Well, good morning, everyone, and welcome to Huntington's 2025 Investor Day. On behalf of Huntington, we're thrilled that you all could join us today. It's wonderful to see so many of you in person. I recognize the weather this morning was challenging for some, so thank you all for attending, and thank you for the many more of you listening virtually today. I'm Tim Sedabres, and I am honored to serve as Huntington's Head of Investor Relations. We're excited today for you all to hear from our broad executive team. We'll talk about our vision, our strategy, and our key business initiatives. Lastly, I want to remind everyone to review our disclaimer on our forward-looking statements on page two. This will cover both the presentations as well as Q&A you'll hear throughout the day. Now for today's agenda.
Our Chairman, President, and CEO, Steve Steinour, will kick us off with an overview of Huntington and our strategy. Following Steve, you'll hear from Brant, Christian, and Melissa from our Consumer and Regional Banking Group, after which we'll break for our first Q&A session of the day. Following Q&A, we'll take a short break before we return for our presentations, where you'll hear from Scott and Tizu from our Commercial Bank and Amit from Enterprise Payments. We'll then open up our second Q&A of the day. Following, we'll hear from Helga and Brendan from our Risk and Credit Organizations. And finally, Zach will bring everything together from a financial perspective. And finally, we'll wrap up with Steve's closing remarks. We will have a third and final Q&A session at that point. And then upon conclusion, we'll have a lunch with the broad executive team.
I hope many of you can stay in the room and join us. For today's event, we have the full executive leadership team with us today, as well as additional presenters. Additionally, we're joined in the room by numerous other key executives from areas across the bank. We're excited for you to get to meet them, hear from them, and see the deep and experienced management team at Huntington. Now, without further ado, I'd like to introduce our CEO, Steve Steinour.
Thank you, Tim. Good morning, everyone.
Good morning.
Good morning.
Audience participation appreciated. Thank you very much. You had to ice skate to get in here today, so we're grateful that you took the time and made the effort to join us today, and especially for you in person, we thank you very much, and welcome to those on the videocast. It's great to be with you today. You're going to hear a lot from our team. We've had an outstanding performance over the last couple of years. In particular, we've got significant growth initiatives where we've made investments, and we're expecting and will achieve the revenue that we're looking for, and that's because of our colleagues. You're going to see a lot of the management team today. Please engage with them, but we have a terrific group of 20,000 colleagues that show up every day, and they deliver for us.
So we'll share our vision, which we're updating a bit, and how we're very well positioned to achieve that and the performance that we expect will be top quartile going forward. So a quick recap. I think I know most of you, but perhaps not all. I joined Huntington in 2009, January 2009. So my timing was at an interesting moment for the industry, and it certainly was challenging for Huntington as well. But I'm proud to say that we took those challenges and we met them head-on. We made a lot of changes. We made hard decisions. And in doing so, we created a culture of accountability, performance, and continuous improvement. And today, we're a leader amongst super regional banks. We have a well-established culture. We have a sharp focus on the customer.
We clearly have leading digital capabilities, and we consistently delivered through a disciplined risk management framework over nearly a decade and a half. And you're going to hear more about these elements today and much more from some of our top leaders. Since the last Investor Day, we've been focused on accelerating investments to drive profitable growth for 2025 and the years ahead. And we've delivered very good results while also driving what I think are transformational changes within the group. We are a different, better bank today than we were in 2022. We're clearly different and better than 2022, and that's why we wanted to come together for another Investor Day. We're building on strong performance. We have very clear momentum, and we've got great confidence in our future. We have never been better positioned for our future than we are today.
We've never been better positioned than we are today. And we want you to leave today with a better understanding about what we're attempting to accomplish with our strategies and our vision. And so with that, let's begin. Five key elements, themes today. One, our culture thrives in a differentiated operating model that's rooted in our shared purpose and vision. Shared purpose and vision. We fundamentally believe we're in a people business where relationships, advice, and solutions are critical to our success. And our colleagues are highly engaged. They act with purpose, and it's evidenced by the numerous customer service awards we've received over the last decade and a half. Now, our colleagues and the care and service they provide are a clear differentiator for us in what is otherwise a crowded marketplace. I don't think we fully appreciate that as an investor group yet.
Second, we operate a powerful franchise that's both scaled and diversified. The scale results in leading market positions. That's especially true in our Midwest footprint and Ohio and Michigan. We are a force in Ohio and Michigan. And as we've constructed this, the loan portfolios have been intentionally balanced across customer segments and geographies with no outsized concentrations. You know, we're 56%-57% commercial, 43%-44% consumer, and we've been like that for a decade and a half. It's been intentional. Across our franchise, we enjoy multiple growth levers in regional and national businesses. That won't be the only one today. Now, those levers are in our core. The core's performing well, but we also have new expansion, geographies, new regions, as well as we've got scaled national businesses, some of which are newer to us.
And over the course of the day, you're going to hear from our executive team, and they're going to highlight many of these growth areas. Fourth, our growth is enabled by a position of strength and stability. It's allowed us to invest and capture market share and grow, particularly over these last couple of years when other banks were more inwardly focused. We've demonstrated the strength and quality of the balance sheet over these past two years in particular in comparison, but we have a decade-plus track record of strong execution, this culture of accountability, and consistent disciplined risk management. You're going to hear a lot about that consistent disciplined risk management as we go forward. And lastly, this focus and discipline by our management team and colleagues set us apart.
The team has delivered top quartile performance in the past years, and we expect to continue to do that in the years ahead. So those five key measurements. Now, as I mentioned in the key messages, we've got a powerful franchise. I'm going to drill down into that a little bit. We've grown substantially since the last Investor Day. Today, we're a top 20 bank in U.S. deposits. We delivered peer-leading growth metrics over the past two years, and we continue to build upon what is a powerhouse consumer regional bank. We have a very high-quality deposit base, and we're growing consumer households and businesses literally every day. Our liquidity is the best in our peer group. And in this area, in this area in particular, our local relationship approach in the markets is working, and we continue to expand these customer relationships. You'll hear more about that.
Now, we strategically realigned our regional banking effort about the time we met in our last Investor Day in late 2022. It was done a couple of quarters earlier. And that was done so we could focus more on this long-standing local approach. We had some great new opportunities and organizational in nature, and it brought us closer, much closer to customers and to the communities we serve. And that's part of the growth formula that we're executing. We're positioned to grow in these core footprints better today than we were two and a half years ago, but we're also positioned in these new regions. Brant and his team are going to provide more insight on the strength of the consumer and regional bank. Again, I think of it as a powerhouse. Now, we've also invested significantly in our commercial segment, which has outperformed and will continue to outperform.
We're going to have a commercial segment that's also a powerhouse in just a few years. It's growing really well. Scott's going to share some of that. We've added new capabilities, specialty expertise. You'll hear about a differentiated ecosystem as well. We're going to get a lot of growth from the commercial side. These revenue streams and synergies are established. And then lastly, we've got a payments business that works with both CRB, our consumer and regional bank, and our commercial segment, tightly integrated. And you'll hear from Amit about the new products, capabilities, and services that we're offering in that important area for us. Now, all of this growth, all of it occurs within this aggregate moderate to low risk appetite. And it's evidenced by the top quartile net charge-offs we have, and we maintain a robust allowance as well on top of that.
Now, our recent success is the result of decisive action and execution over many years. And since 2009, following the great financial crisis, we put this foundation of strong risk management and credit culture into the company. And we emphasize that all the time, and we have for 15 years. So during these times that we've had in the last few years, we focused in particular on executing against that strength. Also, over the 15 years, we've been focused on the customers and building our brand, trying to deliver what they wanted or needed. That's where Fair Play Banking evolved. It started in 2010, and we've never lost this customer focus. I'm going to bring it forward a little bit. From 2015 to 2020, we built on this risk foundation, this very strong risk foundation, and we leveraged the success of our customer-centered focus.
We broke out from the pack with Fair Play Banking 2.0. We did Standby Cash. We did a number of other features Brant will illustrate. And that also gave us the ability then to move forward with enhanced local delivery. We upped that further a couple of years ago, but we've been on this track. Our customers have relationships locally with our teams, with our bankers. Our teams playing well together creates the synergy for the commercial businesses where we have specialized verticals. They don't have the relationships. They don't have the intros in many cases, and they can get that locally and playing as one team, one team, we can deliver that. And so we've also gone on to number one SBA lender. It's, I think, six, seven years now in a row, and we've won consistently numerous customer service awards through that period of time.
So we have this strong foundation and stability for our customers and communities, and we emphasize that. We want to be there in economic cycles. When there's market distortions, when there are interruptions, we have the strength to be there consistently, and that sets up trust. We'll talk more about that in a moment. Now, in 2016, we acquired FirstMerit Bank. We've only done two larger deposit acquisitions in 15 years. FirstMerit was successfully integrated, and it gave us some heft, particularly in Northeast Ohio, and put us with a small presence in Chicago. In 2021 and 2022, we further scaled and diversified the franchise. You know, we had this great opportunity to combine with TCF. It was a home run. It gave us differentiated businesses that we're very proud of, and they're doing well.
We added attractive new markets, including the Twin Cities in Denver, the Denver region, and in addition, we are a force in Michigan. We are a force in Michigan, and we have a complement now in Chicago that we can bring the full bank to. So it's very exciting for us. We've got number four deposit share by branch number, not yet by deposits in Chicago. Now, TCF also brought us an equivalent-sized Equipment Finance, which combined makes us the sixth largest bank-owned Equipment Finance company in the country, and they gave us a very unique gem called Distribution Finance. They use the term inventory finance. We're the second largest in the country in that, and as you know, this combination was very well integrated. We fully achieved the targeted expense synergies, and as we were doing that, we also had this great opportunity with Capstone.
You saw the results of Capstone in just the fourth quarter. It was a fabulous quarter. That sets up both our Capital Markets businesses and our middle markets businesses with the addition of M&A, debt, and capital raising capabilities. We firmly established ourselves post that combination as a leading super regional bank. Now, in 2023 and 2024, you know, the industry had issues in a number of pockets: liquidity, capital, credit. We didn't. We had confidence in the foundation we had built. We chose to play offense. We leveraged our strength. We had industry-leading coverage for liquidity. Capital was strong. Credit, we believed, would be there consistently on a top quartile basis. We played offense. We captured market share in the core businesses. No question. We had great growth in the core.
Because of our culture, and this is an important point, and I think this is generally missed, because of the culture, we attracted a lot of new experienced colleagues, and we've had an exceptional group join us. We've added over 200 RMs just in these past two years, and we've added support around them and the ancillary capabilities for what we call optimal customer relationships, more penetration with products and services that they need. We added eight new specialty commercial verticals. We added these new regions. Love being in North Carolina and South Carolina and Texas. In fact, I spent a fair amount of time in Texas. It's very exciting what's going on in all three of these regional markets, and we invested in new fee revenue capabilities. You're going to hear more about that in each of them, both payments, wealth, I should say payments, wealth, and capital markets.
So we've achieved top loan and deposit growth. We've been able to drive fees very significantly over this period of time. And we also invested in capabilities. Now, we saw with Silicon Valley what I think was an eye-opening moment for the industry, how quickly liabilities or deposits can move. And so we put a lot of investment into our data and capabilities around liquidity and capital stress management and day-to-day management. And that allowed us in part to reset our risk management. We've made those investments. We pay attention to what's going on around us, even though it doesn't impact us. Now, looking ahead to 2025 and beyond, we believe our efforts and approach over the past years clearly put us in a position of strength going forward. We've got momentum. And we've got, with this updated vision and even greater focus on the customer and the customer experience.
We've got investments that we're making to enhance that customer experience. We want to see these customer service awards in perpetuity, and we'll hear more about this in a moment. We've got significant momentum, as I said, and we're going to drive what is already strong organic growth in the years ahead. The core's performing well, and these investments are taking off. We believe that we're well positioned for top quartile performance as a result of this approach, this customer-centered focus, the growth in the investments that we've made. We're achieving already, but we're just getting started. We're early stage, and then the continued execution of our core throughout our footprint and beyond, so we're going to double-click on the last four years. I think of these as transformative. We've diversified. We've integrated well. We have scale now, and we achieved this in 2021, 2022.
This integration of TCF, just taking it a step further, $490 million of cost synergies, fully achieved, 45% of standalone costs. It was a very successful effort, and it added a lot to us. We also made a commitment of putting an extra $150 million over three years in our technology spend. We stepped it up, and we are sustaining that and we've gained significant revenue synergies along the way. Now, TCF allowed us to expand our product set, but we also did a very successful combination with Capstone, and as I said, the profitability of Capstone has just been exceptional. You saw it in the fourth quarter. This year is set up, so it should be a very good year for them as well, and so we're excited by this exceptional growth that we achieved. The combination gave us a 51% revenue growth.
That's first among peers among peers in that period of time, and then 56% revenue PPNR growth during that same period of time, also number one in the peer group. We got the benefit of driving the core at the same time we were doing the combination. Not always the case. Now, in the investor meeting in 2022, we made several pledges. One was that we would open one to two new commercial specialty verticals per year, per year to further build out the Commercial Bank and expand its coverage and expertise, and we've clearly exceeded that. You'll hear from Tizu shortly. She'll talk about the three new verticals or more that we're averaging so far, and we will open more verticals selectively in the years ahead, but we also have these great three regions. The growth in Texas is phenomenal.
If you had a choice to go there or North or South Carolina versus most other states, you'd choose those states, and we are launched, and we have a lot of great new colleagues who've joined us in both those markets. We've also worked hard on the payment side. You'll hear from Amit. This in-house merchant acquiring was done in record time. We've launched several new cards, cashback, secured card, all in this timeframe, so a lot of change since our last Investor Day. We are a top quartile performer or leader with loans, deposits, credit, and liquidity, so we felt it was an important time to come together and provide this update as well as the roadmap going forward. Our performance has been unique. You can see that in the slide in front of you on page 11.
And we believe we can continue to drive this very, very significantly going forward in the years ahead. So continuing, it's important over this last decade to just have a sense of how we've outperformed. This isn't sort of a couple of years only. If you look at that green chart on page 12, you know, ROTCE on average has been greater than our peer median by 150 basis points over a decade. And we believe we're at an inflection point today. We're ramping up these growth initiatives and investments. At the same time, the expense base is largely in. There'll be more in some of these groups as they continue to grow significantly, but the expenses will be moderating. And we've attracted, as I said, exceptional new colleagues with deep relationships. And they were drawn to us. Most of the time, we got the call. We didn't use recruiters.
They were drawn to us because of the culture of the 20,000 colleagues we have who've been with us in many cases for quite a number of years. That culture is an underappreciated asset. Now, we're going to, as these new businesses mature, they're clearly going to get both spread and fee revenue accelerating at a significant rate. So that will drive our core growth at an enhanced level, and we're going to achieve top quartile performance. We're very confident of that. Now, on this next slide, slide 13, we highlight some key enablers that drive our success and our approach to rapidly evolving external dynamics, and as we've seen, there are a lot of external dynamics at the moment, but our industry is also evolving. Our customer needs are evolving. Technology is rapidly evolving, and we have new competitors that have been entering.
You know, there's a lot going on, but it's also an opportunity. It's a significant opportunity if you're ready for it. So we've been acting proactively with an agility and an openness. We're bringing innovation along with us. Sometimes it's our ideas. Sometimes we borrow them. But we're going through a period of rapid change, technological and otherwise. And I believe it creates a set level of opportunities for the foreseeable future for us. So through all this, the emphasis is going to be on a couple of things. First, the North Star. We've got to develop and deliver solutions that our customers want. And you'll hear from Brant, Scott, Amit. They're very focused on not what do we want to do, what do we think our customers need and want. And there are three key ways we do that.
First, we've got a wide offering of solutions, products, and capabilities. So that gives us a lot of feedback. Second, we've got leading digital experiences that complement our award-winning customer support. And then third, we've been always focused on understanding and then responding to the needs of the customer. When you look at the Fair Play series of products developed and services, they're coming from our customers, and our colleagues are channeling them to us. And our colleagues are the enablers here. And that's why I think this culture is so important. Now, we think we're on the verge of a next era of growth. We aim to be with a vision that's updated now, the most people-first, colleagues, relationships with customers, people-first, customer-centered bank in the country.
We believe that's a powerful next step for us to take to a higher level that will include further differentiated customer experience. You've heard us talk in the past about what we're doing to digitize. We call it Project Accelerate. We're making really good progress there, and that will continue. We're growing our customer base today, and we've got strong organic growth, and we're going to continue on that track. Now, in pursuit of this vision, there are four key elements that we're focused on, four attributes that are very important. We want to be the most trusted financial institution in America, not one of. It's a very high bar. We already enjoy very high levels of trust, but we want to break it out. We want to be a category one around trust. We want to further enhance this exceptional caring and inclusive culture of our colleagues.
It's really good. We're going to make it better. We want to be an indispensable partner for customers, and then finally, we're going to deliver top quartile performance over this period of time as well, so this little bit more time on culture and why it's important to us. First, it brings alignment. Colleagues know what's expected. They're aligned. It's in their goals. It's how we talk amongst each other, this teamwork. It sets up OCR. OCR is Optimal Customer Relationships. We started that journey in 2010. We can continuously make it better, and we're doing that, and our colleagues feeling our engagement with them lets them engage with our customers, so that customer centricity and providing solutions and advice, service, it's an incredible element, a decade and a half of consistent J.D. Power awards. Now, it also creates a culture where our colleagues want to be.
They want to be part of a team, one where they can do their best work. We've got six consecutive Best Place to Work awards, six years Best Place to Work award. This culture helps us recruit really exceptional, talented new colleagues. I can't overemphasize that. We are thrilled with the colleagues we've been able to attract over the last couple of years in particular. That's because the core is working so well and the teamwork and the dynamics are so strong. Now, a company with a strong culture and a strong sense of purpose has this engaged workplace where our customers want to bank. We have loyalty. We get loyalty out of this culture, and it's a differentiator. It contributes to this top customer sat ranking as well as a low level of turnover amongst our colleagues. That's what we prize.
Now, this culture begins with a focus on the colleagues, and it then goes to our customers, center of everything we do across all businesses, consumer and commercial. This philosophy guides channel product guidance and experience, even the design customer experience that we want, digital or otherwise. And in all these areas, this passion for the customer and this focus on the customer sets up our near-term opportunities to grow. We're making changes all the time in technology and in otherwise, products, capabilities. It guides our investments. It helps us prioritize our resources and initiatives because we have almost a constant feedback chain between what we get from our colleagues and the research we do. And it sets up, in my opinion, this capability from us to be consistent top quartile. We're not stagnant. We're changing all the time. You get a sense of this on page 17.
We believe this trust, which is a vital area. You saw it two and a half years ago with Silicon Valley and Signature, the trust, the confidence they have in their banks. This sets up with long-term relationships with our customers. We embrace an approach to them where we're becoming a trusted partner. We're going to be with them when times are challenging, when market distortions occur. We'll work with. And you get it. Anybody can, any customer can get a bank in good times, but knowing they'll be there when it's challenging is really important to our customer base. And that's part of how we go to market. We've got solutions and capabilities that help address most of their needs. If we can't address their need, I always tell our team, don't fake it.
If we're not able to do it, get them to someplace they can do it and get great service. They'll be loyal to us for that, and then third, this advice and guidance. We are upskilling the capabilities throughout the firm. You'll hear more about that later, both consumer and our commercial businesses, and so advice and guidance is increasingly important in what we're doing, and particularly with the volatility we see, not just last three weeks, but generally today and throughout the world. This is really important and is an element, a key element of this trust factor, so as we continue, we're going to share updated medium-term targets with you. Zach's going to get into this in more detail. If you take a baseline economic scenario, so I'm not predicting a recession or hyperinflation, baseline, we're going to grow PPNR 6%-9% on average over time.
