Huntington Bancshares Incorporated (HBANL) Earnings

Management highlights

- Stephen Steinour highlighted Huntington's 160th anniversary, focused on being a people-first, customer-centered bank, with a differentiated operating model, 21-state presence for consumer and regional bank, leading national commercial bank, customer-centric approach, and aggregate moderate to low-risk profile. 2025 results included 11% revenue growth, 16% adjusted EPS growth, 290 basis points of positive operating leverage, and strong credit performance. - Brantley Standridge discussed the partnership approach to integrating Veritex and Cadence, including rapid system migration, talent management, and creating a welcoming environment for new colleagues. Veritex integration was substantially complete, and Cadence systems migration expected midyear, with cost and revenue synergies anticipated. - Zachary Wasserman detailed financial performance: Q4 earnings per common share $0.30, adjusted EPS $0.37; strong loan and deposit growth; net interest income growth; fee income strength; core expenses up $7 million sequentially; capital position with adjusted CET1 higher; credit quality with net charge-offs 24 basis points.

Guidance

- Net interest income expected to grow 10%-13% in 2026, supported by 11%-12% loan growth and 8%-9% deposit growth, with further NIM expansion. NII contribution from Cadence expected $1.85-$1 billion. - Noninterest income expected to grow 13%-16%, including contribution from Cadence. - Core expenses expected to grow 10%-11%, with 150-200 basis points of operating leverage. - Net charge-offs expected 25-35 basis points. Effective tax rate 19%-20%. Fully diluted average share count inclusive of Cadence issuance expected ~2.02 billion shares in 2026. - First quarter weighted average share count expected ~1.9 billion due to Cadence's February 1 close.

Segment performance

Average loans grew 14.4% year over year, excluding the addition of the Veritex portfolio; average loans grew $10.9 billion or 8.6% year over year. Average deposits increased 5.1% quarter over quarter and 8.6% year over year. Net interest income grew $86 million or 5.6% sequentially, with net interest margin at 3.15% for the fourth quarter. Fee income was strong across areas: payments grew 5%, wealth management 10%, capital markets delivered its second strongest revenue quarter of all time, and loan and deposit fees up over 20% driven by strong loan commitment fees. In 2025, organic loan growth was $10.1 billion, exceeding loans added through Veritex partnership.

Analyst Q&A

• Q: Clarifying question on expense trajectory, baseline, Cadence addition, and cost savings

  A: Zachary Wasserman explained underlying Huntington expense growth in mid-single digits, aligned to generate 1.5-2 points of operating leverage, with Veritex and small capital markets additions adding to expense growth, and Cadence adding $1.1 billion in expenses, with cost synergies expected from Q2 (Veritex) and Q4 (Cadence)

• Q: Question on partnership generating goodwill, revenue and cost synergies, timeline vs traditional acquisitions

  A: Stephen Steinour and Brantley Standridge discussed partnership allowing greater speed and rigor in decisions, creating certainty for colleagues, and enabling quick realization of cost synergies with line of sight to majority of cost synergies for Cadence

• Q: Question on tighter range for expected first-quarter expenses or early 2026 expenses

  A: Zachary Wasserman stated focus on positive operating leverage, mid-single digit underlying expense growth, reinvestment into business, and marginal profitability with Cadence bringing 50% marginal efficiency ratio before full cost synergy

• Q: Question on revenue-producing initiatives embedded in expense guide, materiality, and revenue synergies from Veritex and Cadence

  A: Zachary Wasserman said little revenue synergies baked into guidance yet, with expectation to share deep dive on revenue synergies later in the quarter, and focus on investments in digital technology, marketing, and people to power revenue growth

• Q: Question on level of investments embedded in underlying Huntington expense growth, new investments, acceleration in spend

  A: Zachary Wasserman said expect to grow investments at ~20% back into business, focusing on digital/technology capabilities, marketing, and people, with examples like new branch openings in North and South Carolina and digital acquisition for revenue synergies

• Q: Question on AI-related investment spend, whether 2026 is high point for investment spend

  A: Zachary Wasserman said investments not a high point, will sustain investment growth model, with significant AI investment driving cost savings, productivity, and customer experience, included in digital and technology investments

• Q: Question on credit guidance, cause of guide range, deposit beta with rate cuts

  A: Eric Wasserstrom said credit guide based on exceptional performance and historical trend, with deposit beta expected to remain in high 30s to 40% aligned with guidance, focusing on core funding for loan growth

• Q: Question on tech investment dollars, rate of growth, balance sheet portfolio tweaking

  A: Zachary Wasserman said details on tech investments to be shared later, and Stephen Steinour noted no special exit portfolio, managing commercial real estate construction with growth areas offsetting

• Q: Big picture question on integration of deals, potential for more M&A

  A: Stephen Steinour discussed successful integrations of Veritex and upcoming Cadence close, focus on driving organic growth and executing integrations well, with strategic M&A considered if meeting financial and risk metrics