Huntington Bancshares Incorporated (HBAN): Business Model Canvas [10-2024 Updated]

Discover the innovative business model of Huntington Bancshares Incorporated (HBAN), a leading financial institution that successfully blends traditional banking with modern technology. This blog post delves into the key components of HBAN's business model canvas, highlighting how they create value through strategic partnerships, customer-centric services, and a robust digital infrastructure. Join us as we explore the essential elements that drive their success and differentiate them in the competitive banking landscape.

Huntington Bancshares Incorporated (HBAN) - Business Model: Key Partnerships

Collaborations with fintech companies

Huntington Bancshares has established strategic partnerships with various fintech companies to enhance its digital offerings and improve customer experience. These collaborations focus on integrating innovative financial technologies, improving transaction efficiencies, and expanding service offerings.

For instance, Huntington has partnered with Zelle to provide real-time payment capabilities, facilitating seamless money transfers for customers. The integration of Zelle has significantly increased the volume of digital payments, with a reported increase of 25% in digital transactions year-over-year as of Q3 2024.

Partnerships with local businesses

Huntington actively collaborates with local businesses to strengthen regional economic development. This includes providing tailored financial solutions and support services to small and medium-sized enterprises (SMEs). In 2024, Huntington has committed $500 million in loans and credit facilities specifically aimed at supporting local businesses, contributing to job creation and economic stability.

Additionally, Huntington has launched initiatives such as Huntington Business First, which offers personalized banking services and financial education resources to local entrepreneurs. The program has seen participation from over 1,000 local businesses, with a reported 20% increase in business accounts opened compared to the previous year.

Alliances with community organizations

Huntington Bancshares has formed alliances with various community organizations to promote financial literacy and support community development. The bank's partnership with the United Way focuses on providing financial education programs aimed at low-income households. In 2024, Huntington has invested $2 million into community programs that provide resources and training for financial management.

Moreover, through its Community Development Financial Institution (CDFI) initiative, Huntington has allocated $100 million in funding to support affordable housing projects and other community development efforts. This initiative has already resulted in the construction of over 1,500 affordable housing units across its service areas.

Partnership Type	Partner Organization	Investment/Commitment	Impact/Outcome
Fintech Collaboration	Zelle	Not disclosed	25% increase in digital transactions YoY
Local Business Support	Local SMEs	$500 million in loans	20% increase in new business accounts
Community Organization Alliance	United Way	$2 million	Financial education for low-income households
Community Development	Affordable Housing Projects	$100 million	1,500 affordable housing units constructed

Huntington Bancshares Incorporated (HBAN) - Business Model: Key Activities

Providing banking services and financial products

Huntington Bancshares offers a wide range of banking services and financial products, which are fundamental to its operations. As of September 30, 2024, the bank reported total average loans and leases of $126.4 billion, reflecting a 4% increase from December 31, 2023. This growth is primarily attributed to a $3.5 billion increase in average loans and leases for the Consumer & Regional Banking segment, which totaled $68.4 billion.

The net interest income for the first nine months of 2024 was $3.01 billion, up 10% compared to the same period in 2023. The net interest margin (NIM) stood at 3.60%, up from 3.44% year-over-year. The bank's diversified offerings include:

• Commercial and industrial loans: $53.6 billion
• Residential mortgages: $24.1 billion
• Automobile loans: $14.0 billion
• Wealth and asset management revenue: $271 million for nine months ended September 30, 2024, up 12% year-over-year

Risk management and compliance

Risk management is a critical activity for Huntington, particularly given the dynamic economic environment. The provision for credit losses increased to $313 million for the nine months ended September 30, 2024, a 13% increase from the previous year, reflecting heightened charge-off activity. The Allowance for Credit Losses (ACL) was reported at $2.4 billion, equating to 1.93% of total loans and leases.

The bank employs a comprehensive risk governance framework that includes:

• Regular assessments of credit, market, liquidity, operational, compliance, strategic, and reputational risks
• Implementation of effective segregation of duties and access management protocols
• Utilization of advanced modeling technology and internal stress testing processes

As of September 30, 2024, the bank maintained a moderate-to-low risk appetite, ensuring a disciplined approach to managing credit quality.

