Huntington Bancshares Incorporated

10/27/2026 | Press release | Distributed by Public on 10/27/2026 15:25

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
INTRODUCTION
We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and
headquartered in Columbus, Ohio. Through the Bank, we are committed to making people's lives better, helping
businesses thrive, and strengthening the communities we serve, and we have been servicing the financial needs of
our customers since 1866. Through our subsidiaries, we provide full-service commercial and consumer deposit,
lending, and other banking and financial services. These include, but are not limited to, payments, mortgage
banking, direct and indirect consumer financing, investment banking, capital markets, advisory, equipment
financing, distribution finance, investment management, trust, brokerage, insurance, and other financial products
and services. As of September 30, 2026, we operated approximately 1,400 branches in 21 states, with our
Commercial and Vehicle Finance businesses delivering expertise nationally.
This MD&A provides information we believe necessary for understanding our financial condition, changes in
financial condition, results of operations, and cash flows. This MD&A provides only material updates to the MD&A
included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Annual Report on
Form 10-K"), and therefore, should be read in conjunction with the 2025 Annual Report on Form 10-K. This MD&A
should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited
Consolidated Financial Statements, and other information contained in this report.
In this MD&A we refer to FTE net interest income and FTE total revenue and the efficiency and tangible common
equity ratios. These financial measures are not required by or calculated in accordance with GAAP, and may not be
calculated the same as similarly titled measures used by other companies. These financial measures should thus be
considered as supplemental in nature and not considered in isolation or as a substitute for the related financial
information prepared in accordance with GAAP. For a further description of these non-GAAP financial measures and
reconciliations to the most directly comparable GAAP measure, see the "Non-GAAP Financial Measures" within the
"Additional Disclosures" section below.
EXECUTIVE OVERVIEW
Veritex and Cadence Acquisitions
Effective October 20, 2025, Huntington completed the acquisition of Veritex Holdings, Inc. ("Veritex"), a bank
holding company headquartered in Dallas, Texas, whereby Veritex merged with and into Huntington, with
Huntington as the surviving entity. Upon completion of the merger, Huntington issued 107 million shares of its
common stock to Veritex shareholders of record as of the merger date, in addition to 1 million shares issued upon
the conversion of certain Veritex equity awards, resulting in total consideration from the transaction of
approximately $1.7 billion.
Effective February 1, 2026, Huntington completed the acquisition of Cadence Bank ("Cadence"), a regional bank
headquartered in Houston, Texas and Tupelo, Mississippi, whereby Cadence merged with and into Huntington
National Bank, with Huntington National Bank as the surviving bank. Upon completion of the merger, Huntington
issued 462 million shares of its common stock to Cadence shareholders of record as of the merger date, in addition
to the conversion of certain Cadence equity awards into Huntington equity awards. Further, each outstanding share
of 5.50% Series A Non-Cumulative Perpetual Preferred Stock of Cadence was converted into the right to receive one
depositary share representing 1/1000 of a share of a newly created 5.50% Series L Non-Cumulative Perpetual
Preferred Stock of Huntington. Consideration from the transaction totaled approximately $8.3 billion.
Historical periods reflect results of legacy Huntington operations. Subsequent to the closing of each respective
acquisition, results reflect combined post-acquisition activity. For further information on the Veritex and Cadence
acquisitions, refer to Note 3 - "Business Combinations" of the Notes to Unaudited Consolidated Financial
Statements.
2026 3Q Form 10-Q 5
Financial Performance Review
Selected Financial Data
Table 1 - Selected Quarterly and Year-to-Date Income Statement Data
Three Months Ended
Nine Months Ended
(dollar amounts in millions, except per share data, share
count in millions)
Sep 30,
2026
Sep 30,
2025
Change
Sep 30,
2026
Sep 30,
2025
Change
Amount
Percent
Amount
Percent
Interest income
$3,389
$2,600
$789
30%
$9,857
$7,645
$2,212
29%
Interest expense
1,320
1,094
3,845
3,246
Net interest income
2,069
1,506
6,012
4,399
1,613
Provision for credit losses
Net interest income after provision for credit
losses
1,946
1,384
5,599
4,059
1,540
Noninterest income
2,189
1,593
Noninterest expense
1,772
1,246
5,355
3,595
1,760
Income before income taxes
2,433
2,057
Provision for income taxes
Income after income taxes
1,982
1,706
Income attributable to non-controlling interest
(1)
(25)
(3)
(21)
Net income attributable to Huntington
1,971
1,692
Dividends on preferred shares
Net income applicable to common shares
$680
$602
$78
13%
$1,848
$1,611
$237
15%
Average common shares-basic
2,019
1,459
38%
1,971
1,457
35%
Average common shares-diluted
2,047
1,485
1,999
1,483
Net income per common share-basic
$0.34
$0.41
$(0.07)
(17)
$0.94
$1.11
$(0.17)
(15)
Net income per common share-diluted
0.33
0.41
(0.08)
(20)
0.92
1.09
(0.17)
(16)
Cash dividends declared per common share
0.155
0.155
-
-
0.465
0.465
-
-
Return on average total assets
1.01%
1.19%
0.95%
1.09%
Return on average common shareholders' equity
9.1
12.4
8.6
11.6
Return on average tangible common shareholders'
equity (1)
14.6
17.8
13.8
16.9
Net interest margin (2)
3.25
3.13
3.23
3.12
Efficiency ratio (3)
61.2
57.4
63.2
58.4
Revenue and Net Interest Income-FTE (non-GAAP)
Net interest income
$2,069
$1,506
$563
37%
$6,012
$4,399
$1,613
37%
FTE adjustment (2)
Net interest income, FTE (non-GAAP) (2)
2,090
1,523
6,072
4,447
1,625
Noninterest income
2,189
1,593
Total revenue, FTE (non-GAAP) (2)
$2,812
$2,151
$661
31%
$8,261
$6,040
$2,221
37%
(1)Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible common
shareholders' equity, which represents a non-GAAP measure. Average tangible common shareholders' equity equals average total common shareholders'
equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred taxes and
calculated assuming a 21% tax rate.
(2)Calculated on an FTE basis, which represents a non-GAAP measure, assuming a 21% tax rate.
(3)Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains
(losses), which represents a non-GAAP measure.
6 Huntington Bancshares Incorporated
Summary of 2026 Third Quarter Results Compared to 2025 Third Quarter
For the third quarter of 2026, we reported net income attributable to Huntington of $721 million, or $0.33 per
diluted common share, compared with $629 million, or $0.41 per diluted common share, in the year-ago quarter.
The third quarter of 2026 reported net income was impacted by $117 million, or $92 million after tax, of acquisition-
related expenses, which reduced diluted earnings by $0.05 per common share, while the third quarter of 2025 was
favorably impacted by $24 million from the gain on sale of a portion of our corporate trust and custody business and
$6 million FDIC DIF special assessment adjustments, partially offset by $14 million of acquisition-related expenses,
which, together, increased diluted earnings on an after tax basis by $0.01 per common share.
Net interest income was $2.1 billion for the third quarter of 2026, an increase of $563 million, or 37%, from the
year-ago quarter. FTE net interest income, a non-GAAP financial measure, increased $567 million, or 37%, from the
year-ago quarter. The increase in FTE net interest income primarily reflected a $62.5 billion, or 32%, increase in
average earning assets and a 12 basis point increase in the FTE NIM to 3.25%, partially offset by a $48.5 billion, or
31%, increase in average interest-bearing liabilities. The increases in average earning assets and average interest-
bearing liabilities were attributable to a combination of the Cadence and Veritex acquisitions, as well as organic
growth. The NIM increase was primarily due to a decrease in deposit rates, partially offset by a decrease in yields on
interest earning assets.
The provision for credit losses was $123 million in the third quarter of 2026, an increase of $1 million, or 1%,
from the year-ago quarter, with the impact of loan growth and higher NCOs in the current year quarter partially
offset by a lower overall reserve coverage. NCOs were $146 million and represented 0.31% of average loans and
leases in the third quarter of 2026, compared to $75 million, or 0.22% of average loans and leases, in the year-ago
quarter.
Noninterest income was $722 million in the third quarter of 2026, an increase of $94 million, or 15%, from the
year-ago quarter. The increase in noninterest income was driven by increases across all major fee revenue
categories, in part due to the impact from the Cadence and Veritex acquisitions. Noninterest expense, inclusive of
the impact from the Cadence and Veritex acquisitions, was $1.8 billion in the third quarter of 2026, an increase of
$526 million, or 42%, from the year-ago quarter. The increase in noninterest expense was primarily driven by
acquisition-related expenses and higher base expenses from the Cadence and Veritex acquisitions.
Balance Sheet, Credit Quality, and Capital Ratios as of September 30, 2026 Compared to Prior Year End
Total assets at September 30, 2026 were $287.8 billion, an increase of $62.7 billion, or 28%, compared to
December 31, 2025. The increase in total assets was primarily driven by $51.3 billion of assets acquired as a result of
the completion of the Cadence acquisition, goodwill resulting from the Cadence acquisition, and organic loan
growth. Total liabilities at September 30, 2026 were $255.6 billion, an increase of $54.9 billion, or 27%, compared to
December 31, 2025. The increase in total liabilities was primarily driven by $46.5 billion of liabilities assumed as a
result of the completion of the Cadence acquisition.