Our return on tangible common will be 16%-17%. We're going to hold more capital after what we saw two and a half years ago. We've got positive operating leverage. We're going to deliver every year, positive operating leverage every year. So there's strong targets. We're confident in our ability to deliver them. Again, we've never been better positioned. So these targets are supported by the strategies you'll hear from the leadership team in the next few hours. Now, to achieve our goals, we're focused on this disciplined management of risk. This is our foundation. Our aggregate moderate to low risk appetite is not going to change. Our risk appetite, as you see, is not just credit. It's generally thought of as credit. We were ahead of the game on liquidity. We moved $20 billion-$30 billion off balance sheet, so we didn't have a run.
We had the best covered deposit ratio, FDIC insured to total deposits of any bank, $50 billion or more when Silicon Valley broke. That wasn't accidental. That's our management. We hedged our AFS. That was proactive management, and it creates this dependency and this consistency. It's part of the bedrock of customer trust and loyalty that we're looking to continue to build on, so this aggregate moderate to low risk appetite, we believe, creates a strategic advantage. It allows us to capture opportunities when others won't or can't, and we've adhered to this for more than a decade and a half. I can assure you it's not going to change, so framework today, similar to what we did in 2022, you're going to have four areas you'll hear from all of us. We're investing.
We're creating that investment capacity because we're trying to drive more efficiencies in the core every year, but we're investing for sustainable growth. We're differentiating the culture, the brand, and the customer experience. Those three set up the revenue, and we're executing for top quartile performance and value creation. Emphasize value creation. The board, management, our colleagues are top 10 shareholders and have been for quite a while, so consistency is very important to us. We have never been better positioned for our future. We're excited about it, and with that, we're going to do a short video. Make sure you're all with us, and then Brant, our President of Consumer and Regional Banking, will step up with some of his team. Thank you very much.
For more than 150 years, Huntington has focused on a simple purpose: to make people's lives better.
Our powerful consumer franchise helps millions of individuals and families pursue their financial goals. Our commercial business brings together strong local relationships and national capabilities to help companies of all sizes grow and prosper. In everything we do, our colleagues are the secret ingredient. We built a culture around the principles of care and service. That culture helps distinguish Huntington in a crowded marketplace, and it propels our growth. Over the past 15 years, we've quadrupled in size, expanding rapidly in both existing and attractive new markets. During that time, we built sophisticated tools and added up deep expertise. Years of disciplined risk management have helped put Huntington on a strong financial foundation and positioned us well to capitalize on emerging growth opportunities. We know that to continue winning in the market, we must build upon what has always made us successful: our people and our relationships.
We are now on a journey to become the leading people-first, customer-centered bank in the country. To do that, we've set four priorities: to be the most trusted financial institution, to enhance our caring and inclusive culture, to be an indispensable partner for our customers, to deliver value through a commitment to top quartile performance. We believe this formula will help drive sustained growth across our franchise for years to come. We have a focused strategy, a relentless commitment to execution, and a strong team to help achieve our ambitions. We have tremendous momentum, and we've never been better positioned for the future. That future starts now.
All right, well, good morning, everyone. Thank you all. Awesome participation. Thank you. Thank you for being here today and thank you so much for your interest in our company. It is fantastic to be with you.
As Steve said, my name is Brant Standridge. I have the privilege of leading our Consumer and Regional Banking here at Huntington and joined Huntington three years ago, actually just before our last Investor Day in 2022. Steve mentioned earlier that we have colleagues that are joining the company because of the culture, because of what we stand for, because of what we're about. I just want you all to know I'm one of those folks. I'm really proud to be here. I'm really proud of the culture we have. I'm also really proud of the growth trajectory. That was something personally I wanted to be a part of, and that's why I'm here.
Now, prior to joining Huntington, I actually spent 24 years with BB&T and then Truist, a number of different capacities there, leading commercial teams, consumer teams, a number of specialty businesses, and the last six years as a member of the company's executive leadership team. I'm personally very proud of what we've been able to accomplish over the last three years. We've grown the customer base. We've expanded our capabilities, and we've doubled down on local. And you'll hear more about how we're doing that as we go through the presentation. We are excited about the future. And I want to point you for a moment to the title of this slide. Our focus on our customer, we believe, will drive growth that is differentiated. We also believe that will create opportunities for the company for further scale. So let me just say that again.
That focus that has existed in the company for many years will drive differentiated growth and opportunities for more scale. So let's dive in. There are four key messages that we would hope that you'll take away from our presentation about Consumer and Regional Banking. First of all, our culture and brand are different, in fact, distinct. Number two, we are investing in frictionless access for our customers and value propositions that reflect a deep understanding of our customers. And we're doing that with people. We're investing in people. Number three, our wealth business and our national franchises have proven to be scalable, and we are clearly expanding them. And then lastly, our focus on personalized experiences, local delivery, and expertise we believe to be differentiated.
For those that may be new to Huntington or new to what is Consumer and Regional Banking, let me just provide a high-level overview. First of all, we are a leading Midwest consumer and business bank with a number of national specialty franchises. Consumer and regional banking represents 69% of the bank's total deposits, 56% of total loans, and 64% of the company's fee revenue. Our core consumer bank operates in 12 states. As you all know, we just recently expanded that into North and South Carolina. We'll talk about that as we go through. We also operate nationally with a number of specialty finance businesses, and we'll detail those as well. One of the things that this company has known for a long time is that it is important to have a strong brand. We have, as a company, spent decades putting the customer first.
That commitment has led to an industry-leading brand. Today, I do it with great pride. It's really fun to highlight that we have leading customer satisfaction and also leading trust. Steve referenced that earlier. And we believe trust is a key factor in engaging our customers. Now, our small business is a large focus for us. You'll hear myself, Christian, others talk about that. We're making significant improvements there. In fact, we've moved nationally from number 11 to number four, and we're not satisfied there. We're going to continue to move from four to being absolutely the top. We have a long history also of product innovation. Steve mentioned this earlier, but it started in 2010 with the concept of Fair Play. It served the company very, very well.
That product innovation, combined with a trusted brand and industry-leading customer service, has resulted in our customer base expanding three times since 2010. Now, when you think about that growth, half of that growth is completely organic. Half of that growth comes from successful retention of two large customer bases that Steve mentioned earlier that were acquired. Steve started off today's presentation speaking about the importance of culture. As we go through today, you'll hear from all of us our thoughts about how special that is here at Huntington. In fact, I specifically remember at last Investor Day, Erika asked me the first question, which was about, as a new colleague, what is it like and what is the culture really like here at Huntington?
And let me just say this: what I observed in the people that I met as I was going through the process and thinking about the opportunity to join Huntington is the reason why I'm here. And let me also say we believe our culture is a primary differentiator for the company. You heard Steve say that as well. It's something that we work very hard every day to cultivate. So what are some of the attributes that come through when you observe this in our colleagues? Number one, we want to make sure every customer and every colleague feel welcome. And that is infused in the company. It's infused in how people interact every day. Number two, there's a belief that fairness is really important. Think about this: Fair Play, which has been substantial for the company. That was an idea that came from colleagues.
It came at just the right time. But it was our colleagues that developed that. Number three, being good citizens and really making a difference for our communities. Just this past year, our colleagues raised $4.1 million to cure cancer. Our colleagues are committed to being good citizens and making a difference for our communities. There is a value on relationships. Steve talked about that: relationships with our customers, but also relationships internally. And the last item I would mention is there is inside of the company a commitment to rigor, to high standards, to things that drive excellent execution. You may ask, what is culture? What does it really mean? It seems like this abstract thing. Our people, how we collectively act, and what we value, that's culture. And we believe that will continue to set the company apart.
On the topic of growth, I wanted to take just a moment and highlight where we've been since 2022, last time we were together. We have made meaningful strides in primary consumer and business customer growth. We have also deepened those relationships through increased digital adoption in consumer, expanded finance options for business. Our efforts have resulted in a more valuable customer base. In wealth specifically, we know we've talked a lot about expanding the number of our banking customers that are introduced to wealth. We set a goal in 2022 of moving that to 3%-5% of our customer base over five years. I'm proud that we've made great progress there. In fact, since 2022, our number of advisory households has grown by 20%.
We now estimate that 2.5%, 2.4% to be precise, of our customer base has been introduced and is a part of our wealth organization. That has led to 12% growth in recurring fee revenue in our wealth business. Let me also share some of the financial highlights. Overall, you'll see that we've delivered top quartile deposit and loan growth since 2022. Our $4.7 billion in deposit growth really points to the strength of that primary customer acquisition engine that I was describing earlier. In fact, we across business and consumer are seeing a higher mix of primary households versus secondary households than our peers. We serve 8% more primary households in consumer than our peers and 6% more primary households in business versus our peers.
In lending, our growth of $6.3 billion speaks to the scale of our consumer finance specialties and also our ability to deepen within the customer base. We have made significant strides creating greater scale in Practice Finance and Small Business Solutions, which we'll highlight in a moment. And we've also delivered a strong increase in recurring fee revenue through our wealth business. On slide 29, you can see the framework that Steve spoke about earlier. And you'll see how that applies to Consumer and Regional Banking. First of all, our strategic ambition guides our actions. But it's powered by our vision to be the leading people-first customer-centered bank in the country. We believe our history of product innovation combined with guidance and advice will ensure that we maximize engagement with our customers.
These efforts will ensure we maintain our leading position with consumers, but also become the business bank of choice for businesses. Our local delivery model is about staying very, very close to our customers, but also offering expertise that's unique through our national business lines. The core of this vision, very consistent with what Steve described, it's about people, people, our colleagues and our customers, our focus on how we solve their problems and how we address their needs. To provide you a little bit deeper dive on Consumer and Regional Banking, there are five business lines that are included. First of all, our branches or retail banking. We serve 3.4 million customers and 350,000 small businesses. We operate 1,000 branches across 12 states. We are also further expanding in North and South Carolina.
Our consumer finance business serves 1.3 million households with a robust suite of lending products for home, auto, and small business. In our regional banking, let me just clarify this. Regional banking is not just about a group of customers, but also about a way of organizing so that we meet our customer needs locally, but in our regional bank, and Christian's here, he'll talk more about this later, we serve 20,000 businesses and many communities, and we do it in a unique way: local, empowered, and integrated. We support these regional banking groups with a unique mixture of national market expertise through SBA, Practice Finance and a number of specialties that you'll hear Scott and his team talk about. Our wealth management business, and Melissa's here and will give you a little bit more detail later, has been enhanced since we were together.
We actually combined our broker-dealer with the Private Bank. And we now have the ability to serve the entire spectrum from a wealth perspective as one business. And then lastly, our insurance business is a scale provider of commercial property and casualty, employee benefits, and personal lines offerings. And it contributes $80 million in recurring fee revenue for the company. And obviously, there's been a lot of changes, but we're now the second largest bank-owned insurance agency in the country. So that's a high-level overview. I want to focus the rest of the time on six key areas that we are focused on that will drive the growth inherent in the guidance that we're providing. Number one, we are expanding our digital channel as a growing storefront. I'll describe more what that means. Number two, evolving the value proposition for our consumer customers.
Number three, growing the scale and scope of our national businesses. Four, expanding our franchise into new geographies. Number five, doubling down on our local approach to business. We'll talk about that. And then number six, how do we continue to accelerate our wealth management business? Now, the last two are very, very important to our growth and success long-term. And we'll have Christian and Melissa here to talk about both of those. So let's start on slide 32 with the work that we're doing with our Digital Storefront. We have a long history of digital excellence. And you can see this clearly in the numbers. In fact, 50% of our new checking households originate digitally. Our digitally active customers have actually grown 8% since we were last together in 2022. And this is a number that's staggering to me. But we have a billion digital customer interactions every year.
What an opportunity. Now, this channel is obviously our highest utilized and fastest growing interaction point with customers. And Huntington has invested in digital for over two decades. We've deployed enhancements. We've delivered award-winning mobile experience. But we also want to have an award-winning e-commerce experience for customers. Now, where will our investments be focused? We want to make our storefront more personal to each customer. We want to make shopping simple and fast. We want to develop real-time tools so that we can see the activity in real time inside of that channel. We also believe that these investments and this effort is meaningful. In fact, between now and 2030, we believe just this effort can drive 100,000 new incremental households to Huntington. We also believe, and this is something the entire industry is focused on, is how do you increase the wallet share with digitally acquired customers?
We think these efforts will drive a three-times increase in the wallet share of those digitally acquired customers. So since 2022, we've already made a number of investments. So we've expanded the digital marketplace. We now promote and originate products that were previously unavailable. We've optimized Huntington.com. And we've now actually shifted our offers to a personalized My Offers page. And this has had a pretty big impact on our account conversions. We've also delivered a One-Tap opening experience for savings and money market. And that has also improved our conversion rates. We are seeing strong growth in digital customer acquisition, digital product originations, and digital engagement as a result. But we're not stopping here.
You'll see outlined on the right-hand side of this slide a few areas we're focused on: mobile-first everything, expanding One-Tap origination to not just be savings and money market, but many more products, making our prompts for customers even more real time. And lastly, and very, very important, efficient and effective authentication of customers. This is very important in the digital space. So I want to double-click for a moment on One-Tap. I talked about what that looks like. But existing customers can now add a new account with One-Tap of their mobile device. So how game-changing was this? Well, prior to this enhancement, it would take roughly eight minutes to open an account. It now takes 22 seconds. So far, our conversions have increased from 44% to 64%. Given the volume that we're describing, it's substantial.
And since August of 2024, when this was launched, we've opened 35,000 accounts using this capability. This is just a start. There are more products that we can provide this simplified approach. And we believe that this keeps pace with and, frankly, begins to exceed customer expectations. I hope that you can see the possibilities that exist as we continue to invest here. The second area I want to highlight is the work we're doing on our consumer value proposition. We talked about this in the Investor Day in 2022. And we have put a significant amount of energy in better understanding our customers' evolving needs. And most specifically, what are the unique jobs that we can do for them? What can we fulfill that may be new and differentiated? Sustaining a value proposition is important to give customers a reason to choose Huntington.
Now, the great news is these efforts are built on a long history within the company of being a leader for product innovation. It started in 2010 with Fair Play, which was absolutely unique in the industry at the time. Now, this effort will span across not just product, but experiences, services, and how we provide advice. We have developed a tremendous amount of research about customers, what's happened, how things have changed. And I wanted to highlight just a few things that we learned. Number one, we learned that our customers and prospective customers did not feel that they were in control of their money. You may not realize this, but the number one reason that customers visit us mobilely is to check their balance. Second, we found that many customers were really craving access to experts when they had a problem, a complicated need.
They wanted to talk to someone who had experienced it before, who understood their problem, who could help solve their need. And then the third item I want to highlight for you is something that, frankly, was a surprise to us. We found that a large number of our customers were dealing with either a dependent child or dependent adult, and that banking was not well equipped to help them manage safety for that individual, but also provide some level of autonomy. This is about delivering customer-centered solutions. This is very aligned with the vision that you've described. And we won't just do this with consumer. You'll hear that we're expanding this approach to other very, very important segments. But in consumer, we believe it's meaningful: 100,000 incremental households and $7 billion in incremental deposits between now and 2030.
What are some of the things that we've delivered so far? In 2024, we launched four new products. When I describe these, don't think about them as individual products. Think about these as platforms. Because what we've developed is kind of version one or version two or version three of what will be multiple versions, what will be an evolution as we continue to improve these concepts. We've delivered a high-yield savings product that in a very short time has generated $1 billion in new deposits. We've launched Caregiver Banking. I'm going to double-click on that on the next slide. I'll move to the next. We've launched a personalized emergency fund. It does two things. One, helps a customer determine what is an appropriate amount of savings, and then helps them establish a path to get there.
And then lastly, we've created a concept called Comfort Zone, which gives our customers a more informed view of their balance. Now, looking ahead, we also will launch new things. So a premier line of credit for prime and superprime borrowers, Pathways, which provides digital planning, both short and long-term, for our customers, Membership Networks, which is about exposing tools and resources to our customers to learn from others' experience. And then lastly, Savings with a Purpose. This will actually allow customers to organize their money without opening a new account. This is one of the things, as we were testing, was the most popular concept for customers. So I want to take a moment and just highlight our caregiver digital experience. This may be something that everyone in this room is either currently dealing with or will deal with. Caring for, it could be a dependent parent.
This surfaced that a large percentage of the population was dealing with this. In fact, 22% of the current U.S. population is caring for a dependent adult. This new program actually allows shared access and customized controls. It provides autonomy to the person being cared for, but also the support of the caregiver. We are actually the only bank in the country currently addressing this need. We are super confident in the future success as we continue to evolve this program. We launched it this past December. We're already seeing very favorable feedback. I just wanted to read something to you. There's a national housing organization that we have a large commercial relationship with. We went to them. We profiled this product and said, "Can you tell us if we're in the right place?
When you think about your residents, they're in the senior care space. Is this something they need?" And here's what they said. "We hear all the time the struggles of our residents in managing their finances. They want to be independent. They want to control their money, but they need a little bit of support." I think this is a real need based on the stories we hear every day, a really good thing. So we believe we're on to something. And we're going to continue to build on this platform. So moving to slide 38, let me highlight a few of our national businesses and how we're investing in their expansion. We've invested to leverage areas where we have something that's unique from an expertise perspective and where there's a scale and efficiency play.
Practice Finance and SBA were both areas that we highlighted in 2022 and are now still growing 15% annually. Our vehicle finance business is a business that we have been in for 75 years. We have a very strong track record of growth. We have a significant presence across the United States, and that business is growing 7% annually. In that business, we expanded into six new states in 2024, and we have an aspiration of being in the contiguous 48. Each of these businesses provides expertise, but they also support our local teams with opportunities and outside of our core footprint, continued opportunity for geographic expansion, so I'll start with Practice and SBA. In Practice, we go to market with a comprehensive ecosystem of products and solutions that's across all banking, specifically designed for someone acquiring or someone who owns a dental practice or a vet practice.
It includes a full relationship approach: deposits, lending, payments. This was a business, as I said earlier, we highlighted in the last Investor Day, and let me just say, since the last Investor Day, we have grown commitments in this business by 50%. We now have over $2.8 billion, and we have business development officers located across the country that support these customers. SBA, Steve mentioned it earlier, seven consecutive years as number one. We've generated $3.9 billion in loan commitments, and when you can help a customer with that first capital need, in many cases, you have that customer for life, and we have been very successful in providing a comprehensive banking offering to these customers. Both of these represent significant opportunity, and you will see how we've outlined that between now and 2030.
In our vehicle finance business, I mentioned that we have opportunity to continue to grow there. Let me share with you four reasons why we believe that. Number one, we have a very strong relationship with our dealership network. We have built that over being in the business steadily and consistently for 75 years. Number two, we have shown the ability to leverage those relationships to drive higher production. That is helpful because we do it with a very efficient underwriting process. Number three, we brought the entire bank. No matter where these dealerships are located, we bring the entire bank there. We have been very successful at fully banking the dealerships that we serve. Then specifically, the expanded geographies of Texas and North Carolina and South Carolina have presented fantastic opportunity for us.