Enhancing digital banking platforms

Huntington is focused on enhancing its digital banking platforms to improve customer experience and operational efficiency. The bank's digital initiatives include:

• Investment in technology to facilitate seamless online banking services
• Expansion of mobile banking capabilities, catering to growing consumer preferences for digital interactions
• Integration of advanced analytics to personalize customer offerings and improve service delivery

In the third quarter of 2024, Huntington reported an increase in noninterest income to $523 million, a 3% rise year-over-year, driven by higher payments and cash management revenue, which reached $158 million. The bank aims to leverage its technological advancements to maintain a competitive edge in the evolving financial landscape.

Key Financial Metrics	Q3 2024	Q3 2023	Change (%)
Net Interest Income	$1.4 billion	$1.368 billion	2.3%
Noninterest Income	$523 million	$509 million	2.8%
Provision for Credit Losses	$106 million	$99 million	7.1%
Net Income	$517 million	$547 million	-5.5%

Huntington Bancshares Incorporated (HBAN) - Business Model: Key Resources

Extensive branch network

As of September 30, 2024, Huntington Bancshares operated a network of 1,000 branches across its service areas, primarily in the Midwest and East Coast of the United States. The bank's extensive branch network provides significant customer access, contributing to its ability to attract and retain clients.

Digital banking infrastructure

Huntington has invested heavily in digital banking, with over 8 million active digital banking users as of Q3 2024. Their digital banking platform includes mobile banking features, online account management, and digital payment solutions, providing customers with convenient access to banking services. The bank reported a significant increase in digital transactions, totaling over 300 million transactions annually.

Digital Banking Metrics	Q3 2024	Year-over-Year Change
Active Digital Banking Users	8 million	15%
Annual Digital Transactions	300 million	20%
Mobile App Downloads	2.5 million	10%

Skilled workforce and talent

Huntington Bancshares employs approximately 11,181 full-time equivalent employees as of September 30, 2024. The bank focuses on attracting skilled professionals across various sectors, including customer service, technology, and financial analysis. The workforce is critical to maintaining high service levels and driving innovation within the bank.

Employee Metrics	Q3 2024	Year-over-Year Change
Total Employees	11,181	-4%
Average Employee Tenure	5.2 years	1 year
Employee Training Investment	$1.5 million	5%

Huntington Bancshares Incorporated (HBAN) - Business Model: Value Propositions

Customer-first approach

Huntington Bancshares Incorporated (HBAN) adopts a customer-first approach, emphasizing personalized banking solutions and customer engagement. As of September 30, 2024, the bank reported a total of $200.5 billion in assets, reflecting a 6% increase from the previous year. This growth is attributed to a focus on enhancing customer experience and expanding service offerings.

Comprehensive financial solutions

Huntington offers a wide range of comprehensive financial solutions, including consumer and commercial banking, wealth management, and treasury services. In the third quarter of 2024, net interest income reached $1.4 billion, while noninterest income was reported at $523 million, marking a 3% increase year-over-year. The net income attributable to Huntington for the same period was $517 million, showcasing the effectiveness of their diversified service portfolio.

Financial Metric	Q3 2024	Q3 2023	Change (%)
Net Interest Income	$1.4 billion	$1.368 billion	-1%
Noninterest Income	$523 million	$509 million	+3%
Net Income	$517 million	$547 million	-5%

Competitive interest rates and fees

Huntington's competitive interest rates and fees are significant value propositions that attract customers. The bank's net interest margin (NIM) for Q3 2024 was 2.98%, a decrease from 3.20% in Q3 2023. Despite this decline, the bank remains competitive with its offerings. Average interest-earning assets increased by 6%, indicating a robust growth strategy in lending activities.

Metric	Q3 2024	Q3 2023	Change
Net Interest Margin (NIM)	2.98%	3.20%	-22 basis points
Average Interest-Earning Assets	$198.3 billion	$186.6 billion	+6%
Average Loans and Leases	$126.4 billion	$121.9 billion	+4%

Huntington Bancshares Incorporated (HBAN) - Business Model: Customer Relationships

Personalized banking experiences

Huntington Bancshares emphasizes personalized banking experiences through tailored financial services. In 2024, the bank reported a total of $1.1 billion in net income for the nine-month period, reflecting a 14% increase compared to the previous year. This growth is attributed to a focus on enhancing customer satisfaction and loyalty.

