Huntington Bancshares Incorporated Reports 2021 Second-Quarter Earnings

Rhea-AI Summary

Huntington Bancshares (HBAN) reported a net loss of $15 million for Q2 2021, a decrease of $165 million year-over-year, primarily due to TCF acquisition-related expenses. EPS for the quarter was ($0.05), down $0.18 YoY, but adjusted EPS was $0.35 after accounting for $0.40 in notable items. The TCF acquisition added approximately $50 billion in assets and is on track for integration by Q4 2021. The Board approved an $800 million share repurchase program for the next year. Customer satisfaction rankings from J.D. Power remain strong, highlighting the bank's focus on digital innovation.

Positive

• Acquisition of TCF Financial added $50 billion in assets, enhancing the company's scale.
• Adjusted EPS of $0.35 reflects operational strength post-acquisition.
• Board approved an $800 million share repurchase program, signaling confidence in future performance.
• Ranked highest in customer satisfaction in mobile banking and consumer banking by J.D. Power.

Negative

• Net loss of $15 million indicates challenges post-acquisition.
• EPS decline of $0.18 year-over-year raises concerns about profitability.
• $269 million in TCF acquisition-related expenses negatively impacted Q2 results.

COLUMBUS, Ohio, July 29, 2021 /PRNewswire/ --

2021 Second-Quarter Highlights:

• Earnings (loss) per common share (EPS) for the quarter were ($0.05), a decrease of $0.18 year-over-year. Excluding approximately $0.40 per common share after tax of TCF acquisition-related Notable Items, adjusted earnings per common share were $0.35.
• On June 9, Huntington completed the acquisition of TCF Financial Corporation (TCF), adding approximately $50 billion of total assets, $34 billion of total loans and leases, and $39 billion of total deposits.
• On track to deliver expected economics from TCF transaction with integration proceeding as planned; consolidated 44 Meijer in-store branches in mid-June; majority of branch and systems conversions expected to occur in October.
• Executed balance sheet optimization strategy following completion of TCF acquisition; remixing securities for yield and duration in line with our aggregate moderate-to-low risk appetite.
• Fully exited interest rate cap position as of June 30 while continuing to maintain equivalent capital protection through a mix of swaps and securities designation.
• The Board of Directors approved an $800 million share repurchase authorization for the next four quarters.
• Ranked by J.D. Power as the highest in customer satisfaction among regional banks for our mobile app for the third consecutive year and highest in customer satisfaction with consumer banking in the North Central Region for the sixth time in nine years.

Huntington Bancshares Incorporated (Nasdaq: HBAN) reported a net loss for the 2021 second quarter of $15 million, a decrease of $165 million from the year-ago quarter, impacted by TCF acquisition-related expenses.  Earnings (loss) per common share for the 2021 second quarter were ($0.05), down $0.18 from the year-ago quarter.  Excluding approximately $0.40 per common share after tax of Notable Items, adjusted earnings per common share were $0.35.  Specifically, second-quarter results were negatively impacted by $269 million pretax of TCF acquisition-related expenses and $294 million pretax of CECL initial provision ("double count"¹) expense related to the acquisition.

Tangible book value per common share ended the 2021 second quarter at $8.23, a 1% year-over-year decrease.  Return on average assets was (0.05%), return on average common equity was (1.9%), and return on average tangible common equity was (2.1%).

CEO Commentary:

"We delivered solid fundamental performance for the quarter," said Steve Steinour, chairman, president, and CEO.  "We are seeing encouraging signs of the economic recovery, and customer activity is starting to normalize.  Lending pipelines have continued to grow across the board, reflecting our view of increased loan demand later this year.

"We are excited about the acquisition of TCF, which has strengthened the run-rate return profile of the company.  Integration execution is proceeding on schedule.  We have completed several systems conversions, and we closed 44 Meijer branch locations in June.  In addition, we remain confident that we will complete the majority of systems conversions and remaining branch consolidations during the first part of the fourth quarter of 2021.  This will move us swiftly toward realizing our annualized cost savings target and set up earnings for 2022 and beyond.

"We are executing strategies to drive sustained revenue growth across the bank, and the TCF acquisition is one component of these efforts.  The second quarter introduction of Standby Cash^SM, our most successful product launch ever, is an example of how we are innovating to further differentiate our products and services.  We also are building out our business banking, middle market, corporate, and wealth management teams, augmented by increased investments in our brand, to accelerate growth across our expanded customer base and geographies.

"Finally, Huntington is proud to be ranked by J.D. Power as the highest in customer satisfaction among regional banks for our mobile app for the third consecutive year," Steinour said.  "Huntington also claimed the highest ranking in customer satisfaction with consumer banking in the North Central Region for the sixth time in nine years.  Our progress on becoming the leading people-first, digitally powered bank in the country is being demonstrated through these accolades and through our increased customer utilization."

The second quarter 2021 earnings materials, including the detailed earnings press release, quarterly financial supplement, and conference call slide presentation, are available on the Investor Relations section of Huntington's website, http://www.huntington.com.  In addition, the financial results will be furnished on a Form 8-K that will be available on the Securities and Exchange Commission website at www.sec.gov.

Conference Call / Webcast Information

Huntington's senior management will host an earnings conference call on July 29, 2021, at 8:30 a.m. (Eastern Daylight Time).  The call may be accessed via a live Internet webcast at the Investor Relations section of Huntington's website, www.huntington.com, or through a dial-in telephone number at (877) 407-8029; Conference ID #13720782.  Slides will be available in the Investor Relations section of Huntington's website about an hour prior to the call.  A replay of the webcast will be archived in the Investor Relations section of Huntington's website.  A telephone replay will be available approximately two hours after the completion of the call through August 6, 2021 at (877) 660-6853 or (201) 612-7415; conference ID #13720782.

About Huntington

Huntington Bancshares Incorporated is a $175 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 more than 1,200 branches in 12 states, with certain businesses operating in extended geographies.  Visit Huntington.com for more information.

¹ "Double count" refers to the additional gross up to the ACL via provision expense for the non-PCD loans and acquired unfunded lending commitments

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SOURCE Huntington Bancshares Inc.

FAQ

What were Huntington Bancshares' Q2 2021 earnings results?

Huntington reported a net loss of $15 million with an EPS of ($0.05), a decline of $0.18 from the previous year.

How did the TCF acquisition impact Huntington's financials?

The TCF acquisition resulted in $269 million in acquisition-related expenses, contributing to the net loss in Q2 2021.

What is Huntington Bancshares' outlook following the TCF acquisition?

Management is optimistic about integration and expects to realize annualized cost savings, setting up for future earnings growth.

What is the status of Huntington's share repurchase program?

The Board approved an $800 million share repurchase program, effective over the next four quarters.

How does Huntington Bancshares rank in customer satisfaction?

Huntington was ranked highest in customer satisfaction among regional banks for its mobile app and consumer banking services by J.D. Power.