HBANL — Huntington Bancshares Incorporated

Summary of Huntington Bancshares (HBANL) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Reported at $0.30; adjusted EPS (excluding acquisition-related expenses) was $0.37, a 9% increase year-over-year.
• Revenue Growth: 11% increase for the full year 2025.
• Loan Growth: Average loans grew 14.4% year-over-year, with organic growth of $10.1 billion, exceeding the $9.5 billion from the Veritex partnership.
• Deposit Growth: Average deposits increased 5.1% quarter-over-quarter and 8.6% year-over-year.
• Net Interest Income (NII): Grew by $86 million (5.6% sequentially) and 14% year-over-year, with a net interest margin of 3.15%.
• Operating Expenses: Core expenses increased by only $7 million sequentially, reflecting disciplined cost management.
• Credit Quality: Net charge-offs at 24 basis points, with a criticized asset ratio of 4.2%.

2. Strategic Updates and Business Highlights

• Huntington is focused on becoming a leading customer-centered bank, expanding its presence to 21 states, particularly in fast-growing regions.
• Strategic investments included branch expansions in North and South Carolina and middle-market banking in Texas.
• Partnerships with Veritex and Cadence are progressing well, with Veritex integration completed efficiently and Cadence expected to close soon.
• The bank is enhancing its capabilities through acquisitions, including TM Capital and Janney Capital Markets, to bolster financial advisory and capital markets services.

3. Forward Guidance and Outlook

• 2026 Guidance:
  • NII growth expected between 10% to 13%.
  • Loan growth anticipated at 11% to 12%, with deposit growth of 8% to 9%.
  • Fee revenue growth projected at 13% to 16%, bolstered by new capital markets teams and existing growth in payments and wealth management.
  • Core expenses expected to grow by 10% to 11%, with a targeted operating leverage of 150 to 200 basis points.
  • Net charge-offs projected between 25 to 35 basis points.

4. Bad News, Challenges, or Points of Concern

• Credit Quality Risks: The criticized asset ratio increased due to Veritex's commercial real estate loans, which could pose future risks.
• Competitive Pressures: The deposit environment remains competitive, and managing down beta effectively is crucial amid potential rate cuts.
• Integration Challenges: While the integration of Veritex is complete, the upcoming integration of Cadence presents operational risks and requires careful management to realize synergies.

5. Notable Q&A Insights

• Expense Guidance Clarification: Management provided clarity on expense growth, indicating that the baseline for core expenses is approximately $4.87 billion, with growth driven by both cost savings and reinvestments.
• Partnership Approach: The management emphasized the collaborative nature of their partnerships with Veritex and Cadence, which has facilitated quicker decision-making and integration, enhancing revenue and cost synergies.
• Future M&A Potential: While management is focused on organic growth, they remain open to strategic acquisitions that align with their growth objectives, though they will avoid auctions or mergers of equals.
• Investment in Technology: Significant investments in digital capabilities, including AI, are planned to enhance customer experience and operational efficiency, with a sustained investment growth rate of around 20%.

Overall, Huntington Bancshares showcased strong financial performance in Q4 2025, with a positive outlook for 2026, while also acknowledging the challenges and risks associated with credit quality and competitive pressures.