Huntington's Inorganic Expansion Efforts: Will it Drive Growth?

Core Insights - Huntington Bancshares Incorporated (HBAN) has expanded its footprint and capabilities through strategic acquisitions, indicating a commitment to growth and long-term profitability [1] Acquisition Strategy - In October 2025, Huntington acquired Veritex Holdings, enhancing its presence in Texas with 31 new branches, resulting in over 1,000 locations and approximately $223 billion in assets, $176 billion in deposits, and $148 billion in loans. The acquisition is projected to yield $20 million in core pre-provision net revenue benefits and improve efficiency and return on tangible common equity [2] - Huntington also entered into an agreement to acquire Cadence Bank, expected to close in Q1 2026, which will add over 390 locations and is anticipated to be 10% accretive to earnings per share, though mildly dilutive to regulatory capital and tangible book value [3] - Previous acquisitions include Capstone Partners and Torana in 2022, which enhanced capital markets and digital capabilities, respectively, and the merger with TCF Financial in 2021, positioning Huntington among the top 25 U.S. bank holding companies [4] Long-term Growth Strategy - Huntington's acquisitions reflect a disciplined growth strategy focused on scale, market expansion, and enhanced capabilities, aiming for a compounded annual growth rate of 6-9% in core pre-provision net revenue and a return on tangible common equity of 16-17% by 2027 [5] Market Performance - Year-to-date, Huntington's shares have increased by 0.7%, compared to the industry's growth of 2.1% [10] - The forward price-to-earnings (P/E) ratio for HBAN is 9.47X, below the industry average of 9.69X [13] - The Zacks Consensus Estimate for HBAN's earnings indicates a year-over-year rise of 20.9% for 2025 and 13.1% for 2026, with the 2026 estimate revised upward recently [17]