[HBAN] Huntington: Q3 2026 earnings preview on deposit costs and margin

Huntington Bancshares (HBAN), a Columbus, Ohio bank holding company that earns its money by gathering deposits, making commercial and consumer loans and charging fees for payments, wealth and capital markets services, will hold its earnings call on 2026-10-22 to report results for the third quarter of 2026, ending September 30, 2026[1]. Ahead of this Huntington Q3 2026 earnings preview, the latest disclosed period is the second quarter of 2026, the first full quarter after the Cadence Bank merger: fully taxable-equivalent net interest income rose 8% sequentially to $2.072 billion, but the net interest margin narrowed 3 basis points to 3.21%[2]; noninterest income rose 15% sequentially to $785 million[3]; and net income was $727 million, or $0.33 per diluted share, with adjusted EPS of $0.39 after excluding $152 million of acquisition-related expenses[4][5]. On September 16 the company cut its full-year 2026 growth guidance for fully taxable-equivalent net interest income to about 35% from 39% to 43%, raised its growth guidance for noninterest income excluding securities gains and losses to about 32%[6], and guided to full-year adjusted EPS of $1.52 to $1.54[7]; on the earlier July call, management said the second quarter was the margin trough and that the third quarter would return to the low 3.20s[8]. On the analyst side, Yahoo Finance's October 14 compilation shows a third-quarter EPS average of $0.38 from 15 analysts (range $0.37 to $0.39) and a revenue average of $2.83 billion from 8 analysts[9], while Barchart's October 1 preview cites diluted EPS of $0.39 against $0.40 in the year-ago quarter[10]. Neither source states whether its figure is on an adjusted basis; the year-ago $0.40 is close to the company's adjusted measure, while GAAP diluted EPS for that quarter was $0.41[5].

Three things matter most in these results, because each maps to a profit line that the September guidance cut left unproven. The first is whether deposit costs come down and the margin rises above the second quarter's 3.21%: the total cost of deposits rose from 1.82% to 1.88% in the second quarter[11], the Cadence systems conversion finished only in mid-June[12], and the third quarter is the first full quarter in which deposits can be repriced in earnest, with each basis point of deposit cost worth roughly $18 million a year in interest expense on about $183.4 billion of average interest-bearing deposits[13]. The second is whether, without the merger day-count lift, average loans reach the roughly $190 billion second-half average implied by the full-year loan growth guidance of about 36%[6]: organic loan growth in the second quarter, after adjusting for Cadence day-count effects, was only $2.2 billion, or 1.2%[14], auto and commercial real estate balances are shrinking, and the sequential third-quarter figure will show true organic growth. The third is whether fee income and expenses both land inside the ranges implied by guidance: the roughly 32% fee growth guidance implies a second-half quarterly average of about $740 million, below the second quarter's $785 million, and the core expense guidance implies quarterly adjusted expenses of about $1.643 billion to $1.668 billion in the second half, against $1.657 billion in the second quarter[6]. Together, these three lines decide whether the third quarter confirms, weakens or leaves unresolved the profit path the company reset in September.

Company Background and Business Structure

Huntington is a Midwestern regional bank whose banking roots go back to 1866, and two Texas-facing acquisitions in 2025 and 2026 turned it into a super-regional bank operating in 21 states. The company was organized under Maryland law in 1966 and operates through its wholly owned subsidiary, The Huntington National Bank; on October 20, 2025 it completed the $1.7 billion acquisition of Dallas-based Veritex, which added $9.3 billion of loans and $10.5 billion of deposits, and on February 1, 2026 it completed the all-stock acquisition of Cadence Bank at 2.475 Huntington shares per Cadence share, valued at about $8.1 billion based on the January 30 closing price, with Cadence holding $54 billion of assets, $37 billion of loans and $44 billion of deposits at the end of 2025[15]. After the mergers the company operates nearly 1,400 branches in 21 states and had $284 billion of assets, $189 billion of loans and $222 billion of deposits at the end of the second quarter of 2026[16]. At the end of 2025 it still operated more than 1,000 branches in 14 states with total assets of $225.1 billion, so almost every line of the 2026 statements has been rewritten by the Cadence consolidation[17].

The company reports two operating segments by customer type, and Consumer & Regional Banking is the bank's main source of low-cost deposits. This segment serves individuals, small businesses and smaller companies through branches, digital channels and dealer relationships; it originates residential mortgages, home equity loans, indirect auto loans and RV and marine loans, provides floorplan financing to dealers, and runs payments and cash management, wealth management and private banking[18]. The segment earned about $1.5 billion in 2025, down 3% from the prior year[19]; in the first half of 2026, with Cadence included, segment net income was about $1.0 billion, up 64% year over year, and segment net interest income rose 44%, driven mainly by acquired loan growth and a 32 basis point rise in the segment margin[20].

The other segment, Commercial Banking, serves mid-market to large corporate clients and is where most of the fee businesses and industry-vertical lending sit. It includes middle market banking, corporate and specialty industry verticals, asset finance, commercial real estate banking and capital markets; the segment earned about $1.1 billion in 2025, down 2%, partly because lower rates narrowed its margin by 33 basis points[19]. Outside the two segments, the securities portfolio, rate hedging, technology and operations and unallocated items sit in Treasury / Other, which is also where acquisition-related expenses and hedging differences land[21].

On the balance sheet, Huntington is a commercial-loan-heavy bank funded mainly by demand and money market deposits. Average loans in the second quarter of 2026 were $189.3 billion, including $90.4 billion of commercial and industrial loans, $23.9 billion of commercial real estate and $5.7 billion of leases, for $120.0 billion of commercial loans in total; consumer loans were $69.2 billion, including $33.5 billion of residential mortgages, $15.7 billion of auto loans, $11.9 billion of home equity and $5.6 billion of RV and marine loans[22]. Average deposits in the same quarter were $223.4 billion, including $40.0 billion of noninterest-bearing demand deposits, $62.4 billion of interest-bearing demand, $75.3 billion of money market, $18.9 billion of savings and $26.8 billion of time deposits[13]. On the revenue side, fully taxable-equivalent net interest income of $2.072 billion made up about 73% of second-quarter revenue[2]; noninterest income of $785 million made up about 27%, led by payments and cash management at $204 million, capital markets and advisory at $140 million, wealth and asset management at $134 million, customer deposit and loan fees at $128 million and mortgage banking at $53 million[3].

Financial History and Current Position

Before the mergers, Huntington was a steadily profitable bank with a recovering margin in fiscal 2025. Net income for fiscal 2025 was $2.211 billion, or $1.39 per diluted share, up from $1.22 in fiscal 2024, with $168 million of acquisition-related expenses reducing EPS by $0.09; net interest income was $5.991 billion, up 12%, and the fully taxable-equivalent margin rose from 3.00% to 3.13%, which the annual report attributed to funding costs falling faster than asset yields[17]. In the same year, noninterest income was $2.175 billion, noninterest expense was $5.015 billion, the efficiency ratio was 59.9%, return on average tangible common equity was 15.7% and cash dividends were $0.62 per share[23].

The 2026 quarterly statements have been rewritten by the Cadence consolidation and merger costs, and the second quarter is the first one that shows the combined bank clearly. The first quarter of 2026 included only two months of Cadence and $263 million of acquisition-related expenses, producing net income of $523 million, diluted EPS of $0.25 and an efficiency ratio of 67.2%[5]. In the second quarter, fully taxable-equivalent net interest income rose 8% sequentially to $2.072 billion, but the margin fell from 3.24% to 3.21%, which the company attributed to a modest increase in overall funding costs[2]. Noninterest income rose 15% sequentially to $785 million[3], and adjusted noninterest expense, excluding acquisition-related costs, rose 10% to $1.657 billion[24]; net income was $727 million, return on average assets was 1.02%, adjusted return on average tangible common equity was 17.5%[4] and the reported efficiency ratio was 61.5%[5].

The balance sheet has grown by about a third within half a year, and credit quality is the line that most needs watching after the second quarter. Average loans of $189.3 billion, average deposits of $223.4 billion and average earning assets of $258.6 billion in the second quarter were up 42%, 37% and 35% from the second quarter of 2025[5]. Net charge-offs were 0.25% of loans, 1 basis point lower than in the first quarter, but the nonperforming asset ratio rose from 0.72% at the end of the first quarter to 0.85%, with nonperforming assets of about $1.6 billion, up 19% sequentially[25]; the allowance for credit losses was $3.4 billion, or 1.78% of loans[12].

Capital ratios have already declined before the larger buybacks begin, and the September guidance revision reset the 2026 and 2027 profit path. The Common Equity Tier 1 (CET1) ratio fell from 10.4% at the end of 2025 to an estimated 10.0% at the end of the second quarter of 2026, driven by risk-weighted assets rising from $208.1 billion to $214.2 billion and by share repurchases[26]; the company bought back 18.8 million shares for $309 million in the first half and kept the quarterly dividend at $0.155 per share[27][5]. On September 16 the company cut its full-year net interest income growth guidance to about 35%[6], guided to 2026 adjusted EPS of $1.52 to $1.54 and raised planned 2027 buybacks to $1.3 billion to $1.4 billion[7]; its 2027 EPS target fell from the $1.90 to $1.93 reaffirmed in July to $1.75 to $1.83[28][8].

