HBANM — Huntington Bancshares Incorporated

Summary of Huntington Bancshares Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Earnings Performance: Adjusted Pre-Provision Net Revenue (PPNR) increased by 12% quarter-over-quarter.
• Net Interest Income (NII): Rose by 8.5% sequentially to $2.1 billion. However, guidance for NII was adjusted to the low end or slightly below due to rising deposit costs.
• Loan Growth: Average loans increased by $15 billion (8.6% sequentially), with organic growth normalizing to $2.2 billion (1.2%).
• Deposit Growth: Average deposits grew by $18.8 billion (9.2% sequentially), with organic growth of $4 billion (1.8%).
• Return Metrics: Adjusted Return on Tangible Common Equity (ROTCE) was 17.5%, with a target of 18%-19% by 2027.
• Tangible Book Value: Continued growth, with a year-to-date share repurchase of $310 million out of a planned $550 million for 2026.

2. Strategic Updates and Business Highlights

• Cadence Systems Conversion: Successfully completed, allowing for enhanced operational efficiency and customer engagement. Deposits grew during the conversion period.
• Market Expansion: Focus on Texas and the South as key growth areas, with significant increases in deposits and loans in these regions.
• Awards and Recognition: Received multiple accolades, including recognition for digital banking and customer satisfaction.
• Revenue Synergies: On track to achieve $365 million in cost synergies from the Cadence merger by Q4.

3. Forward Guidance and Outlook

• Revenue Growth: Anticipated continued high revenue growth, with expectations for strong loan and deposit growth in the second half of 2026.
• NII Outlook: Expected to be at the low end of the range or slightly below due to competitive pressures on deposit costs.
• EPS Target for 2027: Projected earnings per share of $1.90-$1.93, driven by strong organic growth, expanding fee income, and synergy realization.
• Expense Management: Targeting $435 million in annualized run rate cost synergies by Q4, with a core efficiency ratio aimed in the mid to low 54% range.

4. Bad News, Challenges, or Points of Concern

• NII Guidance Adjustment: The outlook for NII was lowered due to increased deposit costs and competitive pressures, which affected market sentiment.
• Loan Growth Moderation: Some headwinds in loan growth, particularly in the auto sector, where volumes were intentionally reduced due to lower returns.
• Credit Performance: While overall credit metrics remain strong, there are concerns about elevated non-performing assets (NPAs) and the potential impact of economic conditions on credit quality.

5. Notable Q&A Insights

• Market Competition: Executives acknowledged competitive pressures on deposit pricing but emphasized their ability to optimize the deposit base post-conversion.
• Confidence in Growth: Management expressed confidence in achieving their financial targets despite the adjustments in guidance, citing strong pipelines and ongoing investments in core businesses.
• Future Loan Growth: Management noted that loan growth is expected to accelerate in the second half of the year, traditionally their strongest period, with a focus on maintaining a balance between volume and return on assets.
• Fee Income Growth: Strong performance in fee income was highlighted, with expectations for continued double-digit growth driven by investments in payments, wealth management, and capital markets.

Overall, Huntington Bancshares reported a solid quarter with strong operational execution and strategic advancements, although faced with some challenges related to NII guidance and competitive pressures. The outlook remains positive, with a focus on growth and efficiency in the coming quarters.