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1. Company Snapshot

1.a. Company Description

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States.The company operates through four segments: Consumer and Business Banking; Commercial Banking; Vehicle Finance; and Regional Banking and The Huntington Private Client Group (RBHPCG).The Consumer and Business Banking segment offers financial products and services, such as checking accounts, savings accounts, money market accounts, certificates of deposit, credit cards, and consumer and small business loans, as well as investment products.


This segment also provides mortgages, insurance, interest rate risk protection, foreign exchange, automated teller machine, and treasury management services, as well as online, mobile, and telephone banking services.It serves consumer and small business customers.The Commercial Banking segment offers regional commercial banking solutions for middle market businesses, government and public sector entities, and commercial real estate developers/REITs; and specialty banking solutions for healthcare, technology and telecommunications, franchise finance, sponsor finance, and global services industries.


It also provides asset finance services; capital raising solutions, sales and trading, and corporate risk management products; institutional banking services; and treasury management services.The Vehicle Finance segment provides financing to consumers for the purchase of automobiles, light-duty trucks, recreational vehicles, and marine craft at franchised and other select dealerships, as well as to franchised dealerships for the acquisition of new and used inventory.The RBHPCG segment offers private banking, wealth and investment management, and retirement plan services.


Huntington Bancshares Incorporated was founded in 1866 and is headquartered in Columbus, Ohio.

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1.b. Last Insights on HBANL

Negative drivers behind Huntington Bancshares' recent performance include rising expenses, which could offset the benefits of its strategic initiatives. Despite delivering earnings and revenue surprises in Q4 2024, Huntington's expenses are a concern. Additionally, market uncertainties may impact its growth prospects. The company's reliance on net interest income (NII) and fee income growth may also be susceptible to fluctuations in interest rates and economic conditions.

1.c. Company Highlights

2. Huntington Bancshares Posts Strong Quarterly Earnings with Loan Growth and NIM Expansion

Huntington Bancshares delivered an outstanding quarter with earnings per common share of 41¢, and 40¢ on an adjusted basis, up 18% year over year. The company's net interest income grew 2.7% sequentially, representing almost 12% growth on a year-over-year basis, with a net interest margin of 3.13%. The actual EPS came out at $0.4241, beating estimates of $0.3745. Average loan balances grew 2% from the prior quarter, and 9.2% year over year, driven by strength in commercial lending and new initiatives.

Publication Date: Oct -20

📋 Highlights
  • Earnings Surge:: Earnings per share rose 18% YoY to 41¢, with adjusted EPS at 40¢, reflecting strong operational performance.
  • Loan Growth Acceleration:: Average loans grew 9.2% YoY and 2% QoQ, driven by commercial lending and Veritex integration, with 8% full-year loan growth guidance raised.
  • Capital Strength:: CET1 ratio held at 10.6%, up 30 bps YoY, while adjusted CET1 at 9.2%, ensuring robust capital adequacy.
  • Net Interest Income Expansion:: NII grew 12% YoY (2.7% QoQ) with a 3.13% NIM, supported by higher loan volumes and asset repricing.
  • Fee Income Momentum:: Noninterest income jumped 14% YoY, with guidance raised to 7% growth, fueled by payments, wealth management, and capital markets.

Strong Loan Growth and NIM Expansion

The company raised its financial guidance for the year, expecting loan growth of approximately 8% on a standalone basis and 9-9.5% inclusive of Veritex. Net interest income is expected to grow 10-11% on a standalone basis, driven by better-than-expected loan growth and higher NIM. The company expects to realize approximately two-thirds of the total PAA benefit from Veritex by the end of next year. With a current P/TBV ratio of 1.03, the stock appears to be reasonably valued.

Credit Quality Remains Strong

The company has had an exceptional year on credit quality, with no major issues reported. They have a moderate to low-risk appetite and strict policies in place, which has helped them avoid problems seen in other lenders. The NDFI book is approximately 2% of total loans, with a relationship approach and active portfolio management. The company's net charge-offs were 22 basis points, and the allowance for credit losses ended the quarter at 1.86%.

Operating Leverage and Growth Prospects

The company has made significant investments in the business, with a focus on driving reengineering into the cost base. They assume at least 1% operating leverage per year, potentially up to 2%. The company expects strong loan growth and NIM expansion to drive a strong outcome, with mid-to-high single-digit loan growth and at least 10 basis points of NIM expansion in 2026. Analysts estimate next year's revenue growth at 10.2%.

Valuation and Dividend Yield

With a dividend yield of 3.94%, the stock offers an attractive return for income investors. The current P/TBV ratio of 1.03 suggests that the stock is reasonably valued. The company's strong return on capital and solid position for growth make it an attractive investment opportunity.

3. NewsRoom

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Huntington Bancshares Incorporated to Present at the 2025 Goldman Sachs Financial Services Conference

Dec -01

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3 Prominent Stocks Estimated To Be Undervalued By At Least 40.2%

Dec -01

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3 Reliable Dividend Stocks Yielding Up To 3.8%

Dec -01

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3 Stocks That May Be Trading Below Their Estimated Value

Nov -26

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3 Stocks Estimated To Be Undervalued By As Much As 32%

Nov -26

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3 Companies Including TransMedics Group That May Be Trading Below Estimated Value

Nov -25

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Huntington's Inorganic Expansion Efforts: Will it Drive Growth?

Nov -25

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Citizens Financial Group And 2 Other Stocks That May Be Priced Below Their Estimated Worth

Nov -25

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.45%)

6. Segments

Consumer & Regional Banking

Expected Growth: 4.5%

Growing demand for digital banking services, increasing adoption of online lending platforms, and rising small business formations drive growth in Consumer & Regional Banking segment.

Commercial Banking

Expected Growth: 4.5%

Growing demand for digital banking services, increasing adoption of cash management solutions, and expansion of commercial lending products drive growth in Huntington Bancshares' Commercial Banking segment.

Treasury / Other

Expected Growth: 3.5%

The treasury and other segment of Huntington Bancshares Incorporated is expected to grow driven by increasing investment securities and miscellaneous income, as well as the company's strategic initiatives to optimize its balance sheet and improve profitability.

7. Detailed Products

Consumer Banking

Provides traditional banking services to individuals and small businesses, including checking and savings accounts, credit cards, and loans.

Commercial Banking

Offers cash management, lending, and other financial services to middle-market businesses and government entities.

Vehicle Finance

Provides financing for new and used vehicles, as well as leasing options for consumers and dealerships.

Residential Mortgage

Offers mortgage loans and refinancing options for homebuyers and homeowners.

Wealth Management

Provides investment, trust, and insurance services to individuals, families, and businesses.

Treasury Management

Offers cash management and treasury services to help businesses manage their cash flow and optimize their financial performance.

Equipment Finance

Provides financing options for businesses to acquire equipment and technology.

Home Equity

Offers home equity loans and lines of credit to help homeowners tap into their home's equity.

8. Huntington Bancshares Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Huntington Bancshares Incorporated operates in a highly competitive industry, and customers have various alternatives to choose from. However, the company's strong brand reputation and extensive branch network help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Huntington Bancshares Incorporated has a large customer base, but individual customers do not have significant bargaining power. The company's diverse customer base and lack of concentration in a single industry reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Huntington Bancshares Incorporated has a diverse supplier base, and no single supplier has significant bargaining power. The company's large scale of operations and diversified supplier base reduce the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. While new fintech companies are emerging, they do not pose a significant threat to Huntington Bancshares Incorporated's established business.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Huntington Bancshares Incorporated faces intense competition from other regional banks, national banks, and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.04%
Debt Cost 9.49%
Equity Weight 60.96%
Equity Cost 9.49%
WACC 9.49%
Leverage 64.05%

11. Quality Control: Huntington Bancshares Incorporated passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 6.1/10

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Quality: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.64$

Current Price

25.64$

Potential

-0.00%

Expected Cash-Flows