Operating Model

Huntington's revenue is the sum of net interest income and fee income, and net interest income equals average earning assets multiplied by the net interest margin. The annual report defines net interest income as interest earned on assets minus interest paid on deposits and borrowings, with the contribution of "free funds" such as noninterest-bearing deposits and shareholders' equity captured in the margin[29]. In the second quarter of 2026, $258.6 billion of average earning assets yielded 5.28%, interest-bearing liabilities cost 2.59%, the resulting net interest spread was 2.69%, and noninterest-bearing funds added 0.52 percentage points, for a margin of 3.21%[2]. This equation means that growth in earning assets and changes in the margin flow directly into net interest income in the same quarter.

The margin's direction currently depends on the liability side: lower deposit costs widen the margin in the quarter they occur, while the pace of deposit repricing sets the lag. Cadence brought $43.5 billion of deposits, largely time, money market and demand balances, and the company deliberately let some higher-cost deposits run off after closing[13]; in July management said 80% of maturing CD balances in the Cadence footprint had been retained and that higher-cost wholesale and brokered deposits were being reduced[30]. The actual second-quarter result, however, was a rise in the total cost of deposits from 1.82% to 1.88% and in the cost of interest-bearing deposits from 2.21% to 2.29%[11], and the 10-Q shows a cumulative total deposit beta, the share of rate moves passed through to deposit costs, of only 30% since the current easing cycle began[31]. Because time deposits reprice only at maturity, the effect of repricing should build over two to three quarters rather than appear immediately after the conversion.

On the volume side, loan mix matters most: commercial and industrial lending is driving growth while auto and commercial real estate shrink, with the net change setting the size of earning assets and the mix setting the loan yield. Average commercial and industrial loans were $90.4 billion in the second quarter, up 11% sequentially, while auto loans were $15.7 billion, down 3%[22]; management said commercial and industrial growth came from verticals including financial institutions, industrials, corporate mortgage finance and Native American financial services, that commercial real estate declined modestly as planned, and that auto production was lower because of spread compression and return requirements[14]. September investor materials show commercial real estate balances falling from $24.3 billion in the first quarter to $23.5 billion in the second, which the company attributed to banks and private credit leaning into the sector and accelerating run-off[32]. The transmission is immediate: balance changes enter average earning assets in the same quarter, while yield changes accumulate quarter by quarter as new loans replace old ones.

Fee income is the second revenue line; it uses little capital and directly improves the efficiency ratio. In the second quarter, payments and cash management revenue was $204 million, wealth and asset management revenue was $134 million and capital markets and advisory fees were $140 million, for $478 million across the three[3]. The company's September materials say that over the twelve months to the second quarter of 2026, capital markets revenue grew at a two-year compound rate of 30%, commercial payments at 15% and wealth at 9%[33]. These fees come from corporate clients adopting treasury management and merchant products, expanding wealth adviser teams, and syndication and advisory work tied to commercial lending relationships; the lag is usually only one or two quarters, but capital markets revenue also depends more on deal activity.

The profit equation is pretax income equals net interest income plus noninterest income, minus noninterest expense and the provision for credit losses, and the merger logic sits mainly in the expense line. Adjusted noninterest expense was $1.657 billion in the second quarter, with personnel costs of $972 million the largest item, followed by outside data processing at $252 million, net occupancy at $88 million and intangible amortization at $54 million[24]. Veritex's $70 million of annualized cost synergies were achieved in the second quarter, and Cadence's $365 million of annualized synergies are scheduled to be fully in the run rate in the fourth quarter[34]; in September the company said expense synergies had been fully delivered[35]. Credit costs are currently low, with a second-quarter provision of $132 million and net charge-offs of $119 million[25]; when expenses stay flat while revenue grows, the efficiency ratio improves and pre-provision profit rises.

For a bank, "cash flow" shows up as capital: retained earnings add to common equity Tier 1 capital, loan growth consumes risk-weighted assets, and only what remains can fund dividends and buybacks. The CET1 ratio was an estimated 10.0% at the end of the second quarter, 20 basis points lower than at the end of the first quarter, and adjusted CET1 including accumulated other comprehensive income (excluding cash flow hedges) was 9.0%[12]. In April the board approved a $3.0 billion repurchase authorization with no expiration date, leaving $2.95 billion available at the end of the second quarter[27]. On liquidity, average deposits of $223.4 billion clearly exceeded average loans of $189.3 billion in the second quarter, and management said deposits growing faster than loans had pre-funded second-half loan growth[36].

The model has three observation limits that matter when reading the third-quarter statements. First, the company does not separately disclose deposit attrition, CD renewal rates or wholesale deposit reductions for the legacy Cadence business, offering only verbal figures such as the 80% retention of maturing CDs on the call, so deposit optimization can only be inferred from consolidated deposit costs and time deposit balances[30]. Second, cost synergies are management's annualized run-rate figures with no separate line in the statements, so they can only be tested through sequential changes in adjusted expenses and headcount, and reinvestment will make the expense decline smaller than the synergy total[34]. Third, the margin includes purchase accounting accretion from Cadence and Veritex, which the company does not break out quarterly in its earnings releases, so the operating margin cannot be cleanly isolated[2].

