Huntington Bancshares NASDAQ: HBAN executives highlighted what CEO Steve Steinour called an “outstanding” first quarter of 2026, pointing to solid organic growth, record capital markets performance, and progress integrating recent partnerships and acquisitions. Management also updated its 2026 outlook, trimming certain net interest assumptions while lifting expectations for fee revenue growth and tightening expense guidance.
Management: Economic conditions steady, but consumer trends mixed
Steinour opened the call by describing a “dynamic global environment,” noting geopolitical developments as a source of uncertainty, while characterizing conditions in Huntington’s footprint as “remaining consistent with prior quarters.” He said the bank continues to see “broad-based strength across commercial end markets” and is “not seeing any signs of a material shift in underlying demand.”
On the consumer side, Steinour said trends are “a bit more mixed,” with middle- and upper-income consumers continuing to spend, while lower-income households face pressure from cumulative inflation effects. Despite uncertainty, he said the bank’s outlook for the year is unchanged, adding that second-quarter pipelines are healthy and customer activity remains steady.
Quarterly results: EPS growth, margin expansion, and record capital markets revenue
CFO Zach Wasserman reported earnings per common share of $0.25 for the quarter. On an adjusted basis, excluding acquisition-related expenses and other notable items, EPS was $0.37, up 9% year-over-year. Adjusted pre-provision net revenue increased 36%, which Wasserman attributed to strong underlying performance across the franchise and contributions from recent partnerships.
Net interest income increased $301 million, or 18.7% sequentially, and was up 33% year-over-year. Net interest margin was 3.24%, up 9 basis points from the prior quarter. Wasserman said the margin increase was driven by lower funding costs, reduced hedge drag, and purchase accounting, partially offset by lower free-funds benefit and higher Fed cash balances.
Fee income was a major focus for management. Wasserman said fee revenue exceeded the bank’s plan and reflected strong customer activity trends. On an adjusted basis, excluding acquisition and divestiture activity this year and last, fee income grew 18% year-over-year. He cited:
- Payments revenue up 21% year-over-year; on an organic basis excluding acquisitions, payments grew about 10%, driven primarily by commercial payments.
- Wealth management revenue up 19% year-over-year, supported by household acquisition and positive assets under management net inflows.
- Capital markets delivering its strongest revenue quarter on record, with revenue excluding the impact of acquisitions up nearly 60% year-over-year, supported by loan syndications, advisory, debt capital markets, fixed income sales and trading, and rate hedging.
- Loan and deposit fees up 28% year-over-year, driven by loan commitment fees; excluding acquisitions, growth was about 18%.
On expenses, Wasserman said that on a normalized basis—excluding one-time costs and the impact of absorbing Cadence’s expense base as well as Janney and TM Capital—operating expenses rose $20 million sequentially, reflecting what he described as continued cost discipline. He also discussed an “enterprise-wide AI program” focused on technology, process transformation, customer-facing use cases, colleague productivity and training, and data/platform capabilities, which he said is “already contributing to productivity and efficiency.”
Loans, deposits, and liquidity: Organic growth plus a liquidity build
Excluding the addition of Cadence on an end-of-period basis, loan balances increased 1.5%, or $2.2 billion, driven by strength in core markets and commercial verticals. Wasserman cited contributions from corporate specialty banking verticals including financial institutions, tech and telecom, and industrials, as well as asset finance and middle market banking.
On deposits, excluding Cadence, core deposits increased $3.8 billion, or 2.3% quarter-over-quarter, as the bank maintained “disciplined pricing” and focused on relationship-led deposit gathering, according to Wasserman.
Steinour emphasized balance sheet strength and said Huntington decided to “temporarily build additional liquidity,” adding cash to the balance sheet. Management said available contingent liquidity was about 173% of uninsured deposits; 69% of total deposits are insured; and the bank’s unmodified liquidity coverage ratio was 118%.
In response to analyst questions, Wasserman said the additional Fed cash balances were not included in the prior plan and were intended to keep Huntington in a position of strength. Steinour added that “the Middle East issues are what drove us to that decision.”
Integration progress, capital return, and updated outlook
Steinour said partner integrations are “on track,” noting the Veritex conversion was completed in the first quarter and that the bank remains on track for the Cadence conversion in June. He said Huntington has onboarded “over 6,000 new colleagues and 1.5 million new customers,” and management pointed to early revenue synergy benefits in capital markets and payments, as well as increased card usage and new consumer account openings.
On capital, Wasserman said Huntington increased its 2026 share repurchase plan to $550 million and reported more than $250 million in repurchases year-to-date, including $150 million in the first quarter and more than $100 million in the second quarter to date, representing about 15 million shares retired. The board also approved a new $3 billion share repurchase authorization replacing the prior program.
Huntington reiterated its longer-term profitability goals and raised its return-on-tangible-common-equity target to 18%–19%, which Steinour said is driven by expected synergies from partnerships, growth in higher-return fee services, and continued capital return. Wasserman said the bank remains on track for its 2027 EPS projection of $1.90 to $1.93 and ROTCE of 18%–19%.
For 2026, management adjusted certain components of guidance. Wasserman said net interest income is now expected to be at the low end of the bank’s guided range, reflecting loan growth expected to be closer to the midpoint of the range rather than the high end, modestly less improvement in deposit costs than previously assumed, and the impact of holding incremental Fed cash that reduces reported NIM. He said the bank now expects 2026 net interest margin to “trend into the high 320s” versus a prior expectation in the “mid 330s,” with 5 basis points attributed to the higher cash balances and about 2–3 basis points attributed to asset optimization and deposit costs.
To offset pressure on net interest assumptions, Huntington raised its expectations for fee revenue growth by 4 percentage points to 31%–33% and tightened its 2026 expense growth range to the lower half of 32.5%–33.5%. Wasserman said these changes would likely result in full-year operating leverage of about 400–450 basis points and reiterated an expectation for a fourth-quarter efficiency ratio in the mid- to low-54% range.
On credit, Wasserman said net charge-offs were 26 basis points and criticized assets were 4.3%, with non-performing assets at 72 basis points. Chief Credit Officer Brendan Lawlor said the bank remains vigilant and continues to be measured in commercial real estate exposure, “particularly on the construction side,” which he said the bank expects to reduce organically over the next two-plus years.
During Q&A, Wasserman said the bank’s preliminary assessment of the revised standardized approach for Basel III endgame suggested a 7.5%–8% reduction in risk-weighted assets, which he said would equate to about 80 basis points of reported CET1 benefit, though he emphasized more steps are needed before finalization and implementation clarity.
Steinour closed by emphasizing organic growth momentum, integration progress, and the bank’s line of sight to its 2027 targets, calling fourth quarter 2026 a point when the run-rate benefits of synergies should be more visible in results.
About Huntington Bancshares NASDAQ: HBAN
Huntington Bancshares Incorporated NASDAQ: HBAN is a bank holding company headquartered in Columbus, Ohio, that provides a broad range of banking and financial services through its principal subsidiary, Huntington National Bank. The company's operations are centered on retail and commercial banking, and it serves individual consumers, small and middle-market businesses, and institutional customers.
Huntington's product offerings include traditional deposit and lending products, consumer and commercial loans, mortgage origination and servicing, auto financing, and business banking solutions.
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