Huntington Bancshares Incorporated

Huntington reported adjusted PPNR up 12% quarter-over-quarter, net interest income of $2.1 billion, and value-added fee revenues up more than 60% year-over-year, or about 30% organically excluding Cadence, Janney, and the corporate trust sale. Net interest margin rose 10 basis points year-over-year and declined 3 basis points sequentially. Non-interest expense was $1.8 billion, up $35 million from the prior quarter; excluding one-time items, it was $1.7 billion, up $145 million sequentially. Adjusted ROTCE was 17.5% in Q2 and 16.7% on a trailing four-quarter basis. For the full year, management now expects average loans to track at or above the high end of the range, NII to come in at the bottom end of the range or modestly below it, fee income to track at the high end of or above guidance, net charge-offs to be in the lower half of the 25 bps-35 bps range, and at least $550 million of stock repurchases. Management reiterated $365 million of Cadence cost synergies in the fourth quarter and $435 million of combined annualized run-rate cost synergies from Veritex and Cadence by Q4. For Q3 and Q4, Zach said NIM should rise modestly into the low 320 bps range in Q3 and the mid-to-high 320 bps range in Q4.

Stephen Steinour framed the quarter as evidence that Huntington has reached an inflection point: the core franchise is strong, the conversions are done, and the company can now focus on growth, revenue synergies, and capital returns. He emphasized that the Cadence conversion was the largest in the company’s history and that execution was successful despite the complexity. His tone was confident and upbeat, repeatedly pointing to the path toward the 2027 ROTCE target of 18%-19% and stronger tangible book value growth.

Zach Wasserman highlighted strong execution across lending, deposits, fees, and credit, citing $2.1 billion of NII, 12% sequential adjusted PPNR growth, 15% growth in value-added fee revenue, and 210 bps of positive operating leverage on a trailing 12-month basis. He said non-interest expense was $1.8 billion, with the adjusted run rate at $1.7 billion, and reiterated the plan to achieve $435 million of annualized run-rate cost synergies by Q4. On capital, he noted $310 million of the $550 million buyback plan had been completed year-to-date, $160 million was repurchased in the quarter, and the company expects an additional $1.1 billion-$1.2 billion of repurchases in 2027. He also said credit remains strong, with net charge-offs near the low end of guidance and stress-test losses of 5.9% of average loans in CCAR, second lowest in the regional peer group.

Analysts focused heavily on why NII guidance moved toward the low end or slightly below while the broader outlook was held steady. Management said the main pressure point is deposit costs and a more competitive funding environment, offset by expected loan growth, fee outperformance, deposit-base optimization after the Cadence conversion, and NIM expansion into Q3 and Q4. Questions also pressed on the gap between current earnings power and the 2027 EPS target; Zach pointed to high single-digit to low-double-digit revenue growth, 400-500 bps of operating leverage, stable credit, and lower share count from buybacks as the main bridge. Management also addressed slower organic loan growth, saying it reflected disciplined pullbacks in lower-return auto lending and some CRE/construction normalization rather than a broad demand problem.