CluenexWhat Huntington Bancshares reported
Huntington Bancshares reported third-quarter 2026 adjusted diluted earnings per share of $0.38, down $0.01 from the second quarter of 2026. On a GAAP basis, diluted earnings per share came in at $0.33, unchanged from the prior quarter and down from $0.41 in the third quarter of 2025. GAAP results included $117 million in pretax acquisition-related expenses (a negative $0.05 per share after tax) tied to recent transactions.
Total revenue was $2.791 billion, down 2% from $2.837 billion in the second quarter of 2026, but up 31% from $2.134 billion in the year-ago period. On a fully-taxable equivalent basis, revenue reached $2.812 billion. Net income applicable to common shares totaled $680 million, compared to $686 million in the prior quarter and $602 million a year ago.
Net interest income rose 1% sequentially to $2.069 billion, or $2.090 billion on a fully-taxable equivalent basis. Net interest margin expanded 4 basis points quarter-over-quarter to 3.25%, supported by reinvestment into higher-yielding investment securities and lower average wholesale borrowings. Total noninterest income fell 8% quarter-over-quarter to $722 million, driven by lower capital markets and advisory fees (down 13% to $122 million) and negative valuation marks on strategic equity investments.
Noninterest expense was $1.772 billion, down 2% from $1.809 billion in the second quarter. Excluding notable acquisition costs, adjusted noninterest expense stood at $1.655 billion, flat compared to $1.657 billion in the previous quarter. The bank's efficiency ratio improved slightly to 61.2% from 61.5%.
Credit quality showed rising defaults alongside lower reserve additions. The provision for credit losses was $123 million, down from $132 million in the prior quarter. Net charge-offs totaled $146 million, or 0.31% of average loans and leases annualized, up from 0.25% in the second quarter. Total nonperforming assets rose $110 million to $1.722 billion, lifting the nonperforming asset ratio to 0.90% from 0.85%.
Capital metrics remained stable. Huntington reported a preliminary Common Equity Tier 1 (CET1) ratio of 10.1%, up 10 basis points from 10.0% in the prior quarter. Tangible book value per common share fell 2% sequentially to $9.47, driven by higher market interest rates reducing accumulated other comprehensive income. The bank repurchased $100 million of common stock during the quarter, bringing year-to-date buybacks to $409 million.
Management did not adjust formal multi-year financial guidance targets, stating that the bank remains on track to meet its financial goals and realize cost synergies from its Cadence and Veritex acquisitions.
How the results compared with what to watch
Ahead of the release, investors focused on four critical areas: deposit funding costs, net interest margin defense, commercial real estate reserves, and Midwest loan volumes. Here is how actual performance lined up against each checkpoint.
First, deposit costs leveled off rather than declining sharply. Average total deposit costs rose 2 basis points sequentially to 1.90%, while the average yield on interest-bearing deposits moved to 2.31% from 2.29%. Noninterest-bearing deposits held resilient at $40.2 billion, up $146 million from the prior quarter and accounting for 18.0% of total deposits. The bank offset slightly higher deposit pricing by cutting average wholesale borrowings by $3.6 billion, lowering total interest-bearing liabilities.
Second, net interest margin outperformed the flat expectations. The margin expanded by 4 basis points to 3.25%, beating the 3.21% baseline set in the second quarter. Earning-asset yields rose to 5.30%, driven by securities portfolio reinvestment where investment yields increased 12 basis points to 3.59%. For broader context, the sector benchmark for Financial Services net margin sits at 19.0%, and regional banks maintaining margins above 3.20% generally protect their return on equity.
Third, credit quality experienced visible softening across commercial real estate and business lending. Nonperforming loans climbed across commercial real estate, commercial and industrial, and residential mortgages. Annualized net charge-offs climbed 6 basis points sequentially to 0.31%, though they stayed below the 0.40% danger zone. Meanwhile, the allowance for credit losses to total loans edged down 3 basis points to 1.75%, meaning the bank chose not to expand its reserve cushion despite rising delinquent assets.