Industry and Competitive Position

The two acquisitions have made Huntington one of the ten largest U.S. commercial banks by assets and given it scale in Texas. Management says the company now ranks in the top 8 in Texas and the top 5 in Dallas and Houston, with 140 branches and 955 revenue-producing colleagues in the state[30]. It competes for mid-market corporate clients and retail deposits with super-regional banks such as Fifth Third, PNC, M&T, Regions, Truist, KeyCorp and Citizens, and the peer group the company chose for its own comparisons includes those banks plus First Horizon, U.S. Bancorp and Zions[37].

On the company's September comparison, which strips out the effects of acquisitions, Huntington's organic growth has clearly outpaced peers. From the fourth quarter of 2024 to the second quarter of 2026, its average loans grew at an annualized 7.6% and average deposits at 4.1%, against peer medians of 3.1% and 0.5%[37]. The company attributes most of the increase to its national commercial industry verticals (about $9 billion of added loans), regional banking, and new branches in the Carolinas and Texas[37]. This comparison was produced by the company using its own method for removing acquisition effects and is not an independent third-party calculation.

Industry competition is pressing on Huntington too, and it already shows in the bank's loan and deposit figures. The September materials note that bank competitors are ramping auto production and compressing spreads, and that banks and private credit are leaning into commercial real estate[32]; the same materials show industry deposit growth accelerating from 1.5% to 6.3% year over year and the market-implied fed funds path about 50 basis points higher than in January, with stronger deposit demand pushing deposit costs up[38]. In July management also named intensifying deposit competition and auto spread compression as key risks and noted that future rate changes could include rate hikes[39].

Huntington's clearest difference from peers is its fee business, though this too rests mainly on the company's own figures. Noninterest income for the twelve months to the second quarter of 2026 was $2.677 billion, compared with $1.872 billion two years earlier, with capital markets and advisory, payments and wealth management the three fastest-growing lines, and merchant acquiring revenue roughly doubled after the business was brought in-house[33]. The available materials do not provide peer fee growth on the same basis, so the relative size of this advantage cannot be independently checked.

Core Debates

With the Cadence conversion done, can deposit costs come down and lift the margin off its second-quarter trough?

This question matters because net interest income makes up about 73% of Huntington's revenue, and both of September's guidance cuts trace back to the margin. Fully taxable-equivalent net interest income was $2.072 billion in the second quarter[2]; in September the company cut full-year net interest income growth guidance from 39% to 43% to about 35%[6] and lowered its 2027 EPS target to $1.75 to $1.83, citing sustained high short-term rates pushing up deposit costs and lower-than-expected yields in some loan categories[28]. Each basis point change in deposit costs is worth roughly $18 million a year in interest expense on about $183.4 billion of average interest-bearing deposits[13].

The observed facts support the claim that the second quarter was the trough, but an alternative reading is equally grounded. The second-quarter margin was 3.21% and the total cost of deposits rose from 1.82% to 1.88%[11]; in July management called the second quarter the margin trough and said the third quarter would return to the low 3.20s[8], adding that 80% of maturing CDs in the Cadence footprint had been retained and higher-cost wholesale deposits were being reduced[30]. On the other hand, the September materials show faster industry deposit growth and a higher market-implied rate path[38], and the company described margin expansion as "moderating" rather than "significant"[35]; the 10-Q shows a cumulative deposit beta of only 30% in the current easing cycle[31]. What the third quarter can test, therefore, is whether deposit repricing offsets an industry-wide rise in funding costs, not whether the margin returns to the expectations of the start of the year.

The financial transmission here is direct: maturing Cadence CDs and wholesale deposits roll over at lower rates or are replaced, lowering the cost of interest-bearing deposits and widening the margin when earning-asset yields hold roughly steady. The second-quarter baselines are a 3.21% margin, $2.072 billion of fully taxable-equivalent net interest income, a 1.88% total cost of deposits and $26.8 billion of average time deposits[5][13]; at the start of the year the company had looked for the margin to reach the mid 3.30s, and in April it lowered that to the high 3.20s[40]. The margin times roughly $260 billion of average earning assets sets net interest income, and the full-year guidance of about 35% implies a second-half quarterly average of about $2.097 billion[6].

What remains unresolved is whether deposit optimization can move faster than the industry's rising costs, and because the company does not disclose renewal rates on Cadence deposits, the answer can only be inferred from consolidated figures. In the third quarter, watch whether the margin is above 3.21% and how the company describes the fourth quarter, whether the total cost of deposits is below 1.88% and the cost of interest-bearing deposits below 2.29%, whether fully taxable-equivalent net interest income reaches about $2.097 billion, and which way time deposit and noninterest-bearing demand balances move. If deposit costs keep rising and the margin falls below 3.21%, the full-year guidance still has a gap even after the September cut; if time deposit balances keep growing, deposit growth may have been bought with price.