NPAs totaled $1.7 billion at September 30, 2026, an increase of $777 million, or 82%, from December 31, 2025,
with the increase due to $295 million of NPAs assumed in the Cadence acquisition and additional increases in
commercial and industrial, commercial real estate, and residential mortgage NALs. The ACL was $3.4 billion, or
1.75% of total loans and leases, at September 30, 2026, an increase of $615 million compared to $2.7 billion, or
1.83% of total loans and leases, at December 31, 2025. The increase in the ACL was driven by the ACL recorded for
loans acquired in the Cadence transaction, in addition to loan and lease growth, partially offset by a decrease in the
overall ACL coverage ratio.
Our shareholders' equity to total assets ratio was 11.2% at September 30, 2026, compared to 10.8% at
December 31, 2025. The tangible common equity to tangible assets ratio, a non-GAAP measure, was 6.9% at
September 30, 2026, compared to 7.1% at December 31, 2025, with a decline in AOCI and an increase in tangible
assets partially offset by an increase in tangible common equity from current period earnings, net of dividends and
share repurchases. The CET1 risk-based capital ratio was 10.1% at September 30, 2026, compared to 10.4% at
December 31, 2025, with the decrease driven by higher risk-weighted assets, the impact of the Cadence acquisition,
and share repurchases, partially offset by an increase in regulatory capital from current period earnings, net of
dividends.
2026 3Q Form 10-Q 7
General
Our general business objectives and strategic priorities are to:
•Deliver our Purpose, Culture, and Vision through a differentiated operating model;
•Deepen customer relationships through advice-driven local delivery of national capabilities and
broader product offerings;
•Generate sustainable long-term profitable growth across our regional and national businesses;
•Invest in technology, data, automation, and digital capabilities to enhance the customer experience,
improve efficiency, and support scalable growth;
•Maintain positive operating leverage through disciplined execution, expense management, and
strategic investment;
•Leverage our scaled regional banking franchise, expanded geographic footprint, and national
specialty businesses to drive diversified growth;
•Deploy capital prudently to support organic growth and deliver long-term shareholder returns; and
•Maintain financial strength and resilience through disciplined risk, liquidity and capital management,
while adhering to an aggregate moderate-to-low risk appetite.
Our quarterly results reflect disciplined execution in an evolving operating environment, driven by growth across
our core business and the successful integrations of Cadence and Veritex. We remain strategically well positioned,
with a scaled and diversified franchise, multiple growth engines, and the achievement of partner synergies. Our
strong liquidity, capital, and credit profiles continue to provide the flexibility to invest in deepening customer
relationships, expanding our capabilities and expertise, and supporting sustainable organic growth. Credit
performance remains solid and consistent with our aggregate moderate-to-low risk appetite. With our differentiated
super-regional bank model, which combines national expertise with local delivery, we remain focused on generating
robust earnings, tangible book value growth, and long-term shareholder value through disciplined growth, prudent
risk management, and continued investment in our franchise.
Economy
The U.S. economy remained resilient in the third quarter, supported by solid consumer spending, business
investment, and continued spending on artificial intelligence and related infrastructure. The labor market remained
stable, with continued payroll growth and unemployment near historically low levels. Geopolitical tensions in the
Middle East and elevated energy prices weighed on confidence, but strong household and corporate balance sheets
helped sustain growth.
Interest rates moved sharply higher during the quarter as persistent inflation and durable economic strength led
investors to price in a higher path for policy rates. In September, the Federal Reserve raised the federal funds target
range by 25 basis points to 3.75%-4.00%, its first rate increase since July 2023. Markets continue to price in the
possibility of further tightening before year-end.
Looking ahead, growth is expected to continue, supported by consumer spending, a stable labor market, and
ongoing investment in technology and infrastructure. Key risks include inflation, the path of interest rates, and
geopolitical developments.
8 Huntington Bancshares Incorporated
DISCUSSION OF RESULTS OF OPERATIONS
This section provides a review of financial performance on a consolidated basis. Key unaudited interim
consolidated balance sheet and unaudited interim income statement trends are discussed. All earnings per share
data are reported on a diluted basis. For additional insight on financial performance, please read this section in
conjunction with the "Business Segment Discussion."
Quarterly Average Balance Sheet / Net Interest Income
The following table details the change in our quarterly average balance sheet and the net interest margin.
Table 2 - Quarterly Average Balance Sheet and Net Interest Margin Analysis
Three Months Ended September 30, 2026
Three Months Ended September 30, 2025
Average
Interest
Income/
Expense
Yield/
Average
Interest
Income/
Expense
Yield/
Change in Average
Balances
(dollar amounts in millions)
Balances
(FTE) (1)
Rate (1)(2)
Balances
(FTE) (1)
Rate (1)(2)
Amount
Percent
Assets:
Interest-earning deposits with banks
$14,288
$135
3.78%
$11,823
$134
4.53%
$2,465
21%
Trading account assets
3.87
4.03
(314)
(50)
Investment and other securities:
Available-for-sale securities:
Taxable
31,521
3.76
23,485
4.19
8,036
Tax-exempt
3,463
4.97
3,318
5.02
Total available-for-sale securities
34,984
3.88
26,803
4.29
8,181
Held-to-maturity securities-taxable
14,314
2.69
15,752
2.66
(1,438)
(9)
Other securities
1,295
5.80
5.15
Total investment and other securities
50,593
3.59
43,443
3.72
7,150
Loans held for sale
1,629
5.62
6.52
Loans and leases (3) :
Commercial:
Commercial and industrial
90,924
1,358
5.84
61,440
6.11
29,484
Commercial real estate
23,071
6.05
10,692
6.86
12,379
Lease financing
5,724
6.72
5,483
6.69
Total commercial
119,719
1,813
5.93
77,615
1,239
6.25
42,104
Consumer:
Residential mortgage
33,183
4.82
24,511
4.23
8,672
Automobile
15,339
5.94
15,693
5.92
(354)
(2)
Home equity
11,869
6.81
10,264
7.34
1,605
RV and marine
5,744
5.58
5,860
5.41
(116)
(2)
Other consumer
2,595
10.44
2,001
10.82
Total consumer
68,730
5.69
58,329
5.57
10,401
Total loans and leases
188,449
2,796
5.84
135,944
2,057
5.96
52,505
Total earning assets
255,274
3,410
5.30
192,732
2,617
5.39
62,542
Cash and due from banks
2,375
1,445
Goodwill and other intangible assets
10,416
5,625
4,791
All other assets
14,197
9,925
4,272
Total assets
$282,262
$209,727
$72,535
35%
Liabilities and shareholders' equity:
Interest-bearing deposits:
Demand deposits-interest-bearing
$63,704
$321
2.00%
$45,980
$235
2.02%
$17,724
39%
Money market deposits
77,353
2.65
62,009
2.99
15,344
Savings deposits
18,839
0.62
15,042
0.35
3,797
Time deposits
23,766
3.40
12,773
3.60
10,993
Total interest-bearing deposits
183,662
1,071
2.31
135,804
2.43
47,858
Short-term borrowings
1,152
3.12
1,267
3.90
(115)
(9)
Long-term debt
18,145
5.28
17,433
5.75
Total interest-bearing liabilities
202,959
1,320
2.58
154,504
1,094
2.81
48,455
Demand deposits-noninterest-bearing
40,154
29,008
11,146
All other liabilities
6,453
4,826
1,627
Total liabilities
249,566
188,338
61,228
Total Huntington shareholders' equity
32,656
21,348
11,308
Non-controlling interest
(1)
(2)
Total equity
32,696
21,389
11,307
Total liabilities and equity
$282,262
$209,727
$72,535
35%
Net interest rate spread
2.72
2.58
Impact of noninterest-bearing funds on NIM
0.53
0.55
NII/NIM (FTE)
$2,090
3.25%
$1,523
3.13%
(1)Calculated on an FTE basis, which represents a non-GAAP measure, assuming a 21% tax rate.
(2)Yield/rates include the impact of applicable derivatives. Loan and lease and deposit average yield/rates also include the impact of applicable non-
deferrable and amortized fees.
(3)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
2026 3Q Form 10-Q 9
Quarterly Net Interest Income
Net interest income for the third quarter of 2026 increased $563 million, or 37%, from the third quarter of 2025.
FTE net interest income, a non-GAAP financial measure, for the third quarter of 2026 increased $567 million, or 37%,
from the third quarter of 2025. The increase in FTE net interest income primarily reflected a $62.5 billion, or 32%,
increase in average earning assets and a 12 basis point increase in the FTE NIM to 3.25%, partially offset by a $48.5
billion, or 31%, increase in average interest-bearing liabilities. The increases in average earning assets and average
interest-bearing liabilities were attributable to a combination of the Cadence and Veritex acquisitions and organic
growth. The increase in the NIM was driven by a decrease in deposit rates, partially offset by lower yields on interest
earning assets.
Quarterly Average Balance Sheet
Average assets for the third quarter of 2026 increased $72.5 billion, or 35%, from the third quarter of 2025.
