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Huntington Bank Shares stock down about one point eight percent as we speak. The company reported second quarter earnings this morning. It boosted its net interest income growth forecast for the full year. Earlier this week, though, the company also agreed to buy Veritec's holdings for one point nine billion dollars in stock that expands its presence in Dallas, Fort Worth and Houston. Back with us is Zach Wasserman, chief financial officer of Huntington Bank Shares. It's the holding company of
the consumer and business regional bank, Huntington National Bank. It's got locations in a handful of states, including Ohio, Minnesota, North and South Carolina and more. Also with us Bloomberg News Senior editor Nina Trentman. She writes the Bloomberg CFO Briefing newsletter, which you should sign up for at Bloomberg dot com slash CFO Dash Briefing. Zach is in Columbus, Ninah in our Bloomberg studio, Zach, I want to start just with the deal for Veritex in Texas that will
accelerate your operations in the state. What attracted you to this bank in particular and to the Texas market.
You know, we're extraordinarily pleased with the opportunity to partner with Veritechs, And you know, a couple of things.
I would say.
One is the Texas market in particular is incredibly attractive. As you probably know, it's one of the fastest growing states in the country. It's the eighth largest economy in the world if it was a standalone country, and just the dynamism and the amount of business activity there is incredibly attractive.
It's one of the.
Reasons why we launched our own business there more than a decade ago, and we doubled down with a local expansion in early twenty twenty four.
But Veritechs also is.
An incredible platform for us to partner with. They're a top ten commercial bank in the state, and in particular focused on the two cities, as you noted before, the two MSA areas Dallas Fort Worth on one hand and then Houston and the other hand that.
We really are focused on.
So we not only see a great opportunity to combine our activities but to really build on that.
One of the things we've talked a lot about is.
That this is a springboard for us to grow organically, not only now in the short term, but really over the longer term in Texas. It'll make Texas our third largest state, to give you a sense, so we already will have a very meaningful present presence in that really great market.
Zach, can you talk to us a little bit about how that deal came together. We know, of course many companies have been looking at deal making this year. Deal making is actually up compared to the prior year period, but still, of course there are deals that are not going through because of terrorists and uncertainty, and how far did that impact your deal and also how did it come together?
Yeah, well, you know, so we have wanted to expand and sort of continue to grow into Texas for some time, and we've been therefore evaluating a lot of opportunities to do that, both organically, you know, as you as you probably know in North and South Carolina, we've we've just announced to a pretty significant organic expand and building fifty five branches and really doubling down building out our whole franchise there, and so we were looking at opportunities to
do the same thing in Texas and obviously evaluating lots of.
Different ways to do that.
When we really began to talk with Veritexs and it came together pretty quickly. The first time we met with them to discuss a partnership in any specificity was in mid June, so just about a month ago, and it evolved quickly for us to see, Wow, these are not only incredibly strategic opportunities, but the organizations themselves share a tremendous affinity in terms of culture and mission, which, as you probably know, that is the sort of secret sauce
to make an acquisition in banking successful. The cultures need to be aligned, the teams need to work together, and we saw that there was not only the strategic opportunity, but the cultures fit and then we were able to work together to find some of these growth opportunities that we could capture together. We said, Wow, this is a partnership that we really should move forward with, and so on Monday we were really pleased to be ably announce that.
Just turning to your earnings, talk to us a bit about the past quarter. We spoke to you at the end of the last quarter and we're asking you, do you see any sign any signs of a recession in your business? How is your business doing? What are you hearing from clients now that we're three months later, How does that look?
Yeah, the Q two results were just phenomenal, and then they really built strength throughout the quarter. To give you a sense, loans sequentially grew just under two percent. That's eight percent year over year. That was at the high end of our guidance range that we had given earlier. In the quarter, deposits grew one percent, fees were up seven percent year on year, spread revenue twelve percent. Ultimately, we saw pretexts earnings up sixteen percent and rings per share growing twenty.
Five percent year on year. So it really was a bang up quarter.
I will tell you, if you rewind the tape and you go back to April, I would have told you we had a lot of momentum. We felt pretty confident about how things where good would go, but there was clearly quite a bit of uncertainty in the market, and the capital markets were pretty volatile.
You know.
Fast forward to June and we saw strength build throughout the quarridor loan and customer activity really firmed up, particularly in mid May and into June, and now the third
quarter is starting out with the bank. We just talked this morning with our analyst and investor community and we shared that, you know, through the first couple of weeks here in July, it's pretty strong actually, So all signs are pointing toward continued growth and certainly a very encouraging end of what was to start with a somewhat uncertain environment.
