Company: HBAN
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000049196-25-000079
Chunk: 116

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 116
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 Middle East conflict will widen. The combination of tariffs, rising inflation, political tensions, still elevated interest rates, and reduced credit availability causes the economy to fall into a recession in the fourth quarter of 2025. Under this scenario, as an example, the unemployment rate increases significantly from baseline levels and remains elevated for a prolonged period. The unemployment rate in this adverse scenario is projected at 6.0% at the end of 2025, and 8.4% at the end of 2026, approximately 160 basis points and 360 basis points higher than the baseline scenario projections of 4.4% at the end of 2025 and 4.8% at the end of 2026, respectively. In addition, GDP is significantly lower in the adverse scenario, with a projected decline of 3.0% in the fourth quarter of 2025 and 1.7% for the full year of 2026, respectively, compared to growth of 1.0% and 1.4%, respectively, in the baseline scenario.

To demonstrate the sensitivity to key economic parameters used in the calculation of our ACL at September 30, 2025, management calculated the difference between our quantitative ACL and this 100% adverse scenario. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in our ACL of approximately $0.7 billion at September 30, 2025. 

The resulting difference is not intended to represent an expected increase in allowance levels for a number of reasons including the following:

•Management uses a weighted approach applied to multiple economic scenarios for its allowance estimation process;

•The highly uncertain economic environment; 

•The difficulty in predicting the inter-relationships between the economic parameters used in the various economic scenarios; and

•The sensitivity estimate does not account for any general reserve components and associated risk profile adjustments incorporated by management as part of its overall allowance framework.

We regularly review our ACL for appropriateness by performing on-going evaluations of the loan and lease portfolio. In doing so, we consider factors such as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. We also evaluate the impact of changes in key economic parameters and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting