Huntington Bancshares Incorporated (HBAN) Earnings Call Transcript & Summary

All right. Up next, we are pleased to have Huntington joining us. Huntington has been able to take advantage of the dislocation across the sector to increase customer acquisition, which has resulted in best-in-class deposit growth. In addition, it's continuing to maintain a strong expense focus and has continued to take a conservative approach on building capital, which should position it well to capitalize on opportunities in the years ahead. Here to tell us more about the story is Chairman, President and CEO, Steve Steinour, and joining us also on stage is CFO, Zach Wasserman. Steve is going to give us some prepared remarks, and then we're going to get into Q&A.

Great. Thank you, Ryan, and the Goldman Sachs team for hosting us today. Welcome to all of you. Zach will handle most of the Q&A, I hope, but we're going to have an interesting morning here with what we're sharing. We're very pleased to give you an update on our recent accomplishments as well as exciting growth initiatives we recently launched. And following my brief presentation, [ and ] I will go back to Q&A. But before we get started, please review Slide 2, which applies to forward-looking statements. So let's start on Slide 3. '23 was a dynamic year for the banking sector, with sustained inflation and Fed interest rate hikes, as well as bank failures early in the year, which we all know. But our stability showed through strongly during these times and was supported by the efforts of our colleagues who remained focused on our customers. It's their dedication, which embodies our purpose to be the leading people for [ this ] digitally-powered bank. Now turning to Slide 4. There are 5 key messages I want to cover today. First, we're operating from a position of strength, which allows us to sustain organic growth, while optimizing the pace of loan growth and returns within the portfolio, deliver expense efficiencies and build our investment capacity. We have strategically positioned ourselves to perform well through a range of scenarios. Second, we are proactively driving capital ratios higher. We are managing internally to a CET1 level inclusive of AOCI, and we intend to drive this ratio higher throughout 2024. Managing the franchise to this metric places us well ahead of future regulatory requirements. Third, we continue to dynamically manage credit with a through-the-cycle outlook, including disciplined client selection, underwriting and rigorous portfolio management. We've been focused for many years, many years on maintaining a credit culture aligned with our aggregate moderate-to-low risk appetite, and we expect to outperform as credit normalizes from historic lows. Fourth, we've delivered consistent deposit growth and well-managed data, and we expect that trend to continue. And finally, when you put all this together, we're leveraging our position of strength to accelerate our organic growth initiatives that support our long-term goals. We are seizing opportunities to add bankers and capabilities across the company, and I'll share more details later. Turning to Slide 5. This year has certainly been challenging in many ways. However, our team delivered exceptional performance. We stayed focused on executing our core strategies throughout the year. In the first half of the year, we realigned our consumer and regional banking segments with our strategic priorities to enhance efficiencies and support future growth opportunities. We made meaningful progress on our strategic goals announced last year at Investor Day, highlighted by our growth in primary bank customers, core deposits, payments and wealth management. We secured the #1 ranking in customer satisfaction and consumer banking for the seventh time and maintained our #1 ranking in SBA lending for the sixth consecutive year. We also added a fund finance team to our specialty banking group in the first half of the year, aligned with our target of 1 to 2 new vertical additions, which we shared at Investor Day last November. In addition to these accomplishments, we drove capital higher, proactively managed expenses to build our ongoing investment capacity, and outperformed our credit targets. Turning to Slide 6. The steady execution of our strategy places us in a strong position. First, we do have strong capital levels adjusted for AOCI, which allows us to sustain balance sheet growth. When you look at our capital plus credit reserves, we are top quartile and well positioned, should the macro environment change. On credit, our charge-offs since the end of 2021 have been top quartile. Our credit quality continues to remain strong, driven by our disciplined customer selection and rigorous portfolio management. Though we are beginning to see credit metrics normalize off these historic low levels, we have a strong allowance supporting a conservative risk appetite. I like that phrase. We have a strong allowance supporting a conservative risk appetite. I think that's going to serve us very well in the next few years. Our deposits have steadily grown since '21, outpacing peers by almost 11 percentage points. We are continuously expanding our core customer base, while not relying on brokered or wholesale markets. The granular growth steadied the bank through the March volatility. Our liquidity to uninsured deposits ratio is now more than double the peer median. Lastly, regarding earnings. Our detailed actions securing our position of strength, which results in a NIM better than peers and a top quartile return profile. We are strategically balancing organic growth to maximize returns while driving capital ratios, and positioning ourselves for accelerated growth as we get into the back half of '24 and 2025. Turning to Slide 7. Let me share a couple of comments on our capital position. We've