Huntington Bancshares Q2 2026: Strong Organic Growth, EPS Miss on Deposit Cost Pressure

Transcript intelligence

What changed

Bullish score improved from 78 in Q1 to 82 in Q2. The Cadence systems conversion was completed in 235 days, ahead of the June target referenced in Q1, with deposits actually growing during the conversion weekend. Organic growth accelerated with 8.6% sequential loan growth and 9.2% sequential deposit growth. Fee revenue growth remained strong at 10-46% year-over-year. The EPS miss of $0.33 versus $0.36 consensus was a negative shift, driven by deposit cost pressure on net interest margin. The stock reacted negatively with a 3.5% abnormal decline and -3.2% subsequent drift on 3.2x baseline volume. Regulatory focus shifted from Basel III Endgame capital optimization in Q1 to CCAR stress test results in Q2. Share repurchase plans were scaled up from $550 million in 2026 to $1.1-1.2 billion targeted for 2027 under the $3 billion evergreen authorization.

Guidance delta

Guidance was maintained for the second consecutive quarter. Q1 2026 had seen NIM outlook revised down to the high 3.20% range while fee-income growth guidance was raised to 31-33%. Q2 brought no new guidance changes; management reaffirmed 2027 targets of 18-19% ROTCE and $1.90-$1.93 EPS. Share repurchase plans were scaled up from $550 million in 2026 to $1.1-1.2 billion targeted for 2027 under the $3 billion evergreen authorization announced in Q1.

Key takeaways

• Q2 organic loan growth of 8.6% sequential and deposit growth of 9.2% sequential demonstrate strong core franchise momentum.
• Cadence systems conversion completed in 235 days, ahead of schedule, with deposits growing during the conversion weekend -- a rare outcome for bank integrations.
• On track for $365 million in cost synergies by Q4 and over $1 billion in new pipeline revenue from cross-selling to acquired customers.
• Fee revenues grew 10-46% year-over-year across payments, wealth management, and capital markets, driving a diversified revenue flywheel.
• EPS of $0.33 missed the $0.36 consensus estimate by 8.0%; revenue of $2.857 billion modestly beat the $2.838 billion estimate by 0.7%.
• Guidance unchanged; 2027 ROTCE target of 18-19% and EPS of $1.90-$1.93 reaffirmed.

Management priorities

• Ramp up marketing spend in the Cadence footprint to accelerate digital deposit acquisition.
• Continue branch expansions in the Carolinas, Colorado, and Chicago.
• Further integrate and cross-sell to Cadence customers across payments, wealth, and treasury services.
• Maintain expense-reduction program targeting over 1.5% baseline OPEX reduction.
• Execute additional share repurchases of $1.1-1.2 billion in 2027.