Company: HBAN
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000049196-25-000038
Chunk: 70

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 2
Chunk 70
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4Nonaccrual loans and leases (NALs):Commercial and industrial$413 $457 Commercial real estate118 118 Lease financing11 10 Residential mortgage90 83 Automobile4 6 Home equity110 107 RV and marine2 2 Total nonaccrual loans and leases748 783 Other real estate, net8 8 Other NPAs (1)48 31 Total nonperforming assets$804 $822 Nonaccrual loans and leases as a % of total loans and leases0.56 %0.60 %NPA ratio (2)0.61 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 scenario used in the March 31, 2025 ACL determination assumes the labor market has softened with the unemployment rate forecasted to remain at 4.1% throughout 2025 before marginally increasing to 4.2% in 2026. The Federal Reserve is projected to continue a cycle of rate cuts that started in September 2024, with further cuts forecast for the second half of 2025 and throughout 2026 until reaching a federal funds rate of 3% by the end of 2026. Inflation is forecast to be 2.8% for the first quarter of 2025 and is expected to remain at similar levels throughout 2025 before approaching 2.5% by the end of 2026. GDP is forecast to decline from the estimated first quarter 2025 level of 2.5%, ending the fourth quarter of 2025 at 1.6% before marginally improving to 1.9% by 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