Huntington originations flat YoY

Huntington Auto Finance ’s originations were flat year over year in the third quarter while net interest margins rose and the yield on new originations increased. Auto originations came in at $1.4 billion in Q3, an increase of 17.3% quarter over quarter and flat YoY , according to the earnings presentation. Estimated yield on new originations during the quarter clocked in at 7.1%, an increase of 20 basis points (bps) sequentially and 230 bps YoY amid elevated interest rates. By comparison, Ally Financial ’s estimated origination yield in Q3 was 10.7%, up from 10.4% in Q2, according to the bank’s earnings presentation. “Auto has performed very well for us. We have confidence in its credit and spreads are very attractive,” Huntington Chief Executive Steve Steinour said on the company’s earnings call today. “It’s a cyclical product. In the past when spreads have widened, we have adjusted to do a bit more. We'll be dynamic as we look at this and the interest rate environment clarifies.” New-vehicle loans accounted for 35% of the bank’s auto originations, down compared with 42% in the second quarter but flat compared with the same period last year, according to the presentation. Weighted average loan-to-value ratios ticked down 1 percentage point QoQ but increased 2 percentage points YoY to 86%. Auto outstandings landed at $12.7 billion at the end of Q3, a decline of 0.8% sequentially and 5.2% YoY, according to the earnings supplement. Net interest margin (NIM) on the portfolio increased to 4.51%, up 34 bps sequentially and 98 bps YoY. Huntington has held tight to its “low-risk” underwriting approach as credit performance worsens, Steinour said. Accounts 30-plus days delinquent came in at 0.86%, up 8 bps QoQ and 15 bps YoY, according to the presentation. Ninety-day delinquencies inched up 1 bps sequentially and YoY to 0.06%. “Credit quality remains strong across our portfolios driven by our discipline, customer selection, underwriting and rigorous portfolio management,” Steinour said. “This approach is unwavering ... as we maintain our aggregate moderate- to low-risk appetite.” Net charge-offs (NCO) rose to 0.14%, an increase of 4 bps sequentially and 7 bps YoY, according to the presentation. Allowance for credit losses on the auto portfolio tallied $143 million for a coverage ratio of 1.13%, flat compared with Q2 and up 25 bps YoY. Marine, RV originations up QoQ Huntington’s RV and marine book grew in Q3, with originations clocking in at about $600 million, an increase of 20% sequentially, according to an Auto Finance News analysis of the bank’s earnings. Year to date, marine and RV originations decreased to $1.4 billion at the end of the quarter, a decline of 6.7% compared with 2022 and down 17.6% compared with 2021, according to the presentation. Outstandings at the end of Q3, however, increased 5.4% QoQ and 9.3% YoY to $5.9 billion, according to the supplement. NIM increased to 4.96%, rising 37 bps sequentially and 67 bps YoY. Growth in the bank’s consumer loan portfolio was partly due to the sequential increase in powersports originations, Zach Wasserman , senior executive vice president and chief financial officer, said on the call. Credit performance remained stable on the marine and RV portfolio, with accounts 30 days or more past due clocking in at 0.39%, increasing 6 bps QoQ and 7 bps YoY, according to the presentation. Accounts 90-plus days delinquent remained flat sequentially and YoY at 0.03%. NCOs rose 3 bps QoQ to 0.16% but fell 1 bps YoY. Allowance for credit loss coverage ratio declined 3 bps QoQ but is up 21 bps YoY to 2.56%, or $151 million, according to the supplement. Meanwhile, Huntington announced on the call that Executive Vice President and Chief Credit Officer Rich Pohle is retiring at the end of the year. Pohle has served as executive vice president since September 2017 and chief credit officer since June 2019, according to LinkedIn . He started at Huntington in 2011 as a commercial regional manager. Shares of Huntington Bancshares Inc. [ Nasdaq: HBAN ] were trading at $9.64 at market close today, up 0.2% from market open. Huntington has a market capitalization of $13.96 billion. Auto Finance Summit, the premier industry event for auto lending and leasing, returns October 29-31 at the Bellagio Las Vegas and features a fireside chat with Ford Credit. To learn more about the 2023 event and register, visit here .

Huntington originations flat YoY

Originations grew 17.3% QoQ in Q3

Subprime auto ABS losses rise 19 bps YoY

Junk fee supervisory and enforcement activity targets auto servicers

Related Posts

CPS’ originations fall 12.3% in Q3

Vroom subsidiary UACC’s originations up 7%

Open Lending certified loans fall 13%

Junk fee supervisory and enforcement activity targets auto servicers

Stay Informed with Our Newsletters

The Roadmap Podcast

SPONSORED

Driving Innovation in Automotive Refunds: How Onbe and Allied Solutions Are Modernizing the Payment Experience

Navigating the Margin Squeeze: EVs, Tariffs & Pricing — A Q&A with Earnix

Enhancing credit approaches to boost conversion and dealer loyalty

Welcome Back!

Retrieve your password