Without the Cadence day-count lift, can commercial lending carry growth while auto and CRE shrink?

This question matters because loans make up about 73% of average earning assets, and the third quarter is the first without a merger day-count effect. Average loans were $189.3 billion in the second quarter, up $15.0 billion sequentially[22], but organic growth after adjusting for Cadence day-count effects was only $2.2 billion, or 1.2%[14]. In September the company named lower-than-expected loan volume as one of two reasons for cutting guidance: more paydowns in commercial real estate and residential mortgages, and deliberately lower auto production because of less attractive risk-adjusted returns[28].

The observed facts show commercial and industrial loans growing while auto and commercial real estate shrink, but the reasons for the shrinkage can be read two ways. Average commercial and industrial loans were $90.4 billion in the second quarter, up 11% sequentially including the merger, while auto loans were $15.7 billion, down 3%[22]; management said the auto cuts and faster commercial real estate run-off were deliberate risk/return choices, with auto production about $2 billion lower year to date, not a sign of weak demand[36]. The alternative reading is equally grounded: in September the company trimmed full-year loan growth guidance from 36% to 37% to about 36%[6], set its 2027 baseline loan growth assumption at about 6%, below the earlier 7% to 8%[28], and acknowledged that auto and commercial real estate run-off reflects competition from banks and private credit[32].

The financial transmission works on two levels: net growth sets the size of earning assets, mix sets the loan yield, and both feed net interest income. The second-quarter baselines are $189.3 billion of average loans, $90.4 billion of commercial and industrial loans, $15.7 billion of auto loans, $23.9 billion of commercial real estate loans and a 5.84% loan yield[22][2]. The full-year loan growth guidance of about 36% implies a second-half average of about $190 billion[6].

What remains unresolved is whether commercial and industrial growth can cover the run-off and whether that growth comes with lower yields. In the third quarter, watch whether average loans reach about $190 billion, the sequential increase in commercial and industrial loans, whether auto and commercial real estate declines narrow, and whether the loan yield holds at 5.84%. If average loans decline sequentially, both the full-year guidance of about 36% and the 2027 assumption of about 6% come under pressure; if growth comes with lower yields, the company is trading price for volume.

With the margin under pressure, can payments, wealth and capital markets carry revenue growth on their own?

This question matters because fee income is the only revenue guidance the company raised in September, and it now carries the job of offsetting margin pressure. Noninterest income makes up about 27% of revenue; full-year growth guidance excluding securities gains and losses was raised from 26.5% to 29.5% to about 32%, while net interest income growth was cut to about 35%[6]. Noninterest income was $785 million in the second quarter, including payments and cash management at $204 million, capital markets and advisory at $140 million and wealth and asset management at $134 million[3]; the company says capital markets revenue grew at a 30% compound rate over the twelve months to the second quarter[33].

The observed facts show fee growth accelerating, but part of the second-quarter increase is not recurring. Noninterest income rose 15% sequentially and 67% year over year[3]; management said organic fee growth excluding acquisitions accelerated from 18% year over year in the first quarter to 30%[36], and 10 capital markets transactions completed in the Cadence footprint had generated $12 million of fees[30]. On the other hand, of the $103 million sequential increase, mortgage banking added $21 million, terminated-lease income added $16 million and other income, including favorable fair-value changes on strategic investments, added $20 million[3]; the full-year guidance of about 32% implies a second-half quarterly average of about $740 million, below the second-quarter level[6]. What the third quarter should show, therefore, is whether the three core lines keep growing, not whether the total sets another high.

The transmission runs like this: corporate clients adopt treasury management, merchant and card products, expanding wealth adviser teams bring in assets under management, and commercial lending relationships generate syndication and advisory work, all of which flow straight into noninterest income and improve the efficiency ratio. The second-quarter baselines are $785 million of noninterest income, $204 million of payments and cash management revenue, $134 million of wealth and asset management revenue and $140 million of capital markets and advisory fees, for $478 million across the three core lines[3]. In September the company also raised its 2026 revenue synergy expectation from $50 million to $75 million to more than $75 million[35].

What remains unresolved is whether the core lines can keep growing if deal activity cools. In the third quarter, watch whether noninterest income is above the roughly $740 million implied second-half average, whether the three core lines together exceed $478 million, and whether the company reaffirms more than $75 million of 2026 revenue synergies. If capital markets revenue falls below $120 million, the second quarter's high level depended on a cluster of deals; if fee growth comes mainly from mortgage banking and investment fair-value gains, the argument that fees offset margin pressure does not hold.

With synergies in place, does the expense base stop growing with the balance sheet in the third quarter?