Average earning assets for the third quarter of 2026 increased $62.5 billion, or 32%, from the third quarter of 2025.
The increases in average assets and average earning assets were primarily due to $51.3 billion of total assets,
including $36.9 billion of loans, acquired in connection with the Cadence transaction, and $12.0 billion of total
assets, including $9.3 billion of loans, acquired in connection with the Veritex transaction, in addition to organic loan
growth over the last year.
Average liabilities for the third quarter of 2026 increased $61.2 billion, or 33%, from the third quarter of 2025.
Average deposits for the third quarter of 2026 increased $59.0 billion, or 36%, from the third quarter of 2025. The
increases in average liabilities were primarily due to $43.5 billion of deposits, including $8.8 billion of noninterest-
bearing deposits and $34.7 billion of interest-bearing deposits, acquired in connection with the Cadence transaction,
and $10.5 billion of deposits, including $2.4 billion of noninterest-bearing deposits and $8.1 billion of interest-
bearing deposits, acquired in the Veritex transaction, in addition to organic deposit growth over the last year.
Average shareholders' equity for the third quarter of 2026 increased $11.3 billion, or 53%, from the third quarter
of 2025, primarily due to the impact of common stock issued in connection with the Cadence and Veritex
acquisitions, and earnings, net of dividends and share repurchases, over the last year.
10 Huntington Bancshares Incorporated
Year-to-Date Average Balance Sheet / Net Interest Income
The following table details the change in our year-to-date average balance sheet and the net interest margin.
Table 3 - Year-to-Date Average Balance Sheet and Net Interest Margin Analysis
Nine Months Ended September 30, 2026
Nine Months Ended September 30, 2025
Average
Interest
Income/
Expense
Yield/
Average
Interest
Income/
Expense
Yield/
Change in Average
Balances
(dollar amounts in millions)
Balances
(FTE) (1)
Rate (1)(2)
Balances
(FTE) (1)
Rate (1)(2)
Amount
Percent
Assets:
Interest-earning deposits with banks
$15,628
$432
3.69%
$11,907
$402
4.50%
3,721
Trading account assets
3.85
3.82
(307)
(53)
Investment and other securities:
Available-for-sale securities:
Taxable
30,369
3.69
23,913
4.52
6,456
Tax-exempt
3,464
4.91
3,274
5.06
Total available-for-sale securities
33,833
3.81
27,187
4.58
6,646
Held-to-maturity securities-taxable
14,618
2.66
16,078
2.65
(1,460)
(9)
Other securities
1,294
5.32
5.43
Total investment and other securities
49,745
1,311
3.51
44,147
1,291
3.90
5,598
Loans held for sale
1,333
5.94
6.47
Loans and leases (3) :
Commercial:
Commercial and industrial
87,644
3,885
5.85
59,477
2,746
6.09
28,167
Commercial real estate
22,718
1,054
6.12
10,831
6.76
11,887
Lease financing
5,735
6.85
5,472
6.61
Total commercial
116,097
5,237
5.95
75,780
3,575
6.22
40,317
Consumer:
Residential mortgage
32,373
1,157
4.76
24,412
4.16
7,961
Automobile
15,679
5.89
15,167
5.82
Home equity
11,692
6.85
10,195
7.33
1,497
RV and marine
5,674
5.49
5,910
5.35
(236)
(4)
Other consumer
2,511
10.15
1,880
10.97
Total consumer
67,929
2,870
5.64
57,564
2,372
5.50
10,365
Total loans and leases
184,026
8,107
5.84
133,344
5,947
5.91
50,682
Total earning assets
251,009
9,917
5.28
190,724
7,693
5.39
60,285
Cash and due from banks
2,065
1,419
Goodwill and other intangible assets
10,024
5,639
4,385
All other assets
13,280
9,790
3,490
Total assets
$276,378
$207,572
$68,806
33%
Liabilities and shareholders' equity:
Interest-bearing deposits:
Demand deposits-interest-bearing
$59,731
$852
1.91%
$44,755
$663
1.98%
$14,976
33%
Money market deposits
75,967
1,456
2.56
61,111
1,388
3.04
14,856
Savings deposits
18,607
0.71
15,012
0.28
3,595
Time deposits
24,466
3.45
13,347
3.81
11,119
Total interest-bearing deposits
178,771
3,039
2.27
134,225
2,462
2.45
44,546
Short-term borrowings
1,592
3.58
1,322
4.04
Long-term debt
19,780
5.14
17,372
5.71
2,408
Total interest-bearing liabilities
200,143
3,845
2.57
152,919
3,246
2.84
47,224
Demand deposits-noninterest-bearing
38,577
29,067
9,510
All other liabilities
5,903
4,904
Total liabilities
244,623
186,890
57,733
Total Huntington shareholders' equity
31,713
20,636
11,077
Non-controlling interest
(4)
(9)
Total equity
31,755
20,682
11,073
Total liabilities and equity
$276,378
$207,572
$68,806
33%
Net interest rate spread
2.71
2.55
Impact of noninterest-bearing funds on NIM
0.52
0.57
NII/NIM (FTE)
$6,072
3.23%
$4,447
3.12%
(1)Calculated on an FTE basis, which represents a non-GAAP measure, assuming a 21% tax rate.
(2)Yield/rates include the impact of applicable derivatives. Loan and lease and deposit average yield/rates also include the impact of applicable non-
deferrable and amortized fees.
(3)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
2026 3Q Form 10-Q 11
Year-to-Date Net Interest Income
Net interest income for the first nine-month period of 2026 increased $1.6 billion, or 37%, from the year-ago
period. FTE net interest income, a non-GAAP financial measure, for the first nine-month period of 2026 also
increased $1.6 billion, or 37%, from the year-ago period. The increase in FTE net interest income reflected an 11
basis point increase in the FTE NIM to 3.23% and a $60.3 billion, or 32%, increase in average total earning assets,
partially offset by a $47.2 billion, or 31%, increase in interest-bearing liabilities. The higher NIM was driven by lower
funding costs, partially offset by the decrease in yields on interest earning assets.
Year-to-Date Average Balance Sheet
Average assets and average earning assets for the first nine-month period of 2026, inclusive of the impacts of
the Cadence and Veritex acquisitions, increased $68.8 billion, or 33%, and $60.3 billion, or 32%, respectively, from
the year-ago period, with the increases primarily due to increases in average loans and leases of $50.7 billion, or
38%, and total investment and other securities of $5.6 billion, or 13%. The increase in average loans and leases
included growth in average commercial loans and leases of $40.3 billion, or 53%, and average consumer loans of
$10.4 billion, or 18%.
Average liabilities and average deposits for the first nine-month period of 2026, inclusive of the impacts of the
Cadence and Veritex acquisitions, increased $57.7 billion, or 31%, and $54.1 billion, or 33%, respectively, from the
year-ago period. The increase in average deposits was driven by an increase in average interest-bearing deposits of
$44.5 billion, or 33%, and an increase in noninterest-bearing deposits of $9.5 billion, or 33%.
Average shareholders' equity for the first nine-month period of 2026 increased $11.1 billion, or 54%, from the
year-ago period primarily due to the impact of common stock issued in connection with the Cadence and Veritex
acquisitions, and earnings, net of dividends and share repurchases, over the last year.
Provision for Credit Losses
(This section should be read in conjunction with the "Credit Risk" section.)
The following table presents the components of the provision for credit losses.
Table 4 - Provision for Credit Losses
Three Months Ended
Nine Months Ended
(dollar amounts in millions)
September 30,
2026
September 30,
2025
September 30,
2026
September 30,
2025
Provision for loan and lease losses
$119
$118
$494
$357
Provision (benefit) for unfunded lending commitments
(81)
(14)
Provision (benefit) for securities
-
-
-
(3)
Total provision for credit losses
$123
$122
$413
$340
The provision for credit losses for the third quarter of 2026 increased $1 million, or 1%, compared to the third
quarter of 2025. The provision for credit losses for the first nine-month period of 2026 increased $73 million, or 21%,
compared to the year-ago period. The increases in current period provision expense were reflective of loan growth
and higher net loan charge-offs, partially offset by a lower overall reserve coverage. The provision for credit losses is
also impacted by fluctuations in the provision for unfunded lending commitments.
12 Huntington Bancshares Incorporated
Noninterest Income
The following table reflects noninterest income for each of the periods presented.
Table 5 - Noninterest Income
Three Months Ended
Nine Months Ended
September 30,
September 30,
Change
September 30,
September 30,
Change
(dollar amounts in millions)
2026
2025
Percent
2026
2025
Percent
Payments and cash management revenue
$211
$174
21%
$602
$494
22%
Wealth and asset management revenue
Customer deposit and loan fees
Capital markets and advisory fees
Mortgage banking income
Net gains (losses) on sales of securities
-
-
-
(58)
Other noninterest income (1)
(20)
Total noninterest income
$722
$628
15%
$2,189
$1,593
37%
(1)In the third quarter of 2026, we reclassified insurance income and leasing revenue into other noninterest income. Prior period amounts have been revised
to conform with the current period presentation.
