Huntington Bancshares Incorporated

Greetings and welcome to the Huntington Bank Sheriff's First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. 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 call over to your host, Tim Sedavras, Director of Investor Relations. Thank you. You may begin.

Thank you, Operator. Welcome, everyone, and good morning. Copies of the slides we'll be reviewing today can be found on the Investor Relations section of our website, www.huntington.com. As a reminder, this call is being recorded, and a replay will be available starting about one hour from the close of the call. Our presenters today are Steve Steinauer, Chairman, President, and CEO, and Zach Wasserman, Chief Financial Officer. Rich Pohle, Chief Credit Officer, will join us for the Q&A. As noted on slide 2, today's discussion, including the Q&A portion, 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 FCC, including our most recent forms 10-K, 10-Q, and 8-K filings. Let me now turn it over to Steve.

Thanks, Tim. Good morning, everyone, and welcome and thank you for joining the call today. It's been an eventful start to the year. We entered 2022 with momentum and we carried forward that trend to deliver a strong first quarter. We are managing through a turbulent macroeconomic environment, high inflation, persistent labor and supply chain constraints, debt interest rate tightening, rapid moves in the yield curve and the devastating crisis in Ukraine. all have made for a challenging backdrop. Now on to slide four. I'm pleased to highlight our excellent first quarter performance. First, our colleagues are delivering on revenue-producing initiatives, supporting our strong results. We're generating profitable growth and building momentum, including executing on our revenue synergies. Second, operating with disciplined expense management, we posted another quarter of sequential reductions in core expenses. Our targeted cost savings are on track for full realization this quarter, and we are capturing these benefits even earlier than originally guided. Third, we had record low net charge loss this quarter with overall exceptional credit quality. Our disciplined risk management continues to be a strength. Lastly, we are confident in our full-year outlook and our ability to drive additional profitability. We are revising our guidance hire to incorporate the recent rate curve outlook and we remain confident that we will achieve our medium-term financial targets in the second half of 22. On slide five, let me share more detail on our first quarter performance. Our robust loan growth, higher net interest income, and planned reductions in expenses supported our record PPNR. Average loan balances excluding PPP grew 10 percent annualized, driven by new loan production across both commercial and consumer portfolios. We continue to see strong customer demand and growing loan pipelines and are confident this momentum will continue over the course of this year. Our teams are fully aligned and executing on the revenue synergy opportunities from TCF. We are seeing terrific momentum in these initiatives as we expand into new markets with enhanced capabilities. In the Twin Cities, our new wealth management, business banking, and middle market teams are already contributing to revenues. Likewise, in Colorado, our business banking and middle market teams are capturing market share and generating revenue. We're also pleased with our inventory finance business, which is seeing seasonal growth and is exceeding our expectations. Additionally, we are seeing increased productivity and positive reception to the Huntington product set and customer service experience. We continue to execute on our strategic initiatives across the bank, In March, we announced the next evolution of our leading Fair Play product set, including the soon-to-be-released Instant Access feature, as well as an enhanced credit card offering through the launch of our Cash Back credit card. In addition, our continued expense discipline has enabled us to support investments that are yielding results. This is evidenced by our record first quarter of sales in wealth management and also by another quarter of robust growth in our capital markets businesses. Just last month, we announced the signing of a definitive agreement to acquire Capstone Partners, a top-tier middle market investment bank and advisory firm that will add significant capabilities and expertise to our capital markets businesses. The transaction is expected to close late this quarter. Capstone is a terrific fit with Huntington, both strategically and culturally, and we're excited for the synergistic growth opportunities. The addition of Capstone better positions us to serve the full range of needs for clients in our footprint, as well as those we serve on an increasingly national basis. The transaction adds key verticals that complement our existing industry specialization and adds new capabilities in expanded sectors. We expect Capstone will meaningfully increase our capital markets revenues by about 50%, and we're excited to welcome our new colleagues to Huntington. Finally, we are proud to share a few of the awards we received during the quarter. We were honored to be recognized by Forbes in 2022 as one of America's best large employers, where we ranked number seven in the banking and financial services industry. We were also recognized in middle market and small business banking with numerous Greenwich Excellence and Best Brand Awards for 2021. And lastly, we are proud that the National Diversity Council named Donald Dennis, our Chief Diversity, Equity, and Inclusion Officer, as a Top 100 Diversity Officer nationally. Before moving on, I'd like to take a moment to welcome Brant Standridge to Huntington, who joined us earlier this month as our President of Consumer and Business Banking. Brant comes to us with a broad set of experiences, including a customer-focused foundation that aligns well with our strategies. As Brant joins us, a special thank you to Steve Rhodes, who will continue to lead our Business Banking Division. Slide six shows our continued trajectory of profitable growth. We've been driving sustainable profitability for years, supported by our prior strategic investments and our long track record of managing to positive operating leverage. We are confident that this increasing trend will continue and will further benefit by the underlying earnings power unlocked from TCF. We are poised to have outsized PPNR growth this year, and expect it to expand sequentially over the remainder of the year. Zach, over to you to provide more detail on our financial performance.