Average total loans and leases increased by $3.5 billion, or 5%, during this period, indicating strong demand for personalized lending solutions. Additionally, the bank's net interest income rose by $268 million, or 10%, driven by a commitment to providing customized financial products to meet diverse customer needs.

Strong community engagement

Huntington Bancshares is deeply engaged in community initiatives, which enhances its customer relationships. The bank's total assets under management reached $33.2 billion as of September 30, 2024, marking a 22% increase from the previous year. This growth is reflective of the bank's focus on community involvement and building trust among its customer base.

During the nine months ended September 30, 2024, Huntington's consumer and regional banking segment reported a net income of $1.1 billion, contributing significantly to the bank's overall financial performance. The bank actively supports local initiatives, which fosters customer loyalty and strengthens community ties.

Proactive customer support

Huntington Bancshares has implemented proactive customer support strategies to enhance customer relationships. The bank's noninterest income totaled $1.481 billion for the nine months ended September 30, 2024, demonstrating its effectiveness in generating revenue through customer engagement initiatives. Key areas of growth include payments and cash management revenue, which increased by 5% to $458 million.

Furthermore, Huntington's customer deposit and loan fees rose by 6%, totaling $246 million during the same period, reflecting the bank's commitment to providing accessible support to its customers.

Metric	2024 Q3	2023 Q3	Change (%)
Net Income	$517 million	$547 million	-5%
Total Assets	$198.3 billion	$186.6 billion	6%
Net Interest Income	$1.351 billion	$1.368 billion	-1%
Noninterest Income	$523 million	$509 million	3%
Total Loans and Leases	$126.4 billion	$122.0 billion	4%

Huntington Bancshares Incorporated (HBAN) - Business Model: Channels

Physical branches and ATMs

As of September 30, 2024, Huntington Bancshares operated approximately 1,000 branches across several states. The bank has a network of over 1,800 ATMs, providing customers with convenient access to cash and banking services. During the third quarter of 2024, the bank reported that total deposits reached $110.1 billion, reflecting its extensive physical presence and customer trust.

Metric	Value
Number of Branches	1,000
Number of ATMs	1,800
Total Deposits	$110.1 billion

Online and mobile banking platforms

Huntington Bancshares has invested significantly in its digital banking capabilities. As of the third quarter of 2024, the bank reported approximately 6.5 million active digital banking users. The online and mobile platforms have seen a 12% increase in user engagement compared to the previous year. The bank's mobile app includes features such as mobile check deposit, fund transfers, and account management, contributing to a net interest margin of 2.98% for the quarter, down from 3.20% the previous year.

Metric	Value
Active Digital Banking Users	6.5 million
User Engagement Growth	12%
Net Interest Margin (NIM)	2.98%

Customer service hotlines

Huntington Bancshares provides customer support through various channels, including dedicated hotlines. The bank reported an average customer service response time of under 2 minutes in the third quarter of 2024. Additionally, they have implemented a multi-channel support system, including chatbots and live agents, which has improved customer satisfaction ratings by 15% over the past year.

Metric	Value
Average Response Time	Under 2 minutes
Customer Satisfaction Improvement	15%
Support Channels	Hotlines, Chatbots, Live Agents

Huntington Bancshares Incorporated (HBAN) - Business Model: Customer Segments

Individual consumers

Huntington Bancshares serves individual consumers through a variety of banking products and services. As of the third quarter of 2024, the Consumer & Regional Banking segment reported net income of $1.1 billion, reflecting a 14% increase compared to the previous year. This segment's net interest income rose by $268 million, or 10%, primarily due to a $3.5 billion increase in average loans and leases, which grew by 5% year-over-year.

Small to medium-sized enterprises (SMEs)

The Commercial Banking segment caters to small and medium-sized enterprises, providing tailored solutions including loans, treasury services, and cash management. For the nine-month period ended September 30, 2024, net interest income in this segment was $1.579 billion, a decrease of 4% from the previous year. The total average loans/leases for SMEs stood at approximately $54.6 billion. The provision for credit losses in this segment was $86 million, reflecting a slight increase from the previous year.

