Huntington Bancshares Incorporated — 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This filing reports annual results; it does not provide a clear, standalone fourth-quarter income statement. Huntington is a diversified regional bank headquartered in Columbus, Ohio, with 1,032 full-service branches and private-client offices at year-end.
Financial performance and condition
| Metric | 2022 | Comparison / context |
|---|---|---|
| Net income attributable to Huntington | $2.238 billion | Up 73% from 2021 |
| Diluted earnings per common share | $1.45 | Up 61% from $0.90 |
| Net interest income | $5.273 billion | Up 29%; fully taxable equivalent (FTE) NIM rose 30 basis points to 3.25% |
| Total FTE revenue | $7.285 billion | Up 21%; non-GAAP measure |
| Noninterest income | $1.981 billion | Up 5% |
| Noninterest expense | $4.201 billion | Down 4%; included $95 million of acquisition-related expense, versus $701 million in 2021 |
| Provision for credit losses | $289 million | Up $264 million from 2021 |
| Net charge-offs | $121 million; 0.11% of average loans | Down from $215 million; 0.22% in 2021 |
| Loans and leases | $119.523 billion | Up 7% from year-end 2021 |
| Total deposits | $147.914 billion | Up from $143.263 billion; core deposits were 96% of total |
| Total assets | $182.906 billion | Up from $174.064 billion |
| Long-term debt / short-term borrowings | $9.686 billion / $2.027 billion | Compared with $7.108 billion / $334 million at year-end 2021 |
| Operating cash flow | $4.027 billion | Investing cash flow was $(11.609) billion; financing cash flow was $8.764 billion |
| Consolidated CET1 capital ratio | 9.36% | Up from 9.33%; above applicable well-capitalized standards and capital buffer requirements |
Year-end cash and cash equivalents were $6.704 billion. Huntington reported $13.1 billion of unpledged investment securities and said it had sufficient liquidity and capital for the next 12 months and the foreseeable future. Uninsured deposits were $47.283 billion. The tangible common equity-to-tangible assets ratio was 5.55%, down from 6.88%, primarily reflecting higher accumulated other comprehensive losses from rising rates.
Material changes versus 2021
- Growth in average earning assets and higher interest rates lifted net interest income; deposit and borrowing costs also rose. Average loans and leases increased 19%, while average securities increased 27%.
- Net interest margin expansion and lower acquisition costs contributed to higher earnings. The prior-year comparison includes only post-June 9, 2021 TCF acquisition results, so year-over-year comparisons are affected by the partial-year acquisition contribution in 2021.
- Mortgage banking income fell 53% to $144 million, reflecting lower salable volume and secondary-market spreads. Capital markets fees increased 67% to $252 million, supported in part by the Capstone Partners acquisition.
- The allowance for credit losses was $2.271 billion, or 1.90% of loans and leases, versus $2.107 billion, or 1.89%, a year earlier. Management cited loan growth and increased near-term recession risk.
- Higher interest rates drove a $2.869 billion after-tax other comprehensive loss in 2022 and increased accumulated other comprehensive loss to $3.098 billion at year-end. Available-for-sale securities had $3.818 billion of gross unrealized losses; held-to-maturity securities had $2.302 billion.
Outlook, commentary, risks and contingencies
- Management’s baseline forecast assumed a mild recession in 2023, modest GDP growth for the year, and recovery toward year-end as inflation gradually subsided. Management emphasized that economic and rate developments remained uncertain.
- The filing identifies credit deterioration, persistent inflation, recession, changing interest rates, deposit outflows and funding costs, market-value losses on securities, cybersecurity and operational disruptions, regulatory changes, and competition as significant risks.
- Management estimated that a hypothetical allowance calculation using a 100% adverse economic scenario would increase the quantitative allowance by approximately $1 billion, excluding qualitative adjustments. This is a sensitivity illustration, not a forecast of expected losses.
- Pending legal and regulatory matters were not expected by management to materially affect consolidated financial position; the estimated aggregate reasonably possible loss range was $0–$10 million in excess of accrued liabilities, where estimable. Actual outcomes could differ, and some matters could affect results in a particular period.
- Huntington completed acquisitions of Torana, renamed Huntington Choice Pay, and Capstone Partners in 2022. The company also announced a planned 2023 realignment of three consumer-oriented segments into Consumer & Regional Banking.
- In January 2023, the Board authorized up to $1.0 billion of common-share repurchases through December 31, 2024, subject to regulatory capital rules. The quarterly common dividend was declared at $0.155 per share.
Important facts for investors to verify
- Whether deposit balances and funding costs remain resilient, particularly given $47.3 billion of uninsured deposits and higher wholesale funding.
- How loan delinquencies, charge-offs, criticized commercial exposures, and the $2.271 billion credit-loss allowance evolve if economic conditions weaken.
- The effect of interest rates and deposit repricing on net interest margin, securities values, accumulated other comprehensive loss, and capital.
- Whether cost savings and anticipated benefits from TCF integration and the 2022 acquisitions are realized, and how the segment realignment affects reported performance.
- Whether planned dividends and share repurchases remain consistent with regulatory capital, liquidity, and subsidiary-dividend constraints.
Audit and controls: The independent auditor issued an unqualified opinion on the financial statements and internal control over financial reporting. The valuation of the allowance’s general reserve was identified as a critical audit matter.