Huntington Q3 Earnings & Revenues Beat on Higher Fee Income, Lower NII
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Huntington Bancshares Incorporated HBAN reported third-quarter 2024 adjusted earnings per share (EPS) of 33 cents, which surpassed the Zacks Consensus Estimate of 30 cents. In the prior-year quarter, the company reported EPS of 35 cents.
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Shares of the company lost 4.2% in the pre-market trading despite the earnings beat. However, a full day’s trading session will depict a clearer picture.
Results have reflected improvements in fee income and average loan and deposit balances. The strong capital position was another positive. However, a fall in net interest income (NII) and elevated expenses were headwinds.
The company reported a net income attributable to common shareholders (GAAP basis) of $517 million in the quarter, down 5.5% year over year.
HBAN’s Revenues Stable, Expenses Rise
Total revenues (on a fully taxable-equivalent or FTE basis) remained stable year over year at $1.88 billion in the third quarter. The top line surpassed the Zacks Consensus Estimate of $1.86 billion.
NII (FTE basis) was $1.36 billion, down 1.1% from the prior-year quarter’s tally. The downside was due to a decline in the net interest margin (NIM) and an increase in average interest-bearing liabilities, partially offset by a rise in average earning assets. NIM contracted 22 basis points to 2.98% in the reported quarter.
Non-interest income moved up 2.8% year over year to $523 million. The upside was driven by a rise in payments and cash management revenues, wealth and asset management revenues, customer deposit and loan fees, capital markets and advisory fees, mortgage banking income, bank-owned life insurance income, gain on sale of loans, partially offset by lower other non-interest income.
Non-interest expenses were up 3.7% year over year to $1.13 billion. The uptick was mainly due to a rise in personnel costs, outside data processing and other services, and marketing fees.
The efficiency ratio was 59.4%, up from the year-ago quarter’s 55.9%. A rise in the efficiency ratio indicates a reduction in profitability.
HBAN’s Loans and Deposits Increase
As of Sept.30, 2024, average loans and leases at Huntington inched up nearly 1% sequentially to $124.51 billion. Average core deposits increased 1.6% to $149.73 billion.
HBAN’s Credit Quality Deteriorates
Net charge-offs were $93 million or an annualized 0.30% of average total loans and leases in the reported quarter, up from $79 million or 0.24% in prior-year quarter. The quarter-end allowance for credit losses increased 2.9% to $2.44 from the prior-year quarter.
Total non-performing assets were $784 million as of Sept. 30, 2024, up 23.7% from the prior-year quarter. In the third quarter, the company recorded a provision for credit losses of $106 million, which increased 7.1% from the year-ago quarter.