Noninterest income for the third quarter of 2026 increased $94 million, or 15%, from the year-ago quarter,
inclusive of the impact of the Cadence and Veritex acquisitions. Payments and cash management revenue increased
$37 million, or 21%, driven by higher cash management and interchange revenue. Capital markets and advisory fees
increased $28 million, or 30%, primarily due to higher advisory fees from the legacy business and the impact of three
strategic business units acquired from Janney in January 2026, in addition to higher syndication fees. Wealth and
asset management revenue increased $27 million, or 26%, primarily due to higher investment management and
trust income. Customer deposit and loan fees increased $22 million, or 22%, primarily due to an increase in
commitment fees and the volume of personal service charges. Lastly, other noninterest income decreased $22
million, or 20%, largely due to a $24 million gain on the sale of a portion of our trust and custody business that
occurred during the year-ago quarter.
Noninterest income for the first nine-month period of 2026 increased $596 million, or 37%, from the year-ago
period, inclusive of the impact of the Cadence and Veritex acquisitions. Capital markets and advisory fees increased
$149 million, or 61%, primarily due to higher advisory fees and the impact of three strategic business units acquired
from Janney, in addition to higher syndication and underwriting fees. Payments and cash management revenue
increased $108 million, or 22%, reflecting higher cash management and interchange revenue. Customer deposit and
loan fees increased $79 million, or 28%, primarily reflecting an increase in the volume of personal service charges
and an increase in commitment fees. Wealth and asset management revenue increased $78 million, or 25%,
reflecting higher investment management and trust income. Mortgage banking income increased $28 million, or
27%, due to an increase in net origination and secondary marketing income. Other noninterest income increased
$81 million, or 37%, primarily due to the favorable net impact of credit risk transfer transactions, valuation changes
on strategic and other investments, and bank owned life insurance income. In addition, the first nine-month period
of 2026 included a $15 million gain from the sale of certain investment securities compared to a $58 million loss
from the year-ago period, both as part of ongoing portfolio positioning.
2026 3Q Form 10-Q 13
Noninterest Expense
The following table reflects noninterest expense for each of the periods presented.
Table 6 - Noninterest Expense
Three Months Ended
Nine Months Ended
September 30,
September 30,
Change
September 30,
September 30,
Change
(dollar amounts in millions)
2026
2025
Percent
2026
2025
Percent
Personnel costs
$990
$757
31%
$2,992
$2,150
39%
Outside data processing and other services
Equipment
Net occupancy
Professional services
Marketing
Amortization of intangibles
Other noninterest expense (1)
Total noninterest expense
$1,772
$1,246
42%
$5,355
$3,595
49%
Number of employees (average full-time
equivalent)
25,898
20,247
28%
25,649
20,198
27%
(1)In the third quarter of 2026, we reclassified deposit and other insurance expense and lease financing equipment depreciation into other noninterest
expense. Prior period amounts have been revised to conform with the current period presentation.
Noninterest expense in the third quarter of 2026 increased $526 million, or 42%, from the year-ago quarter and
noninterest expense for the first nine-month period of 2026 increased $1.8 billion, or 49%, from the year-ago period.
Noninterest expenses for each period presented include acquisition-related expenses, as detailed in the following
table.
Table 7 - Impact of Acquisition-related Expenses
Three Months Ended
Nine Months Ended
September 30,
September 30,
September 30,
September 30,
(dollar amounts in millions)
2026
2025
2026
2025
Personnel costs
$33
$-
$168
$-
Outside data processing and other services
Equipment
Net occupancy
-
-
Professional services
Marketing
-
-
Other noninterest expense
Total impact of acquisition-related expenses
$117
$14
$532
$14
Excluding acquisition-related expenses, noninterest expense for the third quarter of 2026 was $1.7 billion, an
increase of $423 million, or 34%, from the year-ago quarter, inclusive of the impact of the Cadence and Veritex
acquisitions. Personnel costs increased $200 million, or 26%, primarily due to higher salary and benefit expense.
Outside data processing and other services increased $43 million, or 22%, primarily reflecting higher technology and
data expense. Amortization of intangibles increased $38 million primarily due to the impact from the addition of
core deposit intangibles from the acquisitions. Net occupancy increased $29 million, or 51%, largely due to increases
in lease and depreciation expense. Lastly, other noninterest expense increased $72 million, or 79%, primarily due to
an increased volume of expense activity driven by the impact of the acquisitions.
14 Huntington Bancshares Incorporated
Excluding acquisition-related expenses, noninterest expense for the first nine-month period of 2026 was $4.8
billion, an increase of $1.2 billion, or 35%, from the year-ago period, inclusive of the impact of the Cadence and
Veritex acquisitions. Personnel costs increased $674 million, or 31%, primarily due to higher salary, benefit, and
incentive compensation expense. Outside data processing and other services increased $166 million, or 30%,
primarily due to higher technology and data expense. Amortization of intangibles increased $111 million primarily
due to the impact from the addition of core deposit intangibles from the acquisitions. Net occupancy expense
increased $81 million, or 46%, primarily due to increases in lease and depreciation expense. Equipment expense
increased $32 million, or 16%, primarily due to an increase in depreciation expense. Other noninterest expense
increased $136 million, or 43%, primarily due to an increased volume of expense activity driven by the impact of the
acquisitions.
Provision for Income Taxes
The provision for income taxes and effective tax rate were $172 million and 19.3%, respectively, in the third
quarter of 2026, compared to $133 million and 17.4%, respectively, in the third quarter of 2025. The provision for
income taxes and effective tax rate were $451 million and 18.5%, respectively, for the nine-month period ended
September 30, 2026, compared to $351 million and 17.0%, respectively, for the nine-month period ended
September 30, 2025. The increases in the effective tax rates in both current year periods, compared to the prior year
periods, related primarily to higher income before taxes, acquisition-related nondeductible expenses, and the
absence of certain prior-year tax benefits. All periods included the benefits from general business credits, tax-
exempt income, tax-exempt bank-owned life insurance income, and investments in qualified affordable housing
projects.
The net federal deferred tax asset was $1.6 billion and the net state deferred tax asset was $170 million at
September 30, 2026, compared to a net federal deferred tax asset of $856 million and a net state deferred tax asset
of $92 million at December 31, 2025.
We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax
audits have been completed for tax years through 2019. The 2020-2024 tax years remain open under the statute of
limitations. Also, with few exceptions, the Company is no longer subject to state, city, or foreign income tax
examinations for tax years before 2021.
RISK MANAGEMENT
Our Risk Governance Framework and Risk Appetite Statement are foundational to our risk management
program. The Risk Governance Framework defines the three lines of defense structure, roles, responsibilities, and
requirements. The Risk Appetite Statement is approved by our Board and defines the level and types of risks we are
willing to assume to achieve our corporate objectives through defined risk limits for the key risk categories to which
we are exposed: credit, market, liquidity, operational, compliance, and strategic. More information on our risk
management can be found in Item 1A: Risk Factors of this Quarterly Report on Form 10-Q, the Risk Factors section
included in Item 1A of our 2025 Annual Report on Form 10-K, and subsequent filings with the SEC. Our definition,
philosophy, and approach to risk management have not materially changed from the discussion presented in the
2025 Annual Report on Form 10-K.
Credit Risk
Credit risk is the risk of financial loss if a counterparty is not able to meet the agreed upon terms of the financial
obligation. The majority of our credit risk is associated with lending activities, as the acceptance and management of
credit risk is central to profitable lending. A number of other products expose the Company to credit risk, including
investment securities and derivatives. Credit exposure is limited to the sum of the aggregate fair value of positions
that have become favorable to us, including any accrued interest receivable due from counterparties. Potential
credit losses are mitigated by derivatives through central clearing parties, careful evaluation of counterparty credit
standing, selection of counterparties from a limited group of high quality institutions, collateral agreements, and
other contract provisions.
2026 3Q Form 10-Q 15
We focus on the early identification, monitoring, and management of all aspects of our credit risk. In addition to
the traditional credit risk mitigation strategies of credit policies and processes, market risk management activities,
and portfolio diversification, we use quantitative measurement capabilities utilizing external data sources, enhanced
modeling technology, and internal stress testing processes. Our disciplined portfolio management processes are
central to our commitment to maintaining an aggregate moderate-to-low risk appetite. In our efforts to identify risk
mitigation techniques, we have focused on product design features, origination policies, and solutions for delinquent
or stressed borrowers.
Loan and Lease Credit Exposure Mix
Refer to the "Loan and Lease Credit Exposure Mix" section of our 2025 Annual Report on Form 10-K for a
description of each portfolio segment.
At September 30, 2026, our loans and leases totaled $191.4 billion, representing a $41.8 billion, or 28%, increase
compared to $149.6 billion at December 31, 2025. The increase was driven by a combination of the Cadence
acquisition and organic growth. As of the Cadence acquisition date, acquired loans totaled $36.9 billion, including
$17.4 billion of commercial and industrial loans, $9.4 billion of commercial real estate loans, $131 million of lease
financing loans, $8.2 billion of residential mortgage loans, $1.5 billion of home equity loans, and $264 million of
other consumer loans.
The table below provides the composition of our total loan and lease portfolio.
