HBANP — Huntington Bancshares Incorporated

Summary of Huntington Bancshares Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted PPNR: Increased by 12% quarter-over-quarter.
• Net Interest Income (NII): Rose 8.5% sequentially to $2.1 billion.
• Value-Added Fee Revenues: Increased by 15% year-over-year, with organic growth of approximately 30%.
• Loan Growth: Average loans increased by 8.6% sequentially, with a normalized organic growth of 1.2%.
• Deposit Growth: Average deposits rose 9.2% sequentially, with organic growth of 1.8%.
• Return on Tangible Common Equity (ROTCE): Adjusted ROTCE was 17.5% for 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 within 235 days, which included onboarding 4,500 colleagues and hundreds of thousands of customers.
• Focus on organic growth and expanding capabilities across the Cadence footprint, particularly in Texas and the South, which are seen as key growth markets.
• Strong performance in fee-generating segments such as payments, wealth management, and capital markets, contributing to overall revenue growth.
• Recognition of Huntington's culture and customer service through multiple awards, enhancing brand reputation.

3. Forward Guidance and Outlook

• NII Outlook: Expected to be at the low end or slightly below the guidance range due to competitive pressures on deposit costs.
• Anticipation of continued loan and deposit growth in the second half of 2026, with expectations for high single-digit to low double-digit growth in fee revenues.
• Projected EPS growth of approximately 30% from 2025 levels, targeting $1.90-$1.93 per share by 2027.
• Confidence in achieving $435 million in annualized run rate cost synergies by Q4 2026.

4. Bad News, Challenges, or Points of Concern

• Pressure on NII: The guidance for NII has been adjusted downward due to rising deposit costs and competitive pressures, leading to concerns about future profitability.
• Loan Growth Moderation: Some headwinds in loan growth, particularly in the auto lending sector, where volume was intentionally reduced due to lower returns.
• Credit Performance: While overall credit performance remains strong, non-performing assets (NPAs) are elevated due to government-guaranteed loans and some downgrades in commercial credits.
• Market Competition: The competitive landscape for deposits is intensifying, which may affect margins and overall profitability.

5. Notable Q&A Insights

• Management expressed confidence in their ability to navigate competitive pressures and optimize their deposit base post-Cadence conversion.
• Concerns were raised about the stock's performance in light of the adjusted NII outlook, with analysts seeking clarity on the drivers of this change.
• Management emphasized their commitment to maintaining high return levels and managing expenses effectively, with a focus on organic growth and synergy realization.
• The Q&A highlighted the importance of Texas as a growth market, with significant investments leading to substantial deposit and loan growth in the region.

Overall, Huntington Bancshares reported a strong quarter with solid growth metrics and strategic advancements, despite facing challenges related to NII guidance and competitive pressures. The company remains optimistic about its growth trajectory and operational efficiency moving forward.