tapebrief
HBAN · Q4 2025

HBAN · Q1 2026 Earnings

Cautious

Huntington Bancshares

Reported April 23, 2026

30-second summary

Huntington posted $2.59B revenue (+34% YoY) and adjusted EPS of $0.37 (+9% YoY, per management), with GAAP EPS of $0.25 (-26% YoY) reflecting acquisition-related expenses. The print was overshadowed by a cut to FY2026 NIM expectations to the high-320s from the mid-330s — roughly 10bps off the spread anchor that drove last quarter's bull case. Management offset the NIM cut with a 4-point raise to fee revenue growth (to 31–33%), a wider operating leverage band (400–450bps vs prior >250bps), and reaffirmed a FY2027 EPS guide of $1.90–1.93 with 18–19% ROTCE. The setup has shifted from rate-path-independent NIM expansion to fee-driven and synergy-driven earnings power; the Veritex/Cadence integration is now carrying the story.

Headline numbers

EPS

Q1 FY2026

$0.25

+13.6% vs est.

Revenue

Q1 FY2026

$2.59B

+33.9% YoY

+0.5% vs est.

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$2.59B+33.9%$2.19B+18.3%
EPS$0.25—$0.30-16.7%

Guidance

Huntington raised FY2026 fee revenue growth by 4 points to 31-33%, expanded operating leverage to 400-450bps, but lowered NIM guidance to high 320s; introduced FY2027 EPS guidance of $1.90-$1.93 with 18-19% ROTCE.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

New guidance

MetricPeriodGuideYoY
Earnings Per ShareFY2027$1.90 to $1.93—
Return on Tangible Common EquityFY202718% to 19%—
Efficiency RatioQ4 FY2026mid to low 54%—
Share Repurchase ProgramFY2026at least $550 million—

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Net Interest Margin
FY2026
mid 330shigh 320sLowered by ~10 basis points (from mid-330s to high-320s)Lowered
Fee Revenue Growth
FY2026
27% to 29%31% to 33%+4 percentage points (from 27-29% range to 31-33% range)Raised
Expense Growth
FY2026
32.5% to 33.5%lower half of 32.5% to 33.5%Tightened to lower half of prior range (~32.5% to 33.0%)Lowered
Operating Leverage
FY2026
Over 250 basis points400 to 450 basis points+150-200 basis points (from >250bps to 400-450bps range)Raised

Capital & returns

Q1 FY2026
SegmentQ1 FY2026
Return on Average Assets0.81%
Return on Average Tangible Common Shareholders' Equity11.6%
Common Equity Tier 1 Ratio10.2%

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Net Interest Margin (FTE basis)3.24%
Efficiency Ratio67.2%
Total Deposits$223.5 billion
Nonaccrual Loans Ratio0.71%
Nonperforming Assets Ratio0.72%

Management tone

Q2 raise-everything → Q3 raise-and-extend-to-2026 → Q4 close-Veritex-on-strength → Q1 cut-NIM-pivot-to-FY27.

From standalone NIM expansion confidence to active recalibration. Last quarter Zach Wasserman guided to ≥10bps of standalone NIM expansion in 2026 driven by fixed asset repricing — one of the more assertive forward-NIM statements Huntington had made. This quarter the same metric was cut by roughly that magnitude: "we now expect 2026 NIM to trend into the high 320s, compared to our prior expectation in the mid 330s." The reversal is partly defensive (elevated Fed cash for Middle East risk) and partly competitive (slower deposit cost relief), but it dismantles a centerpiece of last quarter's bull thesis. This is the most consequential single tone shift in four quarters.

From organic growth as strategy → Veritex as optionality → partnerships as the new flywheel. Q2 framed M&A as a consequence of organic strength; Q3 operationalized Veritex with branch-build cadence; this quarter the language is longer-dated and synergy-centric: "We are approaching an inflection point where strong core performance, combined with the benefits of our new partnerships, will drive higher returns and accelerate our earnings and tangible book value growth." The center of gravity has moved from NII compounding to synergy realization — a different earnings algorithm than the Street was underwriting in Q3.

