Huntington Bancshares Incorporated (HBAN) Form 10-Q Quarterly Report for the period ended September 30, 2025

EXECUTIVE OVERVIEW

Veritex Acquisition In October 2025, Huntington completed its acquisition of Veritex Holdings, Inc., a bank based in Dallas, Texas. Huntington issued 107 million shares of its common stock, valued at approximately $1.7 billion, to acquire Veritex. At the time of the merger, Veritex had $12.8 billion in assets, including $9.6 billion in loans, and $10.8 billion in deposits.

Pending Acquisition of Cadence In October 2025, Huntington announced plans to acquire Cadence Bank, a regional bank headquartered in Houston, Texas and Tupelo, Mississippi. Under the terms of the agreement, Huntington will issue 2.475 shares for each outstanding share of Cadence in a $7.4 billion all-stock transaction. The merger is expected to close in the first quarter of 2026, subject to regulatory and shareholder approvals.

Reporting Update During the fourth quarter of 2024, Huntington updated its presentation of deposit categories to better align with how the company manages its business. The new categories are: demand deposits (non-interest bearing and interest bearing), money market, savings, and time deposits.

Financial Performance Review

Selected Financial Data In the third quarter of 2025, Huntington reported net income of $629 million, or $0.41 per diluted share, compared to $517 million, or $0.33 per share, in the same period a year ago. For the first nine months of 2025, net income was $1.7 billion, up 20% from the prior year period.

Net interest income, which is the difference between interest earned on loans and investments and interest paid on deposits and borrowings, increased 11% in the third quarter and 11% year-to-date compared to the prior year periods. This was driven by a 15 basis point increase in the net interest margin to 3.13% and growth in average earning assets.

The provision for credit losses, which represents the amount set aside for potential loan losses, increased 15% in the third quarter and 9% year-to-date compared to the prior year periods. This was primarily due to loan growth.

Noninterest income, which includes revenue from fees and other sources besides interest, increased 20% in the third quarter and 8% year-to-date. The increases were driven by higher payments and cash management revenue, wealth management fees, loan fees, and capital markets revenue.

Noninterest expense, which includes salaries, technology costs, and other operating expenses, increased 10% in the third quarter and 6% year-to-date. The increases were primarily due to higher personnel costs and outside data processing expenses.

Consolidated Balance Sheet and Capital Ratios Total assets grew 3% from the end of 2024 to $210.2 billion as of September 30, 2025, driven by a 6% increase in loans and leases. Total liabilities increased 2% to $187.9 billion, primarily due to a 2% increase in deposits and a 6% increase in long-term debt.

Huntington’s tangible common equity to tangible assets ratio improved to 6.8% at the end of the third quarter, up from 6.1% at the end of 2024. The bank’s Common Equity Tier 1 (CET1) capital ratio, a key regulatory measure of capital strength, was 10.6% at the end of the third quarter, up from 10.5% at the end of 2024.

General Business Objectives Huntington’s key business objectives include:

• Delivering a differentiated operating model focused on its culture, purpose, and vision
• Building on its goal to be the leading “people-first, customer-centered” bank
• Achieving top-quartile financial performance through sustainable, profitable growth
• Differentiating its brand and customer experience through expanded products and digital capabilities
• Leveraging its regional banking model and national franchise to drive scale and expansion
• Anticipating evolving customer needs to drive profitable growth
• Maintaining positive operating leverage and disciplined capital management
• Providing stability and resilience through disciplined risk management

Huntington believes its quarterly results demonstrate the strength of its differentiated operating model, with investments driving growth, expansion of net interest income, and strong fee revenue performance. The bank remains focused on delivering profitable growth and shareholder value.

Economy The broader economy has shown resilience, with equity markets near record highs and corporate credit spreads at historically narrow levels. However, there are persistent elevated levels of uncertainty, including the potential impact of trade tariffs.

The Federal Reserve reduced interest rates by 25 basis points in September 2025, citing a weakening labor market, even as inflation remains above the Fed’s 2% target. The manufacturing sector has stabilized, while the services sector continues to expand slowly. Consumer spending has remained relatively robust, though consumer debt and delinquency rates have increased.

