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 same periods in 2024. 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 2024. The allowance for credit losses (ACL) increased to $2.6 billion, or 1.86% of total loans, at the end of the third quarter, compared to $2.4 billion, or 1.88%, at the end of 2024.

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, as well as a gain on the sale of a portion of the trust and custody business.

Noninterest expense, which includes salaries, technology costs, and other operating expenses, increased 10% in the third quarter and 6% year-to-date, primarily due to higher personnel costs and outside data processing expenses, as well as $14 million in acquisition-related costs.

Consolidated Balance Sheet and Capital Ratios Total assets grew 3% to $210.2 billion at the end of the third quarter compared to the end of 2024, driven by a 6% increase in loans and leases, partially offset by a 4% decrease in investment securities.

Total liabilities increased 2% to $187.9 billion, primarily due to a 2% increase in total deposits and a 6% increase in long-term debt.

The 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 common equity tier 1 (CET1) risk-based capital ratio was 10.6% at the end of the third quarter, compared to 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 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, digital capabilities, and partnerships
• 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 differentiated operating model, balance sheet strength, and focus on execution of its core strategies position it well to outperform through a range of economic and interest rate scenarios.

Economy Despite persistent economic uncertainty, the market has demonstrated resilience, with broad equity indices near record highs and corporate credit spreads at historically narrow levels. However, risks remain, including the potential impact of trade policies and tariffs.

In September 2025, the Federal Reserve reduced interest rates by 25 basis points, the first such adjustment since December 2024. While inflation remains above the Fed’s 2% target, the central bank cited a weakening labor market as a key reason for the rate cut. The manufacturing sector has stabilized, while the services sector continues to show slow, steady expansion. 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.

Provision for Credit Losses The provision for credit losses, which represents the amount set aside for potential loan losses, was $122 million in the third quarter of 2025, up 15% from the same period in 2024. For the first nine months of 2025, the provision was $340 million, up 9% from the prior year period. The increases reflect loan growth, partially offset by lower reserve coverage.

The allowance for credit losses (ACL) was $2.6 billion, or 1.86% of total loans, at the end of the third quarter, compared to $2.4 billion, or 1.88%, at the end of 2024. The ACL level reflects the current macroeconomic forecast and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative reserve.

Noninterest Income Noninterest income increased 20% in the third quarter and 8% year-to-date compared to the same periods in 2024. The increases were driven by higher payments and cash management revenue, wealth management fees, loan fees, capital markets revenue, and a $24 million gain on the sale of a portion of the trust and custody business.

Noninterest Expense Noninterest expense increased 10% in the third quarter and 6% year-to-date compared to the same periods in 2024. The increases were primarily due to higher personnel costs, outside data processing expenses, and $14 million in acquisition-related costs.

Provision for Income Taxes The provision for income taxes was $133 million in the third quarter of 2025, up from $116 million in the same period in 2024. For the first nine months of 2025, the provision was $351 million, up from $308 million in the prior year period. The increases were primarily due to higher pre-tax income, partially offset by increased benefits from general business credits and capital losses.

Risk Management Huntington has a comprehensive risk management framework that includes policies, procedures, and committees to identify, monitor, and manage various risks, including credit, market, liquidity, operational, compliance, strategic, and reputational risks. The company maintains an aggregate moderate-to-low risk appetite.

Credit Risk Credit risk is the primary risk associated with Huntington’s lending activities. The company focuses on early identification, monitoring, and management of credit risk through credit policies, portfolio diversification, and quantitative measurement capabilities.

Huntington’s loan and lease portfolio totaled $138.0 billion at the end of the third quarter, up 6% from the end of 2024. The portfolio is well-diversified across commercial and consumer loan segments. The company’s commercial real estate portfolio, which includes some exposure to the office sector, totaled $10.7 billion, or 8% of total loans, at the end of the third quarter.

Credit quality performance remained strong, with net charge-offs of 0.22% of average loans in the third quarter, down from 0.30% in the same period a year ago. Nonperforming assets decreased slightly from the end of 2024.

Market Risk Huntington uses various financial simulation models and derivative instruments to manage its exposure to interest rate risk. The company’s net interest income at risk (NII at Risk) and economic value of equity at risk (EVE at Risk) metrics indicate the balance sheet is asset-sensitive, meaning net interest income and the economic value of equity would generally benefit from rising interest rates.

Liquidity Risk Huntington maintains a large, stable customer deposit base and diversified wholesale funding sources to manage liquidity risk. Total deposits were $165.2 billion at the end of the third quarter, up 2% from the end of 2024. Wholesale funding, including borrowings and long-term debt, totaled $24.6 billion, up 4% from the end of 2024.

The company believes it has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and the foreseeable future. Huntington’s credit ratings from major rating agencies remained stable during the third quarter.

Operational Risk Huntington has a comprehensive operational risk management framework that includes various committees, policies, and controls to identify, monitor, and mitigate operational, fraud, and legal risks, as well as risks associated with models and third-party relationships. The company also has an active cybersecurity program to detect, contain, and respond to cyber threats.

Compliance Risk As a financial institution, Huntington is subject to a wide range of laws, rules, and regulations. The company utilizes a team of compliance experts and provides training to employees to ensure conformance with applicable requirements.

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. At the end of the third quarter, Huntington’s consolidated common equity tier 1 (CET1) ratio was 10.6%, up from 10.5% at the end of 2024. The company believes its current capital levels are adequate.

In summary, Huntington reported strong financial performance in the third quarter and first nine months of 2025, driven by growth in net interest income, noninterest income, and disciplined expense management. The company’s balance sheet remains well-capitalized and liquid, and it continues to execute on its strategic objectives while maintaining a moderate risk profile. Huntington believes it is well-positioned to navigate a range of economic and interest rate environments.