Table 8 - Loan and Lease Portfolio Composition
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
Commercial:
Commercial and industrial
$93,966
49%
$69,442
46%
Commercial real estate
22,748
15,209
Lease financing
5,885
5,727
Total commercial
122,599
90,378
Consumer:
Residential mortgage
33,163
24,777
Automobile
15,355
16,168
Home equity
11,898
10,395
RV and marine
5,757
5,682
Other consumer
2,677
2,242
Total consumer
68,850
59,264
Total loans and leases
$191,449
100%
$149,642
100%
Our loan and lease portfolio is a managed mix of consumer and commercial credits. We manage the overall
credit exposure and portfolio composition via a credit concentration policy. The policy designates specific loan types,
collateral types, and loan structures to be formally tracked and assigned maximum exposure limits as a percentage
of capital. Commercial lending by NAICS categories, specific limits for CRE project types, loans secured by residential
real estate, large dollar exposures, and designated high risk loan categories represent examples of specifically
tracked components of our concentration management process. As of September 30, 2026, there were no identified
concentrations that exceed the assigned exposure limit. Our concentration management policy is approved by the
ROC and is used to ensure a high quality, well diversified portfolio that is consistent with our overall objective of
maintaining an aggregate moderate-to-low risk appetite. Changes to existing concentration limits and incorporating
specific information relating to the potential impact on the overall portfolio composition and performance metrics
require the approval of the ROC prior to implementation.
16 Huntington Bancshares Incorporated
The table below provides our total loan and lease portfolio segregated by industry type. The changes in the
industry composition from December 31, 2025 are consistent with the portfolio growth metrics.
Table 9 - Loan and Lease Portfolio by Industry Type
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
Commercial loans and leases:
Real estate and rental and leasing
$28,571
15%
$20,237
14%
Finance and insurance
17,897
10,489
Retail trade (1)
12,951
12,181
Manufacturing
8,610
8,265
Health care and social assistance
7,765
5,920
Wholesale trade
6,552
5,842
Accommodation and food services
6,216
4,228
Utilities
4,923
3,156
Construction
4,820
2,369
Transportation and warehousing
4,401
3,288
Other services
3,423
3,617
Professional, scientific, and technical services
3,158
2,296
Information
3,026
1,937
Arts, entertainment, and recreation
2,489
1,923
Admin./support/waste mgmt. and remediation services
2,400
1,844
Management of companies and enterprises
1,179
-
Public administration
1,001
Educational services
-
-
Mining, quarrying, and oil and gas extraction
-
-
Agriculture, forestry, fishing, and hunting
-
-
Unclassified/Other
-
-
Total commercial loans and leases by industry category
122,599
90,378
Residential mortgage
33,163
24,777
Automobile
15,355
16,168
Home equity
11,898
10,395
RV and marine
5,757
5,682
Other consumer loans
2,677
2,242
Total loans and leases
$191,449
100%
$149,642
100%
(1)Amounts include $4.4 billion and $4.3 billion of auto dealer services loans at September 30, 2026 and December 31, 2025, respectively.
The following tables present our commercial real estate portfolio by property type and geographic location.
Table 10 - Commercial Real Estate Portfolio by Property Type
At September 30, 2026
At December 31, 2025
(dollar amounts in millions)
Amount by
Property Type
% of Total Loans
and Leases
Amount by
Property Type
% of Total Loans
and Leases
Multi-family
$6,054
3%
$4,822
3%
Warehouse/Industrial
4,136
3,054
Retail
3,462
2,224
Office
2,654
1,804
Hotel
1,910
1,438
Other
4,532
1,867
Total commercial real estate loans and leases
$22,748
12%
$15,209
9%
2026 3Q Form 10-Q 17
Table 11 - Commercial Real Estate Portfolio by Geographic Location
At September 30, 2026
At December 31, 2025
(dollar amounts in millions)
Amount by
Location (1)
% of Total CRE
Loans and Leases
Amount by
Location (1)
% of Total CRE
Loans and Leases
Texas
$6,864
30%
$4,090
27%
Ohio
2,228
2,176
Michigan
1,719
1,872
Florida
1,657
Georgia
1,357
Alabama
Illinois
California
Tennessee
-
Colorado
Other
5,909
3,887
Total commercial real estate loans and leases
$22,748
100%
$15,209
100%
(1)Geographic location based on location of underlying collateral.
Our CRE portfolio totaled $22.7 billion at September 30, 2026, an increase of $7.5 billion, or 50%, compared to
December 31, 2025, driven by $9.4 billion of acquired Cadence loans, partially offset by paydowns. The CRE portfolio
had an associated allowance coverage of 3.9% and 3.7% at September 30, 2026 and December 31, 2025,
respectively.
Credit Quality
(This section should be read in conjunction with Note 5 - "Loans and Leases" and Note 6 - "Allowance for Credit
Losses" of the Notes to Unaudited Consolidated Financial Statements.)
We believe the most meaningful way to assess overall credit quality performance is through an analysis of
specific performance ratios. This approach forms the basis of the discussion in the sections immediately following:
NALs and NPAs, ACL, and NCOs. In addition, we utilize delinquency rates, risk distribution and migration patterns,
product segmentation, and origination trends in the analysis of our credit quality performance.
NALs and NPAs
The following table presents the details of our NALs and NPAs.
Table 12 - Nonaccrual Loans and Leases and Nonperforming Assets
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
Nonaccrual loans and leases (NALs):
Commercial and industrial
$1,046
$562
Commercial real estate
Lease financing
Residential mortgage
Automobile
Home equity
RV and marine
Other consumer
-
Total nonaccrual loans and leases
1,697
Other real estate, net
Other NPAs (1)
-
Total nonperforming assets
$1,722
$945
Nonaccrual loans and leases as a % of total loans and leases
0.89%
0.62%
NPA ratio (2)
0.90
0.63
(1) Other nonperforming assets include certain impaired investment securities and/or nonaccrual loans held-for-sale.
(2)Nonperforming assets divided by the sum of loans and leases, other real estate owned, and other NPAs.
18 Huntington Bancshares Incorporated
Table 13 - Nonperforming Assets Rollforward
Nine months ended
(dollar amounts in millions)
September 30, 2026
September 30, 2025
Nonperforming assets, beginning of period
$945
$822
Acquired nonperforming assets
-
New nonperforming assets
1,706
Returns to accruing status
(173)
(83)
Charge-offs
(362)
(174)
Payments
(656)
(548)
Sales
(33)
(41)
Nonperforming assets, end of period
$1,722
$821
NPAs totaled $1.7 billion at September 30, 2026, a year-to-date increase of $777 million, with the increase
primarily due to acquired NPAs and additional broad-based increases in commercial and industrial, residential
mortgage, and commercial real estate NALs. NALs at September 30, 2026 were not concentrated in any industry or
region.
ACL
Our ACL is comprised of two different components, the ALLL and the AULC, both of which in our judgment are
appropriate to absorb lifetime expected credit losses in our loan and lease portfolio. We utilize an independent
third-party forecast that projects future economic conditions and considers multiple macroeconomic scenarios.
These macroeconomic scenarios contain certain variables that are influential to our modeling process, the most
significant being unemployment rates and GDP.
The baseline economic forecast used as part of estimating the ACL at September 30, 2026 reflected a modest
softening in the labor market and slowing economic growth. Under this scenario, the unemployment rate is
expected to gradually increase over the next year to 4.7%, while GDP growth is expected to moderate through the
remainder of 2026, not exceeding 2% until the fourth quarter of 2027. These economic expectations, together with
portfolio-specific performance trends and other qualitative factors, were incorporated into the Company's estimate
of expected credit losses.
The table below shows the forecasted path of unemployment and GDP in the baseline economic scenario
compared to the end of 2025.
Table 14 - Forecasted Key Macroeconomic Variables
2025
2026
2027
Baseline scenario forecast
Q4
Q2
Q4
Q2
Q4
Unemployment rate (1)
3Q 2026
N/A
N/A
4.3
4.6
4.7
4Q 2025
4.3%
4.6%
4.8%
4.7%
4.6%
Gross Domestic Product (1)
3Q 2026
N/A
N/A
1.9
2.0
2.1
4Q 2025
0.5%
2.3%
1.8%
1.9%
2.0%
(1)Values reflect the baseline scenario forecast inputs for each period presented, not updated for subsequent actual amounts.
Management continues to assess the uncertainty in the macroeconomic environment, including ongoing risks in
the commercial real estate environment, current inflation levels, the impacts of U.S. trade policies, including tariffs,
the impact of higher oil prices, political uncertainty, and geopolitical instability, considering multiple macroeconomic
forecasts that reflect a range of possible outcomes. While we have incorporated estimates of economic uncertainty
into our ACL, the ultimate impact that specific challenges will have on the economy remains unknown.
2026 3Q Form 10-Q 19
Management develops additional analytics to support adjustments to our modeled results. Our Allowance for
Credit Loss Development Methodology Committee reviewed model results of each economic scenario for
appropriate usage, concluding that the quantitative transaction reserve will continue to utilize scenario weighting.
Given the uncertainty associated with key economic scenario assumptions, the September 30, 2026 ACL included a
general reserve that consists of various risk profile components, including profiles to capture uncertainty not
addressed within the quantitative transaction reserve.
