Executive Summary / Key Takeaways

• Accelerated Growth and Profitability: Huntington Bancshares ($HBAN) is demonstrating peer-leading organic growth in loans and deposits, coupled with robust revenue and profit expansion. The company reported a 21% year-over-year increase in Q3 2025 net income and an 18% rise in adjusted EPS, driven by strategic investments and strong execution.
• Strategic M&A and Geographic Expansion: Recent acquisitions of Veritex Holdings (closed October 2025) and the pending acquisition of Cadence Bank (expected Q1 2026) are set to significantly accelerate HBAN's presence and scale in high-growth markets, particularly Texas and the broader South, creating a top 10 bank with $276 billion in assets.
• Differentiated Technology and Operational Efficiency: Huntington is leveraging its API-first Treasury Management Connectivity Ecosystem to offer sophisticated financial intelligence and seamless integration for business customers. This, alongside disciplined expense management, is driving positive operating leverage and enhancing customer experience.
• Robust Capital and Credit Profile: The company maintains a strong capital position with a CET1 ratio of 10.60% and an adjusted CET1 (including AOCI) of 8.7%, exceeding well-capitalized standards. Credit quality remains strong, with net charge-offs at 0.22% in Q3 2025 and a conservative Allowance for Credit Losses (ACL) of 1.86%.
• Optimistic Outlook with Sustainable NIM Expansion: Management projects continued strong loan and deposit growth for 2025 and 2026, with standalone Net Interest Margin (NIM) expected to rise by at least 10 basis points in 2026, primarily from fixed asset repricing. This, combined with strategic fee income growth, underpins a confident financial outlook.

A Legacy of Growth and a Vision for the Future

Huntington Bancshares Incorporated, a diversified regional bank holding company headquartered in Columbus, Ohio, has a rich history dating back to 1866. Over its extensive tenure, Huntington has cultivated a reputation for being a people-first, customer-centered institution, committed to enhancing lives, fostering business prosperity, and strengthening communities. This enduring ethos has shaped its strategic approach, particularly in recent years, as the company has proactively invested in growth amidst broader industry caution.

In 2023, when many financial institutions scaled back due to liquidity, capital, or credit concerns, Huntington embarked on a deliberate strategy of investment. This involved accelerating new customer acquisition, expanding its talent base with hundreds of experienced bankers, and enhancing its capabilities. This counter-cyclical approach has since yielded leading deposit and fee revenue growth, positioning Huntington for sustained outperformance. The company's disciplined management, coupled with a long-standing "aggregate moderate to low-risk appetite," has consistently delivered strong and predictable results through various economic cycles.

Competitive Landscape and Strategic Positioning

Huntington operates in a highly competitive banking sector, vying with a mix of larger national players and other regional banks. Its primary direct competitors include PNC Financial Services Group , Fifth Third Bancorp , KeyCorp , and Regions Financial Corporation , all of which offer similar comprehensive banking services across consumer and commercial segments.

Huntington's market positioning is characterized by its strong regional presence, particularly in the Midwest, where it boasts an extensive branch network and deep community ties. This localized expertise often translates into stronger customer loyalty and tailored lending solutions for small and middle-market businesses, providing a unique value proposition that can differentiate it from larger, more generalized institutions like PNC . While PNC (PNC) is often perceived as more advanced in technological innovation, offering faster digital services, Huntington's focus on integrated services and relationship banking helps it maintain a competitive edge in customer retention.

Against peers like Fifth Third Bancorp (FITB) and Regions Financial (RF), Huntington's diversified segment offerings, including a robust vehicle finance business, provide a broader base for market penetration. However, some competitors, such as KeyCorp (KEY), may hold an advantage in specialized advisory services within wealth management. Huntington's strategic response to this competitive environment involves not only leveraging its core strengths but also aggressively expanding into high-growth geographies and developing specialized verticals. This strategy has enabled Huntington to "massively outpace its peers on both loan and deposit growth," driving a "phenomenal pace of PPNR expansion." The company's commercial card portfolio, for instance, achieved the second-highest growth rate in the industry in 2024, underscoring its operational effectiveness in key fee-generating areas.

Indirect competitors, including fintech companies and digital banks, pose a different challenge by offering alternative, often more accessible, digital solutions. Huntington addresses this by investing in its own technological capabilities and focusing on deepening primary bank relationships, which provides a stable, lower-cost funding base. The company's strategic acquisitions, such as Veritex Holdings and Cadence Bank , are also designed to rapidly scale its presence in attractive markets, enhancing its competitive standing and market share against both direct and indirect rivals.

Technological Differentiation and Innovation

Huntington is actively investing in technology to enhance its operational efficiency, improve customer experience, and maintain a competitive edge. A prime example of this commitment is the recently announced Treasury Management Connectivity Ecosystem. This transformative platform, built on an API-first architecture, is designed to deliver financial control, seamless integration, and intelligent automation for business customers.

