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    HBAN
    Earnings call· Mar 2026(Q1 FY26)

    HUNTINGTON BANCSHARES INC /MD/ Q1 FY26 earnings call HBAN

    Apr 23, 2026 Source

    Executive summary

    Huntington Bancshares Q1 FY26 — Strong Performance and Raised ROTCE Target

    Huntington Bancshares delivered an outstanding first quarter, marked by strong organic growth and successful integration of recent partnerships. The company raised its 2027 ROTCE target and increased its fee income growth outlook for 2026, while proactively calibrating its NII and expense guidance to reflect a dynamic economic environment. Management remains confident in achieving its long-term financial targets through disciplined execution and strategic investments.

    Highlights

    5

    • Adjusted EPS grew 9% year-over-year, driven by strong execution and partnership contributions.

    • Adjusted PPNR increased 36%, reflecting higher net interest income and robust fee generation.

    • Tangible book value grew 9%, supported by strong capital generation and shareholder returns.

    • Raised 2027 ROTCE target to 18-19%, up from 16-17%, due to expected synergies and capital return.

    • Fee income growth outlook for 2026 was raised by 4 percentage points to 31-33%, driven by strong Capital Markets, Payments, and Wealth Management performance.

    Concerns

    4

    • Net interest income (NII) outlook for 2026 was adjusted to the low end of the guided range.

    • 2026 Net Interest Margin (NIM) is now expected to trend into the high 3.20s, down from a prior expectation in the mid-3.30s.

    • Full-year operating leverage for 2026 is now expected to be modestly lower, in the range of 400-450 basis points.

    • Lower-income households continue to feel pressure from cumulative inflation impacts.

    Guidance & targets

    14
    CategoryTargetConfidence
    Return on Tangible Common Equity (ROTCE) target
    18% to 19%
    high materiality
    High
    Q4 Efficiency Ratio
    mid- to low 54% level
    medium materiality
    High
    2027 Earnings Per Share (EPS)
    $1.90 to $1.93
    high materiality
    High
    2026 Net Interest Income (NII) Outlook
    low end of our guided range
    high materiality
    Medium
    2026 Loan Growth
    track closer to the midpoint of our range
    medium materiality
    Medium
    2026 Net Interest Margin (NIM) Outlook
    trend into the high 3.20s
    high materiality
    Medium
    2026 Fee Revenue Growth
    31% to 33%
    high materiality
    High
    2026 Expense Growth
    lower half of the 32.5% to 33.5% range
    medium materiality
    High
    2026 Full Year Operating Leverage
    400 to 450 basis points
    medium materiality
    Medium
    Q2 FY26 Share Count
    approximately 2,055 million shares
    low materiality
    High
    2026 Share Repurchases
    at least $550 million
    high materiality
    High
    2027 Share Repurchases
    $1.1 billion to $1.2 billion
    high materiality
    High
    New Share Repurchase Authorization
    $3 billion
    high materiality
    High
    2026 Revenue Synergies
    $50 million and $75 million
    medium materiality
    High

    Operational metrics

    22
    Adjusted EPS growth
    9%YoY
    Q1 FY26

    Growth driven by strong organic execution and contributions from recent partnerships.

    Adjusted PPNR growth
    36%YoY
    Q1 FY26

    Cadence and Veritex were not included in the prior year quarter, meaningfully increasing average balances and revenue.

    Tangible book value growth
    9%
    Q1 FY26

    Reflects strong capital generation and supports consistent shareholder returns.

    Available contingent liquidity
    173%
    Q1 FY26

    A clear point of differentiation, strengthened by adding cash to the balance sheet.

    Insured deposits
    69%
    Q1 FY26

    Reflects the stability of the deposit base.

    Unmodified Liquidity Coverage Ratio (LCR)
    118%
    Q1 FY26

    Well above peer median, demonstrating strong liquidity.

    Adjusted CET1 ratio
    within 9% to 10%
    Q1 FY26

    Well above regulatory minimums, supporting organic growth and capital return.