So overall, we are well positioned to scale our vehicle finance business nationally and continue to expand within our core footprint. Slide 41 is our fourth strategic investment, which is about continuing to expand our regional banking footprint. We announced this in September. But after the initial success in the five original North and South Carolina markets, we decided to bring the entire Huntington franchise to the Carolinas. Now, this includes wealth, lending, capital markets, payments, more Commercial Banking, but supporting all of that with local branches. When we think about entering a market or expanding in an existing market, one of the things we're trying to achieve with our branch network is something we call optimal relative convenience. In the Carolinas, that distribution is 55 new branches. And we've committed to build those over the next five years.
This expansion will bring the entire Huntington franchise to the region and, frankly, enhance our overall value proposition. Now, for the entire network, let me just mention, you'll see this on the left-hand side of the slide. As we continue to optimize our existing network, it's not just the Carolinas. We will continue to build out in Colorado, Minnesota, other places. And we'll continue to refresh through renovation our existing locations and evolve them to the evolving needs of our customers. We believe that the experience for our customers in the branch is an important component of our value proposition. It is an important component of our growth of customers and will be for some time into the future. Now, I wanted to note this for all of you as we think about this big investment. We have also gotten much better at launching new branches.
We have a very rigorous, our team would say, early-stage reporting process. We do quite a bit of localized marketing. And we are very focused on quickly achieving our return on investment. We have a detailed playbook. We actually call it the blueprint. Now, let me give you an example. We opened a branch in Peters Township, Pennsylvania, in April of 2024. This is the sixth De Novo in Pittsburgh in the last few years. We deployed that playbook: localized marketing, community engagement, a whole list of other tactics to drive performance. And I'll tell you, that team has already become a fixture in that community. And the results show it. Seven-plus months since opening, the branch has deposits and loan balances that far exceed our expectations.
We are going to use this playbook for all of the new builds, whether they're in the 55 in North and South Carolina or our continued expansion in Colorado. One last comment I would make, and we tried to highlight it in this picture. But we also know that our branches drive brand awareness. And so as we think about new branches, we are thinking about how do we creatively use signage, lighting to make sure that we maximize brand impact when we make an investment such as this. Now, before I turn it over to Christian and Melissa to detail regional banking and wealth management, I did want to just highlight that all of these things that we're going to talk about, they're enabled by marketing. And our company has, over many years, developed very strong marketing capabilities. In fact, our teams have excelled at running data-driven marketing acquisition.
This has been a skill set that's developed over a long time. It's a combination between the work we do in analytics and also the work that we do creatively in marketing and what we do in the product groups. We have exceeded industry benchmarks. And let me just share one statistic with you. Our cost to acquire a new customer is 14% lower than the industry. That gives us quite a bit of scale as we continue to invest in acquisition of customers. But in addition to that prowess in data-driven marketing, we're doing two other things really important. One is, as we expand, how do we build some level of national brand awareness? You say, "Well, why is that important?" Well, as we expand the geography, starting from some level of awareness is super helpful.
And then as we think about the expansion of these national businesses, having awareness of Huntington is important. You'll see one of the examples of what we're doing to do that. This year, we aligned ourselves as a partner with the Cleveland Browns. We now have named their stadium Huntington Bank Field. You may say, "Why is that important?" Well, opening day against the Dallas Cowboys, more than 20 million people across the country got introduced to Huntington. And oh, by the way, if you have a young person and they happen to play Madden NFL, thousands of them right now are playing in Huntington Bank Field. So we believe that this is an efficient way of introducing Huntington to a national audience. But in doing that, we have to be relevant locally. And you'll see some examples on the right-hand side of what we're doing.
You could probably recognize this if you're a skier. But this is marketing that we designed specifically for Colorado. It speaks to our colleagues and customers in Colorado. And frankly, it's been effective. Our brand awareness in Colorado has increased 25% since we launched this campaign. So we are combining building a national brand with staying relevant to customers locally and making sure that they know that we understand them and serve them where they are. So this is a very high-level overview. Steve said earlier, "We've never been better positioned." I hope that you can see why we feel that way. We are very excited about what we can do. And I wanted to now introduce both Christian and Melissa. They are doing a super job with two very, very important areas for the company.
I'm pleased that they'll have the ability to share that directly with each of you. Christian, I'll introduce you first.
Great. Thank you, Brant. Good morning. It's great to be with all of you today. I'm Christian Corts, Regional Banking Director. I've been at Huntington for almost two years now. Prior to Huntington, I spent my career at BB&T and Truist, where I was a regional president and regional corporate banking leader across various geographies, including Texas and the Carolinas. During my experience in those communities and others, I gained an understanding and an appreciation of the importance of local and the need to create different experiences in those very different markets. I chose Huntington because of the culture, specifically the culture of putting people first. That combined with the compelling ambition to be the leading customer-centered bank in the country really drew me to the organization.
I am excited to talk about the regional bank and how an aligned and integrated team positioned close to our customer has led and will continue to lead to differentiated performance. So let's begin. Our regional bank value proposition of local delivery is a competitive differentiator. As most other banks are aligning with specialties or verticals in this space, we believe that we will create a differentiated experience by bringing the full Huntington franchise to our customers through local delivery. In early 2023, we reorganized this group and combined business banking with emerging middle market to create a new regional bank segment that covers all businesses with less than $50 million in revenue. To lead this effort, we have assigned regional presidents for those 12 regions and empowered them with enhanced decision-making capabilities and P&L responsibilities to really drive that competitive advantage locally.
As a result, since 2022, we've seen primary bank relationships grow 4.2%. And a primary bank relationship is where our customer has both an active operating account and an additional fee income product. Fee income has grown by 5%. Loan production has grown by 6%. And all those are annually. The regional president is responsible for integrating all lines of business located within a region. This regional model brings us closer to the customer. It differentiates through a greater focus on local and creates alignment that enables us to go to market as one Huntington team. We believe this will continue to create delivery and service differentiation across our markets. At Huntington, we have the products and solutions of a large national bank, but deliver those locally together as a holistic team with the service and attention of a local community bank.
Since 2022, we've had the unique opportunity to further drive our competitive advantage locally, to create a more scalable model where we could continue to grow and create efficiencies that we have reinvested in our business. Now, the changes we've made were intended to build on our already strong foundation and take us to the next level. We've had the opportunity to differentiate performance by aligning and integrating our team and positioning them close to the customer. We've also created scale within our existing footprint by expanding into that emerging middle market. We've gone about creating scale two ways. First, we created a regional playbook that really helped upskill our existing team of bankers. The playbook created routines and expectations around how we will go upmarket holistically together, leading with that guidance and advice.
Second, we invested in new talent with experience in the lower middle market across our existing footprint. But we put a particular focus on Colorado, Minnesota, and Illinois, markets where we believe we could unlock growth opportunity through that local delivery and OCR that Steve mentioned earlier. As a result, since we last met with you in 2022, we've accelerated fee income production through this alignment and integration. We've grown loan production to nearly $1 billion per quarter using this playbook and repositioning our resources to areas with the highest potential and greatest addressable market. So now that we've talked a little bit about scaling in our core, let's talk about how we are enabled to grow externally to our very repeatable model. So we've expanded to North Carolina, South Carolina, and Texas, leveraging our specialty businesses in SBA and Practice Finance.
We furthered that expansion in late 2023 by adding regional bankers to the Carolinas. And we've hired 25 colleagues to work in five geographic hubs. We have gotten off to a fantastic start, not only in hiring, but client attraction. And we see tremendous opportunity as we bring the rest of the franchise to the Carolinas in 2025 and beyond. These investments in both our existing footprint and entry into new markets have created growth capacity. And we expect to provide an additional $700 million of deposit balances and $1 billion in loan balances by 2027. So let me talk to you about how this differentiation really comes to life. The real advantage of our local expertise and delivery model truly shone through with one of our many new customers in Detroit.
With over 180 years of history in the market, this customer came to us with a very specific need: to establish a trust as they were looking to expand. But despite their long history of business in the area, they were dissatisfied with the service and product offerings from other providers because historically, all providers came to them under a singular product, under an industry lens. Huntington, on the other hand, was holistic in our approach. We looked beyond the initial transaction to come together as a team and deliver a solution that met the company's diverse financial needs. We utilized our Institutional Specialty Trust and Nonprofit Banking groups' expertise to bring a differentiated view, but delivered it locally in partnership with our treasury management, capital markets, and merchant teams. The result was a unique solution for that company and a fantastic new customer for the bank.
It is this type of local delivery of our capabilities that creates customer trust and long-term customer retention. And the exciting part is that we are still in the early stages of many more opportunities just like this one. As we were forming our new regional banking model, we recognized an opportunity to more precisely target specific business customers by segmenting them between regional banking customers, $2 million-$50 million in revenue, and small business customers, zero to $2 million in revenue. Specifically, we realized that there was a significant upside opportunity to create a differentiated value proposition for the small business customer and continue to access the lowest cost deposit funding, where we have a 4/1 deposit-to-loan ratio today. We win in different ways with these customers.
And we needed to create an experience that mirrors the simplicity and personalization of consumer banking for those small business owners through all of our channels, including the branch, digital, and central channels. So in mid-2024, we began investing in creating a differentiated value proposition for that small business owner. And we believe there is a substantial deepening opportunity within the 350,000 company customer base we have and an acquisition opportunity for the 1.3 million prospects that are located within five miles of a branch. Huntington is uniquely positioned to succeed in capturing this opportunity. And we are starting from a position of strength. Our current value proposition has enabled us to be an established leader in access to capital through our SBA and Lift Local programs. And both of those programs have generated a tremendous amount of customer loyalty.
But importantly, we understand that we needed to advance and address the distinct needs of small businesses differently. So to start, we realized there is significant crossover between the personal and the business in the lives of those small business owners. So in 2024, we launched Business Owner Perks, which allows the customer to toggle between their consumer accounts and business accounts with a single credential. The deepening results have been tremendous. We've seen a 9% increase in dual customers since the launch. Similarly to the consumer value proposition that Brant talked about earlier, we are utilizing the same research-based approach to create that distinct value proposition for small business owners to address those unique needs. First, we will leverage our branches to differentiate through guidance and advice.
We're going to take some of the best practices from our RM managed channels and apply them to small business relationships in our branch network to create more fee income opportunities through things like payments and insurance, Asset Finance, and wealth. Second, we're going to increase convenience by embedding solutions and streamlining originations. And lastly, we're going to create intuitive digital experiences. The feedback that we've gotten in our research from small business owners is that financial decisions are too cumbersome, and they prefer a more intuitive path similar to the one they experience in their consumer lives. Overall, we will provide a personalized experience, as you can see in our digital mockup, highlighted by timely data-driven insights that will really help those small businesses accelerate their growth goals. So in closing, our aspiration is to be the business bank of choice.
We will drive customer acquisition and deepening by creating scale through our highly differentiated local model, and we will further address the unique needs of those small business owners through creating a differentiated value proposition. Overall, we are highly confident that this will create new household growth of 4%, increased loan production of 7%, and fee income growth of 10%. Now, it is my pleasure to introduce Melissa Holding, Director of Wealth Management, to expand on the exciting growth opportunities ahead.
All right. Thank you, Christian. Well, good morning, everyone. Thank you all for being here and for your interest in Huntington. My name is Melissa Holding, and I'm the Director of Wealth Management. I recently celebrated my one-year anniversary with Huntington after being with BB&T and Truist for 25 years, which I spent in practically every aspect of the wealth business. Most recently, I led the premier banking organization for the company. You've heard a lot about our culture this morning. Steve and Brant did a great job covering it. What I would add to the conversation is it is real, and it's the reason I'm here. To have the opportunity to build an outstanding wealth organization within this culture was really exciting to me personally and compelling to join the organization.
I'm fortunate I've inherited a fantastic base from which to build on, and we're starting from a position of strength, and today, I'm delighted to share with you more about how we plan to leverage the Huntington franchise to drive more growth for the wealth business, as you can see, we're a substantial contributor to Huntington. We serve roughly 180,000 households, manage $34 billion of assets, $17 billion in deposits, $5 billion in loans, and deliver roughly $555 million of total revenue, of which $362 million is fee revenue. A key milestone for us in 2024 was the launch of Preferred Banking. This was designed to cater to the needs of our mass affluent customers. They have assets ranging from $100,000-$1 million with us. Our Private Bank focuses on customers with over $1 million.
Roughly 40% of the AUM in this segment is from customers with over $10 million with us. Over the past 18 months, we've restructured and optimized our business to better scale and meet the evolving needs of our customers. As a result, we are well positioned to effectively serve customers across the wealth continuum within our local delivery model. We have over 500 relationship managers serving these segments throughout our footprint. They're aligned to the regional banking structure that Christian spoke about, which is really important because it allows us to go to market as one team. It is a very exciting time to be in our business. We see a substantial opportunity in Preferred Banking, and we're also focused on elevating our high net worth offering by leveraging national resources with expertise in trust, investments, advanced planning techniques, along with the personalized service our local teams are known for.
In 2022, we began to invest in foundational capabilities to position us for accelerated growth. We have six strategic actions on the slide, but in the interest of time, I'll highlight two. I'll start with SmartInvest, which we launched in the fourth quarter of 2022. This has been a fantastic addition to our product suite. SmartInvest offers enhanced rates on savings solutions for our customers with a fee-based advisory relationship. It simplifies their accounts and rewards them with higher rates as they trust us with more of their personal wealth. The solution has been incredibly successful and has driven over $2 billion of new AUM and 4,300 new advisory households. Also, to better serve our customers, we made key organizational shifts as a part of a strategic reorganization last year. First, we aligned our mass affluent and our Private Bank businesses under a single leader.
I know this sounds relatively straightforward and simple, but the reality is organizational realignments are very challenging. This was an important step to improve collaboration and allow us to focus solely on our customer experience. As we launched Preferred Banking, customers were introduced to their preferred banker as their relationship manager. The financial advisor and preferred banker now work together to deliver our enhanced suite of products. We completely transformed our relationship management approach in the Private Bank. We consolidated the role private banker and client advisor into a single wealth advisor role. Our high net worth customers now have a single point of contact for their relationship. Both of these alignments contributed to increasing our sales capacity and creating a better and more coordinated experience for our customers as well as our teams. These enhancements are just the beginning.
There is so much opportunity to continue to build on the strong foundation. Since our 2022 update, I'm really proud to share we've delivered significant financial results. Our fee revenue has grown at a 12% CAGR. In addition to driving AUM and new advisory households, SmartInvest drove almost $2 billion of new deposits. Fee-based advisory households have grown at a 10% CAGR, and total AUM has grown at a 14% CAGR. Growing advisory households across all the segments is a key focus and our leading indicator of fee revenue growth. I want to thank our exceptional colleagues for these results. It's a testament to how they deliver with excellence each and every day. Our goal is to double this business over the next five years. Our plan is supported by four key priorities. We start with deepening within our existing customer base.
Now that we have the businesses aligned, our unified team is better positioned to go to market and make personal introductions of wealth-qualified customers. Second, we'll differentiate ourselves in key customer segments with specialized services, solutions, and unique value propositions. Third, we'll lead with planning, which is central to providing personalized advice. Fourth, we'll continue to further modernize our wealth products, our capabilities, and our platforms. As a result, we expect to significantly increase assets under management and drive compounded annual revenue growth, positioning us to be a billion-dollar revenue business by year-end 2030. Our most significant opportunity is with our existing customers. In 2022, we shared with you our ambition to grow fee-based advisory households. Brant mentioned this. I'm delighted to share we've grown this number by 20%.
Even with the significant progress we've made, there's still a huge opportunity as 1.4 million of our existing consumer households qualify for wealth management. Our mass affluent strategy enables us to capture these households as they make the transition from saver to investor. So to frame up the financial opportunity, you see on the bottom left part of the slide the average revenue per relationship in the segments. So for every 10,000 of these 1.4 million that we convert into Preferred Banking is an additional $40 million in revenue. We also have a significant opportunity to convert more regional and Commercial Banking customers to Private Banking households. We serve roughly 400,000 customers in this space. For every 2,500 we convert is roughly an additional $62 million in revenue. These customers already know us. They trust our colleagues, and most importantly, they trust our brand.
Our expansion plans also create a significant opportunity to drive new household acquisition. By early 2026, we expect to have five new wealth offices in North and South Carolina. We've already established teams in Colorado and Chicago, and we're continuing to further invest in these markets to continue to grow them. As you can see on the bottom right, we expect new markets will incrementally add seven billion in AUM, over a billion in loans, and two billion in deposits over the next five years. We've identified two distinct customer segments to differentiate our offering. Preferred banking focuses on that 1.4 million consumer households and small business owners. It's really important for the first time we have a holistic relationship manager covering this segment in tandem with a financial advisor. Financial advisors are focused on delivering investment and insurance solutions.
Our shift to an advice-led value proposition focuses on providing goals-based financial planning at scale. This gives our customers the confidence they need in making the best financial decisions for their families. When we create and deliver on our customer's financial plan, we see a 20% increase in our satisfaction scores. We'll also continue to build on SmartInvest to enhance our value proposition for our customers who bank and invest with us. Now, while Preferred Banking is new, the Private Bank is established and already deeply embedded in our local markets. To continue to grow in this space, we've expanded our capabilities to provide a more holistic offering. This enables our Private Bank to focus on the unique needs of high and ultra-high net worth families.
This has included integrating financial planners into our local teams and leveraging national resources to support the creation and management of family wealth capabilities. As we deepen our integration with Commercial Banking and Capstone Partners, we see a significant opportunity to provide proactive advice to business owners. It's really important to be there as they're planning before they're planning the transition out of their business. We position ourselves as strategic partners during that process, and we assist them in maximizing the value of their life's work. As a result, we consistently capture the proceeds from the sale. Going to market as One Huntington reinforces us as our customer's trusted advisor, increases loyalty to Huntington. In a moment, I'll share with you a real-life customer example that I think helps bring this to life.
We are committed to leading with advice and placing our customers at the center of everything that we do. Wealth management is deeply personal for our customers, whether they're choosing their first investment, establishing a family office, or navigating the complexities of selling a business. Financial considerations cannot be separated from personal needs. We believe in addressing matters of the heart and matters of the wallet. If I asked each of you in this room, "Why do you work so hard? What are you saving for?" The answer is usually not to amass as much as possible. I think you'd be really surprised what customers share with us when we sit down with them. I've heard things like, "I'm worried about my special needs child when I'm no longer here. My mother suffered with Alzheimer's for 10 years.
Will I have enough money to meet my family's goals if I too need that type of specialized extended care?" To truly be the most caring bank, we must focus on what matters most to our customers, offering guidance that aligns with their unique needs and aspirations for themselves and their loved ones. There's an art to financial planning. When we have these types of conversations, we move beyond transactions to building deep, trusted lifelong relationships. Now, in order to do all of this, we must deliver a holistic best-in-class offering. We're still early in this part of the process in building our roadmap to prioritize our investments, to continue to enhance and further modernize our products, our capabilities, and our platforms. I look forward to being able to share more updates with you in a future meeting.
So, for the best part, my favorite part, allow me to tell you a story about a recent customer that we were able to help that I think really brings all of this to life. One of our commercial customers approached their banker for guidance on the potential sale of their business. At this time, we did not have their personal relationship. That was with another firm. commercial banker brought in their local wealth team and their Capstone Partners to bring additional expertise to the conversation. Our local wealth team brought in a wealth strategist to help provide comprehensive pre-transaction planning. Now, during this process, we found errors in the customer's existing documents. The language failed to align with their legacy planning goals and potentially would have increased their tax liability.
