Huntington Bancshares reported an extraordinary end to 2025, with full-year adjusted EPS growing 16% and revenue increasing 11%, driven by 290 basis points of positive operating leverage. For Q4, adjusted EPS was $0.37, up 9% year-over-year, supported by a 14.4% increase in average loans (8.6% organic) and an 8.6% rise in average deposits. The Net Interest Margin expanded 2 basis points sequentially to 3.15%, while net charge-offs remained low at 24 basis points. Management highlighted the successful integration of Veritex and the imminent close of the Cadence partnership, positioning the bank in high-growth markets like Texas and the Carolinas. Looking ahead to 2026, Huntington provided robust guidance, projecting NII growth of 10-13% (standalone), loan growth of 11-12%, and fee revenue growth of 13-16%, alongside the initiation of share repurchases.
| Metric | Value | Change |
|---|---|---|
| Q4 Adjusted EPS | $0.37 | +9% YoY |
| FY 2025 Adjusted EPS Growth | 16% | N/A |
| Q4 Net Interest Margin | 3.15% | +2 bps QoQ |
| Q4 Average Loan Growth (ex-Veritex) | 8.6% | YoY |
| Q4 Average Deposit Growth | 8.6% | YoY |
| Net Charge-offs (Q4) | 24 bps | Stable |
| Efficiency Ratio (2026 Guidance) | ~55% | N/A |
| Tangible Book Value Growth | 19% | YoY |
Huntington is executing a unique 'partnership' acquisition strategy, distinct from traditional M&A, characterized by a collaborative 'green glove' integration process. This approach prioritizes talent retention and rapid systems migration—completing the Veritex conversion in just 187 days—to unlock synergies faster. By treating acquisitions as partnerships, Huntington secures better cooperation from target management, leading to quicker realization of cost synergies (Q2 for Veritex, Q4 for Cadence) and earlier revenue generation. This strategic capability provides a competitive advantage in consolidating the fragmented banking landscape.
The bank is aggressively expanding its geographic footprint into high-growth markets, specifically Texas and the Carolinas, which are projected to grow 30% faster than the national average. The addition of Veritex and Cadence establishes a significant presence in these regions, transforming Huntington into a more relevant national player. This shift in asset mix is critical as it exposes the bank to faster organic loan and deposit growth trajectories compared to its legacy Midwest footprint, effectively re-rating the company's growth profile.
Management emphasized a 'flywheel of value creation' where strong profitability and cost discipline fund high levels of reinvestment (approx. 20% growth in investments). These investments are targeted toward digital capabilities, marketing, and talent, specifically in new verticals like specialty finance and capital markets (TM Capital, Janney). This creates a virtuous cycle where investments drive competitive advantages, which in turn drive market share gains and revenue growth, validating the sustainability of their high operating leverage.
Huntington signaled a shift in capital allocation strategy by announcing the planned initiation of programmatic share repurchases in 2026, expected to be approximately $50 million per quarter following the Cadence close. This move, combined with a strong dividend yield, indicates that capital generation is robust enough to support both aggressive M&A integration and direct shareholder returns. This enhances the stock's appeal to income and growth-oriented investors alike.
The company is successfully pivoting toward a fee-income-driven model, with 2026 guidance calling for 13-16% growth in noninterest income. This is supported by the expansion of value-added services (payments, wealth management) and the accretion of new capital markets teams. The diversification away from pure interest income reduces reliance on rate cycles and supports higher valuation multiples, evidenced by the strong performance of Capital Markets and Wealth Management segments in Q4.
Expense guidance for 2026 (10-11% core growth) raised eyebrows among analysts, appearing elevated relative to revenue growth projections until synergies are fully realized. Management acknowledged a high level of reinvestment (growing ~20% annually), which pressures near-term efficiency. While the long-term 'flywheel' narrative is compelling, the sheer magnitude of spending—particularly with the integration of Cadence adding $1.1 billion in expenses—creates execution risk and could lead to volatility in quarterly earnings if revenue synergies slip.
Credit normalization is on the horizon, with management guiding net charge-offs to rise to 25-35 basis points in 2026 from the exceptionally low 24 bps reported in Q4. Additionally, the criticized asset ratio rose to 4.2%, driven by identified issues in the Veritex commercial real estate portfolio. While management remains comfortable with the risk profile, the ingestion of CRE-heavy loan books from Texas partners introduces volatility, especially if economic conditions in those specific regions soften.
Analysts expressed significant confusion regarding the math behind the 2026 expense guidance and the exit run-rate for the combined entity. The difficulty in modeling the 'plus Cadence' scenario suggests a lack of transparency or extreme complexity in the synergy realization timeline. This opacity could lead to mistrust in the markets if actual expenses deviate from the loosely defined guidance ranges, particularly regarding how much of the cost saves are being reinvested rather than dropped to the bottom line.
