Huntington Bancshares Incorporated Decreases Its Prime Rate To 7.5 Percent

Rhea-AI Summary

Huntington Bancshares (Nasdaq: HBAN) has announced a reduction in its prime rate from 7.75% to 7.5%, effective December 19, 2024. This marks the second recent decrease in the bank's prime rate, following a previous reduction from 8% to 7.75% on November 8, 2024.

Positive

• Second consecutive prime rate reduction indicates potential lower borrowing costs for customers
• 25 basis points decrease could help maintain competitive positioning in lending market

Negative

• Lower prime rate may reduce interest income and potential profit margins on loans

Insights

Financial Markets Expert

The 25 basis point reduction in Huntington's prime rate to 7.5% mirrors the Federal Reserve's expected rate cut trajectory, marking a significant shift in the lending landscape. This adjustment will directly impact the bank's net interest margin (NIM) and profitability metrics. The sequential prime rate reductions (from 8% to 7.75% and now to 7.5%) signal a broader easing cycle that could compress lending spreads. For a bank with 23.2 billion market capitalization, this rate reduction may create near-term pressure on interest income, though it could stimulate loan demand and reduce default risks in the lending portfolio.

The timing of this rate cut, effective December 19, suggests Huntington is positioning itself ahead of anticipated Fed policy changes. While lower rates typically squeeze bank margins, they can also catalyze increased borrowing activity, particularly in commercial and consumer lending segments. This move could help maintain competitive positioning in key markets while balancing profitability with growth objectives. Think of it as adjusting the thermostat - too high and borrowing freezes; too low and profit margins melt away. This 7.5% setting aims for the sweet spot.

COLUMBUS, Ohio, Dec. 18, 2024 /PRNewswire/ -- Huntington Bancshares Incorporated (Nasdaq: HBAN) announced that its prime rate is decreasing from 7.75 percent to 7.5 percent, effective December 19, 2024.

Huntington's rate last changed on November 8, 2024, decreasing from 8 percent to 7.75 percent.

About Huntington
Huntington Bancshares Incorporated is a $201 billion asset regional bank holding company headquartered in Columbus, Ohio. Founded in 1866, The Huntington National Bank and its affiliates provide consumers, small and middle‐market businesses, corporations, municipalities, and other organizations with a comprehensive suite of banking, payments, wealth management, and risk management products and services. Huntington operates 975 branches in 12 states, with certain businesses operating in extended geographies. Visit Huntington.com for more information.

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SOURCE Huntington National Bank

FAQ

What is HBAN's new prime rate effective December 19, 2024?

Huntington Bancshares' (HBAN) new prime rate will be 7.5%, decreasing from 7.75%, effective December 19, 2024.

How much has HBAN's prime rate decreased since November 2024?

HBAN's prime rate has decreased by a total of 50 basis points since November 2024, from 8% to 7.5%.

When was HBAN's previous prime rate change?

HBAN's previous prime rate change was on November 8, 2024, when it decreased from 8% to 7.75%.

What is the significance of HBAN's prime rate decrease for borrowers?

The prime rate decrease to 7.5% means lower borrowing costs for customers with loans tied to Huntington's prime rate.