Huntington Bancshares Incorporated

Greetings and welcome to the Huntington Bank Shares first quarter earnings 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 would now like to turn the conference over to your host, Mark Muth, Director of Investor Relations.

Thank you, Darrell. Welcome. I'm Mark Moot, 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 Sondauer, Chairman, President, CEO, and Zach Wasserman, Chief Financial Officer. Rich Pauley, Chief Credit Officer, will join us for the Q&A session. 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 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 the material filed with the SEC, including our most recent Form 10-K and 8-K filings. Let me now turn it over to Steve.

Thanks, Mark. Good morning, everyone. Slide three provides an overview of Huntington's strategy to build the leading people-first digitally-powered bank in the nation. We continue to execute against this strategic vision and are pleased with our progress to date. We see significant opportunities ahead of us as we position our businesses for the recovery at hand. Over the past year, we updated our multi-year strategic plan with a focus on driving long-term revenue growth, continuing to build our brand based on best-in-class products and increasing our industry-leading customer satisfaction across our businesses. We also announced the planned acquisition of TCF Financial, which will provide a powerful opportunity to grow revenue, expand our market presence, and provide scale to our businesses while increasing our investments in digital and other areas. This combination will increase our capacity to invest, and we will become more efficient with the significant expected expense takeouts. We accelerated our digital investments as part of our strategic vision and are encouraged by the digital adoption trends. Due to the investments we've already made, for the first time, over half of new customer deposit accounts were originated digitally in the last quarter. The double digit growth in active digital and mobile engagement is similarly encouraging. As we look ahead, we're optimistic about a strong economic recovery. Unemployment has decreased significantly across our footprint. We're again hearing a crescendo of commentary from our customers regarding labor constraints and wage inflation. Consumer confidence has meaningfully improved. On average, consumers are less leveraged and more liquid. Our debit card trends have consistently posted double-digit year-over-year growth rates for the past several quarters. Consumer spending in service industries is expected to broadly accelerate this year as demand returns. Consumer loan production also continues to be strong. On the commercial side, sentiment is encouraging. Our pipelines are up across the board, increasing our confidence in recovery in commercial loan demand later this year. While supply chain constraints, such as the semiconductor shortages, will likely challenge some manufacturers in the near term, progress of the recovery and visibility into growing customer orders are causing outlooks to strengthen. Let me also share some high-level remarks on our first quarter results, which provided a strong start to the year and included solid core performance with our momentum building. Commercial loan originations were in line with expectations. However, overall growth was constrained by both forgiveness of PPP loans and continued headwinds in dealer floor plan and commercial line utilization, both of which are temporary challenges. Residential mortgage, auto, and RV marine produce seasonally strong originations in face of tight inventory. Growth in consumer loan balances was obscured by unprecedented levels of paydowns following the two recent rounds of stimulus. Deposit growth continues to consistently exceed expectations. Finally, on slide four, I'd like to give an update on the pending TCF acquisition. We believe the timing could not be better as the strengthening recovery dovetails with the growth and scale opportunities presented by this combination. We continue to make good progress toward our anticipated closing late in the second quarter and to complete the majority of system conversions late in the third quarter. In March, Huntington and TCF shareholders approved the transaction and our integration planning is on track. We completed the selection of key management. and anticipate receiving the outstanding regulatory approvals, including the required branch divestitures, in the coming weeks. We've begun major components of the cost reduction plan, including the closure of 44 Meyer branches later this quarter. Now let me turn it over to Zach for more detail on our financial performance. Thanks, Steve, and good morning, everyone.