The deposit beta remains a critical watch item; while management achieved a 40% down beta in Q4 following rate cuts, the guidance for future cuts implies a beta in the 'high 30s to 40%'. In a competitive environment, maintaining this discipline while funding double-digit loan growth will be challenging. Any slippage here could compress Net Interest Margin (NIM) more than anticipated, as the NIM expansion guidance for 2026 relies heavily on hedge benefits rather than pure core spread improvement.
Overall: Management exhibited a highly confident and enthusiastic demeanor throughout the call, frequently using superlatives like 'extraordinary' and 'powerful momentum' to describe performance. There was a distinct focus on the successful execution of their 'partnership' integration model, with executives expressing pride in the speed of the Veritex conversion and the cultural alignment with Cadence. While analysts pressed for clarity on expense run-rates, management remained patient but firm on their strategic investment philosophy.
Confidence: HIGH - Management provided specific, detailed guidance for 2026 and demonstrated deep knowledge of integration timelines and financial drivers. Their willingness to commit to specific metrics like a 55% efficiency ratio and 'mid to high teens' EPS growth underscores their conviction in the outlook.
10% to 13%
11% to 12%
8% to 9%
13% to 16%
10% to 11%
150 to 200 basis points
25 to 35 basis points
~$50 million per quarter expected post-Cadence close
Hedging & Uncertainty: Management used minimal hedging regarding past performance and integration capabilities, speaking with definitive certainty about the 'extraordinary' 2025 results. However, hedging appeared more frequently in the 2026 guidance section, particularly regarding the Cadence integration which has not yet closed. Phrases like 'we expect to have the capacity,' 'we anticipate,' and 'naturally, we will refine this outlook' were used to set expectations without over-committing to specific numbers before the deal closes. This suggests high confidence in the core business but prudent caution regarding the immediate financial impact of the pending merger.
"We're focused on becoming the country's leading people-first, customer-centered bank." - Stephen Steinour, Chairman, President, and CEO
"We actually like to call it the green glove process." - Brantley Standridge, President of Consumer and Regional Banking
"Our flywheel of value creation is working and poised to accelerate." - Zachary Wasserman, Chief Financial Officer
"We intend to continue driving adjusted CET1 toward the midpoint of our 9% to 10% operating range." - Zachary Wasserman, Chief Financial Officer
"We're not gonna do an MOE. We're not gonna go to auctions." - Stephen Steinour, Chairman, President, and CEO
"We expect to see loans grow faster than deposits in the first quarter." - Zachary Wasserman, Chief Financial Officer
Analyst Sentiment: Analysts were generally positive on the growth story but expressed frustration and confusion regarding the specifics of the 2026 expense guidance and the mathematical run-rate of the combined entity (Cadence + Huntington). There was a clear demand for more granular detail on how cost synergies and reinvestment interact.
Management Responses: Management remained patient and composed, repeatedly directing analysts back to the 'flywheel' model and the long-term value creation narrative rather than getting bogged down in quarterly run-rate specifics. They emphasized confidence in hitting the 55% efficiency ratio and the 'mid to high teens' EPS growth trajectory.
Detailed breakdown of the 2026 expense guidance, specifically the baseline for core expenses and the impact of Cadence.
Clarification on the timeline and magnitude of revenue synergies from Veritex and Cadence.
The specific drivers of fee income growth and the contribution of recent capital markets acquisitions.
Credit quality outlook and the specific drivers of increased net charge-offs.
Deposit beta strategy in a falling rate environment.
Technology and AI investment spending levels.
Huntington Bancshares is demonstrating best-in-class execution on a transformative M&A strategy that re-rates its growth profile. The bank has successfully pivoted from a regional player to a formidable franchise in high-growth markets (Texas, Carolinas) through the accretive Veritex and Cadence partnerships. The 'flywheel' model—generating strong operating leverage (290 bps in 2025) to fund reinvestment—is working, evidenced by 16% EPS growth and market-leading organic loan growth. While near-term expense complexity creates modeling noise, the underlying fundamentals of 11-12% loan growth, expanding NIM, and a robust fee income engine (13-16% growth) support a positive outlook. The initiation of share repurchases signals management's confidence in capital generation. HBAN offers a compelling combination of growth, yield, and strategic momentum.
Management expects further Net Interest Margin expansion in 2026 driven by lower hedge drag and fixed asset repricing, suggesting they are well-positioned for a falling rate environment despite maintaining a disciplined deposit beta.
Huntington is intentionally pivoting its asset mix toward states projected to grow 30% faster than the national average (Texas, North Carolina, South Carolina), insulating the bank from broader economic stagnation.
Management expects credit costs to normalize to 25-35 basis points in 2026, up from 24 bps, indicating a recognition that the 'extraordinary' credit performance of 2025 is likely to moderate as the Veritex CRE portfolio seasons.