Higher NII & Fee Income to Aid Huntington Bancshares' Q2 Earnings

Huntington Bancshares (HBAN) is expected to report Q2 2025 earnings on July 18, with preliminary results indicating a 13.3% year-over-year EPS increase to 34 cents on projected revenues of $1.95 billion. Net Interest Income (NII) is anticipated to rise 3% sequentially to $1.5 billion due to stable rates and loan demand, yet total non-interest income is forecast to decline 5.4% sequentially while expenses increase. The bank also raised its allowance for credit losses by $37 million to $2.5 billion, signaling growing asset quality concerns. Despite a 'Buy' rating, the Zacks model indicates a low probability of an earnings beat due to a negative Earnings ESP.

Analysis

Huntington Bancshares (HBAN) presents a mixed fundamental picture ahead of its Q2 2025 earnings report. While the company projects strong year-over-year growth, with preliminary earnings per share rising 13.3% to 34 cents, significant headwinds are emerging. The primary growth driver is Net Interest Income (NII), expected to increase 3% sequentially to $1.5 billion, supported by stable interest rates and healthy loan demand. However, this strength is counteracted by several concerns. Total non-interest income is forecast to decline 5.4% sequentially, and operating expenses are anticipated to rise due to strategic investments. More critically, asset quality appears to be deteriorating, evidenced by a $37 million increase in the allowance for credit losses and a projected 3.5% rise in non-accrual loans, driven by concerns over a potential economic slowdown. This cautious outlook is reinforced by quantitative signals; despite a Zacks #2 (Buy) rank, the company's negative Earnings ESP of -2.42% and preliminary revenue of $1.95 billion trailing the $1.99 billion consensus estimate suggest a low probability of an earnings beat and a potential revenue miss.

Key Decisions for Investors

• Investors should weigh the expected 3% sequential rise in Net Interest Income against the simultaneous $37 million increase in the allowance for credit losses, as deteriorating asset quality may erode top-line gains.
• Given the negative Earnings ESP of -2.42% and preliminary revenues trailing the consensus estimate, investors should be cautious of a potential earnings or revenue miss, despite the company's history of positive surprises.
• Pay close attention to management's commentary on the drivers behind the projected 5.4% sequential decline in total non-interest income and rising operating expenses, as these factors are key headwinds to the positive earnings growth narrative.