been building our capital incrementally over the last 5 quarters, targeting the high end of our stated range of 9% to 10% for CET1. More recently, we adopted a more stringent metric internally by managing CET1 adjusted for AOCI. While other banks may be waiting for the proposed regulatory rules to be finalized and leverage the phase-in periods, we are proactively managing the capital with an intent to get ahead of these new regulations. Our capital priorities have not changed. We plan to first, fund organic growth, second, support our dividend, and third, provide for all other uses, including return capital to shareholders through repurchases, which will remain a key capacity -- a key capital priority over the long term. Turning to Slide 8. Our aggregate moderate-to-low risk appetite continues to be a strength. Our disciplined credit culture is embraced by our colleagues across the bank, and is the basis for our strong credit performance. Our portfolio has been purposely constructed and diversified, with 44% in consumer assets where over 95% are secured with prime and super prime borrowers. In our commercial portfolio, we have diversification across industry and geography, as well as our leading #1 SBA program supported by SBA guarantees. Our low commercial real estate concentration is top quartile in the peer group at about 10% of total loans. Our office exposure is just 1.6% of total loans and currently has a reserve coverage of over 9%. Turning to Slide 9. As I mentioned earlier, we are unique when you look at the growth in our deposit base, and we're doing it while managing beta effectively. Our focus on primary bank relationships and cross-sell efforts have driven these results, which are supported by our leading digital capabilities and award-winning customer service. This strong core funding base has allowed us to keep broker deposits and FHLB borrowings to a very low level. Turning to Slide 10. Our Commercial Banking segment, as we highlighted at Investor Day, comprises a regional and national set of businesses, with diversification and top-tier rankings in many key areas. We operate a leading middle-market banking franchise in our markets, supported by treasury management and capital markets. Nationally, we've been expanding our expertise and capabilities across corporate and specialty banking as well as asset finance. We continue to be focused on driving growth of primary bank customer relationships, and our broad-based products, deep expertise and highly engaged colleagues truly create a differentiated customer experience. As we continue to see market disruption, we see opportunities for us to accelerate the expansion of our commercial bank, both with added capabilities and new attractive geographies. Turning to Slide 11. Our intentional efforts position -- in this position of strength, as I mentioned. As we moved into 2024, this means we can and will continue to play offense. With that in mind, we're announcing our strategic expansion for the commercial bank into the Carolinas. The rationale for this expansion is twofold. First, these markets provide attractive high-growth geographies with substantive commercial business opportunities. Secondly, we were able to be opportunistic in identifying teams of experienced bankers who know these markets well in order to lead our expansion. And I'm very enthusiastic about the teams that we -- who have recently joined the bank. We've had a commercial banking presence in Charlotte for nearly a decade, and we're adding high-performing teams of bankers who will create relationships where we can bring capital and liquidity and other products and services. Our entry into the Carolinas will establish 5 regions throughout, with teams locally in each market. Each of these targeted regions are top 100 markets in the U.S. Our approach will be commercial-led with middle market, corporate and specialty banking capabilities in addition to treasury management and capital markets. And we're going to be adding to our existing regional banking teams our SBA, practice finance and specialty banking teams, as well as corporate teams already in those markets. Turning to Slide 12. In addition to the Carolinas expansion, we've also expanded our specialty banking groups. These build upon our expertise with existing verticals, including health care, mid-corp, franchise and tech and telecom. Earlier this year, we added fund finance to our coverage with the addition of experienced colleagues. And today, we're announcing the addition of a Healthcare ABL team to bolster our offerings and to leverage the full capabilities of the franchise for targeted client solutions. Additionally, we've recently added a Native American Financial Services group, which will deliver comprehensive solutions and be strong advocates for the community served. These additions reflect our continued goal to add 1 to 2 new verticals annually. And while the timing and pace of our expansion is dependent on identifying the right teams, the right people in the current challenging environment, we see opportunities to accelerate our investment and growth. As we move into '24, we'll continue to look for additional opportunities to bolster our talent and expertise with incremental commercial verticals and more depth in a number of businesses. This is an exciting time for Huntington, and we're attracting really good bankers to our companies. The cumulative effect of new colleagues and capabilities throughout the commercial bank from these efforts is substantial. And as a result, will further bolster our multiyear organic growth outlook. So in closing, I'm extraordinarily proud of our team's achievements this year. We look forward to continuing to grow and to seek opportunities in 2024. And we will continue to perform at a very high level. So Ryan, over to you for Q&A, please.

