HBANZ — Huntington Bancshares Incorporated

Summary of Huntington Bancshares Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Reported at $0.25; adjusted EPS was $0.37, reflecting a 9% year-over-year growth.
• Pre-Provision Net Revenue (PPNR): Increased by 36% on an adjusted basis.
• Tangible Book Value: Grew by 9%.
• Return on Tangible Common Equity (ROTCE): Achieved 16% to 17% range, with a target increase to 18% to 19% by 2027.
• Net Interest Income: Increased by 18.7% sequentially and 33% year-over-year, with a net interest margin of 3.24%.
• Loan Growth: Excluding acquisitions, loan balances rose by 1.5% or $2.2 billion.
• Deposit Growth: Core deposits increased by $3.8 billion or 2.3% quarter-over-quarter.

2. Strategic Updates and Business Highlights

• Huntington's diversified super-regional bank model is performing well, supported by strong capital and liquidity.
• Successful integration of recent acquisitions (Cadence and Veritex) is on track, with Veritex fully integrated and Cadence's systems migration expected in June.
• Record performance in capital markets, with significant contributions from fee-based services, particularly in payments and wealth management.
• The bank is investing in strategic areas, including expansion in the Carolinas and enhancements in digital capabilities.

3. Forward Guidance and Outlook

• 2026 Guidance: Adjusted net interest income expectations to the low end of the range due to softer economic growth outlook and increased cash reserves at the Fed.
• Fee Income Growth: Raised expectations for fee income growth to 31% to 33%, driven by strong performance across core businesses.
• Expense Management: Tightened expense growth range to the lower half of 32.5% to 33.5%, with a focus on maintaining positive operating leverage.
• 2027 EPS Target: Projected at $1.90 to $1.93, with ROTCE expected to reach 18% to 19%.

4. Bad News, Challenges, or Points of Concern

• Economic Environment: Concerns about a potential slowdown in economic growth due to inflation and geopolitical tensions, which could impact consumer spending.
• Loan Pricing Pressure: Modest spread compression observed in high-quality commercial loans, indicating competitive pressures in the market.
• Commercial Real Estate Exposure: Monitoring of commercial real estate, particularly construction loans, with plans to reduce exposure over time.
• Market Valuation: The stock underperformed despite strong fundamentals, indicating potential market misinterpretation of the bank's growth story.

5. Notable Q&A Insights

• Balance Sheet Optimization: Management is actively calibrating loan growth expectations and optimizing the balance sheet in response to the economic environment.
• Share Buyback Authorization: A new $3 billion share repurchase authorization was approved, reflecting confidence in capital generation and future opportunities.
• Retention of Talent: Strong retention of leadership and teams from recent acquisitions, with ongoing efforts to attract new talent in competitive markets.
• Revenue Synergies: Early wins in revenue synergies from acquisitions are being realized, particularly in capital markets, payments, and wealth management, with expectations for continued growth.

Overall, Huntington Bancshares reported a strong quarter with solid financial performance and strategic initiatives, while also navigating challenges related to economic uncertainties and competitive pressures.