Huntington Stock Falls as Q4 Earnings Lag Estimates, Expenses Rise Y/Y

Core Viewpoint - Huntington Bancshares Incorporated (HBAN) reported fourth-quarter 2025 adjusted earnings per share (EPS) of 37 cents, missing the Zacks Consensus Estimate of 39 cents, while the prior-year quarter EPS was 34 cents [1][9] Financial Performance - The company’s net income attributable to common shareholders (GAAP basis) was $519 million for the quarter, down from $530 million in the prior-year quarter [2] - For the full year 2025, EPS was $1.39, missing the Zacks Consensus Estimate of $1.49, but showing improvement from $1.22 in 2024 [3] - Total quarterly revenues increased 11.3% year over year to $2.19 billion, although it missed the Zacks Consensus Estimate of $2.20 billion [4] - Full-year revenues aggregated to $8.23 billion, up 10.7% year over year, beating the Zacks Consensus Estimate of $8.21 billion [4] Income and Expenses - Net interest income (NII) on a fully taxable-equivalent (FTE) basis was $1.61 billion, up 14.2% from the prior-year quarter, driven by a rise in average earning assets and net interest margin (NIM), which increased by 12 basis points to 3.15% [5] - Non-interest income rose 4.1% year over year to $582 million, while non-interest expenses surged 20.5% year over year to $1.42 billion, primarily due to increases in almost all cost components [5][9] - The efficiency ratio was 64.2%, up from 58.6% in the year-ago quarter, indicating a decline in profitability [6] Loans and Deposits - As of December 31, 2025, average loans and leases increased 7.8% sequentially to $146.6 billion, and average total deposits rose 5.1% sequentially to $173.2 billion [7] Credit Quality - Net charge-offs were $89 million, down from $97 million in the prior-year quarter, while the allowance for credit losses increased 12.1% to $2.74 billion [8][10] - Total non-performing assets were $945 million as of December 31, 2025, up 14.9% from the prior-year quarter [8] Capital Ratios - The common equity tier 1 risk-based capital ratio was 10.4%, down from 10.5% in the year-ago period, while the regulatory Tier 1 risk-based capital ratio increased to 12% from 11.9% [11] Recent Developments - Huntington Bancshares secured regulatory and shareholder approvals for a $7.4 billion all-stock acquisition of Cadence Bank, expected to close on February 1, 2026, which will expand its presence across 21 states [12] - The company completed a $1.9 billion all-stock merger with Veritex Holdings Inc. in October 2025, enhancing its footprint in key Texas markets [13] Strategic Outlook - The company’s inorganic expansion efforts are anticipated to support revenue growth in the near term, with a focus on strengthening commercial banking capabilities and expanding in key growth markets [14]