Even as other banks play defense, Huntington Bancshares is planning to ramp up its investments in specialty banking verticals and
The Columbus, Ohio-based bank said Friday that it expects its
He said continued investments in high-performing markets, like North Carolina and South Carolina, and in recently launched lines of business, such as health care asset-based lending and fund finance, will lead to growth at the $189.4 billion-asset bank.
"It would appear that our outlook is more bullish than anyone else's in terms of growth, and yet we're highly confident that we'll be able to deliver it," Steinour said Friday in an interview with American Banker. "We're coming into 2024 with momentum and excitement and an expectation of ourselves to continue to play offense, invest and build."
Huntington executives have been talking for months about how
Steinour said the focus is on organic growth — specifically on building in markets like the Carolinas and Texas, where the bank has had a presence, and in places where it gained footing from its 2021 acquisition of TCF Financial, like Colorado and Minnesota.
The bank's spending hit $1.12 billion in the fourth quarter, a 4% climb sequentially, in line with its previous guidance, as it pushed geographic expansion in late 2023.
During a call with analysts on Friday, Huntington Chief Financial Officer Zach Wasserman said that the investments will have long-term benefits that outweigh what he characterized as "short-term challenges with respect to operating leverage."
Huntington reported fourth quarter net interest income of $1.3 billion, a quarter-over-quarter decline of 4% and a year-over-year drop of 10%. Wasserman said he expects that figure to dip further in the first quarter, but then to increase sequentially throughout 2024 as loans pick up.
Huntington is not eschewing cost-cutting entirely. Some of its initiatives are meant to ratchet back expenses over the long term, Wasserman said.
The bank is increasing offshoring, offering a voluntary retirement program and consolidating branches. And it has been pulling back in some lines of business, like commercial real estate lending.
Still, Wasserman said that the long-term earnings potential of staying in a growth posture is much more advantageous than the reverse. "We were pretty purposeful about staying on a growth footing across the board," he said.
Some peer banks, meanwhile, are cutting expenses as their deposit costs increase and their loan originations underwhelm.
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In 2023, Huntington pulled in $5.48 billion of net interest income. Wasserman said that if interest rates remain higher for longer and loan growth hits projections, the bank's net interest income could rise by about 2% this year. But if rates and loan growth are tamped down, that figure could fall by 2%, he said.
While Huntington's net interest income and fee income slowed down in the fourth quarter, Steinour said that deposit and loan stability in 2023 affirmed the bank's efforts to deepen customer relationships.
The bank has also been bolstering its capital position ahead of the proposed Basel III endgame rules, which would require large banks to significantly increase their reserves.
For the coming year, Huntington is projecting that its average loans will rise by 3% to 5%, its deposits will increase by 2% to 4%, and its non-interest income will rise by 5% to 7%, primarily from fees associated with the bank's growing capital markets and wealth management businesses.
The bank's stock price rose by 3.9% on Friday to $12.72.
