Huntington Bancshares Inc /Md/ (HBAN) Stock Analysis and Metrics

Huntington Bancshares

NASDAQ: HBAN

$17.35 ▼ -0.05 (-0.26%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap32.50 Bn

P/E15.71

P/S20.41

Div. Yield0.03

ROIC (Qtr)0.03

Total Debt (Qtr)23.47 Bn

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About

Huntington Bancshares Incorporated is a regional bank holding company that provides a full range of banking and financial services to consumers and businesses. The company generates revenue primarily through interest income on loans and investments, as well as fees from deposit accounts, wealth management, trust services, capital markets, and insurance products. The company operates through the following segments: • The Commercial Banking segment serves…

Investment Thesis

▲ Bull case

Huntington Bancshares has a clear path to deliver 2027 EPS of $1.90-$1.93, which represents approximately 30% growth from current levels, driven by the realization of cost and revenue synergies from the Cadence and Veritex integrations that are tracking ahead of schedule; management emphasized that Veritex conversion is complete and Cadence systems migration is on track for June, with cost synergies expected to be fully run-rated into earnings power by Q4 2026, directly supporting the raised ROTCE target of 18%-19% for 2027, a significant increase from the current 16%-17% range, and this profitability expansion is underpinned by disciplined expense management and positive operating leverage of 220 basis points on a trailing four-quarter basis, excluding one-time items, which demonstrates the company's ability to grow revenue faster than expenses even as loan growth moderates due to portfolio optimization.
The company's fee-based businesses are experiencing exceptionally strong organic growth that is not fully reflected in current market expectations, with payments revenue up 21% year-over-year, capital markets organic revenue growing nearly 60%, and wealth management revenue increasing 19% (with underlying growth of about 10% excluding M&A), and management raised full-year 2026 fee revenue guidance to 31%-33% from 27%-29%, indicating confidence in sustained double-digit expansion in these high-return value-added services as integration synergies materialize, which will offset pressure on net interest income and drive earnings growth independent of loan volume, a critical factor given the guidance for loan growth to track closer to the midpoint of the range rather than the upper end due to economic calibration and portfolio mix management.
Huntington Bancshares is positioned to benefit meaningfully from Basel III Endgame, which anticipates a 7.5%-8% reduction in risk-weighted assets, resulting in an 80 basis point increase in reported CET1 ratio, and this regulatory capital benefit, combined with the company's strong liquidity profile (unmodified LCR of 118% and contingent liquidity covering 173% of uninsured deposits) and insured deposit ratio of 69%, creates substantial capacity for increased shareholder returns beyond the current $550 million annual repurchase guidance, as evidenced by the board's approval of a new $3 billion share repurchase authorization, which management explicitly linked to the opportunity presented by evolving capital regulations, allowing for accelerated capital distribution while maintaining strong capital ratios well above regulatory minimums and supporting tangible book value growth of 9% year-over-year.

Huntington Bancshares has a clear path to deliver 2027 EPS of $1.90-$1.93, which represents approximately 30% growth from current levels, driven by the realization of cost and revenue synergies from the Cadence and Veritex integrations that are tracking ahead of schedule; management emphasized that Veritex conversion is complete and Cadence systems migration is on track for June, with cost synergies expected to be fully run-rated into earnings power by Q4 2026, directly supporting the raised ROTCE target of 18%-19% for 2027, a significant increase from the current 16%-17% range, and this profitability expansion is underpinned by disciplined expense management and positive operating leverage of 220 basis points on a trailing four-quarter basis, excluding one-time items, which demonstrates the company's ability to grow revenue faster than expenses even as loan growth moderates due to portfolio optimization.
The company's fee-based businesses are experiencing exceptionally strong organic growth that is not fully reflected in current market expectations, with payments revenue up 21% year-over-year, capital markets organic revenue growing nearly 60%, and wealth management revenue increasing 19% (with underlying growth of about 10% excluding M&A), and management raised full-year 2026 fee revenue guidance to 31%-33% from 27%-29%, indicating confidence in sustained double-digit expansion in these high-return value-added services as integration synergies materialize, which will offset pressure on net interest income and drive earnings growth independent of loan volume, a critical factor given the guidance for loan growth to track closer to the midpoint of the range rather than the upper end due to economic calibration and portfolio mix management.
Huntington Bancshares is positioned to benefit meaningfully from Basel III Endgame, which anticipates a 7.5%-8% reduction in risk-weighted assets, resulting in an 80 basis point increase in reported CET1 ratio, and this regulatory capital benefit, combined with the company's strong liquidity profile (unmodified LCR of 118% and contingent liquidity covering 173% of uninsured deposits) and insured deposit ratio of 69%, creates substantial capacity for increased shareholder returns beyond the current $550 million annual repurchase guidance, as evidenced by the board's approval of a new $3 billion share repurchase authorization, which management explicitly linked to the opportunity presented by evolving capital regulations, allowing for accelerated capital distribution while maintaining strong capital ratios well above regulatory minimums and supporting tangible book value growth of 9% year-over-year.

