HBANM — Huntington Bancshares Incorporated

Summary of Huntington Bancshares (HBANM) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Reported at $0.30; adjusted EPS was $0.37, reflecting a 9% year-over-year increase.
• Revenue Growth: Achieved 11% revenue growth for the year.
• Adjusted EPS Growth: 16% growth year-over-year.
• Loan Growth: Average loans grew 14.4% year-over-year, with organic loan growth of $10.1 billion.
• 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, showing cost discipline.
• Credit Quality: Net charge-offs at 24 basis points; criticized asset ratio at 4.2%.

2. Strategic Updates and Business Highlights

• Huntington is focusing on becoming a leading customer-centric bank, expanding its presence to 21 states.
• Successful integration of Veritex and Cadence partnerships, with Veritex fully integrated within 187 days.
• Continued investments in branch expansion, particularly in North and South Carolina, and Texas.
• Enhanced capabilities in financial advisory and capital markets through acquisitions of TM Capital and Janney Capital Markets.
• Strong performance in primary bank relationships, with consumer banking up 4% and business banking up 7% year-over-year.

3. Forward Guidance and Outlook

• 2026 Guidance:
  • NII growth projected at 10% to 13%, with loan growth of 11% to 12% and deposit growth of 8% to 9%.
  • Fee revenue expected to grow between 13% to 16%, aided by new capital markets teams and existing core services.
  • Core expenses anticipated to increase by 10% to 11%, with expected operating leverage of 150 to 200 basis points.
  • Net charge-offs projected between 25 to 35 basis points.
  • Confidence in achieving a 55% efficiency ratio for 2026.

4. Bad News, Challenges, or Points of Concern

• Credit Quality: While credit metrics remain stable, the criticized asset ratio has increased, primarily due to Veritex's commercial real estate loans.
• Competitive Environment: The deposit environment remains competitive, which may pressure margins.
• Integration Risks: The success of the partnerships with Veritex and Cadence hinges on effective integration and realization of synergies, which are critical for achieving projected growth.

5. Notable Q&A Insights

• Management emphasized the importance of a partnership approach in integrating new banks, which has fostered goodwill and accelerated decision-making.
• There was a focus on maintaining positive operating leverage while continuing to invest in growth, particularly in technology and digital capabilities.
• The guidance provided for expenses and revenues did not fully incorporate expected revenue synergies from the acquisitions, indicating potential upside.
• Management expressed confidence in achieving long-term earnings targets, including a pro forma EPS of $2 by 2027, despite current integration challenges.

Overall, Huntington Bancshares reported strong financial performance in Q4 2025, driven by organic growth and strategic partnerships, while also outlining a positive outlook for 2026 amidst some integration and competitive challenges.