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HB

HUNTINGTON BANCSHARES INC /MD/ (HBANP)·Q2 2025 Earnings Summary

Executive Summary

  • Solid quarter with EPS of $0.34, flat Q/Q and up $0.04 Y/Y; underlying strength masked by a $58M securities repositioning loss that reduced EPS by ~$0.04 . Total revenue (FTE) rose to $1.954B, +1% Q/Q and +8% Y/Y .
  • Net interest income (NII) increased 3% Q/Q and 12% Y/Y on 2% average loan growth and a 1 bp NIM expansion to 3.11% .
  • Credit improved: NCOs fell to 0.20% (−6 bps Q/Q), with ACL at 1.86% of loans; NPAs stable at 0.63% .
  • Management raised full-year guidance on the call: loans to 6–8% (from 5–7%), deposits to 4–6% (from 3–5%), and NII growth to 8–9% (from 5–7%); reiterated fee growth 4–6% and lowered NCO outlook to 20–30 bps, citing momentum and deposit cost execution .
  • Strategic catalyst: announced all-stock acquisition of Veritex to accelerate Texas expansion; expected close in early Q4’25 .

What Went Well and What Went Wrong

  • What Went Well

    • Deposit and loan growth continued: average loans +$2.3B (+2% Q/Q) to $133.2B and average deposits +$1.8B (+1% Q/Q) to $163.4B, supporting 3% Q/Q NII growth .
    • NIM held at 3.11% (+1 bp Q/Q, +12 bps Y/Y) with lower deposit costs and hedge dynamics; NII (FTE) +12% Y/Y .
    • Credit trends improved: NCOs fell to 0.20% and NPAs remained 0.63%; CFO highlighted disciplined risk management; CEO: “We remain confident… We have never been better positioned.” .

  • What Went Wrong

    • GAAP noninterest income declined 5% Q/Q and 4% Y/Y, driven by a $58M loss on securities repositioning; excluding this and CRT contra revenues, fees grew 7% Q/Q and 7% Y/Y .
    • CET1 dipped 10.5% from 10.6% Q/Q due to higher RWA, partly offset by earnings .
    • Noninterest expense rose 4% Q/Q (personnel +7% Q/Q) reflecting incentive and technology/data costs; efficiency ratio at 59.0% vs 58.9% Q/Q .

Financial Results

Key P&L, balance sheet, and ratios (oldest → newest)

MetricQ2 2024Q1 2025Q2 2025
Diluted EPS ($)0.30 0.34 0.34
Total Revenue (FTE) ($B)1.816 1.935 1.954
Net Interest Income (FTE) ($B)1.325 1.441 1.483
Noninterest Income ($B)0.491 0.494 0.471
Net Interest Margin (%)2.99 3.10 3.11
Efficiency Ratio (%)60.8 58.9 59.0
Avg Loans ($B)123.376 130.862 133.171
Avg Deposits ($B)153.578 161.600 163.429
NCOs / Avg Loans (%)0.29 0.26 0.20
NPA Ratio (%)0.63 0.61 0.63
ACL / Loans (%)1.95 1.87 1.86
CET1 (%)10.4 10.6 10.5
TBVPS ($)7.89 8.80 9.13

Noninterest income breakdown ($ millions)

CategoryQ2 2024Q1 2025Q2 2025
Payments & Cash Mgmt154 155 165
Wealth & Asset Mgmt90 101 102
Customer Deposit & Loan Fees83 86 95
Capital Markets & Advisory73 67 84
Mortgage Banking30 31 28
Leasing Revenue19 14 10
Insurance Income18 20 19
Net Sec. Gains (Losses)— — (58)
Other Noninterest Income24 20 26
Total Noninterest Income491 494 471

Credit KPIs, reserves and capital

MetricQ2 2024Q1 2025Q2 2025
Net Charge-Offs ($M)90 86 66
NCOs / Avg Loans (%)0.29 0.26 0.20
NPAs ($M)780 804 852
NPA Ratio (%)0.63 0.61 0.63
ACL ($B)2.423 2.478 2.515
ACL / Loans (%)1.95 1.87 1.86
CET1 (%)10.4 10.6 10.5
TCE / TA (%)6.0 6.3 6.6

Estimates vs Actuals (S&P Global)

MetricConsensusActualSurprise
EPS ($)0.346*0.346 (rounded) In line*
Revenue ($B)1.971*1.839*Miss*

Values with asterisk (*) retrieved from S&P Global via GetEstimates. Note: Company-reported FTE total revenue was $1.954B; differing revenue definitions can drive variances versus SPGI “Revenue” .

