Huntington Bancshares Inc at UBS Financial Services Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Erika Najarian - UBS - Analyst : <_ALACRA_META_ABSTRACT>So like I said, we're just coming off a very well-received Investor Day for the company, where the clear message is that Huntington is positioned to win, whatever the environment is. That said, as we start the year, there are definitely cross-currents for both the consumer and commercial clients. So maybe, Brant, I'll start with you. Give us a little bit of insight on how you think that Huntington consumer is doing, given a still strong job market but persistent inflation. And then, Scott, if you could follow up, perhaps, on how your commercial clients are doing, given the cross-currents of deregulation, but also policy uncertainty, to say the least. Brant Standridge - Huntington Bancshares Inc - Executive Vice President, President - Consumer and Regional Banking Yeah. Well, great. Thank you, first of all, Erika, for having us today. We really appreciate the opportunity, and thanks for being at our Investor Day conference. First of all, from a consumer perspective, everything that we see would say that the consumer is still strong. Certainly, in our credit portfolios, we are starting to have been seeing, for some period of time, some normalization. As we went through the pandemic, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference there was excess liquidity, and that obviously affected credit quality, and we're seeing normalization, but nothing that would be alarming. We see low utilization rates of credits for consumer, which is great. Our auto business continues to do very, very well, and would say the consumer is strong. There is a bifurcation in that when you look at those below 50% of median income, they've been dramatically more impacted by inflation. So the performance numbers between the top 50% and the bottom 50% are different. That's where there is clearly more stress, but overall, the consumer is doing quite well.

Question: Erika Najarian - UBS - Analyst : And Scott, maybe as a follow-up here, I think investors are talking a lot about very slow January for activity levels, whether it's loan growth or capital markets. We had a very differentiated message at Investor Day on loan growth. If we could perhaps unpack that and maybe update us on what Capstone pipelines are looking like?

Question: Erika Najarian - UBS - Analyst : So Zach, maybe I'll put you in the hot seat. I just want to dive into some of the key messages that you conveyed at Investor Day, and

Question: Erika Najarian - UBS - Analyst : Thank you. And just wanted to ask this follow-up question because this came up in your last meeting. Are you seeing the loan spread compression that some of your regional peers have talked about, given the lack of loan growth for the industry?

Question: Erika Najarian - UBS - Analyst : So the 6% to 9% pre-provision net revenue, or PPNR, growth that you laid out there, I think it's worth reminding the audience how much of that is revenue growth versus expense optimization.

Question: Erika Najarian - UBS - Analyst : And a higher market multiple.

Question: Erika Najarian - UBS - Analyst : So underneath the surface, I think you mentioned that underpinning that is mid-single-digit or high mid-single-digit balance sheet growth. I think everybody's now accepted that Huntington has been a great loan growth story, but actually your deposit story is even better. I mean, how you've grown your deposits when rates went from 0 to 5, then we had a regional banking crisis, has been quite remarkable. So maybe tell us a little bit more about what your expectations are for deposit growth as we march towards 2027.

Question: Erika Najarian - UBS - Analyst : As a follow-up on that, you mentioned a discipline in terms of pricing down deposits. It's been a very long time since we've seen a neutral rate of not 0. We might see a neutral rate of 4. How do you expect deposit competition to evolve in that rate dynamic, especially if loan growth picks back up? And Brant and Scott, if you have differing views in terms of how consumer competition may evolve versus commercial competition for deposits?

Question: Erika Najarian - UBS - Analyst : Got it. And Zach, could you talk a little bit about the growth rate of investment spend? You mentioned it's over two times the rate of total expenses. Maybe unpack what your investment priorities are. And I think in one of the slides, you were giving a scenario analysis for how you're going to think about returns and investments, and you mentioned something called critical long-term investments. What are those in terms of -- what are you working on that you've put under that category? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference

