HBAN — Huntington Bancshares Incorporated

Summary of Huntington Bancshares Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted PPNR: Increased 12% quarter-over-quarter.
• Net Interest Income (NII): Up 8.5% sequentially to $2.1 billion.
• Value-Added Fee Revenues: Grew 15%, with organic growth of approximately 30% year-over-year.
• Loan Growth: Average loans increased by $15 billion (8.6% sequentially), with normalized organic growth of $2.2 billion (1.2%).
• Deposit Growth: Average deposits rose by $18.8 billion (9.2% sequentially), with normalized organic growth of $4 billion (1.8%).
• Return on Tangible Common Equity (ROTCE): Adjusted ROTCE was 17.5% in Q2, with a target of 18%-19% by 2027.
• Tangible Book Value Growth: Continued growth at a high single-digit to low double-digit pace.

2. Strategic Updates and Business Highlights

• Successful completion of the Cadence systems conversion, which was completed 235 days post-announcement, enabling a focus on growth.
• Expansion into Texas and the South is viewed as a significant growth opportunity, with a strong pipeline in energy, commercial real estate, and auto floorplan businesses.
• The company is leveraging its enhanced capabilities in payments, wealth management, and capital markets, which are contributing to strong fee revenue growth.
• The integration of new colleagues and systems has been smooth, with a focus on enhancing customer relationships and deepening primary banking relationships.

3. Forward Guidance and Outlook

• The company expects continued loan and deposit growth, with a strong pipeline supporting this outlook.
• NII is anticipated to be at the low end or slightly below the guidance range due to competitive pressures on deposit costs and a changing interest rate environment.
• The fourth quarter is expected to be the strongest, driven by cost synergies from the Cadence integration and ongoing revenue growth.
• The company aims for EPS growth of approximately 30% from 2025 levels, targeting $1.90-$1.93 per share in 2027.

4. Bad News, Challenges, or Points of Concern

• Deposit Costs: Increased competitive pressures on deposit pricing are anticipated, which may impact NII.
• Loan Growth: Some headwinds in commercial real estate and auto lending due to a focus on maintaining return thresholds, leading to moderated growth.
• Interest Rate Environment: The outlook has shifted from expecting rate cuts to potential rate hikes, which adds uncertainty to NII projections.
• Market Reaction: The stock opened down 5% post-announcement, indicating market concerns regarding the revised NII outlook.

5. Notable Q&A Insights

• Management expressed confidence in achieving revenue growth despite pressures on NII, citing strong loan and fee growth as key drivers.
• The competitive landscape for deposits remains challenging, but management believes they can optimize their deposit base effectively.
• The conversation highlighted the importance of maintaining return thresholds, particularly in the auto lending segment, which has seen reduced volumes.
• Management reiterated their commitment to disciplined expense management and synergy realization, with a focus on achieving their financial targets for 2027.

Overall, Huntington Bancshares reported a solid quarter with strong growth metrics, but faces challenges related to deposit costs and loan growth moderation, which could impact future earnings.