The most significant risk profile components included within our qualitative reserve at September 30, 2026
relate to business banking loans, including SBA guaranteed loans, and leveraged lending within the C&I portfolio.
The business banking risk profile addresses a modest upward trend in default rates resulting from the current
interest rate environment and inflationary impacts on customers. The leveraged lending risk profile addresses
concerns relating to the current interest rate environment and macroeconomic environment.
Our ACL evaluation process includes the on-going assessment of credit quality metrics and a comparison of
certain ACL benchmarks to current performance.
The table below reflects the allocation of our ACL among our various loan and lease categories as well as certain
coverage metrics of the reported ALLL and ACL.
Table 15 - Allocation of Allowance for Credit Losses
At September 30, 2026
At December 31, 2025
(dollar amounts in millions)
Allocation of
Allowance
% of Total ALLL
% of Total Loans
and Leases (1)
Allocation of
Allowance
% of Total ALLL
% of Total Loans
and Leases (1)
Commercial
Commercial and industrial
$1,378
42%
49%
$1,070
42%
46%
Commercial real estate
Lease financing
Total commercial
2,357
1,731
Consumer
Residential mortgage
Automobile
Home equity
RV and marine
Other consumer
Total consumer
Total ALLL
3,222
2,537
AULC
Total ACL
$3,358
$2,743
Total ALLL as a % of:
Total loans and leases
1.68%
1.70%
Nonaccrual loans and leases
NPAs
Total ACL as % of:
Total loans and leases
1.75%
1.83%
Nonaccrual loans and leases
NPAs
(1)Percentages represent the percentage of each loan and lease category to total loans and leases.
The ACL coverage ratio was 1.75% at September 30, 2026, compared to 1.83% at December 31, 2025, with the
decrease largely driven by portfolio mix changes associated with acquired and organic loan growth and changes in
economic assumptions incorporated into the ACL estimate relative to year-end. The ACL coverage ratio at
September 30, 2026 is reflective of the current macroeconomic forecast and changes in various risk profiles
intended to capture uncertainty not addressed within the quantitative reserve.
20 Huntington Bancshares Incorporated
NCOs
The table below reflects NCO detail.
Table 16 - Net Charge-off Analysis
Three Months Ended
Nine Months Ended
(dollar amounts in millions)
September 30, 2026
September 30, 2025
September 30, 2026
September 30, 2025
Net charge-offs (recoveries) by loan and lease type:
Commercial:
Commercial and industrial (1)
$71
$39
$191
$119
Commercial real estate
(4)
(15)
Lease financing
-
(3)
Total commercial
Consumer:
Residential mortgage
-
Automobile
Home equity
-
RV and marine
Other consumer
Total consumer
Total net charge-offs
$146
$75
$376
$227
Net charge-offs (recoveries) - annualized percentages:
Commercial:
Commercial and industrial
0.31%
0.25%
0.29%
0.27%
Commercial real estate
0.16
(0.13)
0.08
(0.18)
Lease financing
0.03
0.04
(0.05)
0.16
Total commercial
0.27
0.18
0.23
0.20
Consumer:
Residential mortgage
0.03
0.01
0.02
0.01
Automobile
0.41
0.26
0.37
0.26
Home equity
0.01
0.01
0.01
0.01
RV and marine
0.40
0.30
0.45
0.36
Other consumer
6.30
4.92
5.50
4.89
Total consumer
0.38
0.27
0.34
0.27
Net charge-offs as a % of average loans and leases
0.31%
0.22%
0.27%
0.23%
(1)Net charge-offs for the nine months ended September 30, 2026 include $23 million of charge-offs on certain loans previously charged off by Cadence,
which were written up to the unpaid principal balance at acquisition and then immediately charged off by Huntington as required by purchase accounting.
NCOs were $146 million, or 0.31% of average total loans and leases on an annualized basis, in the third quarter
of 2026, compared to $75 million, or 0.22%, in the year-ago quarter, with the increase reflecting higher net charge-
offs in both the commercial and consumer loan portfolios.
NCOs were $376 million, or 0.27% of average total loans and leases on an annualized basis, for the nine-month
period ended September 30, 2026, compared to $227 million, or 0.23%, for the year-ago period, with the increase
also reflecting higher net charge-offs in both the commercial and consumer loan portfolios.
2026 3Q Form 10-Q 21
Market Risk
Market risk refers to potential losses arising from changes in interest rates, credit spreads, foreign exchange
rates, equity prices, and commodity prices, including the correlation among these factors and their volatility. When
the value of an instrument is tied to such external factors, the holder faces market risk. We are exposed primarily to
interest rate risk as a result of offering a wide array of financial products to our customers, and secondarily to price
risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity
investments, and investments in securities backed by mortgage loans.
We measure market risk exposure via financial simulation models that provide management with insights on the
potential impact to net interest income and other key metrics as a result of changes in market interest rates. Models
are used to simulate cash flows and accrual characteristics of the balance sheet based on assumptions regarding the
slope or shape of the yield curve, the direction and volatility of interest rates, and the changing composition and
characteristics of the balance sheet resulting from strategic objectives and customer behavior. Our models
incorporate market-based assumptions that include the impact of changing interest rates on prepayment rates of
assets and runoff rates of deposits. The models also include our projections of the future volume and pricing of
various business lines.
In measuring the financial risks associated with interest rate sensitivity in our balance sheet, we compare a set of
alternative interest rate scenarios to the results of a base case scenario derived using market forward rates. The
market forward rates reflect the general market consensus regarding the future level and slope of the yield curve
across a range of tenor points. The standard set of interest rate scenarios includes two types: "shock" scenarios,
which are immediate parallel rate shifts, and "ramp" scenarios, where the parallel shift is applied gradually over the
first 12 months of the forecast on a pro-rata basis. In both shock and ramp scenarios with falling rates, we presume
that market rates will not go below 0%. The scenarios include all executed interest rate risk hedging activities.
Forward-starting hedges are included to the extent that they have been transacted and that they start within the
measurement horizon.
A key driver of our interest rate risk profile is our assumption of interest-bearing deposit repricing sensitivity to
changes in interest rates, otherwise known as deposit beta. In addition, our interest expense is impacted by the
composition of both interest-bearing and noninterest-bearing deposits in relation to our total deposits. Accordingly,
we consider the impacts from both interest-bearing and noninterest-bearing deposits on our total deposit beta.
Since the Federal Reserve began reducing the federal funds rate in the third quarter of 2024, our cumulative total
deposit beta (total cost of deposits) through the third quarter of 2026 was approximately 30%.
We use two approaches to model interest rate risk: net interest income at risk (NII at Risk) and economic value
of equity at risk modeling sensitivity analysis (EVE at Risk).
NII at Risk is used by management to measure the risk and impact to earnings over the next 12 months, using a
wide range of interest rate scenarios, including instantaneous and gradual, as well as parallel and non-parallel,
changes in interest rates. The NII at Risk results included in the table below present select gradual "ramp" -200, -100,
+100 and +200 basis point parallel shift scenarios, implied by the forward yield curve over the next 12 months.
Table 17 - Net Interest Income at Risk
At September 30, 2026
At December 31, 2025
Federal Funds Rate
Federal Funds Rate
Basis point change scenario
Starting Point
Month 12 (1)
NII at Risk (%)
Starting Point
Month 12 (1)
NII at Risk (%)
+200
4.00%
7.00%
1.3%
3.75%
5.25%
2.5%
+100
4.00
6.00
0.7
3.75
4.25
0.9
Base
4.00
5.00
-
3.75
3.25
-
-100
4.00
4.00
-0.7
3.75
2.25
-0.6
-200
4.00
3.00
-0.7
3.75
1.25
-1.9
(1)Represents the federal funds rate in month 12 given a gradual, parallel "ramp" relative to the base implied forward scenario.
The NII at Risk shows that the balance sheet is asset-sensitive at both September 30, 2026, and December 31,
2025. The primary drivers to the change in sensitivity from December 31, 2025 include current and projected
balance sheet composition over the simulation horizon and changes in market rates.
22 Huntington Bancshares Incorporated
EVE at Risk is used by management to measure the impact of interest rate changes on the net present value of
assets and liabilities, including derivative exposures, using a wide range of scenarios. The EVE results included in the
table below present select immediate -200, -100, +100 and +200 basis point parallel "shock" scenarios from the yield
curve term points at the specific point in time that EVE sensitivity is measured.
Table 18 - Economic Value of Equity at Risk
Economic Value of Equity at Risk (%)
Basis point change scenario
-200
-100
+100
+200
At September 30, 2026
2.7%
2.3%
-3.1%
-6.8%
At December 31, 2025
0.3
1.7
-3.5
-8.3
The change in sensitivity from December 31, 2025 was driven primarily by market rates and changes to actual
balance sheet composition, in part due to impacts from the Cadence acquisition.
Use of Derivatives to Manage Interest Rate Risk
An integral component of our interest rate risk management strategy is the use of derivative instruments to
minimize significant fluctuations in earnings caused by changes in market interest rates. A variety of derivative
financial instruments, principally interest rate swaps, swaptions, floors, forward contracts, and forward-starting
interest rate swaps, are used in asset and liability management activities to protect against the risk of adverse price
or interest rate movements. These instruments provide flexibility in adjusting Huntington's sensitivity to changes in
interest rates without exposure to loss of principal and higher funding requirements.
