Huntington Bancshares Incorporated (HBAN) delivered a notable performance in the first quarter of 2025, reporting earnings per common share (EPS) of $0.34. This result marked an increase of $0.08 compared to the same quarter in the prior year, demonstrating significant year-over-year profit growth and surpassing expectations, a key highlight from the company's recent earnings release on April 17, 2025, according to Huntington Bancshares Q1 2025 Earnings Release. The strong performance was attributed by management to growth across core banking activities, including expansion in net interest income and continued robust fee revenue generation.
The reported EPS figure remained unchanged from the linked quarter, indicating a stable earnings trajectory entering the new fiscal year. This stability, coupled with the substantial year-over-year improvement, positions Huntington favorably within the regional banking sector as it navigates the evolving economic landscape. The results underscore the effectiveness of the bank's strategic initiatives aimed at driving core business growth and enhancing profitability.
Analyzing Huntington's Q1 2025 Financial Performance#
The first quarter of 2025 proved to be a period of solid execution for Huntington Bancshares, with key financial metrics reflecting underlying strength. Beyond the headline EPS figure, a deeper dive into the results reveals several performance drivers that contributed to the positive outcome. The company's focus on expanding its core revenue streams, managing its balance sheet effectively, and maintaining disciplined credit quality were central themes in the earnings report and subsequent commentary.
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Management highlighted that the exceptional Q1 results were a product of growth in both loans and deposits, coupled with expanded net interest income and sustained strong performance in fee-generating businesses. This balanced growth across the balance sheet and income statement is indicative of a well-rounded business model capable of performing in varying market conditions. The company's strategic investments in key areas appear to be yielding tangible results, contributing to the observed profit growth.
Decoding Net Interest Income and Margin Expansion#
Net Interest Income (NII) is a critical profitability driver for banks, representing the difference between interest earned on assets (like loans) and interest paid on liabilities (like deposits). For Huntington, Q1 2025 saw substantial growth in this key metric. According to the Huntington Bancshares Q1 2025 Earnings Call Transcript, Huntington Bancshares Net Interest Income reached $1.43 billion in the first quarter.
This NII figure represented an impressive +11% increase compared to the first quarter of 2024 and a sequential increase of +2.2% from the fourth quarter of 2024. This robust growth underscores the bank's success in optimizing its interest-earning assets and managing its funding costs in the prevailing interest rate environment. The year-over-year growth, in particular, highlights a strong recovery and expansion trajectory.
Accompanying the NII growth was an expansion in the Net Interest Margin (NIM). The HBAN NIM for Q1 2025 was 3.1%, reflecting an increase of +7 basis points sequentially from the prior quarter, according to the Huntington Bancshares Q1 2025 Earnings Release. This expansion indicates improved profitability on the bank's earning assets. Factors contributing to this NIM expansion likely include strategic adjustments to the asset mix, repricing of loan portfolios, and effective management of deposit costs, as suggested by management commentary.
Management commentary from the earnings call indicated that the current NIM run rate was approximately 3.07% and is anticipated to remain relatively stable under most scenarios for the remainder of 2025. This guidance provides investors with a degree of predictability regarding the bank's core profitability metric, suggesting confidence in the sustainability of the current margin level despite potential shifts in interest rates.
The Rise of Fee Income: Contributions to Revenue Growth#
Beyond net interest income, fee income represents a vital and increasingly important revenue stream for diversified financial institutions like Huntington. In Q1 2025, Huntington Bancshares Fee Income demonstrated strong performance, contributing significantly to overall revenue growth. According to the Huntington Bancshares Q1 2025 Earnings Release, total fee income for the quarter amounted to $494 million, marking a +6% increase year-over-year.
This growth was broad-based, driven by strong performance across several key fee-generating segments. Payments, wealth management, and capital markets were identified as primary contributors to this positive trend. The diversification of fee income streams helps to mitigate reliance on interest rate sensitive revenue and enhances the stability of the bank's overall earnings profile.
