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Huntington Bancshares Incorporated : Barclay's Conference Transcipt

09/16/2021 | 09:52am EDT

The Huntington National Bank_Barclays Global Financial Services Conference 2021_September 13, 2021

Jason Goldberg:

I am Jason Goldberg, and I cover the US large‐cap bank stocks here at Barclays.

Welcome to our 19th Annual Global Financial Services Conference. Next up,

very pleased to have Huntington Bancshares. From the company, we have Zach

Wasserman, Chief Financial Officer.

Jason Goldberg:

Before I turn over to Zach, just keep in mind in the upper right‐hand corner of

your screen there were a few buttons. One of them is Ask a Question. Feel free

to type in your question. Keep in mind the questions do take a little bit of time

to get to me, so the earlier you ask them, the greater the chances I will get them

before Zack is done. Also in the top right‐hand corner is a button called Survey.

If you click on that, you're able to answer our traditional automated response

questions and, time permitting, we'll take a look at those. Worst‐case scenario

we'll publish them tonight. Zach, please take it away.

Zach Wasserman:

Good morning. Thanks, Jason, and thanks to Barclays for hosting us today. I

want to start off with a welcome to everyone listening today. We really

appreciate your interest and support of Huntington. For today's event, I'm

joined by Tim Sedabres, our Head of Investor Relations.

Zach Wasserman:

Before we get started, I will be referencing our slide presentation. So, before we

get started, let's look at slide two. Please review this slide regarding forward‐

looking statements we'll make today. This morning, I'll start by sharing a couple

updates related to our strategy and recent initiatives, and then I'll turn it over to

Jason for Q&A.

Zach Wasserman:

Moving to slide three, at Huntington we're focused on building the leading

people‐first digitally powered bank in the nation. The recent acquisition of TCF

continues to be additive to and aligned with this overall strategy. TCF bolsters

our ability to drive organic growth across the bank through both increased

market density, and the addition of key growth markets. The incremental scale

it provides further allows us to leverage the investments we've made to date,

and support our commitment to delivering sustainable, top‐quartile financial

returns for shareholders. Slide four summarizes the three key points I want to

cover today. First, Huntington's Fair Play Banking philosophy is the foundation

of our consumer and business banking offerings. We were an early innovator in

the space, dating back over 10 years ago when we introduced to Asterisk‐free

Checking and 24‐Hour Grace. We have continued to innovate with launches of

new and disruptive products. This strategy is yielding measurable results, as

evidenced by strong new household acquisition, reduced attrition, and

continued deepening of customer relationships with Huntington. Secondly, in

the commercial bank, we have a comprehensive solution set for customers and

we are driving growth across all groups. This includes middle market and

corporate banking, as well as numerous specialty areas of expertise, including

healthcare, asset‐based lending, franchise lending, technology and telecom

equipment finance, and inventory finance.

Page 1 of 13

Zach Wasserman:

Additionally, we're extending relationships with our customers with strong

adoption of our treasury management and capital markets capabilities. Third

and finally, we're focused on successfully completing the TCF integration. We're

on track for timely completion of integration activities, including our targeted

cost savings, and we are underway with the execution of revenue synergy

opportunities. The bulk of system conversions are slated for Columbus Day

weekend next month. The branch divestiture is set to close this upcoming

weekend, and the branch consolidations will occur in a phased approach

through the end of October.

Zach Wasserman:

Let's turn to slide five, which gives an overview of our five primary businesses

and our strategies for each. In all of these we benefit from scale, competitive

positioning, and our expertise. The collective nature of these groups provides

comprehensive banking solutions for customers, ranging from consumers to

business owners, all the way up to large corporations.

Zach Wasserman:

Looking at our consumer business first, we're leveraging the market leadership

of our Fair Play philosophy and continuing to bring to market innovative and

disruptive products. Additionally, we're focused on deepening customer

relationships across the space. We're advancing our digital roadmap with added

features and functionality that makes it easier to do business with us and,

importantly, supports customer acquisition and new product origination. We're

very pleased that our continued digital progress was recognized again by J.D.

Power with our third consecutive award for top US banking mobile app

satisfaction study, amongst regional banks.

Zach Wasserman:

In business banking, we start as the number one SBA lender in the nation. This

expertise coupled with our Fair Play and enhanced digital capabilities continues

to fuel growth and outstanding customer satisfaction. We've leveraged our

digital leadership in the consumer space, and applied that to our business

banking platform as well with improved digital product origination, account

management, and self‐servicing. We're also expanding our practice finance

capabilities, which builds on the SBA experience we have. Additionally, we see

significant traction and further opportunity with tailored treasury management

and merchant acquiring offerings for business banking customers. We're

committed to meeting our customers where they are and serving not only their

needs through products and services, but through ease of use and seamless

interoperability, as well.

