Huntington Bancshares Inc., the parent company of Huntington National Bank, reported that home-equity lending volume surpassed traditional mortgage originations during the first quarter of 2023. The company disclosed in its earnings report that first-quarter home-equity originations amounted to $0.8 billion based on commitment amounts, down from last year’s quarterly average of $1.1 billion. However, first-quarter home equity originations exceeded residential mortgage originations by $0.5 billion.
A review of historical data indicates that mortgage originations outpaced home-equity lending in 2020, 2021, and 2022. Prior to that, since at least 2016, home-equity volume had been higher than mortgage activity. In 2022, Huntington ranked as the seventh-largest originator of home equity lines of credit based on a HELN ranking.
In the first quarter, the average loan-to-value ratio on home-equity products increased to 64%, while the average FICO score was 774. Home-equity assets in the company’s investment portfolio totaled $10.166 billion in March, a decrease from $10.375 billion as of December 31, 2022, and $10.343 billion as of March 31, 2022.
Despite the decline in home-equity book balances, the average yield on the home-equity portfolio increased to 7.14% in the first quarter, which was 315 basis points higher than during the first three months of last year. However, delinquency of at least 30 days deteriorated from 0.73% on the same date last year to 1.03% last month.
Huntington Chairman, President, and CEO Steve Steinour noted that the financial institution has worked to ensure resilience across a range of economic environments, positioning the company well for times such as these. Steinour added that Huntington’s long-standing approach to conservative and disciplined risk management has bolstered the foundation of the franchise over the past decade.
In the first quarter, Huntington’s net income attributable amounted to $602 million, which represents a decline from the previous quarter’s figure of $645 million. However, it is an improvement from the $460 million reported in the first quarter of 2022. Huntington’s CEO, Steinour, expressed confidence in the company’s strong capital levels, favorable credit profile, and significant deposit and liquidity profile, which have positioned it well to face the current period with strength.