Thanks, Steve, and apologies, I'm going to start the Q&A with you. But we will find much time for Zach. And thank you for the presentation. I'm sure you're out speaking with lots of CEOs across many industries within your footprint. Maybe just talk about what the mood is across the client base? How are they managing in this environment? And what do their borrowing needs look like for the year ahead?

The companies, the CEOs I'm talking to, the companies are performing generally well. It's not record years in most cases. And backlog for '24-'25 may be lighter -- is lighter in the majority of those. The confidence in sales, not at the same level as it was in the prior year. Having said that, they're having good years. They expect to have good years next year. This recent change in interest rates, I think, will unlock further investment and potentially acquisitions, repositioning of some of these businesses. And we'll be a beneficiary, we'll be supportive of them as well. So we think '24 is going to be a reasonably good year. We're already seeing it, we're a large equipment finance lender. The volume of equipment finance typically is fourth quarter-oriented. This should be a pretty good fourth quarter and confidence is sort of improving with the rate outlook adjustment.

So on Slide 11, you mentioned an expansion into the Carolinas, given others are pulling back. And maybe just talk about what is attracting you to these markets in the Southeast? Why do you believe this is the right time to expand your presence in the region?

Well, we've been there, as I said, for a decade, a variety of business lines. We've been interested in doing more. The ability at this stage, when other banks may be doing cost programs or reductions or have a limited appetite for risk-weighted asset growth for capital or other reasons. This is a window. This is a -- it's a bit of a contrarian play, but we believe it's a very unique window. And much like in 2010, we're going to take advantage of it. We've been gearing the company for outperformance in a recession for 14 years, and we're going to deliver that. And with that, with the strong capital, excellent liquidity, the capabilities of the team, the credit performance, this is our time to move. And we intend to do it throughout '24 as well.

So you also announced on Slide 12, 2 new commercial verticals, Healthcare ABL, Native American Financial Services. Can you maybe just give us an overview of what these are? How do these fit into your medium-term strategy? And what made these 2, in particular, attractive to you?

We're a fairly large health care -- we have a fairly large health care specialty banking group today that's national in business. It's both a combination of hospitals, other health care systems, different forms of delivery and products. This ABL group lets us extend the menu with those relationships, as well as bring other ones into the company. So it's a natural fit. It's hand in glove, and it's a great team. On the Native American front, in our current market, there are different businesses we do with certain tribes, and we've done it for decades. But we have not -- as we moved west, with the TCF combination with Minnesota and Colorado, we see more opportunity. And that set up this vertical. We've got a half dozen very experienced bankers, great reputations and we're prepared to invest. We have the capacity to invest. And that's somewhat unique in -- from where they're coming and an opportunity for us. And so it's very much strategy-driven. It has to have alignment with our credit policies, our aggregate moderate-to-low risk appetite. But like Native American finance -- Native American banking will be 100% probably deposit to loan ratio. It's done well. It's a really, really good business, and it serves an underserved community. It's in line with our purpose.

