Huntington Bancshares Incorporated

Greetings and welcome to the Huntington Bank Shares second quarter 2023 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, Tim Sabatris, Director of Investor Relations for Huntington Bank Shares. Thank you. You may begin.

Thank you, Operator. Welcome, everyone, and good morning. Copies of the slides we will be reviewing today can be found in 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. Earnings documents, which include our forward-looking statements disclaimer and non-GAAP information, are available on the Investor Relations section of our website. With that, let me now turn it over to Steve.

Thanks, Tim. Good morning, everyone, and welcome. Thank you for joining the call today. We're pleased to announce our second quarter results, which Zach will detail later. Our approach to both our colleagues and customers continues to be grounded in our purpose and served us well in the second quarter. Our colleagues again demonstrated that we make people's lives better, help businesses thrive, and strengthen the communities we serve. Now, on to slide four. These are the key messages we want to highlight today. First, Huntington has a distinguished deposit franchise, which continues to benefit from our strategy to acquire and deepen primary bank customer relationships. This has fueled continued deposit growth over the year, including this quarter. Second, We once again drove capital ratios higher with common equity tier one having increased for four quarters in a row. We remain on track to build CET1 to the high end of our range by year end. Third, credit quality, which is a hallmark of the company, is performing very well. and we continue to operate within our aggregate moderate to low risk appetite. Fourth, we are dynamically managing through the interest rate environment. We are maintaining disciplined deposit pricing while delivering deposit growth and maintaining a robust liquidity position. Finally, we remain intently focused on executing our strategy. We are investing in the business to drive long-term sustainable revenue growth, and we continue to proactively manage the expense base, to align with the revenue outlook. Operation Accelerate remains on track and we will increase our use of business process outsourcing to drive sustained efficiencies into 2024. Moving on to slide five. Over the past decade, we've transformed Huntington. This puts us in a position of strength today. This foundation includes our granular and high quality deposit base which is supported by our leading consumer, business, and commercial banking franchises. With this strong foundation in place, we can be nimble and seize on opportunities to expand our business that will arise during times like these. The hiring of the fund finance team we announced last month is a great example. This business was on our commercial banking growth roadmap, and we're pleased to be able to add great talent and welcome these colleagues to Huntington. We are building capital even as we maintain loan growth. We are optimizing the level of new loan growth and remaining judicious for the loans we carry on balance sheet in order to generate the highest return on capital. As a result, capital ratios expanded in the second quarter with our CET1 ratio increasing to 9.82%. Further, our adjusted CET1 ratio is 8.12% above the peer median. Our disciplined approach to risk management drives our strong credit quality. with low net charge-offs and the non-performing asset ratio decreasing for the eighth consecutive quarter. Our management team has a long track record of being disciplined operators with a focus on delivering value for shareholders. This execution has been awarded and recognized across the franchise, including winning the J.D. Power Mobile Award for the fifth year in a row and maintaining our strong number one SBA ranking. Regarding the macro outlook, it remains a dynamic environment Interest rates are playing out in the higher for longer scenario that we had been anticipating for some time. Economic activity in our footprint appears to be holding up relatively well, which supports sustained loan growth and solid credit performance. That said, we are diligent, watching the environment closely, and are actively managing our loan portfolio. We are well prepared to operate through a range of potential scenarios. Further, we are also closely monitoring the potential regulatory adjustments to capital and other requirements. We are evaluating the proposals, and thus far the potential new requirements appear broadly in line with what we had expected. We are well positioned to manage through these changes, address them expediently, and over time offset a meaningful portion of the potential impacts. And finally, before I hand it over to Zach, we want to share that Rich Poli, our Chief Credit Officer, has announced his upcoming retirement effective at the end of 2023. We've greatly benefited from Rich's expertise and leadership during his nearly 12 years with Huntington. He's been a great leader of our colleagues and a great partner for me and the executive team. We have a strong bench and we're pleased Brendan Lawler, Deputy Chief Credit Officer, will succeed Rich in this role at the end of the year. Brendan joined us in 2019 after 25 plus years as a senior commercial credit executive at a large regional bank and is currently responsible for all commercial credit across the bank. Zach, over to you to provide more detail on our financial performance.