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Shares of Huntington Bancshares HBAN tanked 6.1% after it trimmed the forecast for full-year 2024 net interest income (NII). The company’s CFO, Zach Wasserman, revealed this at the 2024 Morgan Stanley US Financials, Payments and CRE Conference.

The bank now expects NII to decline between 1% and 4% this year. Earlier in April, management projected NII to be between a decline of 2% and a rise of 2%.

In first-quarter 2024, HBAN witnessed an 8% year-over-year decline in NII to $1.30 billion.

Despite lowering the NII guidance, the company still expects the metric to grow on a sequential basis for the remaining quarters of 2024. HBAN projects modest NII expansion for the ongoing quarter, with accelerated growth in the second half of 2024 and into 2025.

Rationale Behind Trimmed Guidance

The narrowing projection is primarily due to weaker loan growth as the company focuses on maintaining high marginal returns and increased funding costs linked with strong deposit growth.

At the investors’ conference, HBAN also lowered the top end of its previously-guided loan growth range. The company now expects average loans to grow in the range of 3-4%, a change from previous guidance of 3-5%.

Huntington also expects to end 2024 with bigger deposit growth than previously estimated. The bank now projects average deposits to grow in the 3-4% range, compared with earlier guidance of 2-4% growth. This is likely to be driven by a diverse and highly-granular deposit base, with 70% of insured deposits.

Guidance Unchanged for Non-interest Income & Expenses

HBAN continues to expect adjusted non-interest income to grow 5-7% in 2024. This will be driven by continued execution on key focus areas, including capital markets, payments and wealth management.

Likewise, HBAN expects non-interest expenses to grow 4-5% in 2024. This will be due to organic growth and technology and data investments.

Price Performance

Over the past six months, shares of HBAN have gained 8.7% compared with the industry’s rise of 3.8%.

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Currently, Huntington carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NII Guidance for Other Banks

Other major regional banks, including Wells Fargo WFC and Citigroup C, anticipate NII to decline in 2024. WFC expects the metric to fall in the range of 7-9% from the 2023 reported figure of $52.4 billion. Likewise, C projects NII (excluding Markets NII) to be down modestly in 2024.

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