Zach Shanali Bassak here, thanks for joining us today. You know, even with a lot of promising information coming out of this earning season for the biggest banks, for the regional banks, there seems to have been a pretty muted investor reception for firms even like yours that have boosted net interest income guidance. That should be a really good thing. What are masters telling you in terms of what else they want to see? Why the mouted reaction, even if things are looking pretty good.
You know, it's hard to know what's on the mind of investors any given time, as I'm sure you know. Well, look, I think if you take a step back, the regional bank stocks have expanded a fair amount over the last month, so I think there's part of that sort of profit taking activity going on now as results come through, there's also obviously worries around how will different banks fare under this fairly wide cone of uncertainty, around where interest rates
are going to go from here? Our rate's going to stay flat and could they even go higher or could they go lower. I'll tell you, for our for Huntington's sake, we have positioned the business to be pretty neutral and to effectively have the same outcome if we have zero rate cuts or if as many four rate cuts from here, and so I think, you know, that's one of the
questions on the mind of analysts. I think another one is as low growth in the banking industry generally starts to pick up, which by the way, is an incredibly healthy sign, but as it happens across the industry broadly, what will that do to deposit cost competition and the kind of the benefits of interest rates coming down by around a percentage point relative to the peak of FED funds, you know, over the last number of quarters here. So I suspect those and many other things are on the
mind of analysts, you know. For our part, I'll tell you, you know, we put our heads down and we run the business and and I think you know for what we believe pretty strongly is if we can keep posting that, you know, teens to hire earnings for share growth and revenue growth in the high single digits, that ultimately we'll see the stock prices continue to expand as they have been for the last several months.
Zach, you talked about interest rates, which of course is a nice segue to to our next question. We've seen increasingly intense devey this week and in recent weeks about the future of mister Powell is head of the FED, with the Trump administration asking for ratcod wanting to remove him. We saw this big excitement earlier this week when The New York Times reported that Trump had written a letter and waived that in front of people in Congress. I'm
just wondering for you, as a regional bank CFO. I know that your ps on Wall Street have expressed their support for an independent FED earlier this week when they reported earnings for you as a regional bank CFO, how does that look?
You know, what we want is a well functioning monetary system. We want a predictable and stable environment. We want to understand that it's a fact based and you know, based on the kind of fundamentals of the economy in terms of how the decision making is happening. So far, that appears to be happening. I personally give the federal lotic credit.
It was a very difficult environment they've been through, and they seem to have managed through over the last several years pretty well here and you know, that'll be where our focus is fundamentally coming back. You know, we run the business every day, We take the interest rate as given and we try to optimize around that.
Nina, we're speaking with Zach wassonan chief financial officer of Huntington Bank Shares. Zach, since you do operate in these geographies including Texas, Ohio, Minnesota, North and South Carolina and more, you've got a nice regional view on where there is strength and weakness. Are you seeing any particular geographical weakness emerge anywhere?
Really not, you know, I think pretty broad based growth.
One of the things we shared today in the earnings results is that, like we've seen for the last several quarters, the growth we're seeing is very balanced between what we're calling our core all of the businesses we've been operating for for a long time, but also our new initiatives excuse me, the launches we're doing into North and South Carolina, into Texas.
Recently we launched our business into South Florida and a number.
Of new commercial specialties, and we're seeing a nice balance across them. So, you know, kind of across our traditional Midwest footprint, we're seeing strong growth in Michigan. I was just up with our Michigan based team earlier this week, and we're seeing six percent year over year loan growth.
In that market.
To give you a sense, in Columbus and in our central Ohio region where I'm based, we're seeing very strong economic conditions and a lot of expansion.
And then of course in.
Some of the new geographies that we've were growing into North and South Carolina, Texas, Florida, we're seeing a fair amount of expansion there also, so not really seeing any areas of weakness. And you know, again, as I noted, kind of the trend we're seeing month by month here is firming up pretty well.
Zach.
Thanks for joining us. It's good to see you again. Happy third quarter. I can't believe we're already there. Hope you have a good summer and do come back soon and join us once again. Zach Washerman, Chief financial Officer of Huntington Bank Shares, is the holding company of the consumer and business regional bank. Huntington National Bank locations include Ohio, Minnesota, North Carolina, and more. Stock right now down about two percent.
The company did report results a little earlier in the day.
Also with US.
Bloomberg News Senior editor Nina Trentman. She does write the Bloomberg CFO Briefing newsletter. You should sign up for a Bloomberg dot com slash CFO Briefing