Huntington, Volvo Financial commercial outstandings rise as equipment market normalizes

Commercial financiers Huntington Bank and Volvo Financial Services’ commercial and industrial books grew in the first quarter as the equipment market normalizes. 

Huntington Bank’s commercial and institutional loan outstandings landed at $47 billion in Q1, up 4.3% quarter over quarter and 11.4% year over year, according to the bank’s earnings supplement.  

The jump is due in part to the performance of the bank’s distribution finance segment, which includes equipment and powersports financing, Zach Wasserman, senior executive vice president and chief financial officer of Huntington, said during the company’s earnings call Thursday.  

“Primary components of this commercial growth included distribution finance, which increased $800 million [sequentially] tied to continued normalization of dealer inventory levels, as well as seasonality, with shipments of spring equipment arriving to dealers,” he said.  

Huntington’s lease financing portfolio totaled $5.2 billion in Q1, up 3% QoQ and 6.1% YoY, according to the supplement. The bank’s allowance for credit losses on lease financing was $50 million at the end of the quarter, down 4% QoQ and 12% YoY. The bank reported net recoveries of 0.37%, compared with net charge-offs of 0.4% in the previous quarter and year. 

Meanwhile, Volvo Financial Services’ Q1 new retail financing volume —which includes the company’s truck, construction equipment, bus and marine segments — tallied $2.4 billion, up 12.6% YoY, according to the earnings report. “We continue to see a stable portfolio performance on the back of high customer activity levels and demand for transportation and construction services in most parts of the world,” Volvo Chief Executive Martin Lundstedt said during the company’s earnings call Thursday. 

Despite the increase in financing volume, Volvo Financial Services’ 12-month rolling number of financed units declined 3.1% to 67,727 at the end of Q1, according to the company’s earnings report. The company’s 12-month total financing penetration rate was 27%, down 400 basis points YoY. 

Shares of Huntington Bancshares Inc. [Nasdaq: HBAN] were trading at $11.44 as of market close today, down 1.63% or $0.19 from market open. Huntington has a market capitalization of $16.58 billion.  

Shares of Volvo ADR [OTC: VLVLY] were trading at $20.50 as of market close today, down 0.30% or $0.06 from market open. Volvo has a market capitalization of $18.89 billion.