Huntington Bancshares Incorporated

Greetings and welcome to the Huntington Bank Shares Second Quarter 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 would now like to turn the conference over to your host, Mr. Tim Sudebria, 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 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 filings. With that, let me now turn it over to Steve.

Thanks, Tim. Good morning and welcome. Thank you for joining the call today. Our outstanding second quarter results reflect momentum across the bank as we completed the integration of TCF. While 2022 continues to bring its own set of unique challenges, our businesses are performing very well. Overall, the companies in our markets are in good shape and continue to evidence demand for loans to support business investment and expansion. Consumers are generally maintaining liquidity. Much of the government and municipal stimulus funds are yet to be invested. Importantly, Huntington and the banking industry remain very well positioned to withstand the current volatility. Now on to slide four. First, our performance in the second quarter was exceptional with record net income and PPNR. Our focused execution is driving these robust results and leading returns. Loan growth continued in the quarter as we saw higher balances in nearly every portfolio across our commercial and consumer businesses. Higher loan growth, paired with the benefit from higher interest rates, contributed to expanded net interest income. Second, we're pleased to deliver average deposit growth quarter over quarter in our commercial and consumer businesses. The focus remains on growing primary bank relationships while maintaining a disciplined deposit pricing strategy. Third, we achieved our target for core expenses below the $1 billion level as we completed the TCF Cost Synergy Program. Fourth, we delivered on our medium-term financial goals this quarter earlier than previously guided. Finally, we posted record low net charge-offs this quarter, and overall credit quality remains exceptional. This reflects our disciplined approach to customer selection and our aggregate monitor to low-risk appetite through the cycle. While we acknowledge the potential for uncertainty, to date we are not seeing substantive areas of concern within our loan portfolios. On slide five, let me share more detail on our second quarter performance. Robust loan growth, higher net interest income, and expense reductions supported our record PPNR, which increased 17% from the prior quarter. Average loan balances, excluding PPP, grew 10% on an annualized basis, and our tracking to our expectations. While growing deposits, we are maintaining deposit pricing discipline in the face of a rising rate environment. We were also honored to be once again recognized by J.D. Power for the number one mobile app amongst regional banks. This marks the fourth consecutive year earning the top rank. Last month, we announced the formation of an enterprise-wide payments organization led by a dedicated payments executive. This initiative reflects our strategic priority to accelerate our payments capabilities, expand the services we provide to our customers, and drive additional fee revenues. In May, we announced the acquisition of Toronto, now known as Huntington Choice Pay, which is a payment business focused on providing business to consumer payment services. On the commercial side, we continue to see traction in our treasury management initiatives with revenues growing 12% annualized this quarter. On the consumer side, we launched an enhanced cashback credit card offering late in the first quarter, and results so far have exceeded our expectations. We are driving organic growth opportunities by providing enhanced product offerings to the TCF customer base and growing share of wallet. We completed the acquisition of Capstone last month, which adds a top-tier middle market investment bank and advisory firm, bolstering our capital markets capabilities. We are pleased with the early contribution from our new colleagues who added $4 million of capital market fees in the last two weeks of the quarter post-closing. Looking forward, we see significant revenue synergies within our customer base as well. Turning to slide six, we extended our track record of modeled credit outperformance in the recent CCAR stress test results. This year's process included the acquired TCF loan portfolios, and the results did not materially change our model performance relative to peers. This highlighted the robust credit strength of Huntington's balance sheet, which has continued to outperform peer median benchmarks in every CCAR cycle since 2015. Finally, I want to highlight the accomplishments of the TCF combination. It's been just over a year since we closed on the acquisition, and since then, we've delivered on the commitments we shared at announcement. We closed quickly in under six months and converted systems just four months later. We delivered the cost synergies earlier than guided. The pace of digital investment spend has doubled from the prior run rate, accelerating our digital initiatives. We've delivered leading financial performance, which is evident in our results this quarter. Finally, we are capturing incremental opportunities from the addition of key markets and capabilities through our revenue synergy initiatives. Over the past year, we've added over 50 revenue producing colleagues in Minnesota and Colorado to support wealth management, business banking, middle market, and specialty banking. The middle market teams in the Twin Cities and Denver are growing relationships, increasing loans, and deposit production. We're also seeing increased productivity from the acquired branches and a positive reception to the Huntington product offerings and customer service experience. Our business banking expansion in the Twin Cities and Denver is also showing substantial momentum where we are pleased to have already achieved a top five ranking for SBA lending in both markets. We've seen early traction from our wealth management launch in the Twin Cities with AUM building year to date. As a result of this success, we've replicated that approach in Denver, and we've hired an experienced leader and other new colleagues to build out our capabilities. As for our inventory and equipment finance businesses, the teams continue to capitalize on the opportunities to harness the combined scale to better serve our clients. Today, we're the seventh largest bank-owned national platform, and I expect that ranking to increase based on the momentum we are experiencing. These initiatives are ongoing, and we expect them to contribute to our growth over multiple years. We are well positioned to grow shareholder value. Zach, over to you to provide more detail on our financial performance.