Table 19 shows all swap and floor positions that are utilized for purposes of managing our exposures to the
variability of interest rates. The interest rate variability may impact either the fair value of the assets and liabilities or
the cash flows attributable to net interest margin. These positions are used to protect the fair value of assets and
liabilities by converting the contractual interest rate on a specified amount of assets and liabilities (i.e., notional
amounts) to another interest rate index. The positions are also used to hedge the variability in cash flows
attributable to the contractually specified interest rate by converting the variable-rate index into a fixed rate. The
volume, maturity, and mix of derivative positions change frequently as we adjust our broader interest rate risk
management objectives and the balance sheet positions to be hedged. For further information, including the
notional amount and fair values of these derivatives, refer to Note 15 - "Derivative Financial Instruments" of the
Notes to Unaudited Consolidated Financial Statements.
2026 3Q Form 10-Q 23
The following presents additional information about the interest rate swaps and floors used in Huntington's
asset and liability management activities.
Table 19 - Information on Asset Liability Management Instruments
Weighted-
Average
Maturity (years)
Weighted-
Average
Fixed Rate
(dollar amounts in millions)
Notional
Value
Fair Value
At September 30, 2026
Asset conversion swaps
Securities (1):
Pay Fixed - Receive SOFR
$1,548
7.47
$218
2.16%
Pay Fixed - Receive SOFR - forward-starting (2)
4,074
11.89
1.18
Loans:
Receive Fixed - Pay SOFR
15,275
1.57
(282)
3.23
Receive Fixed - Pay SOFR - forward-starting (3)
4,600
3.33
(184)
3.37
Liability conversion swaps
Receive Fixed - Pay SOFR
9,099
2.62
(294)
2.90
Receive Fixed - Pay SOFR - forward-starting (3)
2,300
3.57
(104)
1.72
Purchased floor spreads (4)
Purchased Floor Spread - SOFR
4,950
2.66
(42)
2.65/3.75
Basis swaps (5)
Pay SOFR - Receive Fed Fund (economic hedges)
4.08
-
3.74
Pay Fed Fund - Receive SOFR (economic hedges)
9.06
-
3.84
Total swap portfolio
$41,874
$(393)
At December 31, 2025
Asset conversion swaps
Securities (1):
Pay Fixed - Receive SOFR
$3,987
3.92
$130
2.48%
Pay Fixed - Receive SOFR - forward-starting (6)
1,160
12.47
3.36
Loans:
Receive Fixed - Pay SOFR
15,800
2.05
(2)
3.18
Receive Fixed - Pay SOFR - forward-starting (7)
2,500
4.21
(3)
3.30
Liability conversion swaps
Receive Fixed - Pay SOFR
10,599
2.97
(22)
3.51
Purchased floor spreads (4)
Purchased Floor Spread - SOFR
6,750
1.06
2.80 / 3.87
Purchased Floor Spread - SOFR forward-starting (7)
3,200
3.49
2.83 / 3.83
Basis swaps (5)
Pay SOFR - Receive Fed Fund (economic hedges)
4.83
-
3.81
Pay Fed Fund - Receive SOFR (economic hedges)
9.81
-
3.99
Total swap portfolio
$44,024
$228
(1)Amounts include interest rate swaps as fair value hedges of fixed rate investment securities using the portfolio layer method.
(2)Forward-starting swaps effective starting from July 2026 to April 2029.
(3)Forward-starting swaps and forward-starting floor spreads effective starting from July 2026 to March 2027.
(4)The weighted-average fixed rates for floor spreads are the weighted-average strike rates for the upper and lower bounds of the instruments.
(5)Basis swaps have variable pay and variable receive resets. Weighted-average fixed rate column represents pay rate reset.
(6)Forward-starting swaps effective starting from February 2026 to October 2027.
(7)Forward-starting swaps and forward-starting floor spreads effective starting from January 2026 to December 2026.
Use of Derivatives to Manage Credit Risk
We may utilize credit derivatives as a tool to manage credit risk within the portfolio by purchasing credit
protection over certain types of loan products. When we purchase credit protection, such as a CDS, we pay a fee to
the seller, or CDS counterparty, in return for the right to receive a payment if a specified credit event occurs.
24 Huntington Bancshares Incorporated
MSRs
(This section should be read in conjunction with Note 7 - "Mortgage Loan Sales and Servicing Rights" of Notes to
Unaudited Consolidated Financial Statements.)
At September 30, 2026, we had a total of $837 million of capitalized MSRs representing the right to service $43.9
billion in mortgage loans.
MSR fair values are sensitive to movements in interest rates, as expected future net servicing income depends
on the projected outstanding principal balances of the underlying loans, which can be reduced by prepayments and
declines in credit quality. Prepayments usually increase when mortgage interest rates decline and decrease when
mortgage interest rates rise. We also employ hedging strategies to reduce the risk of MSR fair value changes.
However, volatile changes in interest rates can diminish the effectiveness of these economic hedges. We report
changes in the MSR value net of hedge-related trading activity in the mortgage banking income category of
noninterest income.
MSR assets are included in servicing rights and other intangible assets in the Unaudited Consolidated Financial
Statements.
Price Risk
Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that
are carried at fair value and are subject to fair value accounting. We have price risk from trading securities, securities
owned by our broker-dealer subsidiaries, foreign exchange positions, derivative instruments, and equity
investments. We have established loss limits on the trading portfolio, on the amount of foreign exchange exposure
that can be maintained, and on the amount of marketable equity securities that can be held.
Liquidity Risk
Liquidity risk is the possibility of us being unable to meet current and future financial obligations in a timely
manner. The goal of liquidity management is to ensure adequate, stable, reliable, and cost-effective sources of funds
to satisfy changes in loan and lease demand, unexpected levels of deposit withdrawals, investment opportunities,
and other contractual obligations. We consider core earnings, strong capital ratios, and credit quality essential for
maintaining high credit ratings, which allow us cost-effective access to market-based liquidity. We mitigate liquidity
risk by maintaining a large, stable customer deposit base and a diversified base of readily available wholesale
funding sources, including secured funding sources from the FHLB and FRB through pledged borrowing capacity,
issuance through dealers in the capital markets, and access to deposits issued through brokers. We further mitigate
liquidity risk by maintaining liquid assets in the form of cash and cash equivalents and securities.
The Board of Directors is responsible for establishing an acceptable level of liquidity risk at Huntington, including
approval of the liquidity risk appetite at least annually. The liquidity risk appetite includes liquidity risk metrics that
are designed and monitored to ensure Huntington maintains adequate liquidity to meet current and future funding
needs, including during periods of potential stress. The Board receives and reviews information on at least a semi-
annual basis to ensure Huntington is operating in accordance with its established risk tolerance. Further, the ALCO is
appointed by the ROC to oversee liquidity risk management, including the establishment of liquidity risk policies and
additional liquidity risk metrics and limits to support our overall liquidity risk appetite. Liquidity risk appetite metrics
are monitored by senior management daily and are reported to the Board at least semi-annually and to ROC on a
more frequent basis.
Liquidity risk is reviewed and managed continuously for the Bank and the parent company, as well as its
subsidiaries. In addition, liquidity working groups meet regularly to identify and monitor liquidity positions, provide
policy guidance, review funding strategies, and oversee the adherence to, and maintenance of, contingency funding
plans. At September 30, 2026, management believes current sources of liquidity are sufficient to meet Huntington's
on- and off-balance sheet obligations over the next 12 months and for the foreseeable future.
2026 3Q Form 10-Q 25
We maintain a contingency funding plan that provides for liquidity stress testing, which assesses the potential
erosion of funds in the event of an institution-specific event or systemic financial market crisis. Examples of
institution specific events could include a downgrade in our public credit rating by a rating agency, a large charge to
earnings, declines in profitability or other financial measures, declines in liquidity sources including reductions in
deposit balances or access to contingent funding sources, or a significant merger or acquisition. Examples of
systemic events unrelated to us that could have an effect on our access to liquidity would be terrorism or war,
natural disasters, political events, failure of a major financial institution, or the default or bankruptcy of a major
corporation, mutual fund, or hedge fund. Similarly, market speculation or rumors about us, or the banking industry
in general, may adversely affect the cost and availability of normal funding sources. The contingency funding plan,
which is reviewed and approved by the ROC at least annually, outlines the process for addressing a liquidity crisis
and provides for an evaluation of funding sources under various market conditions. It also assigns specific roles and
responsibilities and communication protocols for effectively managing liquidity through a problem period and
outlines early warning indicators that are used to monitor emerging liquidity stress events.
Deposits
Our largest source of liquidity on a consolidated basis is customer deposits, which provide stable and lower-cost
funding. Our customer deposits come from a base of primary bank customer relationships, and we continue to focus
on acquiring and deepening those relationships, resulting in a diversified deposit base. Total deposits were $224.7
billion at September 30, 2026, compared to $176.6 billion at December 31, 2025. The $48.1 billion, or 27%, increase
in total deposits, compared to December 31, 2025, was primarily driven by $43.5 billion of deposits acquired in the
Cadence acquisition, in addition to organic deposit growth. Total deposits included $5.1 billion of brokered deposits
primarily consisting of brokered money market and time deposit balances at September 30, 2026, compared to $5.9
billion at December 31, 2025. The level of brokered deposits was below our established liquidity risk metric limits at
September 30, 2026.