Guidance Changes

MetricPeriodPrevious Guidance (Q1 call)Current Guidance (Q2 call)Change
Loan GrowthFY 20255%–7% 6%–8% Raised
Deposit GrowthFY 20253%–5% 4%–6% Raised
Net Interest Income (YoY)FY 2025+5%–7% +8%–9% Raised
Fee Revenue GrowthFY 20254%–6% 4%–6% (unchanged) Maintained
Expense GrowthFY 20253.5%–4.5% 5%–6% Raised
Net Charge-OffsFY 202525–35 bps 20–30 bps Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4’24)Previous Mentions (Q-1: Q1’25)Current Period (Q2’25)Trend
NIM & Deposit BetaNIM 3.03%; total cost of deposits 2.16% (numerical context) CFO: deposit beta execution better than plan; run-rate NIM ~3.07% for 2025 NIM 3.11%; maintained despite hedge dynamics; raised NII guide on momentum Improving
Growth Initiatives (Carolinas/Texas)—Management accelerating branch expansion in Carolinas; new verticals; talent additions Veritex acquisition accelerates Texas; continued new market gains Strengthening
Capital & Buybacks—$1B authorization; likely modest 2025 repurchases CET1 10.5%; adjusted CET1 9.0; capital supports growth and M&A Stable
Hedging & Rate Sensitivity—Hedge drag trending to ~neutral mid-year; near-neutral asset sensitivity in 2025 NIM stable with lower funding costs; hedge backdrop supportive Neutral to positive
Credit Quality—Top-tier NCOs; CECL approach with scenario weighting NCOs improved to 0.20%; NPAs steady; ACL 1.86% Improving
Macro/Tariffs—Mixed client impacts; watch equipment/distribution finance Pipeline momentum improved through quarter; outlook constructive Stabilizing

Management Commentary

  • CEO Steve Steinour (press release): “Our second quarter results reflect the ongoing successful execution of our organic growth strategy… We have never been better positioned.” .
  • On markets and strategy: “The Huntington brand is gaining traction… North and South Carolina and Texas, where the combination with Veritex further supports our long-term growth ambitions.” .
  • Credit stance: “Credit continues to perform well… evidence of our disciplined credit risk management and client selection.” .
  • Q1 context (for trajectory): “We delivered exceptional results… deposit growth well above peers… We are optimistic about Huntington’s future.” .

Q&A Highlights

  • Guidance upgrades: Management increased 2025 outlook for loans (6–8%), deposits (4–6%), and NII (8–9%) citing strong pipelines and stable NIM dynamics .
  • Veritex deal: Executives framed the acquisition as a “springboard” for faster Texas growth with strong local franchise benefits; close expected early Q4’25 .
  • Fee momentum and mix: Payments (+7% Y/Y) and wealth continued to underpin fee growth; capital markets tied to commercial production expected to build into 2H, with some M&A timing sensitivity .
  • Tone vs prior quarter: Management characterized growth environment improving month by month; Q3 starting strong with spillover activity from June .

Estimates Context

  • EPS: Reported $0.34 vs S&P Global consensus $0.346 (in line)*; management noted a ~$0.04 EPS headwind from securities repositioning .
  • Revenue: S&P Global “Revenue” actual $1.839B vs consensus $1.971B (miss)*; company-reported total revenue (FTE) was $1.954B (+1% Q/Q, +8% Y/Y), reflecting net interest income (FTE) plus fees .
  • Implications: Raised 2025 growth guidance suggests estimate revisions upward for NII and balance sheet growth; modestly lower NCO guide supports provision expectations .

Values with asterisk (*) retrieved from S&P Global via GetEstimates.

Key Takeaways for Investors

  • Underlying momentum intact: NIM steady, deposit costs trending favorably, and balance sheet growth supports higher NII trajectory into 2H’25 .
  • Credit normalization manageable: NCOs improved to 0.20%; ACL robust at 1.86% as NPAs remain contained .
  • Guidance raised across core levers (loans, deposits, NII) — expect consensus upgrades for revenue/NII and potentially EPS, offset by higher expense run-rate (tech/data and incentives) .
  • Strategic Texas accelerant: Veritex acquisition enhances commercial opportunities and geographic diversification; regulatory timing the key execution variable .
  • Near-term trading setup: Mixed headline (fee decline from securities loss) vs strong core NII/credit and raised outlook; focus likely on NIM durability, deposit pricing, and integration risk into Q4 close .
  • Medium-term thesis: Balanced growth from specialty verticals and newer markets (Carolinas/Texas), improving fee mix (payments/wealth/cap markets), and capital accretion support ROTCE in mid/high teens through cycle .
  • Watch items: Expense inflation from growth investments, CET1 trajectory with RWA growth, and macro sensitivity (rate path, tariffs) to commercial activity .

Citations: Company 8‑K press release and financial supplement , Q1’25 8‑K and call , and Q2’25 call/transcript summaries and press releases from third-party sources as linked above.