    Share repurchases
    $150 million
    Q1 FY26

    Part of the capital return strategy, contributing to retiring approximately 15 million shares year-to-date.

    Share repurchases
    >$250 million
    YTD Q2 FY26

    Includes $150 million in Q1 and more than $100 million thus far in Q2.

    Shares retired
    ~15 million
    YTD Q2 FY26

    Total shares retired through year-to-date repurchases.

    Operating expenses (normalized sequential increase)
    $20 millionsequentially
    Q1 FY26

    Reflects continued cost discipline and ongoing expense reengineering.

    Positive operating leverage
    220 bps
    Trailing 4-quarter

    Excluding one-time items, demonstrating efficiency.

    Cost base reduction
    >1%each year
    Annual

    Reflects rigorous disciplined reengineering of baseline costs.

    AI program areas
    5
    Current

    Comprehensive enterprise-wide AI program contributing to productivity and efficiency.

    Wealth Management AUM growth
    >13%
    Last year

    Market appreciation helped, but net flows also doubled year-over-year.

    Wealth Management net flows
    doubledYoY
    Last year

    Reflecting strong growth in the Wealth business.

    Carolinas new deposits (first 7 branches)
    $215 million
    Less than a year

    Successful branch expansion in new markets.

    Veritex footprint deposit production growth
    30%YoY
    First 2 months

    Strong deposit production in the newly integrated Veritex footprint.

    Cadence footprint deposit production growth
    160%YoY
    First campaign

    Significant increase in production from the first deposit growth campaign in the new Cadence footprint.

    Basel III RWA reduction
    ~7.7%
    Future

    Estimated RWA delta under the revised standardized approach for Basel III Endgame.

    Basel III CET1 benefit
    ~80 bps
    Future

    Expected benefit to reported CET1 from Basel III Endgame RWA reduction.

    Revenue synergies (2026 plan)
    $50 million to $75 million
    FY26

    Expected from partnership integrations, weighted heavily toward fee revenues.

    Industry KPIs

    12
    MetricValueDetails
    Loans$2.2 billionUSD
    Deposits$3.8 billionUSD
    Rotce ROE16% to 17%%
    Cet1 ratiowithin 9% to 10%%
    Capital returns$150 millionUSD
    Fee income lines31% to 33%%
    Allowance reserves—
    Net interest income$301 millionUSD
    Net interest margin3.24%%
    Net charge offs npls26 bpsbps
    Provision for credit losses—
    Efficiency ratio operating leveragemid- to low 54%%

    Product announcements

    2
    ProductTypeDetails
    Wealth Management Platformupdate
    Digital Capabilities (Texas and Southern footprint)launch

    Deals & partnerships

    4
    Cadence Bankacquisition

    Integration is on track, with system conversion planned for June, marking the final major milestone. Contributed to strong Q1 performance and is a key driver for future synergies.

    Veritex Community Bankacquisition

    Integration was completed in the first quarter, with cost synergies fully reflected in the run rate in the second quarter. Contributed to strong Q1 performance.

    Janney Montgomery Scott LLCacquisition

    Successfully integrated, becoming accretive within three months and contributing to a record quarter for Capital Markets businesses.

    TM Capital Corp.acquisition

    Successfully integrated, contributing to a record quarter for Capital Markets businesses, with new colleagues contributing meaningfully.

    Risks & headwinds

    5
    Geopolitical developmentsCurrent

    Adding complexity to the outlook

    Mitigation: Watching these factors closely; proactively building additional liquidity (added $4B incremental Fed cash).

    Inflationary pressure on lower-income householdsCurrent

    Lower income households continuing to feel pressure from the cumulative impacts of inflation

    Mitigation: Monitoring consumer story, which is a bit more mixed.

    Slightly softer economic growth outlookFY26

    Economic growth this year will likely be lower than originally forecasted

    Mitigation: Fine-tuning loan growth plan to midpoint of range; optimizing balance sheet; calibrating expense growth with revenue environment.