Zach Wasserman:

Looking at commercial banking next, we go to market with a full set of offerings

across the commercial bank to serve a range of customers across all size

spectrums. Additionally, we have expertise in specialty verticals as well as our

asset based lending capital markets, equipment finance, and inventory finance

capabilities. As we go forward, our commercial opportunity is threefold. First, to

move up market in the middle‐market and mid‐corporate spaces. We've proven

we have the right teams, products, and expertise to compete and win, and our

increased scale substantially enhances this opportunity. With a larger balance

sheet, our ability to secure a lead or agent role with our up‐market customers

Page 2 of 13

has greatly improved, which also supports deeper relationships, including

treasury management, capital markets, and other solutions. This comprehensive

approach drives sustainable and attractive return on capital at the customer and

product level.

Zach Wasserman:

Secondly, our opportunity is to continue to leverage and further expand the

expertise we have, including our specialty commercial verticals. Many of these

areas continue to have substantial runway and we expect them to fuel

continued market share growth. Third, excuse me, we have an overarching

focus on digital transformation to further enhance our capabilities and improve

the customer experience. Smooth and intuitive digital‐first client onboarding

enables accelerated adoption of our other digital servicing capabilities, account

management, and treasury management products. Digital loan origination

capabilities not only drive incremental business, but also improve internal cost

efficiency and operational quality. Advanced analytics supports our ability to

provide bankers insights to help clients optimize their own financial

performance, leading to exceptional experiences, loyalty, and deeper


Zach Wasserman:

In wealth management, we have a comprehensive platform, inclusive of private

banking, trust, and investment management. We're seeing substantial

momentum in this business, with record net asset flows and sales. Our teams

have done a great job leveraging our brand and our presence in many of our

markets where we have a deep history. That success is what makes us excited

about the opportunity to take this business to our expanded growth markets in

areas such as the Twin Cities in Minnesota, Denver, and Chicago. Our

relationship model works well, especially when coupled with a customer doing

business with other areas of the bank, such as commercial business, and owners

of our middle‐market and business banking clients. Our strategy expands on

that to optimize our go‐to‐market approach across channels and digitally

engage with all of our customers, ranging from mass affluent through high‐net‐

worth. Looking next at the payments vertical, while we go to market through

our commercial business and consumer groups, we think about payments

capabilities holistically across the bank. Our combined opportunity here is very

substantial given the size and scale of our businesses, looking at all of the

payment related revenue streams across the company. We're continuing to

advance our treasury management products and capabilities and further

penetrating adoption and utilization. Additionally, we're digitizing and

simplifying the customer experience. On the card side, we continue to refine our

offerings for consumer and businesses, and we have terrific and just really

strong debit card penetration, as evidenced by our number 14 ranking

nationally, as the largest debit card programs are ranked. We are also focused

on expanding our credit card business with refreshed products and improved

digital user experience.

Zach Wasserman:

Moving to the next slide, on slide six, and looking at our consumer banking

strategy in particular, you can see that it's founded on our Fair Play Banking

philosophy. As a reminder, we were an early leader. We launched Fair Play back

Page 3 of 13

in 2010, and we have a long track record of demonstrated success. 24‐Hour

Grace was the first of its kind in the industry with a simple and transparent

feature to help customers avoid an overdraft. I say this to remind everyone of

our deep history in looking out for our customers. While others have recently

reached the same conclusion as we did many years ago, our culture at

Huntington reflects this mindset. We've continued to innovate in this regard,

launching Standby Cash and Early Pay, two new features, just last quarter.

Again, to give our customers increased flexibility, to tap a small dollar, digitally‐

enabled line of credit with no fees or interest, paid back within 90 days with

auto‐pay. And secondly, to receive their direct deposit up to two days early.

Zach Wasserman:

Adding these compelling products and capabilities is our leading market share

density and comprehensive channels. We have market‐leading convenience

with top five market share in almost 70% of our MSA, 69 to be precise, across

the footprint, compared to 52% at our typical peers. We have strong digital

capabilities, including online origination across the product set. The

combination of these factors demonstrates Huntington's value proposition and

drives exceptional household growth metrics, which as you can see from

Zach Wasserman:

...in the slide are up 7% annualized year‐to‐date for consumer, and 8% year‐to‐

date for business.