▼ Bear case

Huntington Bancshares' net interest margin is projected to trend into the high 3.20% range for 2026, down from earlier mid-3.30% guidance, with 5 basis points of the reduction stemming from holding higher Fed cash balances (a liquidity buffer with negligible revenue impact) and 2-3 basis points from asset optimization and deposit costs, indicating that the core driver of net interest income growth—margin expansion—is weakening, and while management offsets this with strong fee income growth, the company's reliance on fee revenue to sustain earnings growth introduces execution risk, as any slowdown in capital markets, payments, or wealth management activity could disproportionately impact profitability given the guidance for loan growth to track closer to the midpoint of the range rather than the upper end due to portfolio mix management and economic calibration in a softer macro environment.
Management expressed being 'a little bit more measured' regarding future exposure to commercial real estate, especially construction, signaling ongoing portfolio de-risking that will constrain loan growth potential, and while credit metrics remain stable with a criticized asset ratio of 4.3% and nonperforming asset ratio of 72 basis points post-Cadence merger, the explicit reduction in higher-yielding commercial real estate construction exposure—historically a driver of loan growth and margin—combined with the expectation that loan growth will track at the midpoint of the guided range, suggests a fundamental shift toward lower-risk, lower-return assets that may limit the bank's ability to achieve organic loan growth at levels necessary to support the upper end of earnings projections without continued reliance on fee revenue synergies that are not yet fully realized or guaranteed.
The company's expense discipline, while currently effective, faces mounting pressure from integration costs and variable costs tied to higher fee revenue, as evidenced by operating expenses increasing $20 million sequentially on a normalized basis, and although management delivered 220 basis points of positive operating leverage on a trailing four-quarter basis, the tightening of 2026 expense growth guidance to the lower half of the 32.5%-33.5% range—despite higher variable costs from increased fee revenue—implies limited flexibility to absorb further cost increases or investment needs, and if macroeconomic headwinds persist or integration synergies fall short of expectations, the ability to modulate expenses downward without impairing long-term growth initiatives (such as AI programs, digital capabilities, and wealth platform upgrades) could be constrained, potentially undermining the 2027 EPS target of $1.90-$1.93 and the ROTCE expansion to 18%-19% if revenue growth fails to meet the raised fee guidance of 31%-33% and net interest income continues to face margin pressure.

Huntington Bancshares' net interest margin is projected to trend into the high 3.20% range for 2026, down from earlier mid-3.30% guidance, with 5 basis points of the reduction stemming from holding higher Fed cash balances (a liquidity buffer with negligible revenue impact) and 2-3 basis points from asset optimization and deposit costs, indicating that the core driver of net interest income growth—margin expansion—is weakening, and while management offsets this with strong fee income growth, the company's reliance on fee revenue to sustain earnings growth introduces execution risk, as any slowdown in capital markets, payments, or wealth management activity could disproportionately impact profitability given the guidance for loan growth to track closer to the midpoint of the range rather than the upper end due to portfolio mix management and economic calibration in a softer macro environment.
Management expressed being 'a little bit more measured' regarding future exposure to commercial real estate, especially construction, signaling ongoing portfolio de-risking that will constrain loan growth potential, and while credit metrics remain stable with a criticized asset ratio of 4.3% and nonperforming asset ratio of 72 basis points post-Cadence merger, the explicit reduction in higher-yielding commercial real estate construction exposure—historically a driver of loan growth and margin—combined with the expectation that loan growth will track at the midpoint of the guided range, suggests a fundamental shift toward lower-risk, lower-return assets that may limit the bank's ability to achieve organic loan growth at levels necessary to support the upper end of earnings projections without continued reliance on fee revenue synergies that are not yet fully realized or guaranteed.
The company's expense discipline, while currently effective, faces mounting pressure from integration costs and variable costs tied to higher fee revenue, as evidenced by operating expenses increasing $20 million sequentially on a normalized basis, and although management delivered 220 basis points of positive operating leverage on a trailing four-quarter basis, the tightening of 2026 expense growth guidance to the lower half of the 32.5%-33.5% range—despite higher variable costs from increased fee revenue—implies limited flexibility to absorb further cost increases or investment needs, and if macroeconomic headwinds persist or integration synergies fall short of expectations, the ability to modulate expenses downward without impairing long-term growth initiatives (such as AI programs, digital capabilities, and wealth platform upgrades) could be constrained, potentially undermining the 2027 EPS target of $1.90-$1.93 and the ROTCE expansion to 18%-19% if revenue growth fails to meet the raised fee guidance of 31%-33% and net interest income continues to face margin pressure.

Peer Comparison

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S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	KB	KB Financial Group Inc.	42,090.38 Bn	0.00 Bn	0.01 Mn	56.66 Bn
2	SHG	Shinhan Financial Group Co Ltd	33,919.15 Bn	0.00 Bn	0.00 Mn	40.46 Bn
3	BCH	Bank Of Chile	4,123.52 Bn	368.17 Bn	1.57 Mn	0.00 Bn
4	LYG	Lloyds Banking Group plc	360.83 Bn	0.00 Bn	0.00 Mn	42.37 Bn
5	FCAP	First Capital Inc	204.17 Bn	0.00 Bn	0.03 Mn	-
6	LARK	Landmark Bancorp Inc	187.97 Bn	0.00 Bn	0.00 Mn	0.00 Bn
7	NWG	NatWest Group plc	144.82 Bn	0.00 Bn	0.00 Mn	94.66 Bn
8	PNC	Pnc Financial Services Group, Inc.	101.80 Bn	0.00 Bn	0.00 Mn	21.42 Bn

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Investment Thesis

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Investment Thesis

Consolidation Items Breakdown of Revenue (2021)

Peer Comparison

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