Company: HBAN
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000049196-25-000020
Chunk: 205

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 205
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4 ACL determination assumes the labor market has softened with the unemployment rate peaking at 4.2% in the fourth quarter of 2024. Marginal improvement is expected moving forward with unemployment returning to 4.0% by 2026. The Federal Reserve is projected to continue a cycle of rate cuts that started in September 2024, with gradual cuts forecast throughout 2025 and 2026 until reaching 3% in mid-2026. Inflation is forecast to approach the Federal Reserve’s target level of 2% by the end of 2024 and stabilize in 2025. GDP is forecast to show marginal improvement from the estimated fourth quarter 2024 level of 2.0%, ending the fourth quarter of 2025 at 2.1%. 

The table below is intended to show how the forecasted path of unemployment and GDP in the baseline scenario has changed between those used in the year 2023 and 2024 ACL determination. 

2024 Form 10-K     67

Table of Contents

Table 13 - Forecasted Key Macroeconomic Variables202320242025Baseline scenario forecastQ4Q2Q4Q2Q4Unemployment rate (1)4Q 20233.8%3.9%4.0%4.1%4.0%4Q 2024N/AN/A4.24.14.1Gross Domestic Product (1)4Q 20230.8%1.2%1.5%1.9%2.2%4Q 2024N/AN/A2.02.12.1

(1)Values reflect the baseline scenario forecast inputs for each period presented, not updated for subsequent actual amounts.

Management continues to assess the uncertainty in the macroeconomic environment, including ongoing risks in the commercial real estate environment, current inflation levels, political uncertainty, and geopolitical instability, considering multiple macroeconomic forecasts that reflected a range of possible outcomes. While we have incorporated estimates of economic uncertainty into our ACL, the ultimate impact of specific challenges will have on the economy remains unknown.

Management develops additional analytics to support adjustments to our modeled results. Our Allowance for Credit Loss Development Methodology Committee reviewed model results of each economic scenario for appropriate usage, concluding that the quantitative transaction reserve will continue to utilize scenario weighting. Given the uncertainty associated with key economic scenario assumptions, the December 31, 2024 ACL included a general reserve that consists of various risk profile components, including profiles to capture uncertainty