Our teams work closely with the business owners and their advisors to address these challenges, and together we ensure the transaction aligned with what their intentions truly were. Now, I'm very pleased to share as a result of this effort, our Capstone team helped the company achieve a 25% valuation premium. And because of the expertise we provided, they moved their personal relationship to us, allowing our teams to manage the sale proceeds and deliver trust and estate planning services. This is one of many examples that I could share with you. But the outcome, I believe, highlights the power of our approach when we leverage national expertise when needed while keeping the customer connected to their local team. This collaborative effort made all the difference in addressing a complex situation.
In closing, we aspire to be the leading regional bank wealth manager by leading with advice through local delivery in the Private Bank and enhancing the value proposition for our mass affluent customers. We are very confident in our ability to double the size of the business. I've really appreciated the opportunity to introduce myself today and share our vision. Thank you. All right. Thanks, Brant. Thank you.
All right. Well, we wanted to bring the first section to conclusion. But let me just say this: myself, Christian, Melissa, we are really proud to be able to represent the work of 13,000 colleagues in Consumer and Regional Banking that actually make this happen every day. We just get to stand up here and brag about it. But we have great colleagues that are attracted to a fantastic culture, and that's why we have a good story to tell.
Let me recap a few of the strategic outcomes that we wanted to highlight for you today. First of all, we are going to continue to put our customers at the center of everything we do. Number two, we will achieve sustainable, profitable growth by investing in key opportunities that we shared today: the Digital Storefront, customer value propositions, national businesses, our regional banking expansion, and our wealth management business. Number three, we are differentiating with our culture and our brand and our experience. And lastly, our unwavering focus on customers will continue to drive differentiated growth and further scale. I want to highlight at the bottom, we are executing these strategies, and we will drive top quartile performance and value creation through these initiatives. And we've set some medium-term targets: 5% loan growth, 4% deposit growth, and 7% fee revenue growth.
I'd like to now move to the next part of the agenda, and Christian, Melissa, Steve, Zach are going to come up, and we'd love to take your questions.
We have two mic runners on each side. If you got a question, raise your hand. Go back t here first. All right.
Hey. This is on. Can you hear me? We can. Hey, it's Brian Foran from Truist. I wanted to ask about Carolinas versus Texas. And I know it's not quite as simple as this, but Carolinas, you're doing everything retail and commercial together. Texas is a little bit more commercial-focused. What it is about the retail branch and wealth opportunity in Texas that puts it lower on the priority list or less attractive than the Carolinas?
Brant, do you want to?
Yeah. No, I'll take that. First of all, we view them both as attractive.
Texas is the fastest-growing state in the United States, North Carolina number three, South Carolina number five. And we've fortunately been able, in both cases, to attract very good colleagues that have long histories and reputations in the market that are very positive, that they've been able to take an excellent platform that Huntington's built over many years and serve their customers in an exceptional way. So we see them both as great opportunities. We felt like that North Carolina was the best place for us to start from, and South Carolina was the best place to start from a full franchise build perspective. Clearly, that relative convenience number is less significant in North and South Carolina as it would be in Texas, which is geographically much larger. And so we feel it's a great spot.
But we have opportunity to continue that model in other places as we continue to see success.
Hi. Ebrahim Poonawala , Bank of America. I guess just sticking with that, I think when you talk to investors, rightly or wrongly, there's expectation that M&A could accelerate your strategy in the Carolinas or in the Southeast. Just address that. I think, Steve, you mentioned that you've not been very acquisitive, but the deals you've done have gone well. Give us a sense of, as you think about the regulatory backdrop, maybe gets a little bit better, there might be M&A opportunities. How would you approach them, and how should shareholders think about Huntington pursuing these?
Well, I was wondering if we'd get beyond the first question.
Well, the mic didn't get to me fast enough.
Look, we have just made a significant move, an investment, great new colleagues driving our business expansion.
We're going to grow the core. That's our focus. That's our priority, and that won't change. Now, we've done two deposit transactions of any size in 15 years. Someday, there may be something else to do. We're not working on anything now. We're focused on driving the core. That's the priority. We believe the revenue growth off these new initiatives, in addition to the core growth, will propel us for a number of years, and we've got momentum. We've got the right team here and in the business lines, and our colleagues are highly engaged, so look for us to drive the core. Someday, there may be something else. By the way, that may not be a bank. Capstone was a great combination for us, as was years ago, Macquarie Equipment Finance. That has more than doubled since we picked that up.
I think it was seven or eight years ago. Just if I could, one more on the innovation roadmap, I think, Brant, that you put out. Does that also reflect client preference that's evolving, and does that create a risk from digital native banks that could compete with similar products, not have the branch footprint, and become a competitive threat? Just address that. Thank you.
It absolutely reflects an evolving customer base. And we actually, in our research, saw that there were some fairly major changes in people's desires and jobs post-pandemic. And so what you see in that product roadmap reflects an evolving customer base, reflects evolving demographics, and also reflects kind of new jobs to be done for the group. And I view that as an approach to product innovation versus as a single point in time.
So we will continue to understand deeply the needs of our customers and ensure that our investment capacity and product development is aligned with that understanding of the customer.
Erika Najarian. My question here follows on with both Brian and Ebrahim's question. So what have you learned in your ability to grow deposits the way you have organically? And that what works in terms of de novo expansion versus scale for the sake of scale, right? Because you are in a good spot with the capital. So you're going to get this question every time you see investors, right, Steve? And so as we think about your main message today, how did you drive that ability to grow deposits in the first place? Obviously, there's some cost aspect to it.
But also, as we look at the map, right, in terms of the light green, the medium green, and the deep green, right? Could you let us know how you're thinking about when it's time to flip Texas, for example, to dark green in terms of regional expansion?
I'll start, but Brant, why don't you add to it? First of all, we've had this customer-centered focus since 2010. Fair play. The bank was much more thrift-like. Now, commercial is emerging as the consumer and regional bank already is a powerhouse. We like that positioning. We've invested. We've got dynamic growth coming on the commercial side of those dedicated new businesses. Two are deposit. Two of those verticals are deposit-led. And so they'll balance out some of that growth, maybe much of that growth, as we go forward.
But the core performance is what drives us, and that's where we have to stay focused. We have to grow households and businesses. And fortunately, we've been in a position between a combination of service and new product service innovation to keep that apace. The digital investments that we talked about in 2022 have accelerated significantly the opportunity there. And this one click, this one tap that Brant articulated, we've only just opened up recently. We think it has huge opportunity for us. So a combination of this Fair Play mentality and how we design products, how we deliver products, the service and support, fundamentally thinking that we're in a people business. So you don't have to just do 800 numbers to get to us or some other form is really import ant to us. Brant, why don't you add to that?
No, I'll add.
And I'll start just where Steve was, which is fundamentally what underlines the deposit growth, this household growth. The more customers you have, the faster your deposits are going to grow. So the fact that the company has been able since 2010 to expand the customer base by 3x is substantial from a deposit growth perspective. And then when you look at the performance since 2022 or since March of 2023, it's not one thing. It's a combination of many things. It's really good marketing, 14% advantage for cost to acquire, a strong digital generation engine. 50% of our deposits originate digitally. Very strong value propositions grounded in the concept of Fair Play. All of those things provide the avenue and the reason for customers to choose Huntington. We've also, within our deposit group, done a lot of research about our customers and how they behave.
And that has helped us as we think about how we manage the deposit book day to day and, frankly, how we manage the deposit book going forward in a dynamic rate environment. So I'll just add one more. This optimal customer relationship focus started in 2010. We just keep getting better. It keeps getting more deeply ingrained into the culture of the company. And it triggers off the deposit relationship of the checking account. And so that, we believe, this consistent focus over many years, it's ingrained behavior now. It's understood throughout the group. And that's also a little bit of the secret sauce, I think. Thank you.
Part of the question was, what do you need to see from an organic standpoint, like the light green states to dark green in terms of saying, "Okay, now's the time to expand to that market?
The priority to pick up on that, the priority for our expansion is North and South Carolina, 55 branches over five years. We might be able to accelerate that. In fact, I think we ought to beat that goal. We ought to beat it with quality and growth. We'll continue to learn and get better as we go forward. We'll have more digital capabilities, which will accelerate that growth. Eventually, we expect to be in Texas with a branch footprint. The priority is the success and the Carolinas first.
John Pancari, Evercore ISI. Steve, upfront, you mentioned the medium-term ROE target. I know that you modified that from about 20% to 16%-17%. You mentioned that you're holding more capital. Can you maybe just update us on your capital expectation? I know you have a 9%-10% target.
But what is baked into that updated ROE outlook in terms of your capital positioning?
Thanks, John. Zach, you want to handle that?
Sure. You're happy to. Good morning, everybody. And I'll steal a little bit of my own thunder because I will go through this in more detail in my presentation later. But in short, the expectations we have are to drive ROTCE between 16% and 17% by 2027. We expect a rising trajectory between here and there. Later, in my presentation, you'll see a reconciliation of kind of where we are today versus where we think that target is. There are four key factors that we're seeing. One of them is we do expect to be holding marginally more capital, particularly TCE capital. You've seen tangible book value per share, TCE per share grow at 7% CAGR for the last two years.
Our expectations are high single-digit to low double-digit CAGR in tangible book value per share to land ROTCE overall within a range of 6.5% - 7.5% by 2027. And that'll be a function of our driving adjusted CET1 up into our operating range and just generally the recoupment of AOCI over that time as well. So that'll be pretty powerful value creation in terms of tangible book value per share. And then we'll also see three very substantive return drivers more than offset the drag that that would represent in terms of ROTCE: NIM expansion, fee revenues growing as a percent of revenues, and positive operating leverage. So those will be kind of the drivers to get to 16% - 17%. Again, I'll unpack this in more detail when we talk later this morning.
And we'll carry more liquidity. Zach referenced it. He'll illustrate it.
Again, lessons learned out of Silicon Valley Bank and flows. Although we've got, I think, the best deposit base of any bank in the country, we're still going to carry more. We manage the company conservatively. And then finally, as we think about our capital priorities, for nearly 15 years, we've always said organic growth. We think we've got a breakout moment on organic growth. And that growth of the balance sheet is going to absorb some of that capital as well.
Hi, I'm Manan Gosalia Morgan Stanley. Brant, part of what you're looking for is a 7% CAGR in fees through 2030. And you and your team have highlighted the investments you're making, clearly differentiating the products at Huntington. But there's clearly a lot of competition out there as well.
So in terms of the investment spend that you need to make from here, do you think that a lot of that is already in the run rate? Do you need to make more? Can you talk a little bit more about that?
Well, Zach is going to outline later in the presentation how we think about investment expense overall in the company and how we have targeted growing investment expense faster than core, which means, obviously, we have to reduce the core. I feel that we have built in today into our run rate the investment necessary to do these things. So as we think about and set those goals, they're based on a long-range plan that includes both. And so I feel like we're in a great position.
The key for us will be being focused, understanding exactly what we're trying to achieve and accomplish, and ensuring that we create rigor around the investment process, which we have, that says every time we make an investment in digital or in a new business or in people, that we're doing that with an intended return, and we're doing that in a way that drives us towards these objectives and staying very disciplined in that approach.
Okay. Hi, everybody. Steve Alexopoulos, now at TD Securities. This is for Brant and Christian, so when we hear banks talk about their aspirations to deliver differentiated customer experience, be trusted, I don't think I've ever been to an Investor Day where those weren't the talking points, but when we look at, okay, what's the experience on the ground, usually it's like terrible. It's nothing that the CEO is saying.
You guys have been in the industry for a long time. Teach us what is actually different at Huntington that when Steve tells us his vision and we track it, we could actually see that's what's happening on the ground, and that's not the case everywhere.
It's a really good question. I'll start, and then Christian, please add to that. First of all, I hope what would give you some level of confidence is the company's history, frankly, since 2010. The company's not only talked about the importance of customer experience, but actually delivered customer experience that's been at the very top of the industry based on objective surveys. So one, I hope the history gives some level of confidence. I'd also say it's something we're really focused on top to bottom. We learn from everything that doesn't go well. We learn from every complaint that a customer logs.
We learn from every piece of survey data that we do both internally or through some external third party, and all of that intended to, frankly, deliver better and get better, and I mentioned about rigor. There is a rigor around being exceptional from a customer experience perspective, and it didn't just start in the last three years. That's existed for 20 years, and so that, to me, is the first. The second component, which I want Christian to really highlight, is organizing in a way that allows people to really be there for the customer, and so that's the enhancements that we've made to how we deliver, both in our branch network or through our regional bank, we believe positions our customers in a way, I mean, positions our colleagues in a way that they can continue to deliver. I want to say one other thing.
The other big component that I think is great about the culture of the company that's led to what you're describing is we listen to our colleagues. Fair Play came from the colleagues. So listening to the colleagues, colleagues said, "Hey, this is not working for me," and actually doing something about it is really, really important. And Steve sets that tone in the company, I can tell you. And that has had an enormous impact.
Yeah, thank you. One of the things I'd start with is one of the core tenets of trust is consistency. And Huntington has been consistent in the way that they support their clients for a long time. So we have elevated levels of trust. What is really exciting is when you align goals of a holistic team, when you integrate leadership and they're all going after the same goal together.
And then when you're really close to the customer, that creates a different experience. Being close to the customer creates a different experience in how responsive you are, the decision-makings you make, how you can serve them. And so I think that with being paired with being proactive in our advice and guidance, going to them first, not waiting for them to come to us, will really be the differentiator.
Bill Carcache , Wolfe Research. You've given a lot of great color on the digital investments that you're making.
Could you talk a little bit about the funding, the personalization of your own digital solutions, and the cost of that customization at a time when a lot of your large competitors with significant IT budgets, you're competing against that versus leveraging some of the more boilerplate solutions from FinTech partners, which perhaps could be a little bit more cost-effective, but maybe don't give you the customization that you're looking for?
Well, I think no matter the size of the organization, you have to make choices. And we certainly, in our digital investment, make choices day to day. What should we buy ourselves and make unique? What should we take a partner solution for? And so as we go forward, it will absolutely be a combination of all of those things because it does give you scale.
What we're trying to do with our customer value proposition work is to really understand some unique places where we want to own it because we think we can do something that's different in the industry. And we gave you one example of Caregiver Banking where there's no one else offering that solution in the market today. Won't mean that others won't do it in the future, but we'll be the first. And so we'll find more examples like that where we'll focus our energy and we'll focus our investment dollars.
And then there will be lots of places where we work with partners to provide things that are important to the value proposition and important to meeting our customers' expectations, but maybe not unique enough for us to say, "We want to invest the dollars to build that all ourselves."
Okay, why don't we wrap it there for the first session? We'll have two more Q&A sessions. We want to keep us on schedule today. We will break now for a break, 10:35 A.M. That'll give us about 10 minutes. We'll start promptly at 10:35 A.M. Thank you all.
Good job. Great job.
We ready? Hurry back. Welcome back. Good morning. I'm Scott Kleinman. I'm President of the Commercial Bank. It's wonderful to spend a beautiful day with you in New York City. By way of quick background, I'm the new one on the leadership team.
I've been with the company for nearly 34 years, having started my career on the capital markets side of the business. Fun fact for you all, I actually completed the first client-facing interest rate swap at Huntington. So it was a few years ago, but I guess you could say I was the first employee of capital markets here at the bank. Since that time, I worked in a series of progressive leadership roles across the segment, including the broader build-out of our capital markets platform, as well as corporate banking. Don't laugh at me. I assumed the role of president of the commercial segment nearly five years ago, and I'm thrilled to be here again and excited to share with you the continuing growth of the Commercial Bank.
Tizu Menelik, who's been instrumental in the build-out of our industry verticals, will join me shortly to provide some insights on how we identify attractive sectors for growth. There are three key drivers of our growth story that Tizu and I want to share with you today. First, our ability to expand our local delivery model to new and attractive Commercial Banking markets. We're going to discuss our differentiated go-to-market strategy that has enabled us to attract top talent with strong local connectivity, which in turn has driven performance that exceeded our expectations. Second, our continued commitment to delivering expertise and capabilities through the successful launch and development of industry verticals and ecosystems. We have a strong and disciplined process for selecting verticals and ecosystems, and many of our new businesses can be viewed as logical or natural extensions of activity that already exists within Huntington.
Third, the enhancement of our capital markets capabilities as we build out origination capabilities to complement our strong balance sheet-focused product set. We're coming off a record quarter in capital markets fee income, and our teams are incredibly well-positioned to drive continued growth. Now, I want to provide a quick reset on where we are as a segment today. Currently, the commercial segment is $58 billion in loans and $43 billion in deposits, and that represents 44% of loans and 27% of total deposits at the bank. Fees continue to accelerate at $700 million and now represent 34% of total fee income at Huntington. As the right-hand side of the slide highlights, we've continued to drive scale in businesses and attract talent that projects our brand nationally. Today, the commercial segment represents approximately 2,300 colleagues in 39 states.
As the chart at the center illustrates, our reach now with clients in all 50 states and branches and offices in both the branch and extended footprint. Notably, over 40% of our colleagues are new since 2022. The rapid integration and success is in large part due to an accelerated and intentional onboarding process that we have implemented across the segment. As we've expanded our offering and reach, we have remained focused on delivering both a best-in-class client experience and best-in-class advice and guidance. We're certainly proud of the third-party recognition from Greenwich, and the left-hand side of the screen highlights the best-in-class nature of our local delivery model. This model has been refined over many years, and as our continued success at delivering local, combined with our expanded national capabilities that give us a high degree of confidence in executing on our geographical expansion.
On the right-hand side of the slide, Capstone has a long track record of industry recognition as well. The nationally recognized domain expertise that Capstone provides has been a key driver of not only enhanced fee income through advisory activity, but also client acquisition. The integration of Capstone into our prospecting and deepening routines has fundamentally changed our opportunity as clients clearly value the depth of expertise that can now be delivered. Now, today, you're going to hear all my partners speak to the importance of culture as a differentiator and an enabler of our growth story. Culture is not only why talented colleagues join our team, but more importantly, it's why they stay, and when you can attract talent, that talent will attract more talent, and that in turn leads to the momentum that we have in the commercial segment today.
On a personal level, one of the things I'm most proud of is that we've never forgotten where we came from as a company. The culture that attracted me just a few years ago right out of college, one that focused on how we treat each other, how we collaborate across the segments and the enterprise to deliver client-centric solutions, and how we focus on making the communities we work and live in better is the same culture that exists today. The company is going to change, that's for sure. We're going to do more things in more places with more people. But what is also true is that we're going to continue to focus on and build our culture because it's our culture that connects us across the company and across the country. Now, the segment has grown substantially since our last Investor Day.
In November of 2022, we made a series of commitments around growth initiatives and expansion, and we have delivered. The positive momentum that the segment carries into this Investor Day is a direct result of driving our core banking performance combined with a clear and disciplined focus on expanding both our capabilities and the geographies in which we operate. Simply put, by meeting a more diverse set of client needs, we built more ways to make more money in more places than we ever have before. And we still have more building to do. Now, today, we're going to spend a lot of time on what is new. But before we do that, I want to briefly highlight the continuing strong performance from our core businesses.
The regional franchise continues to grow steadily, and our ability to leverage even more national expertise into our legacy markets positions us well for future growth. Our Asset Finance platform is a scale business, and it continues to grow. In fact, in the fourth quarter, our Asset Finance teams generated record-funded production, and we're a major contributor to the record production achieved by the broader segment. So, while we focused on building new capabilities and expertise, we've not taken our eye off the core of the bank, which has delivered consistency, growth, and stability, which enabled us to play offense coming out of the financial upheaval of 2023 and expand in meaningful ways. So, what does that growth look like? Since 2022, we built eight new verticals, two of which are deposit-centric in nature. We're looking at long runways for these verticals.
