HBANZ — Huntington Bancshares Incorporated

Summary of Huntington Bancshares 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: 11% for the full year, with a strong performance in Q4.
• Loan Growth: Average loans increased by 14.4% year-over-year, with organic loan growth of $10.1 billion, exceeding the $9.5 billion from the Veritex partnership.
• Deposit Growth: Average deposits rose 5.1% quarter-over-quarter and 8.6% year-over-year.
• Net Interest Income (NII): Grew by 5.6% sequentially and 14% year-over-year, with a net interest margin of 3.15%.
• Operating Expenses: Core expenses increased by just $7 million sequentially, reflecting disciplined cost management.

2. Strategic Updates and Business Highlights

• Huntington is focused on becoming a leading customer-centered bank, expanding its presence to 21 states.
• Significant investments in branch expansions in North and South Carolina and Texas, along with new commercial verticals.
• Successful integration of Veritex, with systems integration completed efficiently, and Cadence integration expected to follow suit.
• Strong growth in primary bank relationships: 4% in consumer banking and 7% in business banking year-over-year.
• Continued emphasis on enhancing digital capabilities and fintech solutions to improve customer experience and drive fee revenue growth.

3. Forward Guidance and Outlook

• For 2026, Huntington expects:
  • NII Growth: 10% to 13% on a stand-alone basis.
  • Loan Growth: 11% to 12%, with deposits expected to grow at a similar pace.
  • Fee Revenue Growth: Anticipated between 13% to 16%, bolstered by contributions from new capital markets teams and the Cadence partnership.
  • Operating Expenses: Expected to grow by 10% to 11%, with a target of 150 to 200 basis points of operating leverage.
  • Net Charge-Offs: Projected to be in the range of 25 to 35 basis points.

4. Bad News, Challenges, or Points of Concern

• Credit Quality: While net charge-offs are low at 24 basis points, the criticized asset ratio rose to 4.2%, primarily due to Veritex's commercial real estate loans.
• Competitive Environment: The deposit environment remains competitive, which may impact future deposit growth and pricing strategies.
• Expense Management: Some analysts expressed concerns about the clarity of expense guidance and the potential for higher-than-expected expenses due to ongoing investments and acquisitions.

5. Notable Q&A Insights

• Management emphasized the importance of a partnership approach in integrating Veritex and Cadence, which has facilitated quicker decision-making and synergy realization.
• Analysts sought clarification on expense trajectories, with management indicating a focus on maintaining positive operating leverage while continuing to invest in growth.
• The potential for future M&A was discussed, with management stating that any future deals would need to be strategic and value-adding, with a focus on organic growth as the primary objective.
• There was a consensus on maintaining a disciplined approach to managing costs while investing in technology and digital capabilities to enhance customer acquisition and service delivery.

Overall, Huntington Bancshares reported strong financial results for Q4 2025, with a positive outlook for 2026 driven by strategic investments and successful integrations, despite some concerns regarding credit quality and competitive pressures.