425: Huntington Bancshares Updates Guidance, Highlights Growth

Huntington Bancshares provided updated financial guidance for fiscal year 2025 and detailed its growth strategy, including the anticipated Cadence Bank merger, at the Goldman Sachs Financial Services Conference.

Summary

• Presented at the 2025 Goldman Sachs Financial Services Conference on December 10, 2025, by Chairman, President, and CEO Steve Steinour and CFO Zach Wasserman.
• Updated fiscal year 2025 guidance projects higher average loans (9-9.5%) and deposits (6.5-7%), indicating strong organic growth.
• Net Interest Income guidance increased by $20 million, reflecting a ~12% increase for the combined enterprise including Veritex.
• Noninterest expense guidance includes an additional ~$60 million for Veritex's partial quarter, with a target of ~250bps operating leverage for the combined enterprise.
• Net Charge-offs for FY25 are expected at the midpoint of 20-30bps.
• Highlighted strong organic growth, with standalone loans growing +$2.8 billion and deposits +$1.3 billion in 4Q QTD (as of November 30, 2025).
• Emphasized a 'flywheel for value creation' driven by a differentiated operating model, sustainable operating leverage, disciplined capital allocation, and robust risk management.
• The Cadence Bank partnership is expected to create a multi-region powerhouse with pro forma assets of ~$276 billion, deposits of ~$220 billion, and loans & leases of ~$184 billion (as of September 30, 2025).
• Medium-term financial targets (2027 goal) include 6-9% PPNR CAGR, positive operating leverage, and 18-19% ROTCE.
• Tangible Book Value (TBV) per share increased by 10.3% year-over-year to $9.54 as of 3Q25.

Sentiment

Score: 8

Explanation: The filing presents a strong positive outlook with updated guidance exceeding previous expectations, successful integration track records, and ambitious medium-term financial targets. While the Cadence merger has some dilution, the overall strategic direction and performance metrics are highly favorable.

Positives

• Updated FY25 guidance projects higher average loans (9-9.5%) and deposits (6.5-7%), indicating strong organic growth at the high end or slightly above previous ranges.
• Net Interest Income guidance increased by $20 million, reflecting strong performance.
• The TCF merger achieved a 1.5-year tangible book value earn-back, significantly better than the guided 2.7 years.
• No dilution is expected from the Veritex acquisition due to the elimination of CECL double count, outperforming the initial guide of <1% dilution.
• Post-TCF loan growth (2Q21-2Q25 CAGR) of 4.3% for Huntington Bancshares (HBAN) exceeded the peer median of 2.7% and Real GDP growth of 2.1%.
• The Cadence Bank partnership is expected to expand market reach into faster-growing Southern markets and enhance fee revenue through expanded payments, capital markets, and wealth management.
• Reported a strong LTM Return on Average Tangible Common Shareholders Equity (ROTCE) of 16.7% as of 3Q25.
• Tangible Book Value (TBV) per share grew by 10.3% year-over-year to $9.54 as of 3Q25.
• Medium-term financial targets (2027) include a robust 6-9% PPNR CAGR and 18-19% ROTCE, signaling strong future profitability goals.

Negatives

• The Cadence Bank merger is anticipated to result in a 7% dilution and a 3-year earn-back for Tangible Book Value, which is a significant dilution compared to the Veritex acquisition.
• Purchase accounting adjustments for Veritex and TCF are projected to have a negative pre-tax net impact ranging from $(4) million to $(8) million per quarter through 4Q26.

Risks

• Changes in general economic, political, or industry conditions.
• Deterioration in business and economic conditions, including persistent inflation, supply chain issues, labor shortages, instability in global economic conditions, and geopolitical matters.
• Volatility in financial markets and changes in U.S. trade policies, including tariffs.
• The impact of pandemics and other catastrophic events or disasters on the global economy and financial market conditions.
• Impacts related to or resulting from bank failures and other volatility, including potential increased regulatory requirements and costs (e.g., FDIC special assessments, long-term debt, heightened capital requirements), and potential impacts to macroeconomic conditions affecting the ability to attract and retain depositors or raise capital.
• Unexpected outflows of uninsured deposits which may require the sale of investment securities at a loss.
• Changing interest rates which could negatively impact the value of the investment portfolio.
• Loss of value of the investment portfolio which could negatively impact market perceptions and lead to deposit withdrawals.
• The effects of social media on market perceptions of the company and banks generally.
• Cybersecurity risks.
• Uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve.
• Volatility and disruptions in global capital, foreign exchange, and credit markets.
• Competitive pressures on product pricing and services.
• Risks related to the success, impact, and timing of business strategies, including market acceptance of new products or services.
• Changes in policies and standards for regulatory review of bank mergers.
• The nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to Dodd-Frank, Basel III, and various regulatory bodies (SEC, OCC, Federal Reserve, FDIC, CFPB, state regulators).
• Risks specific to the proposed transaction with Cadence Bank: occurrence of any event giving rise to termination rights, outcome of any legal proceedings, delays in completing the transaction, failure to obtain necessary regulatory approvals (or approvals with adverse conditions), failure to obtain shareholder approvals, failure to realize anticipated benefits (due to integration issues or economic/competitive factors), higher completion costs than anticipated, inability to meet expectations regarding timing/completion/accounting/tax treatment, diversion of management's attention, potential adverse reactions to business/customer/employee relationships, inability to successfully complete integration, and dilution caused by the issuance of additional shares of capital stock.

