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Jun 30, 2021
Huntington Q2 2021 Earnings Report
Reported a net loss impacted by TCF acquisition-related expenses and announced an $800 million share repurchase authorization.
Key Takeaways
Huntington Bancshares Incorporated reported a net loss for the second quarter of 2021 of $15 million, impacted by TCF acquisition-related expenses. Adjusted earnings per common share were $0.35, excluding approximately $0.40 per common share after tax of Notable Items. The acquisition of TCF Financial Corporation was completed on June 9, adding approximately $50 billion of total assets, $34 billion of total loans and leases, and $39 billion of total deposits.
Earnings (loss) per common share (EPS) for the quarter were ($0.05), a decrease of $0.18 year-over-year. Excluding approximately $0.40 per common share after tax of TCF acquisition-related Notable Items, adjusted earnings per common share were $0.35.
Huntington completed the acquisition of TCF Financial Corporation (TCF), adding approximately $50 billion of total assets, $34 billion of total loans and leases, and $39 billion of total deposits.
Integration execution is proceeding on schedule and consolidated 44 Meijer in-store branches in mid-June; majority of branch and systems conversions expected to occur in October.
The Board of Directors approved an $800 million share repurchase authorization for the next four quarters.
Huntington
Huntington
Forward Guidance
Huntington expects lending pipelines to grow and anticipates increased loan demand later in the year, driven by economic recovery and customer activity normalization. The acquisition of TCF is expected to strengthen the company's return profile, with integration proceeding on schedule and cost savings targeted for 2022 and beyond. Huntington is also focused on driving revenue growth through innovation and investments in various business segments.
Positive Outlook
- Lending pipelines have continued to grow across the board, reflecting our view of increased loan demand later this year.
- The acquisition of TCF has strengthened the run-rate return profile of the company.
- Integration execution is proceeding on schedule.
- We have completed several systems conversions, and we closed 44 Meijer branch locations in June.
- We are executing strategies to drive sustained revenue growth across the bank, and the TCF acquisition is one component of these efforts.
Challenges Ahead
- Second-quarter results were negatively impacted by $269 million pretax of TCF acquisition-related expenses
- Second-quarter results were negatively impacted by $294 million pretax of CECL initial provision expense related to the acquisition.
- Net interest income in the 2021 second quarter included a ($55) million mark-to-market of interest rate caps.
- Compared to the 2021 first quarter, FTE net interest income decreased $134 million, or 14%, reflecting 82 basis points of NIM compression.
- Mortgage banking income decreased $29 million, or 30%, primarily reflecting lower secondary marketing spreads and a decrease in salable mortgage originations, in addition to lower net mortgage servicing income.