Company: HBAN
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000049196-25-000079
Chunk: 88

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 88
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obile6 6 Home equity108 107 RV and marine1 2 Total nonaccrual loans and leases808 783 Other real estate, net10 8 Other NPAs (1)3 31 Total nonperforming assets$821 $822 Nonaccrual loans and leases as a % of total loans and leases0.59 %0.60 %NPA ratio (2)0.60 0.63 

(1)    Other nonperforming assets include certain impaired investment securities and/or nonaccrual loans held-for-sale.

(2)    Nonperforming assets divided by the sum of loans and leases, other real estate owned, and other NPAs.

ACL

Our ACL is comprised of two different components, the ALLL and the AULC, both of which in our judgment are appropriate to absorb lifetime expected credit losses in our loan and lease portfolio. We utilize an independent third-party baseline forecast that projects future economic conditions and considers multiple macroeconomic scenarios. These macroeconomic scenarios contain certain variables that are influential to our modeling process, the most significant being unemployment rates and GDP.

The baseline economic scenario used in the September 30, 2025 ACL determination assumes continued tariff uncertainty, but reflects marginal improved performance of the U.S. economy in the near term with minimal change in the overall outlook. In this scenario, the unemployment rate is expected to end 2025 at 4.4%, with peak unemployment of 4.8% through the end of 2026. The Federal Reserve restarted rate cuts in the third quarter of 2025 and is expected to continue with future rate cuts until reaching the federal funds rate of 3% by the end of 2026. The inflation outlook deteriorates slightly as the impacts of tariffs and other trade policies are expected to cascade through the economy, with near-term inflation expected to rise further above the Federal Reserve’s 2% target until the rate begins to decline in the second half of 2026 but still remaining above target. GDP growth, while positive, has slowed to a current level of approximately 1% and is forecasted to remain below 2% through the end of 2026.

The table below is intended to show how the forecasted path of unemployment and GDP in the baseline scenario has changed since the end of 2024.

Table 12 - Forecasted Key Macroeconomic Variables202420252026Baseline scenario forecastQ4Q2Q4Q2