Within fee income, wealth management fees saw a significant jump, increasing by +15% year-over-year in Q1 2025. This growth was supported by a +6% increase in assets under management (AUM) and an +11% rise in wealth advisory households, as detailed in the earnings release. This performance underscores Huntington's success in attracting and serving high-net-worth clients, a segment that typically provides stable, recurring revenue.
Capital markets activity also played a role in the fee income expansion. Revenue from capital markets grew by +20% year-over-year in Q1 2025, supported by activity related to commercial loan production, including underwriting. This suggests that the bank is effectively leveraging its capital markets capabilities to complement its core lending business and generate additional fee-based revenue.
Management also noted sustained investments in revenue-producing initiatives across the commercial and regional banking segments, including the expansion of specialty banking areas. These investments are expected to continue contributing to fee income growth going forward, further diversifying and strengthening this revenue component.
Building the Balance Sheet: Loan and Deposit Dynamics#
The health and growth of a bank's balance sheet, specifically its loan and deposit portfolios, are fundamental indicators of its operational success and future revenue potential. Huntington's Q1 2025 results showed positive trends in both areas, reflecting effective customer acquisition and retention strategies.
Average loan and lease balances demonstrated solid growth in the first quarter. According to the Huntington Bancshares Q1 2025 Earnings Release, HBAN loan growth saw average loan and lease balances increase by +2.1% quarter-over-quarter and a robust +7% year-over-year. This expansion signals healthy demand for credit within Huntington's operating footprint and the bank's ability to capture lending opportunities.
Similarly, average deposit balances also grew, providing a stable funding base for the bank's lending activities. Huntington Bancshares deposit growth was reported at +1.4% quarter-over-quarter and +7% year-over-year in Q1 2025, according to the same source. The parallel growth in both loans and deposits indicates a balanced balance sheet expansion and the bank's success in deepening relationships with its customer base, attracting both assets and liabilities.
Key Q1 2025 Financial Metrics#
| Metric | Q1 2025 | Sequential Change | Year-over-Year Change |
|---|---|---|---|
| EPS | $0.34 | 0.00% | +30.77% |
| Net Interest Income | $1.43 billion | +2.2% | +11.00% |
| Net Interest Margin (NIM) | 3.10% | +7 bps | N/A |
| Fee Income | $494 million | N/A | +6.00% |
| Avg. Loan Balances | N/A | +2.1% | +7.00% |
| Avg. Deposit Balances | N/A | +1.4% | +7.00% |
| Net Charge-Offs Ratio | 0.26% | -4 bps | N/A |
| Nonperforming Asset Ratio | 0.61% | -2 bps | N/A |
| ROTCE | 16.70% | N/A | N/A |
| Tangible Book Value per Share | N/A | N/A | +13.00%+ |
Note: N/A indicates data not explicitly provided in the source comparison format or not applicable. EPS YoY change calculated based on provided Q1 2025 EPS of $0.34 and prior year EPS of $0.26 (implied by $0.08 increase). Tangible Book Value change is approximate. Data sourced from Huntington Bancshares Q1 2025 Earnings Release and Huntington Bancshares Q1 2025 Earnings Call Transcript.
Assessing Credit Risk: Portfolio Quality and Management#
In the current economic environment, maintaining strong credit quality is paramount for bank stability. Huntington's Q1 2025 report indicated continued resilience in its credit portfolio, with improving trends in key risk metrics. According to the Huntington Bancshares Q1 2025 Earnings Release, HBAN credit quality metrics remained solid.
Net charge-offs (NCOs), which represent loans deemed uncollectible and written off, decreased sequentially by four basis points to 0.26% of average loans and leases in Q1 2025. This decline suggests a stable or improving trend in loan performance during the quarter. The nonperforming asset (NPA) ratio, which measures the proportion of assets that are not currently generating income due to borrower distress, also decreased by two basis points sequentially, ending the quarter at 0.61%. These trends indicate effective risk management and a resilient loan portfolio, particularly notable in the context of broader industry discussions around potential credit deterioration.