Future Outlook

Huntington Bancshares projects continued strong organic growth in loans and deposits for fiscal year 2025, with updated guidance reflecting higher expectations. The company aims for significant value creation, targeting a 6-9% PPNR CAGR and 18-19% ROTCE by 2027, driven by its differentiated operating model and strategic M&A, particularly the anticipated Cadence Bank merger in 1Q26. The company expects to maintain a moderate to low risk appetite while driving long-term shareholder value through sustainable earnings growth and top-tier return on capital.

Management Comments

• Organic Growth Remains Our Foundational Strategy.
• We Have a Proven History of Successful Integration.
• We View M&A as a Springboard for Organic Expansion.
• Adhering to an aggregate moderate to low risk appetite.
• Unwavering focus on organic execution alongside seamless integration supports TBV growth.
• Positioned for powerful value creation.

Industry Context

The banking sector is navigating a complex environment characterized by changing interest rates, potential increased regulatory requirements, and competitive pressures. Huntington's strategy of combining robust organic growth with strategic, well-integrated acquisitions (like TCF, Veritex, and the planned Cadence merger) positions it to gain market share and expand into faster-growing regions. This approach aims to differentiate Huntington from peers who may struggle with organic growth or integration challenges, leveraging its 'Fair Play banking philosophy' and 'differentiated operating model' to stand out in a competitive market.

Comparison to Industry Standards

• Huntington's updated FY25 guidance for average loan growth (9-9.5%) and deposit growth (6.5-7%) is at the high end or slightly above previous ranges, indicating stronger performance compared to its own prior expectations.
• Post-TCF loan growth (2Q21-2Q25 CAGR) of 4.3% for Huntington significantly outpaced the peer median of 2.7% and Real GDP growth of 2.1%, demonstrating superior organic growth execution compared to industry benchmarks.
• The 1.5-year earn-back for the TCF merger's tangible book value dilution was substantially better than the guided 2.7 years, showcasing strong integration capabilities relative to typical M&A expectations in the banking sector.
• The Veritex acquisition is projected to have no tangible book value dilution, outperforming the initial guide of less than 1% dilution, which is a highly favorable outcome compared to most bank acquisitions.
• The anticipated 7% dilution and 3-year earn-back for the Cadence merger, while within typical ranges for large bank M&A, is less favorable than the TCF and Veritex outcomes, suggesting a more standard integration challenge.
• Huntington's LTM ROTCE of 16.7% as of 3Q25 and its 2027 target of 18-19% ROTCE indicate a commitment to achieving top-tier returns on capital, which would place it favorably against many regional and national bank peers (e.g., CFG, CMA, FITB, KEY, MTB, PNC, RF, TFC, USB, ZION).

Legal Proceedings

• The filing mentions 'the outcome of any legal proceedings that may be instituted against Huntington or Cadence' as a risk factor related to the proposed transaction.

Stakeholder Impact

• Shareholders: Potential dilution from the Cadence merger, but also potential for long-term value creation through strategic growth and improved financial performance (TBV growth, ROTCE targets). Shareholder approval is required for the Cadence transaction.
• Employees: Potential adverse reactions or changes to employee relationships resulting from the announcement or completion of the Cadence transaction and its integration.
• Customers: Potential adverse reactions or changes to customer relationships resulting from the announcement or completion of the Cadence transaction and its integration. Enhanced product and service offerings, including 'Fair Play banking philosophy,' could benefit customers.
• Regulators: Subject to review and approval by the SEC, Federal Reserve, OCC, FDIC, CFPB, and state-level regulators for the Cadence merger and ongoing operations.

Next Steps

• Huntington and Cadence shareholders will consider the proposed transaction.
• Completion of the Cadence Bank merger is anticipated in 1Q26.
• Integration of Huntington and Cadence successfully.
• Continued execution of business strategies, including the 'Fair Play banking philosophy.'
• Achieve 2027 medium-term financial targets (6-9% PPNR CAGR, 18-19% ROTCE).

Key Dates

Recommendation

The updated guidance for FY25 indicates stronger-than-expected performance in key areas like loan and deposit growth, and net interest income. The company has a proven track record of successful integration and value creation from past acquisitions (TCF, Veritex), significantly outperforming initial earn-back and dilution estimates. The strategic Cadence Bank merger is expected to create a larger, more diversified entity with access to faster-growing markets and enhanced revenue synergies. With robust medium-term financial targets (18-19% ROTCE by 2027) and a demonstrated ability to execute on its strategy, Huntington Bancshares presents a compelling investment opportunity despite the anticipated dilution from the Cadence merger.

Keywords

Huntington Bancshares, HBAN, Goldman Sachs Financial Services Conference, Investor Presentation, Financial Guidance, Cadence Bank Merger, Acquisition, Organic Growth, Deposits, Loans, Net Interest Income, Noninterest Income, Noninterest Expense, Net Charge-offs, Tangible Book Value, ROTCE, PPNR, Banking, Financial Services, Mergers and Acquisitions, Risk Management, Corporate Strategy