This question matters because the profit case for both acquisitions shows up mainly in the expense line. Adjusted noninterest expense was $1.657 billion in the second quarter, up 10% sequentially, mostly because of a full quarter of Cadence[24]; GAAP expense also included $152 million of acquisition-related costs, which held the reported efficiency ratio at 61.5%[5]. The company's goal is a core efficiency ratio in the mid to low 54% range in the fourth quarter[8], and when it cut the 2027 EPS target in September it said it would keep managing expenses while maintaining growth-oriented investment[28].

The observed facts show synergies landing on schedule, but an alternative reading is equally grounded. The Cadence systems conversion was completed in mid-June[12], Veritex's $70 million of annualized synergies were achieved in the second quarter[34], the company said in September that expense synergies were fully delivered[35], and in July management said the 2026 baseline expense reengineering program would deliver about a 1.6% reduction, above the long-term 1% target[30]. On the other hand, personnel costs rose $77 million sequentially and outside data processing rose $29 million in the second quarter[24], and the September materials show the 2027 operating leverage target lowered from 400 to 500 basis points to 300 basis points or more[28]. What the third quarter can test, therefore, is whether synergies stop expenses from rising, not whether expenses fall sharply.

The transmission is that, after the conversion, duplicate systems, branch operations and roles are consolidated, putting Cadence's $365 million of annualized synergies fully in the run rate in the fourth quarter; when expenses stay flat while revenue grows, the efficiency ratio improves, pre-provision profit rises, and the end of merger costs brings GAAP earnings closer to adjusted earnings. The second-quarter baselines are $1.657 billion of adjusted noninterest expense, $152 million of acquisition-related costs and about 26,400 average full-time equivalent employees[24], with a reported efficiency ratio of 61.5%. The full-year core expense growth guidance of 32.5% to 33.5% implies quarterly adjusted expenses of about $1.643 billion to $1.668 billion in the second half[6].

What remains unresolved is how much of the synergy reinvestment will absorb, and whether full-year "core expenses" and quarterly "adjusted noninterest expense" are measured on exactly the same basis, which the company's materials do not spell out line by line. In the third quarter, watch whether adjusted noninterest expense falls in the roughly $1.643 billion to $1.668 billion range, whether acquisition-related costs are clearly below $152 million, which way average headcount and personnel costs move, and whether the fourth-quarter efficiency target is maintained. If adjusted expenses keep rising, reinvestment has eaten the synergies; if merger costs do not wind down, the gap between GAAP and adjusted EPS will carry into the fourth quarter.

Risks and Falsifiers

The first risk is that nonperforming assets, which rose after the mergers, turn into charge-offs and let credit costs erode earnings targets that have already been cut. The nonperforming asset ratio was 0.85% at the end of the second quarter, up 13 basis points sequentially, nonaccrual loans rose 19% sequentially and net charge-offs were 0.25%[25], against full-year guidance for the lower half of a 25 to 35 basis point range[8]; management said the increase came mainly from virtually loss-free government-guaranteed loans and downgrades of a small number of commercial credits[39]. This risk runs through the provision for credit losses; if the nonperforming asset ratio falls or holds in the third quarter and net charge-offs stay at 25 to 30 basis points, the current view that credit is broadly stable is supported.

The second risk is that the capital ratio has already fallen to 10.0% before buybacks step up, so continued growth in risk-weighted assets could limit the pace of repurchases. The CET1 ratio fell from 10.4% at the end of 2025 to an estimated 10.0% at the end of the second quarter, with risk-weighted assets of $214.2 billion[26]; the company plans about $550 million of buybacks in 2026 and $1.3 billion to $1.4 billion in 2027[7], and had repurchased $309 million in the first half[27]. This risk runs through shareholder returns and the share count behind EPS; if CET1 stays above 10% at the end of the third quarter while buybacks proceed on plan, the concern is weakened.

The third risk is that high short-term rates and intensifying industry deposit competition keep pushing deposit costs up, leaving the margin stuck at its trough. Fully taxable-equivalent net interest income was $2.072 billion and the margin was 3.21% in the second quarter[2], the total cost of deposits was 1.88%[11], and in July management already cited deposit competition as the reason for second-quarter margin pressure[39]. This risk runs through net interest income; if the third-quarter margin is above 3.21%, the total cost of deposits is below 1.88% and the company maintains its full-year guidance of about 35%, the concern is falsified.

The fourth risk is that competition from banks and private credit in auto and commercial real estate accelerates run-off faster than commercial loan growth can fill the gap. Average loans were $189.3 billion in the second quarter, including $15.7 billion of auto loans and $23.9 billion of commercial real estate[22], and the company has acknowledged that run-off in both categories is linked to competition[32]. This risk runs through the size of earning assets; if third-quarter average loans are at least about $190 billion and the auto and commercial real estate declines narrow, the concern is falsified.

