Huntington Bancshares Reports $0.25 EPS, Misses on Headline But Beats Adjusted
Huntington Bancshares (NASDAQ: HBAN) reported first-quarter 2026 earnings per share of $0.25, down from $0.30 in the prior quarter and $0.34 a year ago, as the Columbus-based regional bank absorbed $271 million in pre-tax acquisition-related expenses from its recent Cadence and Veritex deals.
However, the underlying performance told a more positive story. Adjusted earnings per share of $0.37, which excludes notable items, remained flat sequentially and improved from $0.34 in the year-ago quarter, demonstrating the core business's strength despite the integration headwinds.
Key Numbers
The headline numbers reflected the transformational nature of Huntington's recent acquisitions. Net income came in at $523 million for the quarter, essentially flat from $519 million in Q4 2025 and down slightly from $527 million a year ago. The bank's return on average assets declined to 0.81% from 0.93% in the prior quarter, while return on average common equity fell to 7.2% from 8.9%.
More importantly, the bank's revenue engine fired on all cylinders. Total revenue surged 34% year-over-year to $2.59 billion, driven by a 33% jump in net interest income to $1.89 billion. The net interest margin expanded 14 basis points year-over-year to 3.24%, benefiting from lower funding costs that more than offset declining asset yields.
The balance sheet expansion was dramatic. Average total loans and leases jumped 33% year-over-year to $174.2 billion, with commercial loans leading the charge at 46% growth to $108.4 billion. The Cadence acquisition alone added $36.9 billion in loans when it closed on February 1, while the earlier Veritex deal contributed $9.3 billion.
Credit quality remained a bright spot. Net charge-offs ticked up only modestly to 0.26% of average loans from 0.24% in the prior quarter, matching year-ago levels. The allowance for credit losses stood at 1.78% of total loans, though this represented a decline from 1.83% in Q4 as the bank integrated the acquired portfolios.
What Management Said
CEO Steve Steinour struck an optimistic tone about the integration progress and future prospects. "Coming off a transformational year in 2025, Huntington delivered a strong start to 2026 through disciplined execution and continued organic growth," he stated in the earnings release.
Steinour emphasized that the core business performance remained robust despite the integration activities: "Our core is performing very well, our credit remains strong, and we are driving toward our committed expense and revenue synergies from our Veritex and Cadence partnerships."
The CEO highlighted successful execution on the integration timeline, noting that Veritex's systems conversion was completed in mid-January, while Cadence's conversion remains on track for June. "The strong engagement we have had from the Cadence teams will help deliver a successful conversion experience for customers," Steinour said.
Looking ahead, management expressed confidence in the bank's positioning. "Our strong balance sheet and industry leading liquidity and reserves position us to be a source of strength for our customers and outperformance for our shareholders," Steinour noted, acknowledging the "period of relative economic uncertainty" while maintaining an upbeat outlook.
What to Watch
Several key metrics warrant close monitoring in coming quarters as Huntington digests its acquisitions. The efficiency ratio deteriorated to 67.2% from 64.2% in Q4, reflecting the temporary elevation in expenses from integration activities. Investors should watch for improvement as cost synergies materialize following the June systems conversion for Cadence.
Capital ratios bear watching as well. The Common Equity Tier 1 ratio slipped to 10.2% from 10.4% in the prior quarter, though this remains above regulatory minimums. The tangible book value per share declined to $9.55 from $9.89 sequentially, though it's up 9% year-over-year.
The bank's aggressive capital return program signals management confidence. Huntington repurchased $150 million in shares during Q1 and another $100 million so far in Q2, while the board approved a new $3 billion share repurchase authorization on April 22, replacing the prior program.
Perhaps most importantly, investors should track whether Huntington can maintain its strong credit performance as the economic cycle matures. The modest uptick in nonperforming assets to 0.72% from 0.62% in Q4 merits attention, particularly given management's acknowledgment of economic uncertainty.
The true test for Huntington will be demonstrating that it can successfully integrate two major acquisitions while maintaining credit discipline and achieving promised synergies. With revenue growth running at 34% year-over-year and the net interest margin expanding, the bank has momentum on its side. However, execution on the integration and maintaining asset quality will determine whether this regional banking consolidation play delivers for shareholders.
*Source: Huntington Bancshares Q1 2026 8-K SEC Filing*
*StockCliff Research*