Fourth, Midwest loan demand reflected caution among business borrowers. Average total loans and leases dipped 0.4% sequentially to $188.4 billion. Commercial real estate loans fell $854 million, or 4%, reflecting active portfolio runoff and stricter underwriting. Commercial and industrial lending provided modest growth, rising $553 million, or 1%, to $90.9 billion. Automobile loans and residential mortgages each contracted by 1% to 2%, showing consumer borrowing restraint.
| Earnings Checkpoint | Expected Condition | Reported Q3 2026 Outcome | Assessment |
|---|---|---|---|
| Net Interest Margin | Hold above 3.20% | Expanded 4 bps to 3.25% | Beat expectations |
| Deposit Mix | Noninterest deposits above 18% | Noninterest deposits at $40.2B (18.0%) | Met expectations |
| Net Charge-Off Ratio | Keep below 0.30% | Climbed to 0.31% | Mild credit deterioration |
| Commercial Loan Growth | 1% to 2% sequential expansion | C&I up 1%, total commercial down $303M | Mixed performance |
| CET1 Capital Ratio | Maintain above 10.0% | Preliminary CET1 at 10.1% | Solid capital strength |
Limits of regional bank earnings analysis
Evaluating a regional bank purely through top-line earnings reports can lead to several common misinterpretations:
- Confusing lower provisions with improving credit: Huntington's provision expense fell from $132 million to $123 million, which helped support adjusted EPS. However, actual nonperforming assets and net charge-offs both increased during the same quarter. A lower provision in the face of rising bad loans lowers balance sheet coverage rather than proving credit health.
- Overlooking tangible book value erosion: Even though the bank generated $680 million in net income applicable to common shares, tangible book value per share dropped $0.18 to $9.47. Fluctuations in bond prices flow through accumulated other comprehensive income, reducing real balance sheet equity without showing up on the income statement.
- Treating acquired growth as organic volume: Huntington's year-over-year loan growth of 39% and revenue gain of 31% reflect the full inclusion of Cadence and Veritex. Sequentially, organic loans contracted 0.4%, demonstrating that underlying Midwest borrowing demand was relatively sluggish.
What it means for the next quarter
Huntington enters the final quarter of 2026 with expanding net interest margins but emerging credit pressures. The widening of NIM to 3.25% proves the bank can reinvest securities at attractive yields while retiring wholesale borrowings. However, nonaccrual loans reaching $1.70 billion indicate that commercial and real estate borrowers are feeling sustained pressure from higher benchmark rates.
Investors should track whether the net charge-off ratio stabilizes near 0.31% or continues climbing toward historical cyclical averages. Furthermore, tracking whether noninterest-bearing deposits remain near $40 billion will show if corporate treasury clients begin moving operational cash into yielding instruments as the Federal Reserve adjusts policy. You can compare Huntington's valuation multiple against the broader sector median of 13.6x and examine peer credit trends in reading M&T Bank earnings.
What this means for you
If you own shares in Huntington Bancshares or regional banking exchange-traded funds, focus on core balance sheet resilience rather than headline revenue beats:
- Check net charge-off trajectories: Look at whether actual written-off loans remain below 0.35% of total loans. Consecutive quarters of expanding charge-offs typically require higher future provisions, which directly depress earnings.
- Monitor tangible book value per share: Real shareholder equity builds through tangible book value compounding over multi-year cycles. Watch whether TBV rebounds from $9.47 as interest rate volatility settles.
- Inspect noninterest deposit stability: When reviewing bank filings, verify whether zero-cost demand deposits hold steady. A sudden drop in noninterest deposits compresses margins much faster than minor loan growth can offset.
- Review balance sheet strength independently: Use research platforms like Cluenex to inspect how regional bank capital cushions, moat ratings, and asset quality metrics compare across economic cycles, or check the Huntington Bancshares stock page for updated SEC filing breakdowns and balance sheet data.