I'm guessing we'll get sizing of these at some point next year?

Yes, Zach will be glad to do that.

Zach, would you like to do that, or are we going to do that next year?

I'm happy to do that next year. But I would say these are really exciting. Each in and of themselves is additive and helpful. Cumulatively, they'll be powerful. And what's good about this moment where we're operating with a position of strength [ and ] with momentum is we're seeing really the highest caliber talent come to us. That's what enables the fast payback because these are experienced bankers with deep relationships that can quickly pull, not only loan business, but importantly, deposits and our value-added fee service businesses as well. And so we're typically expecting around a 12-month point to breakeven, which, again, will accelerate growth and be additive to profitability as we go out into late '24 into '25.

And we announced third quarter and talked about expense growth next year. At this stage, all of this was factored in.

Sure. So Zach, I was laughing, I was thinking about when we were here last year, and I think I asked you about 12 questions on the fourth quarter. Today maybe, we're just going to do 1 and say, what trends are you seeing in the fourth quarter versus the guidance you gave? And maybe just provide some color on how things are preparing versus expectations in totality.

Thanks, Ryan. And I'll just say it's great to be with all of you. In general, the fourth quarter is coming in very much like we expected, continued momentum and execution of our core plan very much in line with our expectations. I'll tick down the categories for you. We expected another quarter of deposit growth. We'll deliver that. We're seeing around 1% sequential deposit growth, even as beta continues to track very closely to our expectations. We expected a continuation of loan growth momentum. And we're pleased to see that. We had expected around 1% loan growth sequentially into Q4. It will probably end up being around 0.5%, so just a little bit slower than that, really driven by some decision-making commitment timing delays on the part of our clients just given some of the economic uncertainty. But generally, the environment looks pretty constructive, as Steve mentioned earlier. NIM, we continue to expect NIM for the fourth quarter to come in between $3.05 and $3.10 in line with our prior guidance. And that will support, again, a continuation, and I'm sure we can extend on this comment. But continue to see flat to rising NIM throughout the course of 2024 as well, under a reasonable range of economic and interest rate scenarios. And that will set up net interest income on a dollar basis to be in line with forecast for Q4 and then growing throughout the course of 2024 on a full year basis. Fees, we expect to be roughly flat coming into the fourth quarter from the third quarter. We'll be at that level, plus or minus $5 million, probably it's coming in very well. And it's encouraging that we're seeing incremental growth, particularly in capital markets, both in core capital markets, and in advisory. It continues to be a challenging environment, but we're seeing incremental growth there, and the momentum is pulling through. Expenses look to be coming in, in line with expectations. And charge-offs as well coming in as we expected, in line with our guidance.

So Ryan, importantly, just to add to that, pipelines backlog coming into the new year looks pretty good as well. It's not as strong as last year, but it's -- on a broader basis, it's good. So we're setting up with these investments for a stronger second half and a really interesting '25 and beyond. And really like how Zach and the team have positioned the company.

Maybe just to expand on the pipeline and backlog is looking good. You guys have obviously had some sort of intentional effort to optimize lending to drive the highest returns, which has been successful. Maybe just talk about the actions that you've taken, where are you seeing further opportunities to optimize? And what are the areas you're looking to grow? Obviously, you laid out a couple here, but what are some of the other areas that you're upbeat on into 2024?