We expect many of them to scale to $5 billion or more in assets over time. Importantly, the growth we are experiencing is not coming at the expense of discipline around pricing and relationship planning, which are core operating principles of the commercial segment. Every commitment that we make that is above $50 million goes through a rigorous capital allocation process where we evaluate both the individual asset return and the entire relationship, inclusive of a detailed relationship plan. The deepening activity, which is so important to achieve the full share of wallet and the commensurate return, is tracked on a granular level, which drives accountability down into the organization. Now, we've also fully integrated Capstone into the company while enhancing the elements of that company that make them unique.
Capstone's deep expertise and insight create a differentiated experience, and it enables us to serve the full range of our customers' needs, both in footprint and nationally. We have robust advisory backlogs with capital markets fees on track to double since our last Investor Day by 2027, and our efforts around verticals and capital markets growth have been accompanied by our expansion into rapidly growing markets where we offer a differentiated model that is driving early wins and success across both North and South Carolina and Texas. Now, I want to double-click on the growth since the last Investor Day. In early 2023, we were faced with a rapidly changing and difficult banking environment. It would have been easy to step back from commitments we made. In fact, we saw others choose to shrink their balance sheets and disengage from the broader market.
We made a different set of decisions, and it has propelled us to the growth that we delivered in 2024. We believed that we would benefit from the disciplined underwriting and client selection that is inherent in our aggregate moderate to low-risk appetite. We believed that the long-standing relationships we had built, in some cases over generations of business owners, would serve us well in a turbulent period. And we saw opportunity in the face of broader disruption and successfully expanded into new verticals and geographies. Our Fund Finance team joined us in June. Our North Carolina and South Carolina build-out commenced in October. Tizu will share a slide later in the presentation that better illustrates where and when we played offense, but you can see in the charts behind me that the investments are yielding a result that will change the trajectory of the Commercial Bank.
Now, I want to take a brief moment to share a video that highlights our progress in the Carolinas. The combination, you've heard this earlier, the combination of local delivery supported by national expertise is a winning value proposition for our clients and the bank. Our progress to date has exceeded our expectations, and we have strong momentum across all of our new markets. So, I'm pleased now to share how we successfully delivered Huntington into North Carolina.
We're new to the Carolinas, but not new to banking. There's a lot of compelling reasons to enter North and South Carolina: very attractive markets, strong economic growth, dynamic population trends, a powerful mix of industries, and high-quality businesses of all sizes. There are a lot of impressive financial services organizations and talented people that were already here in this market.
This being the second largest banking center in the United States outside of New York, it makes sense for Huntington to be here. There was this moment in time where we leaned in when others were pulling back. We knew that we could win in these markets and take share if we did it the right way. A national franchise that believes in investing locally. A lot of the nationals here, if they come nationally and try to talk to a local business, we have that local sophisticated banker that's earned trust over multiple years. So, we can talk specifically not just about your industry, but about your business, your family, your employees. Clients are looking for us. They're looking for bankers and banks that really genuinely care about them. Best-in-class culture enables us to recruit best-in-class talent.
We defined best-in-class talent with just not just a good banker, but bankers that had deep and rich followership in the communities they served. What excites me about the growth here at Huntington is that the community will get to see banking the way it really, really should be. The word's on the street. Huntington is in town.
All right. Thank you, Heath and Ray. Just terrific work. The slide behind me highlights the growth and quick wins that we've delivered in our new markets. From a financial perspective, we have far exceeded the goals we set for ourselves. As the talent that we have attracted has been able to leverage the brand and the platform to make meaningful progress, achieving profitability in the first year, achieving profitability in the first year of our North and South Carolina operation is a major accomplishment for the commercial team.
It's the result of strong local bankers combining with national resources in a seamless manner to deliver all of Huntington to these new clients and prospects. I want to spend a moment on our go-to-market strategy in new regions as our platform has proven a compelling value proposition for both talent and client acquisition. Our regional expansion model is specifically designed to leverage the talent and local connectivity of our bankers. We do this by enabling the bankers to fully leverage our national capabilities, including vertical and credit product expertise, Capstone and capital markets, and we deliver them locally. Our local bankers are not handing off relationships to national business lines. They're maintaining the relationship management locally, and they're driving superior outcomes. The model requires alignment and cooperation across the entire company, but it's proven to be a differentiated value proposition both for our clients and our bankers.
Now, you just heard from Heath and Ray how the culture of the company is a meaningful differentiator in how we deliver the bank, and nowhere is this highlighted more clearly than in our regional expansion and in our ability to consistently attract talented local bankers with strong connectivity, so I want to hand it off no w to Tizu to discuss our industry verticals and ecosystems.
Thank you, Scott. Thank you. Good morning. I'm Tizu Menalik, Head of Corporate, Specialty and Government Banking. I've been with Huntington for two and a half years and in banking for 28 years in Commercial Banking, corporate banking, and private equity at super regional banks and money center banks. I joined Huntington in 2022 to lead the build-out of industry verticals and specialty banking.
I'm happy to be here today to provide you with an update on the continuing growth of the Commercial Bank. Three key messages I want to cover. One, we're delivering specialized solutions through the successful launch and build-out of industry verticals and ecosystems. We're identifying attractive sectors for growth and expanding our expertise and capabilities to become a formidable player through the delivery of tailored solutions to meet the needs of our clients as well as address the pain points of an industry. Two, we're focused on creating ecosystems to be the comprehensive solutions provider. With a focus on delivering the whole bank to the client, coverage and product owners across the organization are fully aligned to meet all aspects of the client's needs.
And then three, as you heard from the video, Ray specifically mentioned our local delivery of national expertise is a powerful differentiator that has proven to be a winning combination for our bankers in building and deepening customer relationships. I'll highlight some examples of this shortly with new verticals, credit products expertise, Capstone, and capital markets. In 2022, we made the commitment to add one to two verticals per year and double our asset and deposit growth in five years. Our reorganization from geographic to industry coverage in 2022 enabled us to accelerate the build-out and growth of additional verticals. Our financial resiliency and strength during March of 2023 positioned us to capture market share as well as enter new verticals and specialty areas.
And then through 2024, we've made investments in hiring 108 relationship managers and developing capabilities to establish six full relationship-focused and two deposit-centric verticals. Some are natural extensions of what we're doing today, such as Healthcare ABL, while others are de novo, Fund Finance, Mortgage Servicing Lending, Mortgage Servicing Deposits, HOA, Title, and Escrow deposits. Where Huntington sees the opportunity to become a meaningful player. The launch and speed to market contributed significantly to the growth of the segment in 2024, with these initiatives representing approximately 20% of loans and deposits. And today, we're pleased to report that we're ahead of our commitments. Based on the current run rate, we're at three new verticals per year and over two times both asset and deposit growth. Now, we've developed a very strong, disciplined, and systematic approach to evaluating and selecting opportunities.
We consider Huntington's right to win through expertise and capabilities, market attractiveness, and where we can generate top quartile risk-adjusted returns. Several verticals are natural extensions or expansions of what we're doing today as we pursue multiple layers of growth. These businesses have long runways as we expect many of them to scale and reach up to $5 billion in assets or deposits over time. As you can see on the chart, we've designated them into three categories. Compelling growth industries or specialties such as healthcare support high growth and greatest capability alignment for quick scalability. Competitive growth industries or verticals are such as Fund Finance, mortgage servicing, and lending are opportunities advanced during market disruption or competitive disruptions, enabling opportunistic entry into attractive verticals.
Niche growth industries or specialties such as Native American Financial Services, Mortgage Servicing Deposits, and HOA, Title, and Escrow are focused on specialized markets for unique tailored capabilities. Now, as we build industry expertise, we're also focused on building ecosystems where we, as coverage and product owners across the segments and lines of business, collaborate with each other to deliver the full capabilities of Huntington. By enriching customers' lifecycles with relevant services, we build greater customer engagement and loyalty, which drives our strong financial performance. Two examples I'd like to highlight are the sponsor ecosystem and mortgage ecosystem. So, for our sponsor ecosystem, we're leveraging our existing capabilities as well as building new expertise to become a strategic partner to the sponsor. We do that through sponsor and portfolio-level products such as Fund Finance, Leveraged Finance, capital markets, and Capstone. We advise and execute financing solutions for underlying portfolio companies.
We deliver the bank, capital markets, payments, wealth management, and most importantly, we generate attractive risk-adjusted returns in an efficient and well-orchestrated manner. And we apply the same approach to our mortgage ecosystem. We're building out a Mortgage Servicing Lending platform, a robust infrastructure to support the deposits. To better serve our mortgage originators and service our clients, we have aligned our existing businesses across the ecosystem, including Correspondent Mortgage Banking, TBA hedging, and capital markets to enhance our value proposition as a comprehensive solutions provider. It is important to note that in both ecosystems, we had much of the expertise in-house. And with our expansion into these key areas in the last 12 months, we're well-positioned to meaningfully expand our value prop to grow assets, deposits, and fees. Now, continuing the theme of ecosystems, we want to spend a few minutes on healthcare ecosystem as a case study.
Healthcare is one of our most mature, long-standing verticals, doubling in size since 2018. Through 2020, we've established a fully integrated national healthcare lending platform where we lend into various subsectors of the industry and patient collection solutions. Over the last three years, we've invested in a healthcare ABL team and are actively investing in AI payment solutions as we build product capabilities to differentiate our ecosystem. As we look into the next phase, we're focused on driving innovation and developing expertise and capabilities, again, for holistic coverage to address the most pressing industry needs. This ecosystem is a great example of how we've evolved from lending to learning, building capabilities, and driving innovation, and we expect to apply this proven playbook to invest in bolt-on acquisitions and capabilities in other areas for other verticals as we gain scale and maturity.
I mentioned earlier that we're continuing to deepen client relationships by capitalizing on our unique ability to deliver national expertise at the local level. We deliver a differentiated value proposition in our local markets, unlocking the full potential of our industry and specialty expertise. Now, let me set up this case study, which I'm really excited to share with you, as it exemplifies the power of our platform when we bring it all together. The background here is the CFO of this company is contemplating a financial restructure to buy an existing equity investor, and timing and execution were very important. Our Texas regional bankers leveraged our national capabilities, including Leveraged Finance, credit products, capital markets to deliver a solution that met the client's needs.
Huntington was selected to lead the deal in this highly competitive process, and it was based on our focus on the relationship, customized solution providing flexibility, agility, and execution capabilities. The strong talent that we've attracted locally with the combination of national expertise is resulting in enhanced brand recognition across our footprint. One final point, our efforts around building verticals, ecosystems, and investments that we've made to date have diversified our sources of revenues. Clients we cover, prospects we target, yielding a result that will accelerate the growth trajectory of the Commercial Bank. And with that, let me turn it back to Scott to discuss our capital markets expansion efforts. Thank you.
Thanks. Great job, Tizu. All right. Since our last Investor Day, we focused on enhancing our capabilities, which has enabled us to deliver expertise across the segment and drive an overall increase in fee income.
The build has helped us diversify away from the loan being the core driver of our capital markets outcome, as we can now raise the capital clients need in the market and advise on a broader array of strategic transactions. This is reflected in the consistent growth of capital markets source fee revenue. Importantly, our current trajectory places us on track to exceed our 2022 Investor Day commitment of $450 million of revenue by 2027. And we will continue to invest as we build out our leverage finance platform and seek additional opportunities to further scale our Capstone advisory platform. Given our current size, scale, and capabilities, we're well-positioned to accelerate our growth in corporate finance fees by tapping into a naturally addressable market for a super regional bank of our size.
We believe that growth in syndicated and Leveraged Finance and Debt and Equity Capital Markets will be a critical driver of our continued capital markets expansion. We believe that this growth will drive us past $450 million of revenue in 2027 and towards our 2030 target of $600 million. Along those lines, we recently announced a senior hire to lead the strategy, and we look forward to welcoming Chris Wood to Huntington in early March. Now, the opportunity to quickly deliver a higher level of capability at scale is what led to the Capstone acquisition. The thesis was clear. Our depth of middle market relationships at Huntington and a high level of trust earned over many years could be further enhanced by the ability to advise on the full business lifecycle for our clients.
With Capstone's focus on privately held middle market companies and deep industry expertise, we have seen collective wins greater than our expectations across Commercial Banking, treasury management, and of course, with success fees in capital markets. The level of joint calling and collaboration is outstanding, and it's really allowed us to level up our degree of sophistication with our clients. Quick Capstone wins in North and South Carolina and Texas reflect how we brought Capstone and its capabilities into our client base. I'll let you in on a little secret. We had Capstone engagements in all of those markets before we made our first loan. In addition, when there's an opportunity to win, our win rate with Huntington clients is four times, four times greater than other Capstone origination efforts.
While the M&A market has been challenging since 2022, we're optimistic about the backlog for Huntington clients, which now represent approximately one quarter of Capstone's overall backlog in what we expect to be a very active 2025. The Capstone integration gives us great confidence we can execute on tuck-ins as they become available in targeted industries or extend capabilities that fit our broader ecosystem thesis. Now, I'll leave you with a few key messages. First, we will continue to invest in geographies, products, and capabilities that will enable us to enhance and add to the value that we provide a broad set of clients on both the local and national level. In return for the value that we provide our clients, we expect to extract value in the form of loans, deposits, and fees, all of which we see growing at high single-digit to low double-digit CAGRs.
Second, our culture is an enabler of a differentiated client experience, and we will continue to leverage our capabilities locally while scaling and building the brand nationally. And third, we will continue to execute in a disciplined manner as we extend our capabilities and meet our midterm targets. Tizu and I, thank you for your interest in the Commercial Bank. And I now want to turn it over to my partner in payments, Amit Dhingra.
Thank you, Scott. Good morning, everyone. It's great to see many of you again. What a beautiful day in New York and a chance to talk about my favorite topic, payments. By the way, for those of you who know me and know that my home state is Minnesota, it is a beautiful day, 30 degrees warmer than home, isn't it? I could have taken a walk outside.
But for those that are new, I'm Amit Dhingra, and I have led the payments business here at Huntington since 2022. Let me just tell you a few facts about myself. First, I'm not a funny guy. Second, I've had. That was a joke. You should have laughed. Second, I have had various payments leadership positions at Huntington prior to this role, and Enterprise Payments was set up in 2022. Prior to Huntington, I was an executive at U.S. Bank, and before that, I spent six years at McKinsey & Company in their financial services practice. I'm really excited to speak with you again. Let's begin. Let me start with a few key messages, right?
If there's two things I want you to take away when you walk out today, it is that the payments organization is focused first on accelerating the growth of recurring fee income, and second, we're continuing to build scale, and I'd say we're really well-positioned to do that in a variety of ways. First, we're maintaining our focus on customer acquisition and deepening relationships as we drive organic growth. This is a theme you heard Steve talk about a few minutes back. Second, we're continuing to enhance our product offerings and customer experience with holistic solutions across all segments and the entire customer lifecycle. I'll repeat that: all segments, entire customer lifecycle.
Third, as a $200 billion bank that has witnessed rapid growth over the past few years, we are purposefully accelerating our growth and enhancing ourselves with differentiated go-to-market models such as Merchant, which I'm going to talk about in detail in a few minutes. Importantly, we are continuing to have a heightened focus on innovation and strategic partnerships. During the last Q&A, one of you asked a question around partnerships, and I will touch upon that as well today, but that is a key lever as we drive growth. And this also helps us enter and expand into the emerging payment value pools. Now, before we get into our initiatives and strategy, I think one of you just asked me a few minutes back, and I'd love to say I added this slide now, but this was there before.
Let me just describe what payments is at Huntington and what it looks like, right? Our payments business enhances value across the entire customer base, including consumers, businesses, and commercial. Most of you know this fact, but over 80% of all interactions our customers have with us are payments-related. Frankly, we at Huntington realize the importance of payments and the value that it adds to our franchise. As you can see, we have a broad set of products, services, and capabilities for our entire customer base. It includes a strong set of card offerings, treasury management payables, and receivables, and merchant. We have payment platforms such as Zelle, RTP, and our B2C disbursements platform, which we acquired in 2022. As you can see, we are a full-spectrum provider offering a comprehensive set of solutions to our customers.
Hopefully, that answers the question I was asked, but again, full-spectrum provider, comprehensive set of solutions for our customers. Also, as you can see here, we have a scaled payments business, and our strong presence positions us for further expansion and reach. We're almost 30% of Huntington's fee income with significant scale in many areas. For example, we process over 2.6 trillion transactions, and then we're the number three Mastercard debit issuer in the country. Zach is going to talk about our focus on high return on tangible equity businesses in a little bit of time. But as you look at the right side of the slide, what you can see is we have diversified our sources of fee income over the past two years. And honestly, my plan is to accelerate that as we go forward.
Now, as you look at the bottom, the center of the page, you'll see four areas of growth. I believe there's significant opportunity in all four, but then there are certain areas such as merchant acquiring, where over the next five years, we will grow four times in revenue. Net, what I want you to take away on this page is fee income is a really big opportunity that we are well-positioned to capture, and all this progress and strength showcases our strategic focus on driving revenue across our fee income businesses. Before discussing about future opportunities, let me take a moment and highlight our team's strong execution since we last spoke. Firstly, as you can see on the left side, we have capitalized on a significant deepening opportunity to increase credit card accounts by 80%.
Second, as you can see here, we already had a very active debit customer base, and our transactions per active account exceeded our peers. Over the past couple of years, we have continued to focus on customer engagement and have driven this metric even further. As you look at this, we have increased the gap in transactions per active account, and we are now almost 30% higher than our peers. By improving sales effectiveness, we have increased treasury management fee production by 30%. Scott referenced a short while earlier about payments and commercial working together. This is a prime example of how we have gone to market with our commercial clients. And finally, as you look at our annual merchant revenue, it's significantly higher than what it was two years back. Let me just tell you, I am extremely proud of these achievements.
Ebrahim, my bonus has been paid, but when you talk to Steve later, you should remind him how great these numbers are, right? But it's all about the payments team that we have built over the past few years, and I'm really excited about future opportunities. So let's pivot to talking about future opportunities. As you heard from Steve earlier, he's emphasized our focus on customer experiences and relationships to drive differentiation and expand our customer base. Within payments, what we have done over the past few years is we have continued to build on our differentiated offering with segment-specific solutions, enhanced go-to-market strategies, and partnerships and innovation. Over the past two years, we launched numerous products. For example, cashback card and secured card on the consumer side drove significant growth while maintaining credit discipline. I'll repeat that: while maintaining credit discipline.
We expect to maintain this trajectory of launching products. On the commercial side, we developed vertical-specific solutions to cater to unique client needs, and as we move forward, we're going to accelerate the pace of these customer-specific solutions. Our enhanced go-to-market strategies provide access to new revenue pools. I'm going to talk about merchant in a few minutes, but versus our prior merchant operating model, where we referred the customer to a third party, which, by the way, I did not love the fact that we were referring to a third party, we now own the entire end-to-end customer experience. Importantly, as we continue our journey of connecting with customers in the manner they want, we will continue to leverage innovation and partnership to meet their needs. So how are we going to measure ourselves?
