Detailed Narrative
Successful Cadence Systems Conversion
Huntington successfully completed the Cadence systems conversion in June 2026, just 235 days after the announcement. This milestone involved training 4,500 colleagues, onboarding hundreds of thousands of customers, converting ATMs, and providing customized treasury products to over 6,000 commercial customers. Notably, the bank grew deposits during the conversion weekend and subsequent weeks, demonstrating strong customer and colleague engagement and the effectiveness of their integration playbook.
Strong Organic Growth and Revenue Momentum
The core franchise delivered robust organic growth, with average loans increasing $2.2 billion (1.2%) and average deposits growing $4 billion (1.8%) sequentially, outpacing loan growth. This growth is broad-based, driven by customer acquisition and deepening primary bank relationships across consumer, business banking, and commercial segments. Value-added fee revenues saw significant organic growth of approximately 30% year-over-year, with strong contributions from payments, wealth management, and capital markets, indicating a powerful and diversifying revenue stream.
Synergy Realization and Texas/South Expansion
Huntington remains on track to achieve $365 million in Cadence cost synergies by Q4 2026 and combined $435 million from Veritex and Cadence. Revenue opportunities are developing as planned, with nearly $1 billion in expanding client commitments across energy, commercial real estate, and auto floorplan businesses in the Cadence footprint. Capital Markets has completed over 10 transactions, generating $12 million in fees. The company is actively adding experienced bankers and expanding capabilities in high-growth markets like Dallas, Houston, Fort Worth, Austin, Nashville, and Atlanta, reinforcing the strategic importance of the Texas and South expansion.
Net Interest Margin and Deposit Strategy
Net interest margin (NIM) declined 3 basis points sequentially to 3.15% in Q2, but management expects this to be the trough. NIM expansion is anticipated in the second half of 2026, driven by fixed asset repricing, alleviation of temporary liquidity drag, and optimization opportunities within the Cadence deposit portfolio. The deposit strategy remains disciplined, focusing on valuable and granular funding, with primary banking relationships increasing across all customer segments and successful retention of maturing CDs.
Capital Position and Shareholder Returns
The company maintains a strong capital position, supporting organic growth and shareholder returns. Adjusted return on tangible common equity (ROTCE) was 17.5% in Q2. Huntington has completed $310 million of its $550 million planned share repurchase program for 2026 and expects to repurchase an additional $1.1 billion to $1.2 billion in 2027. Tangible book value per share grew 13% before distributions, enabling a 3% dividend yield and share repurchases.
Credit Performance and Stress Test Results
Credit performance remained strong and consistent with expectations, with net charge-offs trending near the low end of the guided range. The criticized asset ratio declined, and stable trends were observed across the broader portfolio. The 2026 CCAR results reinforced the strength of Huntington's credit profile, with cumulative loan losses of 5.9% of average loans, the second lowest in its regional peer group, and strong allowance relative to modeled stress losses.