Corporate clients

Huntington also serves corporate clients, providing a range of services from corporate banking to advisory services. For the nine-month period ended September 30, 2024, the net income attributable to this segment was $853 million, down 9% compared to the prior year. Corporate clients contributed to a total average assets of $62.9 billion. The noninterest income for corporate banking was reported at $490 million, indicating a 2% increase from the previous year.

Customer Segment	Net Income (9M 2024)	Net Interest Income	Total Average Loans/Leases	Provision for Credit Losses
Individual Consumers	$1.1 billion	Increased by $268 million (10%)	Approx. $3.5 billion increase (5% YoY)	N/A
Small to Medium-sized Enterprises	N/A	$1.579 billion (decreased by 4%)	$54.6 billion	$86 million
Corporate Clients	$853 million (decreased by 9%)	N/A	$62.9 billion	N/A

Huntington Bancshares Incorporated (HBAN) - Business Model: Cost Structure

Personnel and staffing costs

For the third quarter of 2024, Huntington Bancshares reported personnel costs of $684 million, representing an increase of $62 million or 10% from the previous year. Year-to-date, personnel costs have totaled $1.986 billion, up from $1.884 billion in the same period last year.

Technology and infrastructure investments

Outside data processing and other services, which include technology and infrastructure investments, amounted to $167 million in the third quarter of 2024, reflecting a $18 million or 12% increase from the prior year. For the nine-month period, this cost reached $498 million, compared to $448 million in the previous year.

Marketing and advertising expenses

Marketing and advertising expenses were reported at $33 million for the third quarter of 2024, which is an increase from $29 million in the same quarter of 2023. For the nine-month period, these expenses totaled $88 million, compared to $86 million in the previous year.

Cost Category	Q3 2024 ($ Million)	Q3 2023 ($ Million)	YTD 2024 ($ Million)	YTD 2023 ($ Million)
Personnel Costs	684	622	1,986	1,884
Outside Data Processing and Other Services	167	149	498	448
Marketing and Advertising	33	29	88	86

In total, Huntington Bancshares' noninterest expense for the third quarter was $1.130 billion, an increase of $40 million or 4% from the previous year. For the nine-month period, total noninterest expense reached $3.384 billion, compared to $3.226 billion in the year-ago period.

Huntington Bancshares Incorporated (HBAN) - Business Model: Revenue Streams

Net interest income from loans

The net interest income for Huntington Bancshares Incorporated (HBAN) for the nine months ended September 30, 2024, was reported at $3.013 billion, an increase of $268 million, or 10%, compared to $2.745 billion for the same period in 2023. This growth was primarily driven by a $3.5 billion increase in average loans and leases, which rose by 5%. The net interest margin (NIM) for this period stood at 3.60% compared to 3.44% in the previous year.

Noninterest income from fees and services

For the nine months ending September 30, 2024, noninterest income amounted to $968 million, reflecting a $15 million increase, or 2%, from $953 million in the same period of 2023. Key components of noninterest income included:

Noninterest Income Source	2024 (in millions)	2023 (in millions)	Change (in millions)
Payments and cash management revenue	$335	$321	$14
Wealth and asset management revenue	$262	$231	$31
Customer deposit and loan fees	$160	$152	$8
Capital markets and advisory fees	$16	$11	$5
Leasing revenue	$2	$1	$1
Insurance income	$47	$49	($2)

Overall, the increase in noninterest income was attributed to higher revenue in payments and cash management, wealth management, and customer deposit fees.

Wealth management and advisory fees

Wealth management and advisory fees contributed significantly to the noninterest income of HBAN. In the third quarter of 2024, total wealth and asset management revenue was reported at $93 million, up from $79 million in the third quarter of 2023, marking an increase of 18%. For the nine months ended September 30, 2024, wealth and asset management revenue totaled $271 million, up from $242 million in the previous year.

In summary, the various revenue streams of Huntington Bancshares Incorporated demonstrate a solid performance in both net interest income and noninterest income, with particular strength in wealth management and advisory services, reflecting the company's diverse business model and effective management strategies.

Article updated on 8 Nov 2024

Resources:

1. Huntington Bancshares Incorporated (HBAN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Huntington Bancshares Incorporated (HBAN)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Huntington Bancshares Incorporated (HBAN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.