HUNTINGTON BANCSHARES INC /MD/ (HBAN) Q3 2025 Earnings Summary

Executive Summary

• EPS of $0.41, up $0.07 QoQ and $0.08 YoY; adjusted EPS $0.40 excluding notable items, with management raising full‑year guidance across NII, fees, and operating leverage .
• Revenue growth accelerated: total revenue (FTE) rose to $2.151B (+10% QoQ, +14% YoY) on loan growth and NIM expansion to 3.13% (+2 bps QoQ, +15 bps YoY) .
• Versus S&P Global consensus, EPS beat ($0.41 vs $0.37*) while revenue modestly missed ($2.015B* vs $2.050B*), driven by mix of fee strength and hedging drag; the company highlighted strong deposit beta and funding discipline as NIM drivers .
• Catalysts: Q4 Veritex close adds ~2–3 bps to NIM and $20M PP&R ($0.01 EPS) with one‑time acquisition costs of $125–$150M; management signaled baseline buybacks of ~$50M per quarter through 2026 .
• Subsequent events: prime rate cut to 7.00% (Oct 29), Veritex regulatory approvals (Oct 3), dividend maintained at $0.155, and definitive agreement to acquire Cadence Bank to expand scale across the South/Texas .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

• Strong spread revenue and NIM execution: NII up $39M QoQ (+3%) and +11% YoY; NIM 3.13% (+2 bps QoQ, +15 bps YoY) on better funding costs and asset yields .
• Broad-based fee momentum: payments, wealth, and capital markets collectively +13% YoY; noninterest income +33% QoQ and +20% YoY (adjusted +13% QoQ, +14% YoY) .
• Management confidence and guidance raises: “We grew revenue 14% YoY… adjusted PP&R 16%… adjusted ROTCE above 17%… we are again raising our financial guidance for the year.” (CEO) .

What Went Wrong

• Revenue vs consensus slightly light: S&P Global revenue actual $2.015B* vs $2.050B* consensus, as net hedging drag partly offset core NII/fee strength .
• Expense uptick tied to outperformance: GAAP noninterest expense $1.246B (+4% QoQ, +10% YoY) with revenue‑related compensation; adjusted expenses also up 4% QoQ and 10% YoY .
• Seasonality/tariffs impacted equipment finance: management noted tariffs on imported components and delivery delays limiting a record Q4, even as 2026 outlook is constructive .

Values retrieved from S&P Global.*

Financial Results

Headline Metrics vs Prior Periods and Estimates

Balance & Credit KPIs

Fee Revenue Mix

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We grew revenue 14% year over year, adjusted PP&R 16%, and tangible book value by 10%, while generating an adjusted ROTCE above 17%… we are again raising our financial guidance for the year.” — Steve Steinour, CEO .
• “EPS was $0.41. On an adjusted basis… $0.40, up 18% year over year… Net interest margin was 3.13%… Operating performance accelerated… due to both better‑than‑expected funding costs and better asset yields.” — Zach Wasserman, CFO .
• “We had a 40% beta in the last two weeks of the quarter… continues to be our expectation for what we’ll see over the course of this overall downward cycle.” — Zach Wasserman .
• “For the fourth quarter, we expect approximately $20M of core PP&R benefit from Veritex… We also expect… ~$125–$150M [one‑time] acquisition‑related expenses.” — Zach Wasserman .
• “Our baseline assumption as of now is for approximately $50M of repurchases per quarter through 2026.” — Zach Wasserman .

Q&A Highlights

• Loan growth momentum: Guidance implies ~1.5% sequential Q4 growth; pipelines strong across regional banking, middle market, auto, equipment finance .
• Credit risk safeguards: Emphasis on relationship orientation, front‑end client selection, collateral monitoring; passed on recent problematic names; NDFI exposure ~2% of total loans excluding certain categories .
• Operating leverage model: Structural re‑engineering of baseline costs (~1% removed annually) to fund growth investments; sustainable 1–2% operating leverage targeted .
• NIM drivers: Fixed asset repricing differential (~70–75 bps) supports ~10 bps expansion in 2026 across multiple rate‑cut scenarios; Veritex adds 2–3 bps on top .
• Equipment finance/tariffs: Q4 strong but not a record due to tariffs on imported components and delivery delays; constructive for 2026 .

Estimates Context

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Strong fundamental momentum: double‑digit YoY revenue growth, NIM expansion, and fee strength underpin rising guidance and lower efficiency ratio .
• EPS beat vs consensus with modest revenue shortfall; mix, hedging drag, and notable items (gain on trust sale; FDIC DIF benefit; Veritex costs) affect optics—focus on adjusted trends .
• Near‑term catalysts: Veritex close lifts Q4 NIM by 2–3 bps and adds $20M PP&R ($0.01 EPS), offset by ~$125–$150M one‑time acquisition costs—watch stock reaction as investors parse core vs reported .
• 2026 setup constructive: at least +10 bps NIM expansion expected, mid‑to‑high single‑digit loan growth, and baseline ~$50M quarterly buybacks—supportive of ROTCE sustainability .
• Credit clean and disciplined: NCOs 0.22%, NPAs 0.60%, ACL 1.86%; consistent moderate‑to‑low risk appetite and relationship focus mitigate sector headline risks .
• Deposit beta execution (~40%) and funding discipline should sustain NIM tailwinds amid Fed cuts; prime rate reductions support lower funding costs .
• Strategic M&A footprint expansion: Veritex regulatory approvals and Cadence agreement expand TX/South presence; integration track and revenue synergies are medium‑term drivers .

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Additional Relevant Press Releases During/After Q3

• Prime rate decreased to 7.25% (Sep 17) and 7.00% (Oct 29) .
• Quarterly common dividend declared at $0.155 (Oct 17) .
• Veritex merger approvals and expected close (Oct 20) .
• Definitive agreement to acquire Cadence Bank (Oct 27) .