Overall, I expect our strategic initiatives to capture significant growth potential, including improved acquisition, deepening, and increased retention. I expect that over a third of our incremental fee income growth will come from new value propositions, and all these actions, along with growth in the core, will result in 9% + CAGR in payments revenue over the next five years. Now that I've given you an understanding of the high-level opportunities, let me do a deep dive into card. As we highlighted throughout the day, it's about meeting customer needs to acquire and deepening relationships. Recently, last year, one of the ways we did this is by launching secured card. This is a really important offering for our customers, and many of them are new to credit or looking to build credit.
Also, many of you may have read this stat in the past, but 80%-90% of secured card customers, when they graduate, they stay with their primary institution. Take even unsecured card. I'm sure many of you may remember the very first card you got in college. People hang on to that. And so as we think about this, the team I referenced earlier, creating a lifelong relationship with the customer, that's what we're focused on. In addition to our secured card offering, you heard Brant reference Caregiver Banking and the focus on dependent care adults. Very soon, we'll be rolling out cards to support Caregiver Banking. Now, let me switch gears and talk about another theme and a pillar of growth. As you remember, a couple of years back, we launched cashback card. It has been really successful. Over two-thirds of our acquisitions come from that value proposition.
From my perspective, this opens up a significant opportunity because there are 10 million prospects within five miles of our branches. There's really three reasons. I'm an ex-consultant. I always talk in three reasons, right? There's three reasons why I believe that this will drive growth. First is the strong value prop. Second, we're among the top two in unaided awareness in our core markets. The third and the most important one, number one in our trust rankings. As we move forward, I expect prospecting will generate over 25% of incremental card balances in the next five years. We also spoke about Brant spoke about our new partnership with Cleveland Browns. We've launched a Cleveland Browns debit card, and that's driving growth. This is a really important organization that we serve and will continue. Examples of these will continue to drive our growth.
So what do I hope to accomplish from all these efforts? Over the next five years, we will double the credit card portfolio, and our credit card business will continue to grow in double digits. Similarly, we are well-positioned to win in treasury management. As you all know, this is a relationship-driven business, and we are focused on segment-specific needs as we deepen relationships with customers. You heard Scott recently talk about verticals. We are building tailored solutions for our commercial clients. We're doing the same for the 350,000+ small business customers that Brant has. You heard him talk about our focus on Practice Finance as an example. Let me give you an example. We recognized a significant opportunity to offer tailored payables and receivable solutions to medical practitioners who want to spend more time caring for their patients versus worrying about ins and outs of payments and banking.
Our offering is integrated into their workflows, and we're seeing great results, so what does this all add up to on treasury management? As a consequence of all these actions, I expect to double our payments product penetration within our small business clients, and if you combine that with faster product development, faster onboarding, all this will translate to double-digit year-on-year fee growth. I'm really confident we can do that based on the early strength we're seeing in our treasury management solutions for business and commercial clients. Now, let me take a moment to walk you through our biggest success last year. As you all know, every business, regardless of size, needs to accept payments, so three months back, in November last year, we launched a new merchant operating model, and let me just highlight a few key changes. Previously, as I said, merchant was referred to a partner.
We brought all the functions in-house, opening up a world of opportunity. As an example, we are now able to select best-in-class merchant-specific solutions and leverage an ecosystem of partnerships when delivering these solutions. Additionally, we have a segmented sales and service model. And as you all know and I've heard, we have leading scores in customer experience and service when you look at Greenwich Surveys. Most importantly, we can now take a relationship-based approach to holistically price for our merchant customers. As we move forward, later this quarter, we will be embedding our merchant solutions into the lending and deposit workflows. This is a prime example of how we'll continue to deepen with our customers. And overall, I expect our merchant business revenue to increase over 4x by 2030. Many of my colleagues spoke about culture in the beginning.
Let me take a moment to highlight how culture drives outcomes in enterprise payments. You can see the themes around innovation, unique customer needs, and relationships translating into a pipeline of new products. But within payments, culture also translates in terms of pace of execution. As an example, standing up a new merchant operating model, any guesses how long it typically takes? 12 to 18 months. Within Huntington, the entire process from contract signature to going live took six months. And this included building, integrating the merchant organization with over 80 people into the organization. And as we did that, we attracted payments talent from 10 different banks and seven processors. On that note, I'd love for you to take 60 seconds and watch a video about our new merchant operating model. You'll hear from two people: Deepak Kapoor, who's our Merchant Services Director. He runs our merchant business.
I made him sit in the center of the room. Second, as you'll hear from Amanda, who's the merchant salesperson. But what you'll see in the video is how culture translates to a differentiated experience for our customers. You'll also see the benefits of taking an integrated view across the entire customer relationship. We're already beginning to see the results of this model launched in November in terms of increased acquisition, deepening, and retention.
From a Huntington perspective, merchant service has been a third-party referral partnership. We used to have their salespeople, their service people, underwriting people manage everything for us. One of the biggest pieces of feedback we received from a customer service perspective is customers knew when they weren't speaking to a Huntington employee. We wanted to make a better client experience. How do we differentiate ourselves? We bring it in-house.
We are having a huddle here at the branch, and basically, I'm introducing myself, but also letting them know how we can work together so that we can really help businesses thrive. This really gives our customers the advantage of my business accounts here, my merchant accounts here, my treasury management products are here. I got my loan from this bank. I, as a customer, have visibility into all of that. This is a deepening opportunity with our hundreds of thousands of business customers and our thousands of commercial customers. We have seen a huge volume of referrals come in, and I'm super excited about the path forward. We're growing, and we want to continue to grow, and so to be able to scale business at the rate that we're growing, this is the time for us to have this division in-house.
I think there's a lot of opportunity for us, for the customer, for the shareholder, for the colleague. It is the right thing to do.
Okay. I was just thinking to myself, I look much better in person than on video, but Deepak, Amanda, thank you so much and excellent work on the integration. Let me now spend a moment to highlight a couple of examples of how we are leveraging innovation and partnerships to not just provide innovative solutions to our customers, but making it easier for them to take advantage of the broader payments and business ecosystem. The first example, right on the small business side, we have a partnership with the small business payments platform, which has pre-built integrations with other parts of the business ecosystem, such as accounting and payroll providers.
Moreover, what's really important is these pre-built integrations are customized to the industry in which these small businesses participate, right? As a business owner, that's a great outcome for me because now I have a unique customized platform to meet my needs, and Huntington is providing this platform to me. This solution is catering to our entire customer base of 350,000 small business customers. And this opens up a significant opportunity for us because we have seen that the revenue from our business payables receivables relationship is over four times that. So we believe we will capture that revenue in the next few years. Scott mentioned his focus on commercial deposit-centric businesses. In the next few months, we'll be launching a customized solution that simplifies payments processing for these clients.
The ability for these customers to integrate not just with us, but their customers using our solution makes it even more powerful and opens up broader banking opportunities for us. We've already introduced this solution to customers. I've been part of the demos, and this has generated a lot of demand and excitement, and this will result in not just a 10% increase in CSG deposits, but it will be a huge driver for Commercial Bank in establishing primacy for their clients. The theme I said earlier, payments powering the entire enterprise, this is an example of that, so let me summarize with a few key messages for you all. First, our growth strategy relies on investing to acquire and deepen relationships as we continue to scale up our payments capabilities. We're continuing to focus on enhancing our product offerings and differentiating with innovative solutions to solve customer needs.
We're ensuring strong execution that capitalizes on the significant investments we have made and are continuing to make. Over the next five years, I foresee significant growth, not just from new initiatives, but also from our core business. In terms of 2030 targets, I expect revenue to grow at 9% CAGR, supported by credit card growth of over 12% CAGR and TM fee income growth of over 10%. I'm really excited about the runway in front of us. I believe we have the talent and expertise to make Huntington an industry-leading payme nts provider. Thank you for your time. With that, give us a moment to set up for the next Q&A.
Thank you, Amit. We'll move to our second Q&A. I'll note there is not another break scheduled.
So if you do need to get up, please do feel free to step out and get a coffee or a drink, but we'll keep it going on the agenda here.
Now that we introduced our comedian, Amit, let me do two more introductions. We've got two directors with us today, Rafael Diaz-Granados. Rafael, why don't you stand up? It's a little dark in here. Ex-GE executive, now very involved in private equity and a host of other activities in the community. One of our outstanding directors, Ken Phelan, next to him. Ken, a Chief Risk Officer at JPM, experienced at JPM Regional Bank, and was the first Chief Risk Officer of the U.S. Treasury. So thank you both for being with us. Okay. Shall we get into it? Where's the energy? Okay. Bill's going to kick us off. All right. Thank you, Bill.
Amit, following up on some of your commentary around the partnerships in particular, historically, we've seen a lot of relationships between banks that own the customer relationship and merchant acquirers who have sort of capabilities in the technology front and can excel there. And maybe could you give a little bit more color on the partnership that you described? Is there kind of like the technological capabilities being provided by the partner? Is that like a white label service where they're kind of in the background and it's HBAN that owns a relationship with the merchant and therefore the ability to grow deposits and volume and all of that that can come from that? How that's different now as a result of this partnership versus historically when Huntington didn't have those capabilities?
Yeah. Thank you, Bill. That's a great question.
Maybe just if you take the operating model in merchant, right? In the past, as we did the referral, our partner did the acquisition, onboarding, processing, servicing, right? That's what they did. What we do now is we're doing the onboarding. They just do the pipes and the processing, if I may call it, but we do the servicing. We're doing all the marketing, right? So essentially, in the past, we had a minority revenue share. Now we have a majority revenue share in that partnership.
Vast majority. We do the underwriting as well. So we've got that customer experience, Bill.
Yeah. And to the point I referenced, Bill, which is we have all the data about our customer. So we're able to now approach the customer in a much more holistic manner.
One thing I would tack on, we have a Ventures function.
Igor Cerc, who's here in the room today, helps to run that under part of my team. And we do a lot of development of partnerships with innovative technology companies. The payments area is ripe for this. And so there's a number of our underlying capabilities around payments that are ultimately provided by partners, which is a great source of, to your point, your earlier question, sort of acceleration at a lower investment level. So we're absolutely capitalizing on that.
Ryan Nash, Goldman Sachs. Lots of banks talk about the ability to lead with treasury management and that being a big part of the overall fee growth. You guys showed 10% growth, which clearly it's a big part of the strategy. So as you benchmark versus peers, do you feel you're getting your fair share across the customer base?
And if not, what is it about the Refresh strategy that you think will allow you to win business at a faster pace versus history?
Scott, why don't you and Amit respond?
So if you ask me if we're getting our fair share of TM or Amit, you might get a different answer because TM's under Amit's world. But what I would say is this: We are intently focused on our relationship planning. 95% of the relationships that we have in the Commercial Bank have a detailed relationship plan, and treasury management and payments is a big part of it. I don't believe we've gotten all that we can. I do believe we've gotten much, much better, and you see that in the results. So my expectation, to be very clear, is that we will continue to drive improvement in that space and in deposits.
We had 17% deposit growth last year. And as you know, a lot of times that comes with the full suite of treasury management. So we're on the way. We're not finished.
Maybe let me just tack on to what Scott added, right? There's probably three levers to think about. One is the reference to relationship planning, robust relationship planning to uncover the customer needs. The second piece is we made huge investments in differentiated vertical-specific solutions. That's really what wows our customers when we go to market with that. And that also opens up then the deepening opportunity with the existing customer base. And what we are doing is we're going to market jointly with both commercial and TM joint to the hip. So when we get that share of wallet, we get both those. So that's really the driver of growth.
Maybe if I could throw a follow-up in there. So Steve, when you were asked earlier about M&A, you said maybe non-bank-oriented acquisitions could be part of the strategy, and when I think about a lot of the success you've talked about with Capstone, as you think about the products that are there, are there areas that you think you can acquire that could sort of help accelerate the fee income growth?
Yes. To be determined. No, we have Zach and Igor along with Amit and Brant and Scott looking at a variety of, whether it's capital markets, payments, or wealth supplements. Those are the three areas of principal focus where we think we have a lot of opportunity, both within the existing base, but then as we continue to grow at a significant level, so that's generally where the focus will be.
We'll go to either Ebrahim and Matt.
I guess a question for Scott. There's this narrative from the non-banks, private credit players in terms of leaning in investment grade, AB asset-based financing. Just talk to us in terms of when you go towards the higher end, are you seeing private credit emerging as a larger competitor? And are you losing deals to them on term structure? Just would love to hear your perspective on how big of a competitive threat they are to the regional bank.
So I want to go back to what Steve said earlier. I'm surprised it's the third question. Let me give you some perspective on what we're seeing in private credit and also talk about how we actually leverage that. So first, through our Capstone channel, we can raise that capital for clients. So if a client wants to operate, and you guys know usually we're seeing this on the margins, right?
Where you're operating at six, seven, eight times leverage. So outside of what we would think of as what we would call our front-end guidance or our comfort level, we can source that capital. And we do that on a best execution basis broadly for clients. In terms of are we seeing disintermediation, our sample size is relatively small at Huntington last year. Ebrahim, it was two. And they were both clients that were operating at one to two times that needed to operate or wanted to operate at a higher degree of leverage. I'd say the important thing there, we lost the credit, right? We weren't going to go and we weren't comfortable underwriting. We retained the deposits, the TM, and the payments. So it's on that margin right now. It's usually towards the outside of our box.
Again, importantly, we can leverage it and we do when our clie nts want to. And they're going to operate the company that way. We can help them source it and we do.
And I guess maybe one follow-up for Amit, the merchant acquiring piece in payments. I don't understand this too well, but all I hear is banks can't compete with the large banks, with the non-banks. So are the partnerships kind of allowing you to bridge that gap where you're aware of a large regional bank where it feels like their payments business has been under pressure? Yeah. How do you address that?
Yeah, this is a great question, Ebrahim. And look, as we set up the merchant operating model, we have almost a dozen partnerships we have set up. Because to me, it's about bringing the best of breed in terms of solutions for our customers.
As you have the relationship, who are the right partners? Because the customer really cares about is the capability, and if Huntington can provide that capability, then I'd say that's the tip of the spear for us to compete, so as Deepak set it up, he's had vast experience working across banks and processors and issuers. We have taken that partnership approach to providing them, and the first thing I said is not having a pure referral model now allows us to provide that full spectrum in terms of choice of solutions. That's what is really exciting our customers. That's what is driving growth. Partnerships include partnerships with merchant gateways, other providers, servicing providers, and so we have created, I hate to use the word spider's web, but it's like a spider's web in terms of an ecosystem that enables us to bring the best solutions to our clients.
There was a question earlier today as well that I would just tack on to link these together about can you compete with fintechs? And it's sort of the same analogous question you just asked. And what I would tell you is the capabilities that we have built through our technology development, which is 4x what it was five years ago, are effectively now replicating those capabilities. It's a bit of an urban legend that we can't compete. Really, the differentiation is people saying they want the service that we're going to provide. And that's really where we're winning. And so I think the proof is in the pudding. That's what's driving these high single- to low double-digit TM growth rates you're seeing. And it's very sustainable out into the future.
It's also just to close it out. There's an agility in the company with this increased investment capacity to be able to respond and do this, whether it's 10 partners on merchant or otherwise. We don't have to be the developer in each area, much like some of the very large banks that you referenced at the outset. We can take the best of. And that's, I think, an advantage over the long term.
Matt O'Connor, Deutsche Bank. Just want to follow up on the plans to double credit card loans in the next five years. Are you looking to bring in new customers or is this only for existing customers? And I did look up your secured card offering and you have to have a checking or bank account, deposit account with you, which seems like a smart strategy.
But how do you think about growing kind of the broader unsecured book over the next several years?
Yeah. Matt, thank you for the question. I'd say there's opportunity across all the areas, right? There's a piece of continuing to establish relationships with our existing. There's a lot of headroom in the existing customer base. There's a lot of headroom with the secured card offering in the existing customer base. I call that low-hanging fruit. And then there's new to the bank customers too. So I'd say we're going to focus on all the areas to drive. And as we looked at it, it's literally the business is firing on all 12 cylinders in those three areas.
I think as we think about the credit quality of that book, you've got good disclosures on the rest of the consumer book in your appendix.
And it's really almost like a super prime as we think about the auto, RV, marine. And is that the targeted customer or are you going down a little bit more in the kind of traditional prime to get that growth?
Matt, it's a really high-quality book. I've run this book for six years now with really predictable, steady loss rates, right? And so we will continue on that trajectory. And we believe that growth can come while maintaining the high quality of the credit book.
Hey, Brian Foran from Truist. Hiring. Can you just speak to obviously some really big wins, team hiring, vertical hiring, the bankers in the new states? The past two years have also been a time when a lot of your competitors were struggling or even disappearing. As the industry kind of stabilizes and improves, what's the current environment for hiring?
Do you have that kind of still differentiated ability to hire at reasonable terms?
Scott, maybe you'll add, Tizu.
We have momentum. We have a tremendous amount of incoming to Huntington because of the strength of the bank and what we were able to do the last few years. So we will continue on. I'll give you an example. Yesterday, there was a bank that exited LevFin and whatnot. I heard about that at 8:00 A.M. I had resumes at 10:00 A.M. that were sent to us. That's something that would not have happened at Huntington multiple years ago. So we have a momentum and we've executed in the markets. And I expect that will continue. I expect we'll continue to add talented people too, right? Once you have the momentum in this business, you want to keep going. You want to keep investing.
And what I would tell you is the talent that we're getting, the people who are interested in our story and our culture. I'm really, really optimistic just this year and next and moving forward about our ability to continue to make those investments and continue to alter the trajectory of the Commercial Bank.
And I'll just add for the businesses where we have hired bankers, we're in very good shape. We're focused on execution, really performing against the business plans that we've built. And then over time, right, continue to add resources to support their revenue growth.
We'll take one more on the session, Steven.
Hi. For Amit, with Washington taking a very friendly attitude towards crypto companies now, it seems like the wheels could be in motion to disrupt the payment industry vis-à-vis stablecoins. Can you be proactive here? I don't know what you're thinking about.
Or are you just going to try and deepen the moats and fight it off as long as you can? Because in five years, we may look back and say, wow, they had the best DVD business in town, but streaming is coming.
So Steve, here's how I'd describe that, right? And great question, thank you. One is we're always going to watch how the regulators and watch the posture and stay abreast of regulation. I think the second thing is when I wake up every day, it's always looking at what are the value pools, what's emerging, and what can I do to drive value for my customers? And so to your question, hey, are we only going to stay with an existing customer base? It's around ensuring I anticipate customer needs. Or do I proactively tap into some of the emerging value pools?
So we actually have a portfolio of opportunities that we look at, work in partnership with Zach's team as we think of the innovation and partnerships. So that's what we're doing every day, right? So I obviously can't give you the specifics of which portfolio and which opportunity, right? But it's actively something we're looking at.
If I tack on to that, just one of the near-term potential applications of that is really leveraging blockchain and smart contracts to affect payments in kind of contractual form. That's something we're looking very carefully at. If you really look right now, are there practical, legitimate uses that businesses are looking at for a lot of stablecoin transactions in our customer set? The answer is typically no. But certainly, the kind of longer-term trajectory is interesting and we're staying very well abreast of it.
Appreciate it all. Thank you.
We'll wrap up this section of the Q&A. Thank you to all of our presenters. And we will welcome up our Chief Risk Officer, Helga Houston.