The bank's vehicle finance portfolio, a significant component of its consumer lending, continues to be managed with a focus on credit quality. Management commentary highlighted a strategic shift initiated since the 2008 financial crisis to focus auto lending primarily on super-prime borrowers. This deliberate approach aims to mitigate credit risk within this asset class. Consumer auto loan balances grew by +6% year-over-year in Q1 2025, indicating growth alongside this risk-mitigation strategy.
Commercial Real Estate (CRE) exposure has been a point of focus for investors and regulators in the banking sector. According to commentary from the Huntington Bancshares Q1 2025 Earnings Call Transcript, commercial real estate balances declined by $261 million from the prior quarter. Similar to the auto portfolio, HBAN has emphasized improved risk management practices for CRE since the 2008 financial crisis, indicating a proactive approach to managing potential vulnerabilities in this sector.
Regarding the Allowance for Credit Losses (ACL), a buffer against potential loan losses, Huntington increased its ACL sequentially by $32 million to a total of $2.5 billion at the end of Q1 2025. The ACL represented 1.87% of total loans and leases. This increase, despite improving credit quality metrics, reflects strong loan growth during the quarter and management's prudent approach to reserving, maintaining what they view as adequate coverage based on current portfolio performance and economic outlook.
Navigating Interest Rate Dynamics#
The interest rate environment remains a significant factor influencing bank profitability. Huntington has taken steps to manage its exposure to interest rate fluctuations. According to the [Huntington Bancshares Q1 2025 Earnings Call Transcript](https://seekingalpha.com/article/4776012-huntingt on-bancshares-incorporated-hban-q1-2025-earnings-call-transcript), the bank has been actively working to reduce its asset sensitivity over the past 12 months, aiming for a near-neutral position. This strategy seeks to minimize the impact of potential rate changes, whether increases or decreases, on its net interest income.
As part of this strategy, Huntington added approximately $4 billion in floor spreads during Q1 2025. These hedging instruments are designed to protect against the downside risk of declining interest rates, helping to stabilize NII in a falling rate scenario. This proactive balance sheet management reflects management's calibration to the most likely interest rate environment scenarios they analyze.
HBAN vs. Peers: A Regional Bank Performance Snapshot#
Comparing Huntington's Q1 2025 performance to that of its regional banking peers provides valuable context for its results and competitive positioning. While direct peer comparison data was not explicitly provided in a consolidated format within the data, the individual metrics reported by HBAN can be benchmarked against general sector trends discussed in broader industry analysis, such as the Regional Bank Credit Risk Outlook published by S&P Global Ratings in February 2025, which noted potential weakening asset quality and high interest rates as sector headwinds.
Huntington's average loan growth of +2.1% quarter-over-quarter and +7% year-over-year, coupled with average deposit growth of +1.4% quarter-over-quarter and +7% year-over-year, suggests strong organic momentum relative to some peers who may be experiencing slower balance sheet expansion or deposit outflows. The bank's ability to grow both sides of the balance sheet simultaneously indicates effective relationship banking and competitive product offerings.
The reported Net Interest Margin (NIM) of 3.1% and the sequential expansion of +7 basis points position Huntington relative to the varied NIM performance observed across the regional banking sector. While some banks have seen NIM compression due to deposit cost pressures, Huntington's ability to expand its margin suggests effective asset-liability management and potentially a more favorable funding mix or asset repricing strategy.
In terms of credit quality, Huntington's declining trends in net charge-offs (0.26%, down 4 bps sequentially) and nonperforming assets (0.61%, down 2 bps sequentially) appear favorable when compared to broader sector concerns about potential asset quality deterioration mentioned in reports like the S&P Global outlook. This suggests that HBAN's risk management practices and portfolio composition are holding up well, at least through the first quarter of 2025.
