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Huntington (HBAN) Q2 Earnings & Revenues Beat, NII Drops
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Huntington Bancshares Incorporated (HBAN - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 30 cents, surpassing the Zacks Consensus Estimate of 28 cents. In the prior-year quarter, the company reported EPS of 35 cents.
Shares of the company gained 2% in the pre-market trading. However, a full day’s trading session will depict a clearer picture.
Results have reflected improvements in average loans and deposits. However, a fall in net interest income (NII) and elevated expenses were headwinds.
The company reported a net income applicable to common shares of $474 million in the quarter, down 15.2% year over year.
Revenues Fall, Expenses Rise
Total revenues (on a fully taxable-equivalent or FTE basis) dropped 2% year over year to $1.82 billion in the second quarter. The top line surpassed the consensus estimate of $1.81 billion.
NII (FTE basis) was $1.33 billion, down 2% from the prior-year quarter’s tally. The downside was due to a decline in the net interest margin (NIM), partially offset by an increase in average earning assets. NIM contracted 12 basis points to 2.99% in the reported quarter.
Non-interest income moved down 1% year over year to $491 million. The downside was mainly due to lower other non-interest income and a decline in gain on the sale of loans.
Non-interest expenses were up 6% year over year to $1.12 billion. The uptick was mainly due to a higher personnel costs and an increase in outside data processing and other services.
The efficiency ratio was 60.8%, up from the year-ago quarter’s 55.9%. A rise in the efficiency ratio indicates a reduction in profitability.
As of Jun 30, 2024, average loans and leases at Huntington inched up 1.7% year over year to $123.38 billion. Average core deposits increased 4.7% to $147.39 billion.
Credit Quality Deteriorates
Net charge-offs were $90 million or an annualized 0.29% of average total loans and leases in the reported quarter, up from $49 million or 0.16% in the prior year. The quarter-end allowance for credit losses increased to $2.42 billion from $2.34 billion in the prior-year quarter.
Total non-performing assets were $780 million as of Jun 30, 2024, up from $557 million in the prior-year quarter. In the second quarter, the company recorded a provision for credit losses of $100 million compared with $92 million in the year-ago quarter.
Capital Ratios Solid
The common equity tier 1 risk-based capital ratio was 10.4% in the quarter compared with 9.8% in the year-ago period. The regulatory Tier 1 risk-based capital ratio was 12.1%, up from 11.6% in the comparable period in 2023. The tangible common equity to tangible assets ratio in the second quarter was 6%, up from 5.8% in the year-ago quarter.
Our Viewpoint
Huntington’s inorganic expansion moves are likely to bolster its revenue growth in the near term. Its elevated non-interest expenses are expected to keep the bottom line under pressure in the upcoming period. Any deterioration in the balance sheet might affect its financials.
Huntington Bancshares Incorporated Price, Consensus and EPS Surprise
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were undermining factors.
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Huntington (HBAN) Q2 Earnings & Revenues Beat, NII Drops
Huntington Bancshares Incorporated (HBAN - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 30 cents, surpassing the Zacks Consensus Estimate of 28 cents. In the prior-year quarter, the company reported EPS of 35 cents.
Shares of the company gained 2% in the pre-market trading. However, a full day’s trading session will depict a clearer picture.
Results have reflected improvements in average loans and deposits. However, a fall in net interest income (NII) and elevated expenses were headwinds.
The company reported a net income applicable to common shares of $474 million in the quarter, down 15.2% year over year.
Revenues Fall, Expenses Rise
Total revenues (on a fully taxable-equivalent or FTE basis) dropped 2% year over year to $1.82 billion in the second quarter. The top line surpassed the consensus estimate of $1.81 billion.
NII (FTE basis) was $1.33 billion, down 2% from the prior-year quarter’s tally. The downside was due to a decline in the net interest margin (NIM), partially offset by an increase in average earning assets. NIM contracted 12 basis points to 2.99% in the reported quarter.
Non-interest income moved down 1% year over year to $491 million. The downside was mainly due to lower other non-interest income and a decline in gain on the sale of loans.
Non-interest expenses were up 6% year over year to $1.12 billion. The uptick was mainly due to a higher personnel costs and an increase in outside data processing and other services.
The efficiency ratio was 60.8%, up from the year-ago quarter’s 55.9%. A rise in the efficiency ratio indicates a reduction in profitability.
As of Jun 30, 2024, average loans and leases at Huntington inched up 1.7% year over year to $123.38 billion. Average core deposits increased 4.7% to $147.39 billion.
Credit Quality Deteriorates
Net charge-offs were $90 million or an annualized 0.29% of average total loans and leases in the reported quarter, up from $49 million or 0.16% in the prior year. The quarter-end allowance for credit losses increased to $2.42 billion from $2.34 billion in the prior-year quarter.
Total non-performing assets were $780 million as of Jun 30, 2024, up from $557 million in the prior-year quarter. In the second quarter, the company recorded a provision for credit losses of $100 million compared with $92 million in the year-ago quarter.
Capital Ratios Solid
The common equity tier 1 risk-based capital ratio was 10.4% in the quarter compared with 9.8% in the year-ago period. The regulatory Tier 1 risk-based capital ratio was 12.1%, up from 11.6% in the comparable period in 2023. The tangible common equity to tangible assets ratio in the second quarter was 6%, up from 5.8% in the year-ago quarter.
Our Viewpoint
Huntington’s inorganic expansion moves are likely to bolster its revenue growth in the near term. Its elevated non-interest expenses are expected to keep the bottom line under pressure in the upcoming period. Any deterioration in the balance sheet might affect its financials.
Huntington Bancshares Incorporated Price, Consensus and EPS Surprise
Huntington Bancshares Incorporated price-consensus-eps-surprise-chart | Huntington Bancshares Incorporated Quote
Currently, Huntington carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
WaFd, Inc.’s (WAFD - Free Report) third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
WAFD’s results reflected a rise in NII and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Hancock Whitney Corp.’s (HWC - Free Report) second-quarter 2024 earnings per share of $1.31 beat the Zacks Consensus Estimate of $1.19. However, the bottom line compared unfavorably with $1.35 per share registered in the year-ago quarter.
HWC’s results were aided by an increase in non-interest income. However, a decline in NII and higher expenses and provisions were undermining factors.