The tangible benefits of this technology are significant. The Connectivity Ecosystem can process more than 10 million transaction events daily and offers over 500 interfaces, enabling businesses to unify their banking, enterprise resource planning (ERP), and other financial tools. This streamlined operation unlocks actionable insights from existing systems, leading to faster, data-driven decisions for clients. For investors, this technological advancement contributes to Huntington's competitive moat by offering superior digital capabilities to commercial clients, potentially leading to increased customer stickiness, higher fee income from treasury management services, and improved operational efficiency. This differentiation is crucial in a banking landscape where technological prowess is increasingly a key determinant of market share and profitability.

Beyond this, Huntington is also exploring and integrating other innovative solutions. A partnership with True Link, announced in September 2025, aims to set a new standard in family banking, addressing the complex financial challenges of managing money for loved ones. The company also continues to invest in talent for its leverage finance program and private equity coverage, indicating a commitment to technology-driven solutions within capital markets. These initiatives collectively underscore Huntington's strategic intent to leverage technology not just for efficiency, but as a core driver of customer acquisition, deepening relationships, and long-term profitable growth.

Robust Financial Performance and Operational Momentum

Huntington Bancshares delivered an "outstanding quarter" in Q3 2025, with net income attributable to Huntington rising to $629 million, or $0.41 per diluted common share, marking a 21% increase year-over-year. On an adjusted basis, EPS grew 18% from the prior year. This strong performance reflects the company's strategic execution and operational effectiveness.

Net interest income (NII) for Q3 2025 increased by $155 million, or 11%, from the year-ago quarter, reaching $1.50 billion. This was primarily driven by a 15 basis point increase in the Fully-Taxable Equivalent (FTE) Net Interest Margin (NIM) to 3.13% and a 6% increase in average earning assets. The NIM expansion was largely due to a decrease in the cost of funding, partially offset by a slight decrease in yields on earning assets and hedging activity. Year-to-date (nine months ended September 30, 2025), FTE NII increased $458 million, or 11%, with NIM rising 12 basis points to 3.12%.

Noninterest income also showed significant strength, increasing by $105 million, or 20%, to $628 million in Q3 2025. This was bolstered by a $24 million gain from the sale of a portion of its trust and custody business, alongside robust increases in payments and cash management revenue (up 10% year-over-year, with commercial payments up 20%), capital markets and advisory fees (up 21%), customer deposit and loan fees, and wealth and asset management revenue (up 12%, with AUM up 11% and advisory households up 9%). Year-to-date, noninterest income grew 8%, driven by these key strategic areas.

Operating expenses increased by $116 million, or 10%, to $1.20 billion in Q3 2025, primarily due to higher personnel costs and outside data processing and other services, including $14 million in Veritex Holdings acquisition-related expenses. Despite this, Huntington has achieved "500 basis points of positive operating leverage" on a trailing twelve-month adjusted basis, demonstrating its commitment to efficiency even while investing for growth. The company's efficiency ratio improved to 57.40% in Q3 2025 from 59.40% in Q3 2024.

Loan growth accelerated to 9.2% year-over-year in Q3 2025, with average loan balances increasing $2.8 billion, or 2%, from the prior quarter. New initiatives, including geographic expansion and specialty verticals, contributed approximately 40% of this growth. Average deposits increased by $1.4 billion, or 1%, in Q3 2025, with the overall cost of deposits declining by two basis points, reflecting disciplined pricing and a focus on primary bank relationships.

Strategic Initiatives and Growth Trajectory

Huntington's growth strategy is multifaceted, combining organic expansion with strategic acquisitions to enhance its market footprint and capabilities. The company's recent history is marked by a deliberate "investment cycle" that is "not at the end," with management asserting that "the growth opportunities today are the most attractive they've been since I joined Huntington."

A cornerstone of this strategy is geographic expansion. The company has been actively building out its presence in North and South Carolina, with plans to open "more than 20 branches next year" (2026) to bring its full franchise to the region. Similarly, in Texas, Huntington established a local banking presence in 2009, which was significantly bolstered by the addition of middle market teams that quickly achieved profitability. The Veritex Holdings, Inc. acquisition, completed on October 20, 2025, is a pivotal step, immediately establishing Huntington as the "fourteenth largest depository in the state and the fifth largest in Dallas." This $1.70 billion transaction is expected to generate significant cost and revenue synergies, serving as a "springboard" for further growth in the dynamic Texas market.

Further solidifying its Southern footprint, Huntington announced on October 27, 2025, a definitive merger agreement to acquire Cadence Bank in a $7.40 billion all-stock transaction, expected to close in Q1 2026. This acquisition will create a "top 10 bank with assets of $276 billion and deposits of $220 billion," expanding Huntington's reach to 21 states and making it the largest bank in Mississippi and a top 10 bank in Alabama and Arkansas by deposits. These mergers are expected to unlock substantial revenue synergies by integrating Huntington's comprehensive product offerings, including payments, wealth management, and capital markets, into the acquired customer bases.