The fifth risk is that capital markets and mortgage revenue fall with deal activity, leaving fee income unable to offset margin pressure. Noninterest income was $785 million in the second quarter, including $140 million of capital markets and advisory fees and $53 million of mortgage banking income[3], and the full-year growth guidance of about 32% implies a second-half quarterly average of about $740 million[6]. This risk runs through noninterest income; if the three core lines together exceed $478 million in the third quarter and the company maintains or raises its full-year fee guidance, the concern is falsified.

The sixth risk is that reinvestment and incentive pay offset the synergies, so expenses keep growing with the balance sheet. Adjusted expense was $1.657 billion in the second quarter, with personnel costs of $972 million[24], and the fourth-quarter core efficiency target is the mid to low 54% range[8]. This risk runs through noninterest expense and the efficiency ratio; if third-quarter adjusted expense falls within the implied range, average headcount declines and the company reaffirms its fourth-quarter efficiency target, the concern is falsified.

What to Watch Next

The four core debates reduce to a short list of figures that can be checked directly in the third-quarter report; baselines are second-quarter 2026 figures or second-half quarterly averages implied by full-year guidance.

• Deposit repricing and the margin: the baseline is a 3.21% margin, a 1.88% total cost of deposits and $2.072 billion of fully taxable-equivalent net interest income. A margin above 3.21% with deposit costs below 1.88% confirms the trough; a margin below 3.21% falsifies it.
• Commercial lending versus auto and CRE run-off: the baseline is $189.3 billion of average loans, $90.4 billion of commercial and industrial loans and a 5.84% loan yield. Average loans of about $190 billion with a stable yield confirm the case; a sequential decline in average loans falsifies it.
• Fee income as the offset: the baseline is $785 million of noninterest income, $478 million across the three core lines and more than $75 million of expected revenue synergies. Core lines above $478 million confirm the case; capital markets revenue below $120 million falsifies it.
• The expense base: the baseline is $1.657 billion of adjusted noninterest expense, $152 million of acquisition-related costs and about 26,400 employees. Adjusted expense within $1.643 billion to $1.668 billion with lower headcount confirms the case; continued growth in adjusted expense falsifies it.

Conclusion

Huntington's results are driven by three lines: the margin on roughly $260 billion of earning assets, its fastest-growing fee businesses, and the expense base left by the Cadence merger. In the second quarter, fully taxable-equivalent net interest income was $2.072 billion with a 3.21% margin[2], noninterest income was $785 million[3], adjusted expense was $1.657 billion[24], adjusted return on tangible common equity was 17.5%[4] and the CET1 ratio was 10.0%[26]. The most important and least settled relationship is whether Cadence deposit repricing can outrun the industry-wide rise in deposit costs; the company's September cuts to full-year net interest income guidance and to its 2027 EPS target show that this relationship turned less favorable after the second quarter than expected[6][28].

Only two independent outside interpretations were published after the second-quarter results, and both put deposit costs at the center of the problem. FN2 Research's July 30 review argued that Huntington's organic loan and deposit growth was strong but that rising deposit costs squeezed the margin and pushed EPS below consensus; however, it compared GAAP EPS of $0.33 with a $0.36 consensus, while the company's adjusted EPS was $0.39, a difference in basis readers need to keep in mind[41]. InvestorsHub's September 16 report mainly relayed the company's Barclays conference message that higher short-term rates and loan and deposit competition had slowed margin expansion, and recorded a share price drop of about 3% that day[42]. The two pieces agree on margin pressure: FN2 flagged deposit costs as the main pressure in July, seven weeks before the company cut guidance, while InvestorsHub added the other side, the raised fee guidance, and neither offered an independent judgment on expenses or credit. Beyond these two, publicly available post-results sell-side or research-firm work with its own financial analysis remains a coverage gap, and the two pieces should not be treated as a market verdict.

After the third-quarter report, certain combinations of observations would materially change the current understanding. A margin above 3.21% and a total cost of deposits below 1.88%, together with average loans of about $190 billion, core fee lines above $478 million and adjusted expenses within the $1.643 billion to $1.668 billion range, would give strong support to the profit path the company reset in September. Conversely, rising deposit costs and a margin below 3.21%, combined with a sequential decline in average loans or fee growth coming mainly from mortgage banking and investment fair-value gains, and a further rise in the nonperforming asset ratio, would materially weaken the current understanding.