    Modestly less improvement in deposit costsFY26

    Improvement we're seeing is modestly less than our prior assumption

    Mitigation: Focus on optimizing loan growth rather than pursuing volume at the expense of marginal returns; disciplined pricing management.

    Commercial Real Estate (CRE) exposureLong-term (2+ years)

    Tuning lower commercial real estate, in particular, construction within commercial real estate

    Mitigation: Long-term strategic expectation to reduce as a percent of overall loan base; vigilant on entire portfolio.

    Q&A highlights

    6

    Can you elaborate on the balance sheet optimization project, its goals, timeline, and how success is measured?

    The optimization calibrates against a slightly softer economic outlook, leading to forecasting loan growth at the midpoint of the range. It involves tuning down commercial real estate, particularly construction, and ensuring core deposit growth matches or exceeds loan growth, while being judicious about managing NIM.

    “what we're doing is a few things really primarily to calibrate against what we see as the economic environment, which continues to be supportive generally of the plan, but at the margin is a little softer in terms of economic growth outlook.”

    asked by Jon Arfstrom · answered by Zachary Wasserman

    2 min read6 chapters

    Detailed Narrative

    01

    Economic Outlook and Proactive Management

    Huntington Bancshares characterizes current economic conditions across its footprint as consistent with prior quarters, noting broad-based strength in commercial markets. However, the consumer story is mixed, with lower-income households facing pressure from inflation. The company is proactively managing its balance sheet and expenses, adjusting its 2026 NII outlook to the low end of its range and fine-tuning loan growth expectations to the midpoint, while also accelerating efficiency initiatives to calibrate with the revenue environment.

    02

    Strong Q1 Financial Performance and Raised Targets

    The company delivered an outstanding first quarter with 9% adjusted EPS growth, 36% adjusted PPNR growth, and 9% tangible book value growth. Building on consistent performance, Huntington raised its 2027 Return on Tangible Common Equity (ROTCE) target to 18-19%, up from 16-17%. This reflects confidence in achieving higher profitability through synergies, growth in value-added services, and continued capital return.

    03

    Partnership Integrations and Synergies on Track

    Integrations of Veritex and Cadence partnerships are proceeding well, with the Veritex conversion completed in Q1 and Cadence on track for June. The company is realizing expected cost and revenue synergies, with cost initiatives tracking on schedule and early revenue benefits seen in capital markets, payments, and new consumer account openings. These integrations are expected to drive an inflection point in earnings power and higher returns.

    04

    Robust Balance Sheet Strength

    Huntington maintains a strong balance sheet with differentiated liquidity, capital, and credit fundamentals. Available contingent liquidity represents approximately 173% of uninsured deposits, and the unmodified Liquidity Coverage Ratio (LCR) is 118%. The adjusted CET1 ratio is well within the 9-10% operating range, and reserve levels remain above peers, with net charge-offs well below. The company also elected to add $4 billion of incremental Fed cash to further strengthen its liquidity profile.

    05

    Exceptional Fee Income Growth

    The first quarter saw outstanding fee income generation, exceeding plans due to underlying momentum and recent acquisitions. Payments revenue increased 21% year-over-year (10% organic), Wealth Management revenue grew 19% (10% underlying organic), and Capital Markets delivered a record quarter with nearly 60% year-over-year growth (excluding acquisitions). This strong performance led to a 4 percentage point increase in the 2026 fee revenue growth outlook to 31-33%.

    06

    AI Program and Efficiency Initiatives

    Huntington has a comprehensive enterprise-wide AI program gaining momentum, contributing to productivity and efficiency across five key areas: technology, genetic process transformation, customer-facing use cases, colleague productivity, and data/platforms. This investment is disciplined and focused on generating real operating outcomes, serving as an increasingly important enabler of expense efficiency and operating leverage over time⏳. The company is accelerating targeted efficiency initiatives and rephasing📎 select investments to manage expenses.

    AI-generated summary of the company’s earnings call. Not investment advice.