From Q3's "raise the ROTCE range" forward-lean to Q1's reaffirmation of the FY2027 anchor. Last quarter management telegraphed that the 16–17% ROTCE range was no longer sufficient. This quarter they reaffirmed the 18–19% FY2027 target as on-track. The current Q1 ROTCE of 11.6% means investors are being asked to underwrite seven quarters of ~100bps-per-quarter expansion. The target is credible only if both the fee guide and the operating leverage band hold.

From "growth environment improved month by month" (Q2) to explicit macro downgrade. This quarter: "The macro environment is certainly more uncertain now…at the margin, economic growth this year will likely be lower than originally forecasted." Loan growth was also walked from "tracking the high end" to "closer to the midpoint" of the range. The cumulative effect — slower loans, lower NIM, more uncertain macro — is being papered over by fees and synergies. That's a fundamentally different earnings mix than the franchise has typically run on.

Recurring themes management leaned on this quarter:

Integration execution on track delivering synergiesFee income outperformance offsetting NII pressureBalance sheet strength and liquidity as competitive differentiatorDisciplined expense management and operating leverage2027 ROTCE target raised to 18-19% on partnership benefitsMacro uncertainty requiring cautious customer demand outlook

Risks management surfaced:

Geopolitical developments adding complexity to outlookLower income household pressure from cumulative inflation impactsMacro environment uncertainty and likely lower economic growthCompetitive deposit pricing environmentQuarter-to-quarter variability in reported NIM during Cadence portfolio optimization

Q&A highlights

Erica Najarian · UBS

Unpack incremental cost actions and baseline cost reduction amounts; address talent retention concerns from smaller peers experiencing culture clashes post-acquisition.

Management confirmed $50 million in baseline cost tuning, with emphasis on accelerating efficiency programs and reprioritizing investments. Noted 7 consecutive years of 1%+ annual cost reduction while reinvesting significantly. On talent, emphasized strong retention of leadership and teams, successful hiring announcements in Austin and Dallas, and noted that portfolio adjustments due to credit philosophy differences are marginal and manageable.

$50 million baseline cost tuning action7th consecutive year of 1%+ cost base reduction while reinvestingStrong overall retention with continued successful hiringAustin and Dallas announcements supporting talent expansion

John Arkstrom · RBC Capital Markets

Request for details on balance sheet optimization project: objectives, timeline, success metrics, and rationale for $3 billion buyback authorization versus $550 million near-term execution plan.

Management explained optimization is driven by calibrating to softer near-term economic growth while maintaining long-term support. Primary drivers: reducing commercial real estate (especially construction) as % of loan base, matching core deposit growth to loan growth, and managing NIM. $3 billion authorization provides multi-year evergreen flexibility; $550M (2026) + $1.1-1.2B (2027) already exceeds prior $1B authorization. Basel III represents additional 2027 repurchase opportunity.

$3 billion evergreen buyback authorization$550 million 2026 expected share repurchases$1.1-1.2 billion 2027 expected share repurchases7.7% RWA reduction expected under Basel III standardized approach (~80bps CET1 benefit)

Manan Gosalia · Morgan Stanley

Breakdown of NII guidance changes between lower spreads on loans and higher deposit costs; unpacking the margin outlook by component.

NII decline driven by lower loan growth (mid-range vs. high-end tracking) and modest NIM compression. Margin expected to trend to high 320s from mid-330s (7-8 bps lower): 5 bps from elevated cash balances, 2-3 bps from slightly higher deposit cost trajectory, remainder from lower asset yields on optimization. Deposit cost declines expected but at slower pace. Characterized environment as rational and competitive.

Margin compression 7-8 basis points to high 320s (from mid-330s)5 bps from elevated cash balances (liquidity buffer)2-3 bps from higher deposit cost trajectoryRemaining basis points from lower asset yields

John Pancari · Evercore

Detail on loan pricing and spread trends; explanation of why elevated cash at the Fed was not already baked into prior guidance.

No significant spread compression observed overall; modest 5-15 bps compression for high-quality commercial borrowers in competitive markets, with no expectation of further changes from forward pipelines. Elevated cash position (driven by Middle East geopolitical concerns) was not in prior plan; described as disciplined liquidity management and risk mitigation. Highlighted 118% unmodified LCR as top-quartile for large banks.

Loan spread compression range: 5-15 basis points for high-quality commercial borrowersNo expected further spread compression in forward pipelines118% unmodified LCR (top quartile for large banks)Elevated cash driven by Middle East geopolitical risk monitoring

Ben Austin · Autonomous Research

Walkthrough of raised fee income guidance drivers; long-term growth expectations for payments, wealth, and capital markets post-integration; extent of revenue synergy inclusion in outlook.

