 31,

2025, respectively.

Credit Quality

(This section should be read in conjunction with Note 5 - “Loans and Leases” and Note 6 - “Allowance for Credit

Losses” of the Notes to Unaudited Consolidated Financial Statements.)

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.

Credit quality performance in thefirst quarter of 2026 reflected NCOs of$111 million, or 0.26% of average total

loans and leases, annualized, anincrease of$25 million, compared to$86 million, or 0.26% of average total loans

and leases, annualized, in the year-ago quarter. Theincrease reflects a$13 million increase in consumer NCOs to$55

million, and a$12 million increase in commercial NCOs to$56 million in thefirst quarter of 2026. NPAs totaled$1.4

billion at March 31, 2026, an increase of$412 million, or 44%, from December 31, 2025, with the increase primarily

due to $295 million of NPAs assumed in the Cadence acquisition and additional increases in commercial and

industrial and commercial real estate NALs.

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NALs and NPAs

The following table presents the details of our NALs and NPAs.

(1)Other nonperforming assets include certain impaired investment securities and/or nonaccrual loans held-for-sale.

(2)Nonperforming assets divided by the sum of loans and leases, other real estate owned, and other NPAs.

ACL

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.

The baseline economic scenario used to estimate our March 31, 2026 ACL assumes continued tariff uncertainty,

but reflects marginal improved performance of the U.S. economy in the near term with minimal change in the

overall outlook. In this scenario, the unemployment rate is expected to remain at 4.5% throughout 2026 before

declining slightly in 2027. The Federal Reserve restarts rate cuts in 2026, resulting in an average federal funds rate of

3.2% for 2026. The inflation outlook stabilizes slightly as the impacts of tariffs and other trade policies moderate,

and near-term inflation declines but remains above the Federal Reserve’s 2% target throughout 2026. After slow

GDP growth to end 2025, GDP growth accelerates in the first quarter of 2026 but is expected to decline over the

remainder of 2026 and remain below 2% for all of 2027.

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 2025.

(1)Values reflect the baseline scenario forecast inputs for each period presented, not updated for subsequent actual amounts.

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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, including tariffs,

the impact of higher oil prices, 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.

Management develops additional analytics to support adjustments to our modeled results. Our Allowance for

Credit Loss Development Methodology Committee reviewed model results of each economic scenario for

appropriate usage, concluding that the quantitative transaction reserve will continue to utilize scenario weighting.

Given the uncertainty associated with key economic scenario assumptions, the March 31, 2026 ACL included a

general reserve that consists of various risk profile components, including profiles to capture uncertainty not

addressed within the quantitative transaction reserve.

The most significant risk profiles the Company maintains at March 31, 2026 relate to business banking loans

within the C&I portfolio and office loans within the CRE portfolio. The business banking risk profile addresses a

modest upward trend in default rates resulting from the current interest rate environment and inflationary impacts

on customers. The office portfolio risk profile addresses concerns relating to the current interest rate environment,

upcoming maturities, falling property values, and uncertainty about demand for office space.

Our ACL evaluation process includes the on-going assessment of credit quality metrics and a comparison of

certain ACL benchmarks to current performance.

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.

(1)Percentages represent the percentage of each loan and lease category to total loans and leases.

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At March 31, 2026, the ACL was$3.4 billion, or 1.78% of total loans and leases, compared to$2.7 billion, or

1.83%, at December 31, 2025. The increase in the ACL was driven by$578 million of ACL recorded for loans and

commitments acquired in the Cadence transaction, as well as organic loan and lease growth. The ACL coverage ratio

at March 31, 2026 is reflectiveof the current macroeconomic forecast and changes in various risk profiles intended

to capture uncertainty not addressed within the quantitative reserve.

NCOs

The table below reflects NCO detail.

(1)Includes charge-offs of $23 million on certain loans previously charged off by Cadence, which were written up to the unpaid principal balance at acquisition

and then immediately written off as required by purchase accounting.

NCOs were an annualized 0.26% of average loans and leases in thefirst quarter of 2026, unchanged from the

year-ago quarter. As a percentage of average loans and leases, NCOs for commercial loans and leases were lower,

with annualized commercial loan and lease NCOs of 0.21% in thefirst quarter of 2026, compared to 0.24% in the

year-ago quarter, while annualized consumer loan NCOs of 0.34% in thefirst quarter of 2026 increased from 0.29%

in the year-ago quarter.

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