Well, I'll start, but add to it, Zach. So commercial real estate is an area that we're going to restrain growth and shrink a bit. We think of it as a core product. We've got great long relationships with -- multigenerational with a number of developers. We know they'll perform well through the cycle, and we're going to stay with them. But we'll probably shrink in aggregate the portfolio. It is running down a little bit this year, and I expect will continue. We've -- because of the geopolitical risk, we've pulled out of, roughly $1 billion out of trade finance during the course of the year. We're going to be very, very cautious, very cautious on that going forward. We were never a high-leveraged lender, so we don't have to pull back. A lot of our small business is SBA-guaranteed. So as we've looked at the portfolio and its construct, on the whole we like where we are. We're just rationalizing returns literally across the portfolio. If we're not getting the cross-sell we want and we're not getting the returns we're looking for, then there's like a gradual transition. Through all that, we're getting net growth. And I think as that matures or stabilizes, we'll have interesting net growth.

You talked about reducing CRE. Obviously, that's been a focus point in the market, as has broader credit. Zach referenced expecting to be in the range in the fourth quarter, which is encouraging to hear. Maybe just talk about, like what are the areas you're most watching, and how do you see credit progressing into '24?

I think the industry is very focused on commercial real estate, office. Some may be focused on multifamily. Generally, it's soft. Not a lot of liquidity. And having said that, our strategies have been working well so far in terms of the selection of who we're doing business with, and their support of their different projects to the extent it's required. So we've been getting true-ups for rates or collateral purposes for more than a year now from many of our customers, and expect that to continue, and have had very strong reaction. So I think there'll be more -- I think there'll be some CRE losses. I think the industry will experience that as well. But I don't think this is anything like in '08, '09. There was an underlying conservatism by many of the banks going forward, certainly by us. So CRE would be #1 and some subsections of that. Typically leverage is the second, and this just hasn't been a big focus for us. So -- and I'm not overly concerned by that. And then small business because they have less opportunities, and we do a lot with small business. But we do a lot with the SBA. And we like having that 75%, 80-plus percent guarantee on the riskier side of that loan. We've been around for 157 years. So we've got deep relationships with many of these customers that have gone through the cycle. And at Investor Day last year, we talked about our deposit to loan ratio being 3:1 in business banking, 3x deposits to loans. That's one of the best ratios in the country, and reflects the focus and dedication of the teams around delivering great business banking services. So on the whole, the top 3 areas you would typically look at, I feel very good with us. And we don't see other areas somehow uniquely emerging.

Great. Zach, maybe switching to expenses. You came out with an expense guidance of 4% for '24, which at the time was higher than the market expected. Obviously, we're starting to see some of the investments that are contributing. But can you maybe just kind of break down for us how much of this is revenue growth spend versus market-related pressures such as inflation, need to spend on risk management and regulation? Maybe just parse out what contributed to the growth for '24.

Yes, for sure. And to some degree it's a contrarian play, as Steve noted, but I think one that we think is going to -- designed to really set up the company to generate significant value. If I take a step back, driving efficiency is a critical goal for the company. We've talked a lot about the model we try to run, which is driving continual efficiencies in baseline operating costs in order to funnel an outsized amount of expense growth capacity into investment areas, like tech dev, like marketing, like adding new people, and still keeping the expense growth overall at a very low level. And we've been doing that through a series of proactive actions: our long-term reengineering programs, some of the tactical programs we've done throughout the course of this year, and we've just announced another set in Q3 to continue to do that. That's allowed us to keep overall core expense growth at only 2.5% for the last 4 quarters. And my expectation is we'll be able to maintain that roughly 2.5% underlying core, even as we're accelerating revenue growth as we go into 2024. What we're trying to do now is do 2 things, which will add about $70 million, around 1.5% of additional expense growth into 2024, a temporary elevation of expense growth before it comes back down, really to do 2 things. On one hand, to fund these offensive and opportunistic growth opportunities that Steve detailed a little earlier. That's about 1/3 of that additional expense growth in 2024. And then the other side is to really address the lessons learned from the last year. If you take a step back and think of what were the lessons here, it was around how quick the environment could move and how much data and automation capabilities are really critical to manage in the kind of risk management posture that we want to have. And clearly, at the margin, there are new coming regulations that will require investments around capabilities. And so that's the other 2/3 of that. In our view, it's the right balance at this point, to quickly address the capability needs, to seize these growth opportunities and to really set up what we expect to be a very powerful exit trajectory out of '24 and into '25.