Good morning. Good morning. It's good to be with all of you today. So as Tim said, I'm Helga Houston. I have been the Chief Risk Officer at Huntington for the past 13 years. Prior to joining Huntington, I spent over 20 years at Bank of America across multiple business lines, including commercial real estate, large corporate, wealth, and consumer. I'm excited to be with you here today to talk about why risk management is a competitive advantage for Huntington. Overall, our risk management key messages have remained consistent since our last Investor Day, which is exemplified by our disciplined execution against an aggregate moderate to low risk appetite. Risk management is deeply embedded into our culture where everyone owns risk.
That shared ownership enables outperformance by bringing our teams together early to ensure alignment between strategy and our aggregate risk appetite. Our focus over the past two years has been on ensuring that our risk talent and processes are commensurate with our size and complexity and are scalable. Within our established risk framework, we drive alignment by actively engaging across three very clear lines of defense with our business segments as our primary risk takers. In terms of colleagues and processes, our efforts to scale have included significant investment in talent, particularly talent with larger bank experience across treasury risk, model risk, technology, and cyber risk management. Additionally, we have been ensuring that we have transparent and repeatable processes, leveraging automation where possible. Risk partnership has also been key to alignment with discussions around our data management strategies and our technology and cyber strategies.
Overall, our credit risk framework and discipline has had proven success over the years, and Brendan will go into that in more detail in just a minute. We've also stayed highly disciplined in compliance, including BSA/AML risk management. Our strong deposit base and diversified funding sources are a strategic advantage. Later in Zach's presentation, you'll see that alignment of strategies resulting in strong capital, liquidity, and interest rate risk management. There is a consistent theme around ensuring that our risk management disciplines are fit for purpose today and scalable for the future. The key takeaway is that risk management is deeply embedded in our culture. We take pride in not being in the headlines for the wrong reasons and continuing to focus on consistent performance against an ingrained risk appetite.
The best way to demonstrate this consistency is through publicly available CCAR data, which shows our top-tier performance in stressed environments throughout the years. Our stress capital buffer was also at the minimum 2.5% coming out of the 2024 cycle. Importantly, we are careful stewards of our allowance for credit losses with consistent top-tier CCAR credit performance and one of the strongest loss coverage ratios versus peers. Now, let me turn it over to Brendan to provide more detail on our credit portfolio and risk management. Brendan.
Thank you, Helga. Good morning, everyone, and thank you, Helga. For those of you who haven't had the opportunity, or I haven't had the opportunity to meet, my name is Brendan Lawler. I'm Chief Credit Officer here at Huntington. I joined the bank approximately six years ago as Deputy Chief Credit Officer for Commercial.
I mean, I've been in my current role for over a year now. Prior to joining Huntington, I worked for 25 years in various roles at KeyBank with a focus in Commercial Banking and credit. There's three key themes I want to highlight for you today about how we manage credit here at Huntington. First, we have a disciplined approach, and it is paired with consistent execution to drive outperformance through economic cycles. Second, we have a diversified portfolio across products and relationships that is built through rigorous client selection and is governed by a sound concentration framework. Lastly, this approach allows us to pursue high-quality growth initiatives within our risk appetite. In the period just after the pandemic, our credit performance was exceptional, and since that time, our charge-offs have normalized as we expected in the low 30 basis points range.
We have been consistently near or within the top quartile of our peer group, demonstrating our outperformance, and we expect this trend to continue as we have recently provided our 2025 charge-off guidance of 25-35 basis points. Since our last Investor Day, the mix of the portfolio has been relatively stable. The split between consumer and commercial, as Steve mentioned earlier, is purposeful to aid in our consistent credit performance. Our consumer portfolio is built around a high-quality customer across all of our products, and the commercial portfolio continues to demonstrate strong charge-off performance because of its balanced and diversified approach. We believe this mix allows us to grow the core successfully, but also provides a foundation for new initiative growth.
From an overall culture perspective with respect to credit, we apply industry and product-level expertise, and we combine it with rigorous client selection so that we are aligned around who is a targeted Huntington customer. Upon that, we bring our disciplined approach with tools such as industry, sponsor, and borrower-level concentration limits to drive diversity throughout the portfolio. And as has been demonstrated by many of my leadership team partners, this approach is not new to Huntington. But what is important is it is also applied consistently across any new initiative we launch. We've demonstrated that this cultural approach leads to positive outcomes with our top-tier, excuse me, consumer and commercial charge-off performance. Let me just share with you a great example of how our proactive approach benefited our commercial real estate portfolio over the last several years.
As most of you are aware, higher interest rates combined with increased remote work and inflationary cost pressures drove a lot of stress across the commercial real estate market. We had a disciplined approach that we brought through our client selection around customers who had demonstrated that they wanted to support, they would have the willingness and the ability to support their investments, and that led us to reduce our core customers from over 5,000 in 2010 down to approximately 500 today. In addition to this, we built a peer-leading reserve coverage ratio against the entire commercial real estate book. We implemented quarterly portfolio reviews where we analyzed both current and projected debt service coverage ratios. This allowed us to make sure that we had good visibility into both current and potential risks.
But what it also did for us is it allowed us to approach our customers proactively and work with them in advance of maturities to reach constructive solutions. The results of this outreach, our customers injected nearly $1 billion of incremental capital into the projects that we finance, and in many cases, fully rightsizing the loan to the current rate environment. This proactive approach was so well received by our customers that we have retained that core group that I just talked about, and we are looking to do more with them. This is just one example of many where I believe our proactive approach drives positive outcomes for both our clients and for Huntington. So in closing, let me quickly just recap those themes for how we manage credit here at Huntington.
First, we have a disciplined approach, and we pair it with consistent execution to drive outperformance through economic cycles. Second, we have built a diversified portfolio through rigorous client selection and governed by a sound concentration framework. And lastly, these enable us to pursue high-quality growth initiatives within our aggregate to moderate low risk appetite. And with that, I'll thank you for your time. I look forward to any questions you may have later. But for now, I'm going to turn it over to our CFO, Zach Wasserman, for a financial review.
Thanks, Brendan.
Thank you, sir.
And good morning, everybody. I'm Zach Wasserman, Chief Financial Officer. I joined Huntington just over five years ago after four years at Visa as CFO of Visa's North American business. And before that, I spent 15 years at American Express in a variety of divisional CFO roles.
I started my career way back when as an investment banker. In my role as CFO here at Huntington, I oversee all financial management functions with a major focus on planning and analysis, balance sheet management, portfolio optimization, and the control environment. I also oversee the strategy function, focusing on strategic planning, mergers and acquisitions. Our corporate ventures activities, as I discussed earlier, focused on fintech partnerships and data and analytics, driving value through machine learning and AI applications. I'm pleased to be with you today to help to wrap up all the content you've heard and illustrate how it comes together for powerful value creation. There are four key messages I want to share with you today. First, our business has significant momentum. We're building on the position of strength we demonstrated in the last two years to drive peer-leading growth. Second, at our core, we're operators.
We have a prioritized strategy and intense focus on execution to deliver top quartile performance. Third, our highly disciplined allocation of investments and capital drives continuous enhancement in the value of the franchise. And fourth, we are well positioned to achieve our financial objectives both in the short run and over the longer term. Our growth model is a system of major elements that work together in concert. It all starts with the compelling strategies you've heard today. The broad portfolio of customer segments we serve each have their own unique needs. We tailor our approach to develop best-in-class products and services to each of them. Our goal is full primary banking relationships that bring loans, deposits, and value-added fee services delivered with consistency and quality that drive lifelong relationships. I will tell you, however, that strategies are not worth much without exceptional execution.
You've heard a lot about our culture today. And one of the most important things that our culture stands for is a focus on execution. Another foundational element of our approach is the way we do financial and balance sheet management. As I will cover in more detail later, we have a systematic focus on re-engineering baseline operating costs to create investment capacity. The ability to fund offensive expense investments and grow them faster over long periods of time than the industry is a key enabler of our competitive success. Another important element is hedging our balance sheet. Over the course of cycles, we accomplish our goals of protecting capital and supporting NIM to drive consistent earnings power. As I noted in my key messages, we have a disciplined process to allocate, one, investments, and two, capital, to the highest value businesses.
We intentionally orient growing allocations to those businesses based on what we believe are the most important drivers of value in banking: a strong and growing return on tangible common equity, a top-quality deposit base, a diversified loan portfolio, a focus on customer segments that bring loans, deposits, and fee revenues, that full banking relationship, exposure to growing revenue and profit pools, and product lines where our expertise and service is differentiated. Lastly, the bedrock under all of it is our aggregate moderate to low risk appetite. This foundational approach to credit, capital, liquidity, and focus on other critical risk management domains ensures that we're always in a position to support our customer throughout cycles. This is the key to building lasting trust. It also positions us to capture opportunities when others are disrupted, just as we demonstrated over the last two years.
Let me expand for a minute on that position of strength that we demonstrated. The operating environment over the past two years was certainly one of the most challenging for the industry since the Great Recession. With the rapid rise in interest rates and the longest period of inverted yield curve on record in modern history, the pressure on balance sheets and margins was significant. Many banks experienced attrition of deposits, both in search of higher rate or for perceived safety. Some banks struggled with reduced capital from negative securities marks and therefore needed to pull back on lending and, as a consequence, put talented bankers on the sidelines. And of course, some struggled with outsized commercial real estate exposures. Throughout it all, Huntington outperformed. And this outperformance put us in a position of strength.
Our securities portfolio was protected with significant hedging, and our strong return on capital supported our ability to fund accelerating high-return loan growth. Our focus on CET1, inclusive AOCI, demonstrates the rigor of our capital management approach. Our liquidity was extraordinarily strong. We have the highest level of insured deposits of any Commercial Bank greater than $100 billion of assets. Our cash and borrowing capacity represent the most coverage of uninsured deposits of any large bank by a wide margin. Additionally, for nearly a decade, we have purposely managed large dollar, more price-sensitive, non-operational commercial deposits off our balance sheet and our liquidity portal, helping us to avoid deposit runoff that others experienced. Throughout the rate cycle, our deposit base demonstrated its stability and quality, and our robust growth in deposits supported core funding. Our credit quality has also been clear.
The disciplined approach to credit through purposeful diversification, client selection, and portfolio management drove well-controlled performance. Just advance the slide, if you would. Technical difficulty here. Okay. We have the lowest percentage of CRE of any large regional bank, and our reserve coverage at the top tier in the peer group provided both protection from credit losses and another form of embedded capital. All of this created a formidable position of strength from which to seize compelling new growth opportunities. As many in the industry pulled back, we leaned in. We invested to drive peer-leading growth. We launched our commercial business into three of the fastest-growing states, and we established eight new specialty banking verticals. We also accelerated development in our key fee businesses. The return from those investments is very visible in our results.
Loan and deposit growth has significantly outperformed peers, and fee performance has been excellent, with fee revenues in 2024 growing at 10% and the mix of fees within total revenues up 2% year-over-year. We enter this year, 2025, with significant momentum. As we've guided, we expect this year to be a year of positive operating leverage. We also expect fee revenue growth to continue at a strong pace and to generate record spread revenue. All of that will come together to drive strong profit growth this year and into 2026 and beyond. Driving revenues higher is our core focus. Last year, we generated just over $7 billion. Over the next three years to 2027, we expect to drive that to $9 billion, a high single-digit compound growth. Our longer-term projections would indicate that by 2030, we can drive that to $11 billion, continuing our robust organic growth path.
We have significant revenue opportunities across our businesses. Consumer and regional banking represents a strong growth opportunity. This is a business that brings a top-quality, granular deposit franchise. It also brings great lending growth opportunities. Our small business division continues to outperform the industry, leveraging our number one SBA loan originator position. Our regional banking teams are executing our local model very well. We expect the same strong performance as we execute our full franchise expansion into North and South Carolina. Our vehicle finance segment is one of our most efficient and optimized businesses, driving growth in high credit quality, secured loans with solid returns. Our home equity business and our growing card business represent additional opportunities. Commercial banking is expected to generate the fastest revenue growth, particularly in the near term, given the momentum that we have in new markets and verticals.
The core commercial business is also performing very well. For example, we've doubled the size of the Distribution Finance business since it came to us in the TCF acquisition in 2021, and it's still ramping. Driving fee revenue growth faster than spread revenues and increasing fees as a percentage of total revenues is a core objective. Our three main fee drivers, payments, wealth management, and capital markets, all have the ability to sustainably grow revenues high single to low double-digit growth rates over time. I want to take a minute and provide more details on the framework we use to continually optimize key value drivers. We leverage our strategic and long-range planning process to assess each of the major business lines on what we believe are the most important drivers of value. Effectively, we are stack-ranking our businesses with the goal of clear-eyed assessment of the highest value creation opportunities.
We work to develop the growth initiatives that would allow us to deploy increasing proportions of investment expense and capital toward the businesses that have the highest value creation opportunities. We call this process the value map, and our goal is to continually shift our mix to the highest value businesses. We assess the businesses on a variety of strategic and financial metrics, strategic factors such as competitive advantage in large growing markets, as well as consistency and resiliency, and financial factors such as return on capital, well-controlled credit, and the degree to which the businesses bring those full banking relationships, inclusive of loans, deposits, and fee-based services. An example of the outcome of this process is illustrated on this slide.
As we deploy the value map, we often look at how our businesses are arrayed, in this case, in a simplified view of expected return on capital and expected risk. As we apply this discipline, we are systematically reallocating capital to businesses with the highest risk-adjusted returns, shifting the mix over time to drive continual improvement and return on tangible common equity, all while remaining within our aggregate moderate to low risk appetite. Shifting gears for a minute, talking about loans, our loans ended 2024 with 56% commercial and 44% consumer exposures, with purposeful diversification across sub-asset classes and even more granular diversification across underlying geographies and industry sectors. As I said, we're entering 2025 with strong growth momentum. Consistent with our guidance, we drove accelerating loan growth throughout 2024, both from our core and new initiatives.
Production and pipelines consistently ramped up throughout last year, and the new initiatives collectively exceeded our business case, growing production in each quarter last year, a trend we expect to continue into this year. We drove lending growth to exit 2024 at nearly 6%, even as we saw CRE paying down at an elevated rate. Our deposit franchise is outstanding and well-diversified. We continue to have the leading percentage of insured deposits and a solid loan-to-deposit ratio. Our strategy, as you've heard, is centered on acquiring and deepening primary bank relationships, resulting in a growing proportion of the deposit base in checking and operating accounts. We view our top-quality deposit base as the foundation of value of the company and a key differentiator. Growing our fee businesses is a core objective. These value-added services provide significant strategic value.
They're integral to our goal of creating primacy, providing critical services and embedding Huntington deeply into our customers' financial lives. They're often the mechanism that we use to deliver the advice and expertise that cements our leading position of trust. They also provide significant financial benefits. These are capital-light revenue streams that drive our top-tier ROTCE. Often, they're also recurring revenue streams that rank high in our value map assessment. As we've discussed, we have three primary areas of fee growth: payments, wealth management, and capital markets. Fundamentally, our opportunity here is about penetrating these services deeply into our customer base and then augmenting that with continual addition of new products and services that increase business with existing customers. We see the opportunity to sustainably grow overall fees at high single digits and continually increase the mix of fees within total revenues.
Switching to NIM, our business was built to generate a top-tier NIM. We're very pleased with the performance of NIM throughout the up cycle, despite an extraordinarily difficult environment. As we've guided, we expect to maintain a stable NIM during 2025 and over the moderate term into 2026 and 2027. As the curve continues to steepen, we would expect NIM to expand toward or above our longer-term averages and maintain top quartile performance within our peer set. Our hedging strategy is designed to protect the bank from the extremes of potential interest rate scenarios, blunting the range of outcomes and supporting both our position of strength and low volatility sustainable earnings power. We have balanced objectives of protecting capital against upside scenarios and protecting NIM against downside scenarios. Our program is rigorous, with modeling of numerous interest rate scenarios across a wide range of outcomes.
Our approach is designed to continually recalibrate our hedge posture to the most likely range of outcomes for the next two to three years. As you can see from the bottom right chart on this slide, we've actively recalibrated our posture over time. Before the start of the up-rate cycle in 2020 and 2021, we began to increase capital protection hedges, given the expectation of rising rates. This strategy worked very well to protect capital and benefit securities yields. As we reached the top of the rate cycle and the most likely trajectory of short-term rates was flat to down, we actively recalibrated. Our business is naturally modestly asset-sensitive and is poised to benefit as the yield curve normalizes. As I mentioned earlier, we believe our model for expense management is a key differentiator.
It all starts with a foundational principle that we want to drive annual positive operating leverage, actively calibrating to hold expense growth less than the growth rate of revenue. Our ability to drive efficiency ratio lower over time is a key lever to drive ROTCE higher. The second key component of our model is what I mentioned earlier. The secret sauce of our financial performance is our ability to systematically create and deploy investment capacity. As we work to create growth revenue initiatives, our most notable binding constraint is the growth rate of investments.
The minimum objective that we have is to grow investments in key revenue-producing categories such as technology development, marketing, and select additions of personnel at least twice the growth rate of overall expenses, allowing us to continually enhance our competitive position and drive outsized profitable revenue growth as we grow that base faster than the overall market. We accomplish this robust generation of investment capacity through the third key element of our expense management model, which is the continual re-engineering of baseline operating costs. Each year, we target to take out approximately 1% of baseline operating costs through a series of programs such as process automation, leveraging business process offshoring, optimizing our branch distribution network, and as we move forward, a very promising area that will drive productivity as we leverage artificial intelligence.
As you can see on this chart, over the past two years, we've executed this program very well, holding down base growth despite higher volumes and the inflationary environment. We've also been able to grow investments even faster than our target long-term growth rate. As we operate in the next several years, I expect this program to continue to support solid growth and investment capacity within our overall expense guidance constraints. A key outcome of our aggregate moderate to low risk appetite is our peer-leading credit performance. Strong asset quality is a hallmark of our franchise. Charge-offs last year, as you heard Brendan say earlier, were 30 basis points, more than a third lower than the peer median. Additionally, our ACL reserve coverage remains robust and well higher than the peer median, providing significant protection.
Our capital priorities are unchanged and are anchored by our top priority to fund high-return organic growth. Our year-end 2024 common equity tier-one ratio was 10.5%, and our adjusted CET1 ratio, inclusive of AOCI, is 8.7%. Our expectation is to drive adjusted CET1 into our target operating range of 9%-10% in the first half of 2025 and continue to drive higher within the range even as lending grows robustly. We're committed to supporting our dividend and have a solid 3.6% dividend yield. Share buybacks remain a component of our expected capital distribution plan over time. As you can see from this slide, over the past five years, we've distributed almost $5 billion to shareholders. As we look out over the next several years, our strong return on tangible common equity and the runoff of AOCI will be a substantial continued support to capital generation.
Driving performance and growth from the core is the foundation of our strategy. However, as we've noted throughout today's presentation, a key part of our growth model is augmenting that core growth with opportunistic expansions. These expansion opportunities can come in different forms, from organic expansions to partnerships to acquisitions. Each of these growth levers provides opportunities to penetrate new markets, bolt on key products or services, expand into new attractive geographies, and add scale to existing businesses. Each has their own role to play, and over time, it's contributed to our growth. What is critical here to create value is to be disciplined, selective, and focused on great execution. Good examples of organic expansions are what we did recently with our commercial launches into North Carolina, South Carolina, and Texas.
By recruiting talented banker teams and backing them with the full power of Huntington, we have built powerful new regions for us in just one year. As we think about these organic expansion opportunities, the keys to us are the ability to hire top experienced talent, our competitive advantage to win in the market, and, of course, the ability to generate a great ROI on the investment. Over time, partnerships have also played a key role for us, and we're focused on accelerating partnership creation to increase that momentum. Our motivation here is accelerating speed to market and leveraging the unique capabilities of a partner to drive meaningful new growth. Terrific examples are the partnerships that support our growing payment capabilities that we discussed with Amit earlier.
