Huntington Bancshares Incorporated

Greetings and welcome to the Huntington Bank Share's fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mr. Mark Moose, Director of Investor Relations.

Thank you, Melissa. Welcome. I'm Mark Middiff, Director of Investor Relations for Huntington. Copies of the slides we'll be reviewing can be found on the Investor Relations section of our website, www.huntington.com. This call is being recorded and will be available as a rebroadcast starting about one hour from the close of the call. Our presenters today are Steve Steinhauer, Chairman, President, and CEO, Zach Wasserman, Chief Financial Officer, and Rich Pohle, Chief Credit Officer. As noted on slide two, today's discussion, including the Q&A period, will contain forward-looking statements. Such statements are based on information and assumptions available at this time and are subject to changes, risks, and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of risks and uncertainties, please refer to this slide and material filed with the SEC, including our most recent forms 10-K, 10-Q, and 8-K files.

With that, let me now turn it over to Steve. Thanks, Mark, and good morning, everyone. Slide three provides an overview of Huntington's strategy to build the leading people-first digitally-powered bank in the nation. Our 2020 results demonstrate that we're driving revenue growth despite headwinds. We're focused on acquiring new customers and deepening those relationships to gain both market share and share of wallet. We are investing in customer-centric products, services, and digital technology that will drive sustainable growth and outperformance. both today and for years to come. Huntington operates an intentionally diversified business model, balanced between commercial and consumer, which provides a good mix of revenue and credit exposure. We've built a competitive advantage with our consistently superior customer service and our differentiated products and services. We are committed to developing best-in-class digital capabilities, like our mobile banking app, which has been recognized as the highest in customer satisfaction by J.D. Power two years in a row. In 2020, we introduced several new innovative products and features that will continue to serve our customers' needs and differentiate Huntington from the competition. We are not done. We have a pipeline of innovative products and features that we will release throughout the year. We have a proven track record of solid execution, adjusting our operating plans to the environment in order to drive shareholder returns. This allowed us to deliver our eighth consecutive year of positive operating leverage in 2020. Our focused execution has and will enable us to ensure investments in the products, people, and digital capabilities, which will drive sustainable long-term growth and outperformance. We are particularly excited about the TCF acquisition we announced last month, which provides additional scale and growth opportunities. We filed the bank regulatory applications last week and announced the planned consolidation of 198 branches We are making good progress on our preparations for integration later this year. We remain on track with the previously announced schedule for an expected closing date late in the second quarter. We are pleased with our 2020 results and continued momentum across the bank, despite an extraordinarily challenging operating environment. And I'm incredibly proud of the outstanding efforts of our colleagues to overcome the challenges of the pandemic, as well as look out for our customers. For the year, we grew revenues 3%, loans 6%, and core deposits 11%. And while bottom line results in EPS were down due to elevated provisioning required under the CECL reserve accounting, our pre-tax pre-provision earnings increased 4%, and these are all very strong results. We also closed the year with strengthening commercial loan production as expected in the fourth quarter. Our consumer lending businesses, especially home lending and vehicle finance, are continuing to provide very good loan originations. Our home lending business achieved record mortgage originations for the second consecutive year. Our deposit growth parallels the entire banking system, and we do not foresee this changing any time soon. Our balance sheet is very well positioned with robust capital liquidity, and our hedging strategy has reduced interest rate risk. 2020 also marked the 10th consecutive year of an increased cash dividend. Credit quality continues to improve, illustrating that our decisive and conservative actions in the second quarter appropriately identified the highest risk portions of our portfolio, allowing us to proactively work with our customers. As we enter 2021, I'm very encouraged not only by our momentum, but also the underlying strengths I see in our local economies. Economic data shows that our footprint is recovering more quickly than the nation as a whole, and our conversations with our customers support this. The unemployment rate in November was below the national average in five of our seven states, including our largest market in Ohio at 5.7%. Over 2.9 million jobs were created in our footprint between April and November, which means 24% of the national total were created in these seven states. Further, 44% of all manufacturing jobs created during this period occurred in our footprint states. The V-shaped manufacturing recovery is fueling regional economic growth, even though many manufacturers continue to face challenges from supply chain disruptions, skilled labor shortages, and periodic plant shutdowns related to the virus. These inventory challenges are visible in the auto, RV, and marine industries and inform our belief that continued low dealer floor plan utilization rates could take at least several more quarters to return to longer-term averages. The recovery in unemployment boosted both the region's consumer confidence and consumer retail spending above the respective 2020 national averages. Home prices continued to appreciate, especially with solid increases in Ohio, Michigan, Pennsylvania, and Indiana. The Midwest also led the country in year-over-year growth in single-family home sales in the third quarter, up 56% compared to 39% for the nation. Turning to our business, we're also seeing momentum. We saw an uptick in commercial loan activity late in the fourth quarter, consistent with our prior guidance. We are also seeing continued strength in consumer lending. As we enter the first quarter, our commercial pipelines also are up from a year ago. We expect consumer lending to remain strong and commercial activity to continue to improve over the course of the year. The consistently high level of execution we're seeing across our businesses, strengthening commercial loan activity, and constructive economic outlook are driving our strategy to accelerate investments, leaning into the recovery to drive increasing growth over the intermediate term. It also informed our decision to pursue and ultimately enter into the TCF acquisition. Let me now turn it over to Zach for an overview of our financial performance.