So Zach, in your update, you said deposit betas seem to be coming in as expected. I think the guide was for a little bit above 40 versus in the high 30s where we currently are. Maybe just talk about what you're seeing on deposit pricing and [ with even ] the markets are actually starting to believe, we may to see cuts next year. I know the forward curve is pricing in 3. Most banks seem to think 2. But how does this change the way you think about deposit pricing and deposit betas over time?

Yes. I would characterize the -- on average for the totality of Q4 versus Q3, the deposit competitive environment to be roughly consistent. With that being said, as we get towards the latter stages of Q4, we are seeing the early indications of the deposit environment beginning to anticipate down rate moves [ and ] down rate beta, which is as would be expected and I think is constructive, very much aligned with our expectations. The outlook for beta for us, and I've always made pains to say this every time I talk about beta, the end game for beta will be completely a function of the end game for the industry environment, clearly. And with the economic environment. To the extent that we don't see any rate cut early, and there's an extended pause. You'll see beta continue to trend higher for a period of time. But in that scenario, we'll also have higher NIM. To the extent that we do see the forward yield curve realized with a relatively early first rate reduction. And I think you'll see a pretty quick pivot to down rate management and down beta management. So overall, it continues to track very closely to our expectations. And I think we're ready to execute on either of those scenarios.

So you're one of the few banks that is talking about growing NII and stable to up margin in '24. Can you maybe just talk about some of the drivers that underlie that and how this would change under a different rate environment, such as if we don't get cuts versus if we do? And how you position the balance sheet for that?

The approach we've been taking for the last 1.5 years has been to leverage the natural modest asset sensitivity of the business, to really reap the benefits of the higher interest rate environment. And we've seen that come through with a very significant spread expansion since the rate cycle began, even as we also plan for a pretty wide range of potential scenarios. And we set up the playbook to ensure that we know how to manage in each of those, with a goal toward blunting the range of outcomes within NIM, really keeping it as tight a corridor as we can. The yield curve has reset quite a bit, as you said, right, around 25 bps on the short end, roughly 50 bps lower on the long end. The central set of forecasting scenarios that I look at is bound at the low end by the forward yield curve, which, at least as of yesterday, had 1 cut in April or May and then 4 cumulative cuts in 2024. Personally, I don't believe that's going to come to pass, and we would very likely take the over on that in the near term. So we also plan for a higher scenario that's around 50 or 70 basis points higher than that. In that scenario, as I mentioned earlier in my remarks, we continue to see a trajectory of flat to up NIM throughout the course of 2024, and the ability to grow net interest on a dollar basis for the full year. We are asset-sensitive, and so to the extent that, that really fast rate reduction path comes to pass, growth will be pretty marginal, but much more likely to be in a higher range and a higher level of growth. I think kind of the approach we've been taking is to focus on driving to the outcomes that we've talked about here and protecting the downside, and really setting up to see an acceleration of momentum as we go into '25.

You talked about the fee income generally flattish. Obviously, there's been a challenging year given several industry headwinds. You guys do have a very upbeat view on fee income growth over the medium term, as you expect them to grow faster than loans and NII. Talk maybe about some of the investments you made that should drive this. And as you look to '24 and '25, which areas of the business are you most excited about?

