Huntington Bancshares Inc (NASDAQ:HBANP) Q3 2018 Earnings Conference Call - Final Transcript

Oct 23, 2018 • 09:00 am ET


Huntington Bancshares Inc (NASDAQ:HBANP) Q3 2018 Earnings Conference Call - Final Transcript


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Greetings and welcome to Huntington Bancshares Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I'd now like to turn the conference over your host, Mark Muth, Director of Investor Relations.

Mark Muth

Thank you, Sherry. Welcome. I'm Mark Muth, Director of Investor Relations for Huntington. Copies of the slides we will be reviewing can be found on the Investor Relations section of our website, This call is being recorded and will be available as a rebroadcast starting about one hour from the close of the call. Our presenters today are Steve Steinour, Chairman, President and CEO; and Mac McCullough, Chief Financial Officer. Dan Neumeyer, our Chief Credit Officer, will also be participating in the Q&A portion of today's call.

(Forward-Looking Cautionary Statements)

Let me now turn it over to Steve.

Steve Steinour

Thanks, Mark, and thank you to everyone for joining the call today. As always, we appreciate your interest and support.

We had another very good quarter and as we continued to deliver high-quality earnings and expect to carry this momentum through the end of the year. It was also another clean quarter, as for the third quarter in a row, there were no significant items. We reported net income of $378 million and earnings per share of $0.33, increases of 37% and 43% respectively over the third quarter of 2017. Return on common equity was 14% and return on tangible common equity was 19%. We had record revenue of $1.2 billion, which represented a 5% year-over-year increase and maintained strong expense discipline. We're pleased with the resulting efficiency ratio of 55.3%, an improvement of 520 basis points from the year-ago quarter. The average total loan increase was strong at 7% versus the third quarter of 2017 and 5% annualized versus the 2018 second quarter. This loan growth was driven by a 10% year-over-year increase in average consumer loans with particular strength in residential mortgage, RV and marine financing and automobile lending. We remain focused on core funding the balance sheet with 6% growth in average core deposits.

In the third quarter, we increased the quarterly common dividend to $0.14 per share, representing a 27% linked quarter increase and a 75% year-over-year increase. This year marks the eighth consecutive year that we've increased the common dividend. We believe our earnings power, capital generation and risk management discipline will support higher dividends, including a higher dividend payout ratio over time. We also repurchased $691 million of common shares or approximately 65% of the total repurchase included in our 2018 CCAR capital plan.

As briefly outlined on slide three, we developed Huntington strategies with the vision of creating a high performing regional bank and delivering top-quartile through-the-cycle shareholder returns. Our profitability metrics are among the best in the industry and we have built sustainable competitive advantages in our key businesses that we believe will deliver high performance in the future. The