Leveraging the capabilities of innovative partners like Payabli and Qolo, we believe that together, we will quickly build a scale leadership position in many areas of payments faster and with greater depth together than we could have done separately. Acquisitions have also played a role for us over time. Over the past 15 years, we've completed two depository bank acquisitions of size and a handful of non-bank acquisitions. The two bank deals were approved and integrated very quickly, with significant value creation. The TCF acquisition in 2021, we believe, was a home run. We were able to deliver almost $500 million of cost savings and capture very meaningful revenue synergies. Capstone, as we noted earlier in 2022, was a great example of a bolt-on acquisition. We're seeing significant growth in advisory fees and synergies with our banking business. The key with acquisitions is to be extremely selective.
We have looked at many different opportunities over time and only elected to move forward with a few of them because we set a very high bar for strategic, financial, and cultural fit. Our core objective will always be to drive the vast majority of our growth organically. Expansion opportunities like these will remain opportunistic and augment organic growth at the margin. Over the medium term, the next three to five years in our baseline economic outlook, we see the core financial goals continuing to be PPNR growth, return on tangible common equity, and the delivery of positive operating leverage. These goals are foundational to the way we run the company, and the levels of performance highlighted here represent sustainable and achievable outcomes. We believe the business model can well support a PPNR growth rate of 6%-9% on average over time.
We do see scenarios where we outperform that range for a specific year, given the timing of likely NIM expansion. On ROTCE, as I noted earlier in my question and answer remark, we're targeting a range of 16%-17% by 2027. As I noted, delivering annual positive operating leverage is a core tenet of our expense management model. We actively calibrate our plans to the economic environment to remain strong and to maximize opportunities that are presented in any environment. Our baseline outlook for the medium term is calibrated to consensus and the current forward interest rate yield curve. In this environment, we see tremendous opportunity to maintain our absolute and relative growth advantage for loans and deposits while also driving strong fee revenue growth. We would expect to continue our capital management approach and ongoing investments fueled by expense re-engineering.
There are numerous other scenarios we study and develop contingent action plans to address. Two examples of these are scenarios where inflation re-emerges and separately a near-term mild recession. In the case of re-emerging inflation, we could see Fed funds again rising with a commensurate slowdown in economic activity. In this scenario, we would emphasize capital protection hedging while selectively growing assets to take advantage of likely market disruption. We would also recalibrate investments to support lower expense growth. In the case of a mild recession, we would direct asset growth to areas of resiliency and prepare for areas of opportunity in the eventual recovery. Hedging activities would emphasize further downside NIM protection. Capital would benefit from accelerated AOCI recapture as rates fell, providing flexibility for other uses, including share repurchases.
Expense management would again be calibrated to the pace of revenue growth with a focus on preserving the most critical areas of investment. Maintaining our strong return on tangible common equity and increasing the level of returns over time is a key objective. Last year, we delivered 15.8%. As I noted, we forecast the next several years in a range of 16%-17% with a rising trajectory through 2027. There are four primary drivers of ROTCE during this time. One is the continued growth of capital, both driving adjusted CET1 into our operating range and increasing levels of tangible common equity. We will benefit from significant AOCI recapture and expect to operate, as I noted before, TCE in a range of 6.5%-7.5%. This will drive a strong continuation of growth in tangible book value per share.
TBV per share, as I noted, has been growing at 7% for the last two years and we'd expect the next three years to be in a growth rate of high single- to low double-digit. Of course, this will represent a modest headwind to ROTCE over that time. However, more than offsetting that will be the three key return enhancement levers that are illustrated on this slide. As I noted, we expect NIM to rise over the next several years toward or above our long-term averages. This will be driven by the inherent benefits of an upward-sloping yield curve. It will also be driven by the ongoing portfolio optimization I discussed earlier that increases risk-adjusted returns and yields. Additionally, our deposit strategies focused on primary bank relationships will drive an increasing mix of our deposit base in checking and operating accounts supporting fundamental funding cost reduction.
Another important lever is our growing capital light fee revenues faster than spread revenue and increasing them within the mix of total revenues. And the expense management model, leveraging ongoing re-engineering to fund both investments and drive positive operating leverage, will also benefit ROTCE. We're extremely pleased with the momentum that we've generated and are confident in the achievement of our strategic and financial goals. Our approach to investing, building powerful businesses in the highest value creation areas with a keen focus on optimizing capital allocation is working. We're leveraging our differentiated market position, our position of trust with a broad set of customer segments, and our culture built on a commitment to service. Our financial and management approach drive that differentiated position, and we're executing. Our teams, as you've heard today, have a passion to achieve and are agile in the face of changing market conditions.
We will continue to demonstrate commitment to our aggregate moderate to low risk profile and drive top quartile performance. With that, I'll pass it back to Steve to conclude our presentation.
Thank you, Zach. Very well done, as usual. Let's get the energy up here a little bit. All right, so we're thrilled to be with you, and you had an opportunity to hear from our experienced management team. I would say experienced and young management team. We've never been better positioned. We shared that with you. You've got a sense of the foundation that we're working from. Now, we have a clear strategy, set of strategies. We're execution-focused. We have a lot of growth opportunities, and we have a confidence as we move forward. So this is truly the best team I've ever worked with, and I hope you have an appreciation for that.
Now, we have more of our colleagues also in the room for those of you who are going to stay with us for lunch, so I hope you'll spend time with them. Five points. Colleagues set the culture. The culture and the operating model with local orientation, it's a winner, and we're proving that. We have a scaled and diversified franchise. You got a sense of that from this morning, and we've got a lot of opportunities in many of these businesses. We have multiple revenue growth levers, both regionally and nationally in these businesses, and we're going to execute plans that are established. We're coming at this from a position of strength. We believe our risk management is very sound, maybe the best in the industry, maybe the best in the industry.
And we're focused on driving and disciplined in doing that, the growth over the next number of years. We've got a powerhouse consumer bank, Commercial Banks coming up, and we're very excited by what is going on in payments. So this people-first, customer-centered bank, the customer centricity, the question earlier, everybody talks about culture and customer-centered. Nobody did what we did in 2010 and maintained it. Nobody. I remember being in the IR day at that point. When we said we were doing Fair Play Banking and 24-Hour Grace, you could have heard a pin drop. In fact, the first question was, "You guys are crazy." Wasn't quite that blunt, but that set this foundation. That charted the course for us, and we've been on it ever since. We're going to invest continuing in the opportunities in the business, and we believe we've got a series of those.
We talked about those in each of the business lines, but especially focused on these fee businesses and the opportunities before us. We believe we are well positioned to execute for top quartile performance and value creation. You got a little bit of insight on the value map today from Zach. There's a lot of work that goes into that. Most importantly, we've got a management team you can count on, and frankly, they're going to be in place for a long time. We've got a younger management team, mid-40s to mid-early 50s, maybe one or two exceptions, so unlike most banks and frankly, most companies, we're top 10 shareholders. We are totally aligned. We mess up somehow. We feel it. I think that enhances the execution. I think it's powerful in that alignment. We hope we've given you this conviction today, so you'll join us.
With that, I'm going to invite the leadership team up. We'll do a quick Q&A because we know you've been in these seats for a while. Thank you very much for joining us. Come on up. Okay, let's go, Tim. Come on, come on, come on, come on. Quit stalling. Go ahead. Manan, what's on your mind? Let's go, Mike.
Thank you. Zach, question for you. With the $9 billion of revenues in 2027 and then eventually $11 billion of revenues, what kind of balance sheet size do you need to get there? And then as a follow-up to that, are there any investments you need to make as you get closer to that $250 billion mark? And would you perhaps accelerate some of those investments if you want to remain opportunistic for any acquisition opportunities that come up?
Thanks, Manan. Great questions, both of them.
And so just addressing your first question in terms of the balance sheet growth that we're expecting, I mentioned high single digits revenue growth. We talked about fee revenues likewise growing at high single digits and that fees would be growing faster than spread. So I'm expecting the balance sheet to grow at mid to kind of low, mid-high growth rates if that helps you. I'm not going to be more specific than that. Clearly, it's a multi-year timeframe, but we expect solid continued growth in loans. Typically, our expectation is to grow the balance sheet at around two times GDP. Obviously, we're adding new growth initiatives that help to augment that growth.
Likewise, I would just note that our general expectation is we will grow deposits at a pretty similar rate as loans, core funding, and really leveraging the power of the franchise that is a powerful deposit gathering engine, even as much as it is as a loan engine. We've made significant investments in capabilities this year. We talked a lot as we entered 2024 that we wanted to take advantage of the learnings from the lessons of 2023 and invest in data and automation capabilities to really enhance the fundamental strength of the firm in terms of real-time understanding of where our liquidity was, where our capital was, and what's happening in our business and what our customers are doing. That helps us not only achieve readiness for our current category, but the future. So we'll be well ready by the time we cross that, whenever that occurs.
Next question, John. We passed out some mics for this.
Jon Arfstrom, RBC. Steve, you walked into this one. How long do you want to do this?
You have more energy than you need. My two bosses in front of you. Have you been comparing notes? I love what I'm doing. I love what I'm doing. I feel privileged to do it, but I have been doing it for a while, and it's important that our board makes with me appropriate arrangements for an orderly transition in due course. That's not going to be in the next couple of years, but in due course, it will happen, and we have a great team, a deep team, incredibly talented colleagues, and so when it's appropriate, we'll share the information. Thank you, Jon.
Yep, I hope to see you up here in 2030.
Me too, but it's not likely, but me too.
Just one more. This came up a little bit on the call, but maybe for Scott. What are you seeing in pipelines and commercial activity? It's three weeks since the call, but what are you seeing?
It's actually really constructive for us still. Some of what we had was, believe it or not, things we missed in last quarter, which was a record quarter of production. I expect the first quarter to be very good as well. I would say overall sentiment is cautiously optimistic to optimistic, and you just really have to believe with all the headline risks that there'll be more good than bad, and I think that's how our clients are approaching it. We're looking at enhanced CapEx this year. We're the sixth largest Equipment Finance company. ELFA, which is equipment leasing forecast, is almost 5%.
So John will have leverage to that as well, and we're seeing some of that pull through. So we continue to be optimistic in our ability to drive loan growth. We say GDP times two, and I think about that as our core. And then I think about the new initiatives, right? They're still on an upward slope for quite a while, and we don't have a lot of attrition there. So generally speaking, what we're putting on there is just a contribution to balances in our growth. So we continue to be constructive. We continue to be optimistic, but we continue to be vigilant. There's still a lot that's going on around us, and if things were to change, we will adjust accordingly and appropriately. Appreciate it.
But we're positive on the outlook, and from what we saw in January, there's no reason not to be positive going forward.
Thank you.
I just wanted to follow up on that, Scott. So more good versus bad, but in an environment where tariffs are imposed, just talk to us in terms of your visibility from a risk management perspective around your clientele that would be impacted because input costs are going up. Just is it easy to assess that risk? Yeah.
Ebrahim, say that again. I didn't hear you.
It's a tariff risk as to clients.
So we've done a lot of work on that. It's difficult to understand exactly where it could come from, but we have. So things like our auto book, for instance, which is a little under $2 billion with Tier 1 single source suppliers of critical parts, right? We've done a lot of analysis on the book to assess that.
I think ultimately with tariffs, what will actually be the determinant is where they actually end up, at what level, and how long if they come. But you can rest assured us, we're thinking about our book, and we're thinking about where we want to add balances. We're certainly taking into account what the horizon might look like. I would tell you, Ebrahim, from what we've put on so far, and you see it in our credit performance being very consistent, we're very comfortable with what we're putting on as far as the risk-reward and the long-term performance. We all understand it's critically important that the vintage of loans, especially in new initiatives, seasons well. And I'm very confident that's what's going to happen.
And we've seen the movie before.
We sure have.
Right? We've all seen it before.
Hope fully, part two is better.
Just one quick follow-up for you, Zach. If the Fed stays on pause for the rest of the year, at what point do deposit costs stabilize? Just talk to us in terms of.
We saw the Q4 performance for NIM obviously be very strong. The teams executed the down-beta plan very well. And our expectation was to continue to drive down funding costs in the first quarter, even though the expectation was sort of pause here, likely no cut until at least the middle of the year. And so I think we do still have room to come down. I think it's still a process into the first half of the year, Ebrahim. Obviously, what happens with deposit costs and funding costs thereafter is both a function of what the Fed does, but also what the expectation for what they will do.
And so we'll have to see how things play out in terms of what the market expectations are and how the economy is performing. But I do think there's good opportunity. We discussed in the January earnings call that we think we can deliver on that stable NIM irrespective of whether there is a reduction from the Fed, either zero down to a couple or even three. So we'll see, but I think there's still some more room to go for sure.
David L ong from Raymond James. Steve and team, this has been great. You guys are very optimistic about 2024, the near term, the medium term. You put out some very nice targets for 2027. If we get back here in two to three years and we don't achieve some of the targets that you put out there, what will have caused that?
I guess my question is, what are the biggest risks to achieving your 2027 targets that have been put out there?
Well, I'm going to take it first. Helga, respond as well. There's a lot of geopolitical tension. So put that aside. Can't do anything about that. The rest of it, I think, generally falls back to us. If we miss on something, did we overweight somewhere else? If we get a breakaway opportunity in wealth, we will take that. We will exceed that. That may mean we don't push as hard somewhere else. So we're capital optimizing as we go. But as we sit here today, we expect to fully achieve across the board. And it will take something extraordinary. If there's a massive stock market correction, it could impact wealth and the objectives. And that would just push it out a couple of years from my perspective.
Most of what we're talking about executing, we've put a lot of investment in the last year and a half. These we don't need, we've got foundation. You'll need incremental support as we get to next growth levels, but we don't need to do foundational things. What Amit talked about, a lot of that's in or going in this year. It's not a 2026 deliverable. Now, we'll find more opportunity and we'll continue to invest, but we're giving you what we think is a very realistic orientation for the next few years. And we would expect to deliver it, right?
Absolutely.
Okay, good.
Hi, John Pancari Evercore. I'm sorry to bring it back to acquisitions, but if I could bring it back to.
I know we're wrapping up. Got to do it one more time, John.
Right. And I hear you that you've been extremely selective.
You have a very high bar, as Zach noted. And you've also noted, though, that TCF was a home run deal. How do you view acceptable guardrails in terms of deal metrics? If you were to consider a whole bank deal in terms of what's an acceptable level of book dilution, earnback of that book value, EPS implications, just if you could help us and how you think about it if you were to evaluate something.
Yeah, I'll be happy to have Zach answer that question. Thanks, John.
You're serious. Okay. All right.
I did the first one. You could do the second.
I thought that was a joke. Look, there are no cut-and-dried rules other than we want to make sure that we are going to add value, that there's a strong IRR, that there's a great financial return ultimately. And importantly, it's not about financial.
It's also strategic, cultural. I mean, really, I think we're getting too fixated on this, to be honest. The focus is organic growth. We know that. Acquisitions are opportunistic at best. And we'll see if something is truly extraordinary that meets those hurdles. Strategically, it's in a great growth market or there's terrific products or capabilities that it adds. If the culture is a terrific fit, if the financials are great, then perhaps. But the focus is organic growth.
Guys are obviously optimistic next few years. The revenue, high single digits, is a high hurdle here. If it looks like that's going to be challenging and you need to tighten up on costs, you've got those squares that you showed us, some of the different how you'd react to different environments.
But I'm curious, from an expense point of view, is this Steve and Zach, are you guys going to your team saying, "You got to find 5% to cut?" Or is it the team saying, "Hey, this is what we found. We've got some of these options already laid out." How do you guys think about that, creating that flexibility if you need it?
Well, as Zach alluded to, we're trying to drive the core down so we can invest in growth initiatives. We've been doing this for a number of years now. We'll continue on that. We do have an expense roadmap of the core of where we're focused to continue to drive that for the next number of years. And if for some reason the revenue doesn't materialize and we need to do more than that, we will do it. We're committed to positive operating leverage.
And if I could just add one thing to it, as a business leader, I know Scott, Amit, others would say this. I mean, we feel it's our responsibility to find that. And so our teams all know that in order to create the investment capacity to grow the revenue at the rates that you just described, that we have to be diligent in viewing our business and how we can do it more effectively. So our businesses and the leaders that are standing on this stage all have to be responsible for clearly and critically examining how we do things and finding ways to be better. I'll just tack on one thing.
That investment pool of technology development, not run the bank, but true development of technology, marketing, and additions of personnel that are adding to these growth initiatives, as a percentage of the expense base is double where it is today than it was five years ago. It went from being kind of average to well above average for a large regional bank. It is the reason why we're being so competitively successful. Those charts that show significant outperformance on loans, deposits, sustainable fee revenue growth, that's the outcome that you get when you generate that powerful investment capacity. So we're all aligned on that. I think you can see this team as a very strong teamwork quotient, and we know we've got to drive efficiency, and there's plenty of ways to keep doing it. It's a very sustainable model that we'll drive over time.
I guess Scott from Piper Sandler. I guess, Steve, when you think about sort of the cost base, just sort of tack on a little. I guess this will be sort of the third year of an elevated base of spending. And I don't think there's any debate on the balance sheet growth, the revenue momentum that you all have had, which is about the best out there. But in a sense, if we were to take a look at the profitability a couple of years ago, where it's expected to go over the next couple of years, not necessarily much change. So is there a point where the investment cycle sort of does abate a little and we could flip to sort of the post-investment profitability being significantly better than where you were before this all started?
Or are we more concerned with growth rather than just the profitability improvement?
Well, we've got 6%-9% PPNR in the plan, CAGR. So we do expect to drive incremental profitability along the way. But you'll see as these investments mature, the expense front load of the base and the revenue growth will separate, and we'll see higher and higher returns. That's why Zach was suggesting from the 15%+ return on tangible, we'll move it into 16% and 17%. It will gradually step up. We would expect to move beyond that, but we're only giving you the 2027 outlook. And part of that's because we do believe we've got a momentum and we should continue to invest. It's easy to stop it and to harvest in the near term. This is hard to do, hard to build this kind of momentum.
We've got it, and we're going to play a revenue game. If we don't get the revenue, we will pull the expenses back. We'll pull it as hard as we have to in order to achieve the outcome. But over time, this is going to create further separation, I think, in terms of growth and returns. And our priority will be returns than growth over time. Zach, anything you want to add?
Look, I think Steve said it well. I mean, the 6%-9% growth in PPNR is the same as our historical goals. And I think we'll continue to be the model that it's a very sustainable way for us to drive ultimately EPS north of that and to generate TSR both with EPS and with our dividend. And so it's a very sustainable model.
The way I think about it, Scott, is of that 6%-9% PPNR, we want about three quarters of it to come from revenue growth and about one quarter to come from operating leverage. That's a great model for us to enable us to continue to drive investment, continue to drive that outsized competitive position, and have a very sustainable long-term track of revenue growth. We talked about it, and it was very intentional in my slide showing 9% for 2027, $9 billion, I'm sorry, of revenue for 2027, but then $11 billion for 2030. This business has a lot of room to grow in terms of market share gain and competitive position that we're adding. So that model, we think, is very sustainable to drive that outcome and ultimately bring it back to TSR, which we're laser-focused as a top 10 shareholder on driving total shareholder return.
We want to hit that level, and I think all that model hangs together to do that. Take one more.