Sources

[1] HBAN earnings calendar · 2026-10-22 third quarter 2026 earnings call (calendar last updated 2026-10-14) · 2026-10-14 · Drillr earnings calendar

[2] HBAN 8-K filed 2026-07-23 · net interest income and margin · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[3] HBAN 8-K filed 2026-07-23 · noninterest income by line · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[4] HBAN 8-K filed 2026-07-23 · 2Q26 net income and returns · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[5] HBAN 8-K filed 2026-07-23 · five-quarter earnings summary · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[6] HBAN 8-K filed 2026-09-16 · Barclays conference FY2026 guidance revision · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[7] HBAN 8-K filed 2026-09-16 · Barclays conference earnings, returns and capital return outlook · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[8] HBAN earnings call 2026-07-23 · guidance · 2026-07-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[9] Yahoo Finance HBAN analysis (accessed 2026-10-14) · 2026-10-14 · Yahoo Finance · https://finance.yahoo.com/quote/HBAN/analysis/

[10] Barchart 2026-10-01 · What to Expect From Huntington Bancshares' Next Quarterly Earnings Report · 2026-10-01 · Barchart · https://finance.yahoo.com/markets/stocks/articles/expect-huntington-bancshares-next-quarterly-143008862.html

[11] HBAN 8-K filed 2026-07-23 · financial supplement cost of deposits · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex992.htm

[12] HBAN 8-K filed 2026-07-23 · 2Q26 results highlights · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[13] HBAN 8-K filed 2026-07-23 · average deposits and acquired deposits · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[14] HBAN earnings call 2026-07-23 · loan, deposit and fee performance · 2026-07-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[15] HBAN 10-K filed 2026-02-13 · business overview and acquisitions · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[16] HBAN 8-K filed 2026-09-16 · Barclays conference franchise scale · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[17] HBAN 10-K filed 2026-02-13 · FY2025 summary of results · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[18] HBAN 10-K filed 2026-02-13 · business segments · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[19] HBAN 10-K filed 2026-02-13 · FY2025 segment results · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[20] HBAN 10-Q filed 2026-07-28 · Consumer & Regional Banking first-half results · 2026-07-28 · 10-Q · https://www.sec.gov/Archives/edgar/data/49196/000004919626000066/hban-20260630.htm

[21] HBAN 10-Q filed 2026-07-28 · segment structure · 2026-07-28 · 10-Q · https://www.sec.gov/Archives/edgar/data/49196/000004919626000066/hban-20260630.htm

[22] HBAN 8-K filed 2026-07-23 · average loans by type and acquired loans · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[23] HBAN 10-K filed 2026-02-13 · FY2025 income statement table · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[24] HBAN 8-K filed 2026-07-23 · noninterest expense and notable items · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[25] HBAN 8-K filed 2026-07-23 · credit quality · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[26] HBAN 8-K filed 2026-07-23 · capital · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000060/hban20260630_8kex991.htm

[27] HBAN 10-Q filed 2026-07-28 · share repurchase authorization · 2026-07-28 · 10-Q · https://www.sec.gov/Archives/edgar/data/49196/000004919626000066/hban-20260630.htm

[28] HBAN 8-K filed 2026-09-16 · Barclays conference revised FY27 outlook drivers · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[29] HBAN 10-K filed 2026-02-13 · net interest income definition · 2026-02-13 · 10-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000015/hban-20251231.htm

[30] HBAN earnings call 2026-07-23 · Cadence conversion and synergy progress · 2026-07-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[31] HBAN 10-Q filed 2026-07-28 · deposit beta and NII at risk · 2026-07-28 · 10-Q · https://www.sec.gov/Archives/edgar/data/49196/000004919626000066/hban-20260630.htm

[32] HBAN 8-K filed 2026-09-16 · Barclays conference auto and CRE loan dynamics · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[33] HBAN 8-K filed 2026-09-16 · Barclays conference fee growth drivers · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[34] HBAN 8-K filed 2026-09-16 · Barclays conference cost and revenue synergies · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[35] HBAN 8-K filed 2026-09-16 · Barclays conference execution versus January plan · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[36] HBAN earnings call 2026-07-23 · analyst questions and answers · 2026-07-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[37] HBAN 8-K filed 2026-09-16 · Barclays conference organic growth versus peers · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[38] HBAN 8-K filed 2026-09-16 · Barclays conference deposit pricing pressure · 2026-09-16 · 8-K · https://www.sec.gov/Archives/edgar/data/49196/000004919626000077/hbanbarxpresentation_vf.htm

[39] HBAN earnings call 2026-07-23 · risks · 2026-07-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[40] HBAN earnings call 2026-04-23 · guidance · 2026-04-23 · earnings-call · https://ir.huntington.com/news-presentations/events-and-presentations

[41] FN2 Research 2026-07-30 · Huntington Bancshares Q2 2026 review · 2026-07-30 · FN2 Research · https://fn2.ai/earnings/hban/2026-q2

[42] InvestorsHub 2026-09-16 · Huntington shares fall after guidance cut · 2026-09-16 · InvestorsHub · https://finviz.com/news/392627/huntington-bancshares-shares-fall-3-after-bank-lowers-earnings-guidance