Zach Wasserman:

Turning to the next slide, on slide seven, I'd like to give you a deeper view into

our priorities for the commercial business. We have three primary themes in

our commercial strategy: driving acquisition and deepening, amplifying

experience and capabilities, and extending digital transformation. Under this

umbrella, we have six primary strategic priorities to drive growth of all our

commercial relationships.

Zach Wasserman:

Number one is market expansion, including taking the Huntington brand and

expertise to new growth markets, such as the Twin Cities, Denver, as well as our

expanded efforts in Chicago.

Zach Wasserman:

Second, we're leveraging the substantial size and scale of the combined

equipment and inventory finance business group we now benefit from. This

group has grown over 50% with the acquisition of GCF.

Zach Wasserman:

Third, corporate banking includes our move up‐market in the mid‐corporate and

middle‐market space, as well as leveraging sector‐based expertise through our

industry vertical groups in healthcare, asset‐based lending, franchise, and tech

and telecom. As we look out, we continue to seek new opportunities to add

bankers and teams with expertise that aligns with these targeted industry


Zach Wasserman:

Fourth, in capital markets, we want to drive incremental fee revenue through

deeper penetration into the customer base and to continue to add expanded

Page 4 of 13

expertise and capabilities. This initiative closely aligns with our focus for

corporate banking and up‐market positioning.

Zach Wasserman:

Fifth, growing share‐of‐wallet with treasury management. This is both through

increased new acquisition and expansion of existing relationships. We're also

enhancing the technology‐enabled solutions and accelerating capabilities such

as real‐time payments and API enablement, which allows our more

sophisticated corporate customers to integrate into their banking and liquidity

data feeds on their own side.

Zach Wasserman:

Finally, digital transformation, which is designed to improve both the customer

experience as well as operational efficiency and includes enhancements to

onboarding, lending, and transactional activities. Through our existing

investment program, we've directed substantial resources toward this digital

roadmap and established best‐practice agile‐development approaches within

the business.

Zach Wasserman:

On slide eight, I want to transition now and outline five select opportunities we

see for revenue synergies that are being created as part of the TCF acquisition,

many of which are already well underway in their execution. First, middle

market expansion. We see substantial opportunity to grow share within the

vibrant commercial activity hubs in the Twin Cities, Denver, and Chicago. This

initiative is gaining traction with key leadership personnel in place and growing

banker teams to go after these markets.

Zach Wasserman:

Second, deploying our consumer product set to the legacy TCF customers.

We've added 1.5 million customers from TCF, all of whom will receive the

upgraded product capabilities and digital offerings in just over a month when

we convert systems. The opportunity to bring fair play to these customers and

to further expand and strengthen relationships is very substantial. In many

cases, TCF was under‐penetrated in some of the areas where Huntington has a

strong offering, such as mortgage, home equity, and debit card.

Zach Wasserman:

Third, business banking expansion. Similar to our middle‐market work, we see

the opportunity to bring our leading SBA platform and business banking

program broadly to the TCF markets. There are over 2 million small businesses

in Minnesota, Colorado, and Illinois, and we believe we can capture more than

our fair share with our expertise and offerings. We're building out SBA banker

teams as we speak to go after these opportunities.

Zach Wasserman:

Fourth, wealth management expansion. The addition of legacy TCF markets

brings tremendous opportunity for our private banking, trust, and investment

teams. The size and the wealth in these markets provides us with a great deal of

runway to leverage that infrastructure and expertise to go after this wealth

management business. Just last month, we were pleased to announce we added

a leader for our wealth efforts in the Twin Cities, and we continue to build out

that team.

Page 5 of 13

This is an excerpt of the original content. To continue reading it, access the original document here.


Huntington Bancshares Incorporated published this content on 16 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 September 2021 13:51:06 UTC.

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Financials (USD)
Sales 2021 6 005 M - -
Net income 2021 1 361 M - -
Net Debt 2021 - - -
P/E ratio 2021 14,4x
Yield 2021 3,81%
Capitalization 23 581 M 23 581 M -
Capi. / Sales 2021 3,93x
Capi. / Sales 2022 3,48x
Nbr of Employees 17 018
Free-Float 98,5%
Duration : Period :
Huntington Bancshares Incorporated Technical Analysis Chart | HBAN | US4461501045 | MarketScreener
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 19
Last Close Price 15,97 $
Average target price 17,63 $
Spread / Average Target 10,4%
EPS Revisions
Managers and Directors
Stephen D. Steinour Chairman, President & Chief Executive Officer
Zachary J. Wasserman Chief Financial Officer & Senior Executive VP
Paul G. Heller Senior EVP, Chief Operations & Technology Officer
David L. Porteous Lead Independent Director
Richard Westman Neu Independent Director
Sector and Competitors