Beyond geography, Huntington is also expanding its specialized verticals. In Q1 2025, it launched the Financial Institutions Group and Aerospace and Defense verticals, and it expects to add "one to two new verticals every year." These initiatives, coupled with the ongoing success of existing specialty businesses like Funds Finance, are key drivers of loan growth and fee income.

Capital, Liquidity, and Risk Management

Huntington maintains a robust financial foundation, characterized by strong capital and liquidity positions, underpinned by a disciplined risk management framework. At September 30, 2025, total assets stood at $210.20 billion, with total deposits of $165.20 billion, an increase of 2% since December 31, 2024. Insured deposits comprised approximately 70% of total deposits, reflecting a stable and diversified funding base. The Bank's primary funding source is customer deposits, which funded 75% of total assets and 115% of total loans and leases.

The company's Common Equity Tier 1 (CET1) risk-based capital ratio was 10.60% at September 30, 2025, comfortably above regulatory well-capitalized standards. The tangible common equity to tangible assets ratio also improved to 6.80%. Huntington's Stress Capital Buffer (SCB) requirement is at the minimum of 2.50%, indicating strong resilience under stress scenarios. The company's capital management strategy prioritizes funding high-return loan growth and supporting its strong dividend yield, with an aim to drive adjusted CET1 (inclusive of AOCI) higher towards the midpoint of its 9-10% operating range. A $1 billion common share repurchase authorization was approved in April 2025, providing flexibility for future capital deployment, with management anticipating "approximately $50 million of repurchases per quarter through 2026."

Credit quality remains a core strength, consistent with Huntington's "aggregate moderate-to-low risk appetite." The Allowance for Credit Losses (ACL) stood at $2.60 billion, or 1.86% of total loans and leases, at September 30, 2025. Net charge-offs (NCOs) were an annualized 0.22% in Q3 2025, down from 0.30% in the prior year, largely due to decreased commercial and industrial NCOs and net recoveries in commercial real estate (CRE) loans. While the office CRE portfolio remains an area of uncertainty, it constitutes a manageable 1% of total loans and leases, with robust ACL reserves of approximately 11%. Management continuously assesses macroeconomic uncertainties, including tariffs, inflation, and geopolitical instability, and incorporates these into its ACL modeling, including a hypothetical adverse scenario that would increase ACL by approximately $0.70 billion.

Outlook and Guidance

Huntington Bancshares is entering the final quarter of 2025 with significant momentum and a confident outlook. Management has raised its full-year 2025 guidance, projecting average daily balance (ADB) loan growth of approximately 9% to 9.5% (inclusive of Veritex Holdings ) and ADB deposit growth of 6.5% to 7% (inclusive of Veritex Holdings ). Standalone Net Interest Income (NII) guidance has been increased to 10% to 11% growth year-over-year, driven by strong loan growth and an expanding NIM. Standalone fee income is expected to grow approximately 7%.

For the fourth quarter of 2025, standalone Huntington NIM (excluding Veritex Holdings ) is expected to rise by one to two basis points from the Q3 level. The Veritex Holdings acquisition is anticipated to contribute approximately $20 million in core Pre-Provision Net Revenue (PPNR) and lift the reported NIM by an additional two to three basis points in Q4 2025. Looking ahead to 2026, standalone NIM is projected to rise by "at least 10 basis points," primarily due to continued benefits from fixed asset repricing, a trend expected to extend into 2027. This NIM expansion is deemed achievable across various Federal Reserve rate scenarios, from zero to seven cuts, supported by Huntington's "near-neutral" asset sensitivity. Veritex Holdings is expected to add an additional two to three basis points to NIM expansion in 2026.

Expense growth for full-year 2025 is forecast at 6.5%, driven by volume-related factors and higher incentive compensation, but the company expects to achieve "over 250 basis points of efficiency ratio improvement" through positive operating leverage. Management's baseline assumption for share repurchases is "approximately $50 million per quarter through 2026," balancing capital return with continued high-return loan growth.

Conclusion

Huntington Bancshares stands as a compelling investment story, distinguished by its proactive growth strategy, robust financial performance, and disciplined risk management. The company's ability to invest and expand during periods of industry uncertainty has yielded significant momentum, reflected in peer-leading loan and deposit growth, and strong revenue and profit expansion. Strategic acquisitions like Veritex Holdings (VBTX) and Cadence Bank (CADE) are poised to further amplify this growth, particularly in dynamic Southern markets, while its investments in technological differentiation, such as the Treasury Management Connectivity Ecosystem, enhance its competitive moat and operational efficiency.

With a strong capital base, conservative credit profile, and a clear roadmap for sustained NIM expansion and fee income growth, Huntington is well-positioned to deliver long-term shareholder value. While macroeconomic uncertainties and competitive pressures persist, the company's "aggregate moderate to low-risk appetite" and proven execution capabilities provide a solid foundation. Investors should recognize Huntington's strategic foresight and operational excellence as key drivers for continued outperformance in an evolving financial landscape.