Fee raise attributed to strong performance in payments, wealth, and especially capital markets (60% organic YoY growth; TM Capital acquisition in January contributing). All businesses exceeding plan. $50-75M revenue synergies expected for 2026, largely already in guidance. Long-term assumption remains high single-digit overall fee growth and double-digit growth for power alleys, but expecting even faster growth over next 2 years driven by revenue synergies weighted to fee revenues. Wealth AUM growth >13% with doubled net flows YoY.

$50-75 million revenue synergies expected in 2026 (largely already in guidance)Capital markets 60% organic YoY growthWealth AUM growth >13% with doubled net flows YoYHigh single-digit long-term fee growth with double-digit power alley growth

Answers to last quarter's watch list

Reported Q4 NIM landing within the 316–318bps zone — Q4 2025 NIM printed at 3.15%, just below the 316–318 zone management had previously guided to. However, the 2026 path that 316–318 was supposed to lead into has now been cut from mid-330s to high-320s. Status: Resolved negatively (path lowered)
Revised ROTCE medium-term target — Management reaffirmed an 18–19% ROTCE target for FY2027 rather than as an immediate medium-term reset. Q1 2026 ROTCE of 11.6% requires substantial recovery to reach the target. Status: Resolved (range confirmed at 18–19% for 2027)
Veritex one-time expense inside $125–150M envelope — The press release and call did not flag an overshoot; the tightening of FY2026 expense growth to the lower half of the range suggests integration costs landed in-line.
Resolved positively
2026 NII growth disclosure — Management gave the components rather than a single NII range: NIM high-320s, fee growth 31–33%, expense growth in the lower half of guide, operating leverage 400–450bps. The NIM cut is the headline; the operating leverage raise is the offset. Status: Resolved (NIM lower, leverage higher) with mixed read
C&I loan growth sustaining above 15% YoY — Commercial Banking loans grew 40.9% YoY in Q1 reflecting the Veritex/Cadence consolidation, so organic C&I growth is no longer cleanly observable on a YoY basis. Management's commentary that loan growth is now tracking "closer to the midpoint" rather than the high end of the range suggests organic momentum has softened. Status: Not resolved (disclosure framework changed)
Equipment finance credit deterioration — Nonaccrual loans ticked up to 0.71% from 0.62% in Q4 2025, but the call did not specifically flag equipment finance as a driver.
Continue monitoring

What to watch into next quarter

Q2 2026 NIM stepping toward the high-320s revised path. Q1 printed 3.24%; the new exit target implies ~3.28–3.29% by Q4. A second consecutive quarter without sequential NIM expansion would call the high-320s into question and put the FY2027 EPS anchor under pressure within two quarters.

Whether elevated cash balances at the Fed normalize. Management attributed 5bps of the 7–8bps NIM cut to geopolitical liquidity buffer. If cash levels stay elevated through Q2, that becomes a structural rather than tactical headwind.

Fee revenue trajectory holding the 31–33% FY26 path. With capital markets +60% organic YoY and wealth +13% AUM, the fee guide raise is doing the work to offset the NIM cut. A miss here removes the offset.

Operating leverage in the 400–450bps range cleanly observable by Q3. The 67.2% Q1 efficiency ratio versus the Q4 2026 mid-to-low 54% target requires roughly 350bps of quarterly improvement. Q2 needs to show concrete progress toward the exit rate.

Nonaccrual ratio trajectory. The sequential move from 0.62% (Q4 2025) to 0.71% (Q1 2026) is the first material credit signal in several quarters. Another 10bps step in Q2 would invalidate the "underlying fundamentals remain solid" framing.

$550M FY2026 buyback pace. Management disclosed $250M+ year-to-date ($150M in Q1, $100M+ quarter-to-date in Q2). A first-half pace materially below ~$275M would suggest capital is being held back for optimization or M&A rather than returned.

Sources

  1. Huntington Bancshares Q1 2026 8-K / press release (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/49196/000004919626000032/hban20260331_8kex992.htm
  2. Q1 2026 earnings call prepared remarks and Q&A (Steve Steinour, Zach Wasserman).

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