Earnings

Huntington CEO Stands Behind 2027 EPS Target After Rate Hikes, Tougher Rivals And Faster Real Estate Retreat

Chairman and CEO Steve Steinour says rates, inflation and competition forced the cut, but the bank still sees 2027 EPS of $1.75 to $1.83.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Huntington CEO Stands Behind 2027 EPS Target After Rate Hikes, Tougher Rivals And Faster Real Estate Retreat

Huntington Bancshares is sticking with 2027 earnings per share of $1.75 to $1.83, even after cutting guidance at a September conference, Chairman and CEO Steve Steinour said on the bank's third-quarter earnings call on Thursday. He blamed a harsher rate and inflation backdrop, fiercer competition and a commercial real estate pullback that is running faster than planned.

What the bank got wrong

Asked by a UBS analyst what management misjudged when it set the 2027 target, Steinour said the bank now operates in a "very different interest rate environment, very different inflation environment" and a much tougher competitive one. He said the bank has pulled back in indirect auto and home mortgage, and that the reduction in commercial real estate exposure, once planned over a couple of years, is "happening much faster than we would have projected."

Much of the shift came from refinancing. Steinour said far more loans than expected moved to Fannie Mae and Freddie Mac in July and August as borrowers locked in rates ahead of expected hikes, with some going to debt funds. He added that commercial real estate construction commitments fell significantly during the quarter to about 8%, and will continue at a much more modest level.

Huntington, a Columbus, Ohio, regional bank that completed its merger with Cadence Bank on February 1, 2026, now runs nearly 1,400 branches in 21 states.

Bridging $1.54 to $1.76

Chief Financial Officer Zach Wasserman fell ill and skipped the question session, so Eric Wasserstrom, the bank's Director of Investor Relations, answered in his place. He bridged consensus EPS of about $1.54 this year to $1.76 next, a 22-cent gap: about six cents from $150 million of added cost savings tied to Cadence, about two from buybacks and 14 from core growth, which he called an 8% to 9% rate.

He said the low end of guidance holds with 6% loan growth and flat net interest margin, and that the outlook includes no reserve release in 2027. It assumes a deposit beta, the share of rate increases passed to depositors, of 50% to 60%, against about 45% in the 2022-24 rate-hike cycle. Buybacks of $1.8 billion to $1.9 billion are planned across this year and next; Huntington has repurchased about $460 million so far this year, including $50 million in the fourth quarter to date.

Caution, not a downturn call

Steinour said he is "a little more cautious perhaps than some of my peers," citing market volatility and a long stretch of recovery. He said he is "not calling for a downturn," and that the bank would "rather have capital and return it to shareholders" than lend at very low returns.

For the fourth quarter, management expects loan balances to grow from the third quarter and fee revenue of about $750 million, slightly under the roughly $730 million-style target Wasserstrom said had been floated at a Barclays conference, a miss he tied to a sharp rise in rates that hit capital markets and mortgage banking. Full-year fee growth is still expected near 31%, and full-year net charge-offs near the low end of a 25 to 35 basis point range.

The next test is the fourth quarter, when management expects loans to grow and fees to reach about $750 million.

Sources

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