The fee business strategy has been one that's been a really core focus for us for a long time, for a number of reasons. More and more, it's important to wrap our relationships around our customers ever more with value-added services. It's clearly fee-based revenues will loom even larger going forward to really support ROE, given coming regulations around capital. And there's a really attractive opportunity in front of us. And so we've been investing in it significantly. In our capital markets business, we've now fully integrated the Capstone acquisition from last year, and that is really firing in terms of getting lead generation and customer cross-pollination between Capstone and our banking business. Clearly, it's been a challenging capital markets environment this year with lower M&A advisory. And as lower -- slightly lower commercial loan production, less core capital markets activities, the pipeline, as Steve mentioned, looks quite robust. And I think as we go out into the rest of 2024, we'll see continued sequential growth in capital markets. So we feel very encouraged about that. On the payment side, there's just been a dramatic amount of innovation. When you think about payments, we think about 3 legs of the stool: treasury management, card and ChoicePay. And we've been driving significant growth in each of these areas. Treasury management's double-digit levels of penetration growth into the customer base, we're seeing 8% revenue growth. Card business is really firing with a lot of fundamental momentum and new product launches. And then our ChoicePay product is really beginning to get momentum in the marketplace. And then wealth, this year again, kind of like capital markets, has been a tough one, with asset levels both on the equity markets and bond markets coming down. But the underlying trend of asset gathering and of client penetration is really pretty promising. When we talked at Investor Day in November of 2022, we said that we had, had 1.7% penetration of our wealth management offering within our affluent consumer base, and we wanted to get that to be between 3% and 5% penetration. We've already brought it up 0.5 percentage point since then, to 2.2%. And so we're seeing that momentum. And now with equity and bond markets seeming to stabilize, that underlying growth will come through as well. So my expectation is we'll see quite a solid fee growth year in 2024, and certainly continue to grow north of spread and north of loans.

2 more questions that I wanted to get through here. This one might be for both of you. So you guys have done a good job rebuilding the adjusted capital just above 8. You talked about getting it back into the 9 and 10 and no repurchase. I guess, why such a conservative approach? And once you get to that targeted range, how do you think about capital priorities? Do you expect M&A to play a role in there as we look out over an intermediate timeframe?

Well, as we've seen in the last 3, 4 years, there's been a lot of volatility. And frankly, believe at some level the regulation is going to come in to adjust to AOCI. We're just going to front run it, we can get ahead of it, building capital to that ratio. I think it's a prudent thing for us to do irrespective of the regulation. So that's number one. Second, in terms of use of capital, it hasn't changed. It's core growth, dividend and then the other uses. And we're committed to buyback over the longer term. That will become part of what we do. We're going to be accreting capital back in off the AOCI now for the foreseeable future. Also, bolstering that fundamental ratio position us to do other things with that capital. In terms of inorganic in M&A, we have done 2 larger deals in 14 years. This is not -- we're not like rushing to do something. If there's something out there that we think makes [ right ] sense for our shareholders medium, long term, we'll look at it. But it's got to be right price, risk, social issues, the rest of it that come in line, Ryan. I don't feel -- the opportunities are so extensive for us on the organic growth. I mean, we're going to have more specialty banking announcements next year. We're looking at driving these core TCF markets in Chicago and the Twin Cities and Denver, in addition to the preexisting core. We've got -- our consumer regional bank that was a combination of 2 segments, during the course of this year, has never performed better in my 14 years. I'm very enthusiastic. And you see the momentum on the commercial side as well.

Maybe just to build on that, Stephen, closing, just your view on how you think about Huntington's position relative to the rest of the industry? And is there anything you want to reiterate to the investment community regarding the Huntington story?

Look, I think we've taken a very disciplined approach to credit over many, many years. We've always published the consumer side. It's super prime, prime. It's going to perform very well. 770 FICO for a dozen plus years on average, and it's 95% secured. I feel -- that's 44% loan portfolio, we feel really good. Talked about commercial, our credit will outperform. I'm highly confident of that. Still work we have to do, but it will outperform. Second, we're in a great position with capital, both capital -- but also when you add in the reserve, we feel that we've got a very strong position. And liquidity is peer-leading. So when you think about the building blocks, we're in really good shape. Management is doing a great job, highly engaged colleagues. Look at the customer service awards, both commercial and consumer and regional bank, we're poised for this. The intent all along, much like 2010 was to be a bit of a contrarian and to play offense in a down cycle. And we're going to do that, in this moment where some banks are pulling back.

Awesome. Well, please join me in thanking the Huntington team.

Thanks, Ryan.

Thank you.