Question: Erika Najarian - UBS - Analyst : Right. So I want to dive a little bit more deeply in the key messages in the consumer and regional bank, but before that, I just wanted to remind the audience, if you do have a question for management, submit it through your UBS mobile conference app, and I'll get it in this iPad right here. So on the de novo strategy, you mentioned that you're going to open 100 branches, 55 in the Carolinas, 21 in Colorado. So as we think about the decision tree that management goes through, when they've decided it's time to put a branch in the ground, give us a little bit of a sense of what are -- how do you get to the conclusion it's appropriate time to do that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference

Question: Erika Najarian - UBS - Analyst : So the standard question that investors have asked in the past when trying to assess the de novo strategies, oh, how long does it take to get to profitability? But given your partnership with Scott's team, you showed us a map where you had national franchises and SBA offices. How does Huntington measure return on investment in terms of the expansion markets that you've laid out?

Question: Erika Najarian - UBS - Analyst : So how are the Carolinas and Colorado doing? And as you think about seasoning in those markets, what are you learning as you introduce that Huntington brand into those new markets that you'll take away for future expansion? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference

Question: Erika Najarian - UBS - Analyst : Got it. And before I turn it over to Scott, maybe one more question. So Melissa Holding, a relatively new hire for you, essentially laid out a target for nearly doubling your AUM, your wealth AUM, by 2030. Wealth is a business that a lot of your peers are starting to invest more dollars in. How does Huntington stand out and when in such a crowded field?

Question: Erika Najarian - UBS - Analyst : Thank you, Brant. Scott, 2022 Investor Day, the message was add verticals, add specialty verticals, add capabilities. You've done that and more, and that's clearly led to standout growth in commercial loans, deposits, and fees. So in 2028, what is that slide going to look like? So in terms of -- what are your sort of goals in terms of the commercial banks contribution to the top-of-the-house targets? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference

Question: Erika Najarian - UBS - Analyst : Well, just to emphasize that success, I think, you mentioned during Investor Day, that your middle market expansion strategy in the Carolinas and Texas have or are poised to turn profitable within the first year. So you mentioned that over the next three years, you'll probably continue to add one to two specialty verticals. What is the pacing for geography?

Question: Erika Najarian - UBS - Analyst : Speaking of talent, it's now stuff of legend, at least in the regional banking lore, about how you've hired a lot of talent in '23 and early '24. And I thought Tizu's presentation in terms of the sponsor and mortgage ecosystem and the capabilities you could provide was actually a great underrated slide. So my question for you is, do you have the talent to really fulfill all that sponsor ecosystem, the mortgage ecosystem, and that $450 million revenue target for capital markets? Are you still hiring at a good speed?

Question: Erika Najarian - UBS - Analyst : Yeah. Just maybe double-click on the payments opportunity. I think you're also targeting 10% plus treasury management fee growth. How well penetrated is TM among your middle market and SMB clients?

Question: Erika Najarian - UBS - Analyst : Got it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference

Question: Erika Najarian - UBS - Analyst : Got it. Maybe Zach, pulling back up, you did have a slide that said scale and scope is a secondary strategic priority, but competitive positioning is a primary priority. Can you talk about why Huntington doesn't look at that as one and the same? And also, what's more important to your Board, scale or culture?

Question: Erika Najarian - UBS - Analyst : So Zach, to this vein, you mentioned during Investor Day that you pulled out 45% of the cost from TCF, which is much bigger than the usual deal math that we've seen in the past. And then from an organic standpoint, I think you mentioned in our previous meeting that when you came in, you were able to optimize costs and reallocate it to revenue-producing costs. So as we think about these remarkable numbers, especially at 45%, what have you learned from integration or just maybe the technology and operations from a standalone basis that you could take into the future?

Question: Erika Najarian - UBS - Analyst : So we're at the two-minute warning. Let's go to the lightning round. Maybe for each of you, what is the one message that you really want to reiterate from Investor Day, from either your business or Zach at the top of the house, that you want to really repeat that you think that investors should take away?

Question: Erika Najarian - UBS - Analyst : That's awesome. Since there are no questions on the iPad, we're going to wrap it up here. Huntington, thank you, guys. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 10, 2025 / 1:50PM, HBAN.OQ - Huntington Bancshares Inc at UBS Financial Services Conference