Huntington Bancshares Loan Growth Up

Huntington Bancshares (NASDAQ:HBAN) reported second quarter 2025 results on July 18, 2025, featuring earnings per share (EPS) of $0.34 and sequential growth in average loans and deposits of $2.3 billion (1.8%) and $1.8 billion (1.1%), respectively. Loan growth exceeded internal forecasts, prompting increases in full-year loan growth guidance (now 6% to 8%), while the upcoming Veritex acquisition was described as a significant catalyst for Texas market expansion.

Material Operating Leverage Enhances Long-Term Profitability

On an adjusted basis, pre-provision net revenue (PPNR) expanded 15% year over year, while expense growth for 2025 is now forecast at 5% to 6%, largely driven by higher incentive compensation reflecting performance outperformance, reinforcing capital growth.

"We have more positive operating leverage now than we had in the original budget, something like half a point to maybe even a point more operating leverage, so it's really good."
— Zach Wasserman, Chief Financial Officer

Operating leverage is now more positive than in the original budget, directly supporting tangible book value and return on equity.

Strategic Veritex Acquisition Fast-Tracks Texas Franchise Buildout

The announced Veritex acquisition adds over 30 branches to Huntington’s Texas footprint, creating immediate scale in Dallas-Fort Worth and Houston and transforming Texas into the company’s third-largest deposit market post-close. Leadership continuity with Malcolm Holland as chairman of Texas and local customer relationship strengths are central integration themes.

"Texas alone, as I think I shared Monday, is a huge economic and demographic opportunity, and Texas will become our third-largest state in terms of deposits when we close this."
— Stephen Steinour, Chairman, President, and CEO

This acquisition accelerates the bank's access to high-growth South-central U.S. markets.

Robust Credit and Funding Profile Underpins Resilient Balance Sheet

Net charge-offs declined to 20 basis points, and the allowance for credit losses increased to 1.86%, maintaining a cautious risk posture despite credit outperformance. Adjusted CET1 capital progressed to the lower end (9%) of the bank's targeted operating range, and liquidity remains strong with 2 times coverage of uninsured deposits.

"Our liquidity remains strong with 2 times coverage of uninsured deposits. Notably, our tangible book value increased 16% year over year."
— Stephen Steinour, Chairman, President, and CEO

These factors support future growth, regulatory compliance, and strategic flexibility.

Looking Ahead

Management raised the full-year outlook for loan growth to 6% to 8%, with net charge-off guidance for 2025 lowered to 20 to 30 basis points. Adjusted CET1 was 9%, at the lower bound of the targeted operating range of 9% to 10%. Expectations for the third quarter of 2025 include approximately 1% sequential loan growth, stable net interest income, and expenses (GAAP) of about $1.2 billion, reflecting seasonal marketing investments. No quantified forward guidance relating to the Veritex acquisition will be issued until closer to the deal's closing in the fourth quarter.

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This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.