Overall, the economic indicators suggest a transitional phase rather than a downturn, with many economists anticipating a soft landing and a return to moderate GDP growth as fiscal and monetary policies begin to support renewed momentum.

Quarterly Average Balance Sheet / Net Interest Income Huntington’s net interest income, which is the bank’s largest source of revenue, increased 11% in the third quarter and 11% year-to-date compared to the prior year periods. This was driven by a 15 basis point increase in the net interest margin to 3.13% and a 6% increase in average earning assets, partially offset by a 7% increase in average interest-bearing liabilities.

The increase in the net interest margin was primarily due to a decrease in the cost of funding, partially offset by a decrease in yields on earning assets and net hedging activity.

Average assets grew 6% year-over-year, driven by an 8% increase in average loans and leases. The growth was broad-based, with a 10% increase in average commercial loans and a 6% increase in average consumer loans.

Average liabilities grew 6% year-over-year, primarily due to a 6% increase in average deposits and a 16% increase in average total borrowings.

Provision for Credit Losses The provision for credit losses, which represents the amount set aside for potential loan losses, increased 15% in the third quarter and 9% year-to-date compared to the prior year periods. This was primarily due to loan growth, partially offset by lower reserve coverage.

Noninterest Income Noninterest income increased 20% in the third quarter and 8% year-to-date compared to the prior year periods. The increases were driven by higher payments and cash management revenue, wealth management fees, loan fees, and capital markets revenue. A $24 million gain on the sale of a portion of the trust and custody business also contributed to the third quarter increase.

Noninterest Expense Noninterest expense increased 10% in the third quarter and 6% year-to-date compared to the prior year periods. The increases were primarily due to higher personnel costs and outside data processing expenses. The third quarter also included $14 million of expenses related to the Veritex acquisition.

Provision for Income Taxes The provision for income taxes was $133 million in the third quarter, up from $116 million in the same period a year ago. The effective tax rate for the third quarter was 17.4%, down from 18.2% a year ago, primarily due to increased benefits from general business credits and capital losses.

Risk Management Huntington has a comprehensive risk management framework that includes policies, processes, and committees to identify, monitor, and manage various risks, including credit, market, liquidity, operational, compliance, strategic, and reputational risks.

The bank’s credit risk management focuses on early identification, monitoring, and mitigation of credit risk through credit policies, portfolio diversification, and quantitative measurement capabilities. Huntington’s loan portfolio remains well-diversified, with no identified concentrations exceeding established limits.

The bank’s market risk management activities, including the use of derivatives, aim to minimize fluctuations in earnings caused by changes in interest rates. Huntington uses net interest income at risk and economic value of equity at risk modeling to assess its interest rate sensitivity.

Huntington maintains strong liquidity, with customer deposits funding 75% of total assets and the bank having significant secured borrowing capacity at the Federal Reserve and Federal Home Loan Bank. The parent company also has ample liquidity, with $4.1 billion in cash and cash equivalents.

Operational risk management is a key focus, with various committees overseeing risks related to internal controls, compliance, fraud, technology, and third-party relationships. Cybersecurity is an important component of Huntington’s overall risk management approach.

Capital Huntington’s primary capital objective is to maintain appropriate capital levels to support its operations, absorb potential losses, and provide protection to depositors and creditors, while also funding organic growth and providing returns to shareholders.

The bank’s Common Equity Tier 1 (CET1) capital ratio, a key regulatory measure of capital strength, was 10.6% at the end of the third quarter, up from 10.5% at the end of 2024. Huntington’s tangible common equity to tangible assets ratio also improved to 6.8% at the end of the third quarter, up from 6.1% at the end of 2024.

Huntington believes its current capital levels are appropriate and that it has the necessary capital resources to support its operations and growth plans.

In summary, Huntington delivered strong financial performance in the third quarter and first nine months of 2025, with growth in net interest income, noninterest income, and earnings. The bank’s balance sheet remains well-capitalized and liquid, supporting its strategic objectives and ability to navigate the current economic environment. Huntington’s comprehensive risk management framework and disciplined approach to capital management position the bank for continued success.