A key measure of profitability and efficiency for banks is Return on Tangible Common Equity (ROTCE). Huntington reported a strong ROTCE of 16.7% in Q1 2025. This metric, combined with the tangible book value per share increasing by over +13% year-over-year, underscores the bank's ability to generate solid returns for its shareholders on a tangible equity basis, a performance that likely compares favorably to many regional peers.
Management's Forward Guidance for 2025#
Management commentary during the Q1 2025 earnings call provided updated guidance for the full year, reflecting confidence based on the strong start to the year. This outlook is crucial for investors assessing the bank's future earnings potential.
| Metric | Full-Year 2025 Guidance |
|---|---|
| Net Interest Income (NII) Growth | +5% to +7% |
| Fee Revenue Growth | +4% to +6% |
Data sourced from Huntington Bancshares Q1 2025 Earnings Call Transcript.
Full-year 2025 NII guidance was increased to a range of a +5% to +7% rise, up from prior expectations. This upward revision reflects the strong Q1 performance and the expectation for a stronger NIM throughout the year than previously modeled. This suggests management anticipates continued favorable dynamics in their interest-earning assets and funding costs.
Full-year 2025 fee revenue is projected to grow in the +4% to +6% range. This guidance aligns with the observed growth in Q1 and reflects the expected contributions from ongoing investments in fee-generating businesses, including payments, wealth management, and capital markets. This diversified revenue growth forecast provides a positive outlook for the bank's non-interest income streams.
CEO commentary from the earnings call painted a positive picture, noting that the company was "hitting on all cylinders" and expressing satisfaction with the overall performance. Management emphasized their dynamic approach to calibrating strategies based on multiple potential interest rate scenarios, indicating preparedness for various market conditions. This forward-looking perspective, anchored by strong Q1 results and positive guidance, provides a basis for assessing Huntington's strategic trajectory for the remainder of the year.
Commitment to Shareholders: Dividend Declaration#
Huntington Bancshares continues to demonstrate a commitment to returning capital to its shareholders through dividends. On April 17, 2025, the company announced that its Board of Directors declared a quarterly cash dividend on its common stock of $0.155 per common share, according to Huntington Bancshares Dividend Declaration. This dividend amount remained unchanged from the dividend paid in the prior quarter.
The common stock cash dividend is scheduled to be payable on July 1, 2025, to shareholders of record as of the close of business on June 17, 2025. The consistent declaration of the dividend at the same level underscores the bank's stable financial position and its ability to generate sufficient earnings and capital to support shareholder distributions, even while investing for growth.
Conclusion: Charting Huntington's Course Ahead#
Huntington Bancshares' Q1 2025 performance provides a strong foundation for the year. The results highlight effective execution across core banking functions, leading to robust growth in net interest income and fee revenue, stable balance sheet expansion, and resilient credit quality. The sequential and year-over-year improvements in key metrics demonstrate the bank's ability to thrive in the current banking landscape.
Management's upward revision of full-year NII guidance and positive outlook for fee revenue growth underscore confidence in the sustainability of these trends. Strategic actions, such as hedging against interest rate risk and focusing on higher-quality segments within lending portfolios (like super-prime auto and managed CRE exposure), appear to be contributing to both profitability and risk mitigation.
Compared to the broader regional banking sector, Huntington's reported metrics, including strong loan and deposit growth, NIM expansion, and improving credit quality ratios, suggest a competitive position marked by strong organic momentum and effective management. The solid ROTCE and tangible book value growth further reinforce the picture of a bank generating value for its shareholders.
The declaration of a consistent quarterly dividend signals financial stability and a continued commitment to shareholder returns. As Huntington moves through 2025, investors will likely monitor the bank's ability to maintain its NIM in a potentially changing rate environment, continue executing on fee-generating initiatives, and manage credit quality, particularly within areas like commercial real estate, although recent trends have been positive.
Overall, Huntington's Q1 2025 results, supported by data showing growth across key areas and proactive risk management, paint a picture of a regional bank executing effectively on its strategy and positioned for continued performance in the near term.