Insured deposits comprised approximately 68% and 70% of our total deposits at September 30, 2026 and
December 31, 2025, respectively. The composition of our deposits is presented in the table below.
Table 20 - Deposit Composition
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
By type:
Demand deposits-noninterest-bearing
$41,317
18%
$32,205
18%
Demand deposits-interest-bearing
64,503
48,510
Money market deposits
77,509
65,123
Savings deposits
18,861
15,426
Time deposits
22,488
15,346
Total deposits
$224,678
100%
$176,610
100%
Total deposits (insured/uninsured):
Insured deposits
$153,113
68%
$123,744
70%
Uninsured deposits (1)
71,565
52,866
Total deposits
$224,678
100%
$176,610
100%
(1)Represents consolidated Huntington uninsured deposits, determined by adjusting the amounts reported in the Bank Call Report (FFIEC 031) by inter-
company deposits, which are not customer deposits and are therefore eliminated through consolidation. As of September 30, 2026, the Bank Call Report
estimated uninsured deposit balance was $75.9 billion, which includes $4.3 billion of inter-company deposits. As of December 31, 2025, the Bank Call
Report estimated uninsured deposit balance was $56.9 billion, which includes $4.1 billion of inter-company deposits.
Wholesale Funding
Sources of wholesale funding include non-customer brokered deposits, short-term borrowings, and long-term
debt. Our wholesale funding totaled $28.5 billion at September 30, 2026, an increase of $4.1 billion compared to
$24.4 billion at December 31, 2025. The increase from year end was primarily due to a $4.8 billion increase in short-
term borrowings, primarily comprised of short-term FHLB advances, and $1.8 billion of senior and subordinated debt
issuances, partially offset by maturities and repayments.
26 Huntington Bancshares Incorporated
Cash and Cash Equivalents and Investment Securities
Cash and cash equivalents were $16.8 billion and $13.5 billion at September 30, 2026 and December 31, 2025,
respectively. The $3.3 billion increase in cash and cash equivalents was largely due to higher interest-earning
deposits held at the FRB as part of prudent liquidity risk management to support our strong liquidity position.
Our investment securities portfolio is evaluated under established ALCO objectives. Changing market conditions
could affect the profitability of the portfolio, as well as the level of interest rate risk exposure.
Total investment securities, comprised of AFS and HTM securities, were $49.4 billion at September 30, 2026,
compared to $41.4 billion at December 31, 2025. The $8.0 billion increase in investment securities, compared to
December 31, 2025, was largely driven by $9.0 billion of investment securities acquired in the Cadence transaction.
At September 30, 2026, the duration of the investment securities portfolio, net of hedging, was 3.3 years. Securities
are pledged to secure borrowing capacity with the FHLB and the FRB, discussed further in the Bank Liquidity and
Sources of Funding section below.
Bank Liquidity and Sources of Funding
Our primary source of funding for the Bank is customer deposits. At September 30, 2026, customer deposits
funded 76% of total assets (115% of total loans and leases). To the extent we are unable to obtain sufficient liquidity
through customer deposits, cash and cash equivalents, and investment securities, we may meet our liquidity needs
through wholesale funding and asset securitization or sale. Additionally, the Bank may also access funding through
intercompany notes or parent company deposits placed at the Bank.
The Bank maintains borrowing capacity at both the FHLB and the FRB secured by pledged loans and securities.
While the Bank does not consider borrowing capacity at the FRB a primary source of funding, it could be used as a
potential source of liquidity in a stressed environment or during a market disruption. The amount of available
contingent borrowing capacity may fluctuate based on the level of borrowings outstanding and level of assets
pledged.
A summary of the Bank's selected contingent liquidity sources is presented in the following table.
Table 21 - Selected Contingent Liquidity Sources
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
Unused secured borrowing capacity:
FRB
$87,502
$71,296
FHLB
20,624
16,212
Unpledged investment securities (at market value)
11,280
11,743
Interest-earning deposits held at FRB
14,439
11,712
Selected contingent liquidity sources
$133,845
$110,963
As of September 30, 2026, we believe the Bank has sufficient liquidity and capital resources to meet its cash flow
obligations over the next 12 months and for the foreseeable future.
Parent Company Liquidity
The parent company's primary financial obligations consist of dividends to shareholders, debt service, income
taxes, operating expenses, funding of nonbank subsidiaries, repurchases of our stock, and acquisitions. The parent
company obtains funding to meet obligations from dividends and interest received from the Bank, interest and
dividends received from direct subsidiaries, net taxes collected from subsidiaries included in the federal consolidated
tax return, fees for services provided to subsidiaries, and the issuance of debt and equity instruments.
The parent company had cash and cash equivalents of $3.9 billion and $3.6 billion at September 30, 2026 and
December 31, 2025, respectively.
2026 3Q Form 10-Q 27
On October 21, 2026, our Board of Directors declared a quarterly cash dividend on our common stock of $0.155
per common share, payable on January 4, 2027 to shareholders of record on December 18, 2026. Additionally, on
October 21, 2026, our Board of Directors declared quarterly dividends on our Series B, F, G, H, J, and K preferred
stock, payable on January 15, 2027 to shareholders of record on January 1, 2027, and a quarterly dividend on our
Series L preferred stock, payable on February 19, 2027 to shareholders of record on February 4, 2027. On
September 14, 2026, our Board of Directors declared a quarterly dividend on our Series I preferred stock, payable on
December 1, 2026 to shareholders of record on November 15, 2026. Current quarterly dividend declarations are
expected to total approximately $353 million.
During the first nine months of 2026, the Bank paid common dividends to the parent company of $1.1 billion.
During the first quarter of 2026, the Bank redeemed all of its preferred stock outstanding that had previously been
held by the parent company. To meet any additional liquidity needs, the parent company may issue debt or equity
securities. To support the parent company's ability to issue debt or equity securities, we have filed an automatic
shelf registration statement with the SEC covering an indeterminate amount or number of securities to be offered or
sold from time to time as authorized by Huntington's Board of Directors.
As of September 30, 2026, we believe the Company has sufficient liquidity and capital resources to meet its cash
flow obligations over the next 12 months and for the foreseeable future.
Credit Ratings
Credit ratings represent evaluations by rating agencies based on a number of factors, including financial strength
and the ability to generate earnings, as well as factors not entirely within our control, including conditions affecting
the financial services industry, the economy, and changes in rating methodologies. Credit ratings are subject to
change at any time. Our credit ratings impact our availability and cost of financing, as well as collateral requirements
for certain derivative instruments and deposit products. A downgrade to our credit ratings could adversely affect our
access to capital, increase our cost of funds, or trigger additional collateral or funding requirements.
The following table presents our credit ratings and rating agency outlooks.
Table 22 - Credit Ratings and Outlook
At September 30, 2026
Moody's
Standard & Poor's
Fitch (2)
DBRS Morningstar
Huntington Bancshares Incorporated
Senior unsecured notes
Baa1
BBB+
BBB+
A
Subordinated notes
Baa1
BBB
BBB
A (low)
Commercial paper
NR
NR
F1
R-1 (low)
Ratings outlook
Negative
Stable
Stable
Stable
The Huntington National Bank
Senior unsecured notes
A3
A-
A-
A (high)
Long-term deposits
A1
NR (1)
A
A (high)
Short-term deposits
P-1
NR (1)
F1
R-1 (middle)
Ratings outlook
Negative
Stable
Stable
Stable
NR - Not Rated
(1)Standard & Poor's does not provide a depositor rating. The Bank's long-term issuer credit rating is A- and its short-term issuer credit rating is A-2.
(2)In September 2026, Fitch Ratings lowered the Company's senior unsecured debt rating to BBB+ and subordinated debt rating to BBB. Fitch indicated that
the action reflected the application of its methodology for institutions expected to be subject to Category III regulatory standards and did not reflect a
change in its assessment of the Company's underlying credit profile.
Contractual Obligations and Commitments
In the normal course of business, we enter into various contractual obligations and commitments that could
impact our liquidity and capital resources. These arrangements include commitments to extend credit, interest rate
swaps, floors, financial guarantees contained in standby letters-of-credit issued by the Bank, commitments by the
Bank to sell mortgage loans, operating lease payments, and other purchase and marketing obligations.
28 Huntington Bancshares Incorporated
Operational Risk
Operational risk is the risk of loss due to human error, third-party performance failures, or inadequate or failed
internal systems and controls, including the use of financial or other quantitative methodologies that may not
adequately predict future results; violations of, or noncompliance with, laws, rules, regulations, prescribed practices,
or ethical standards; and external influences such as market conditions, fraudulent activities, disasters, failed
business contingency plans, and security risks. We continuously strive to test and strengthen our system of internal
controls to ensure compliance with significant contracts, agreements, laws, rules, and regulations, to reduce our
exposure to fraud and to improve the oversight of our operational risk.
To govern operational risks, we have an Operational Risk Committee, a Legal, Regulatory, and Compliance
Committee, a Funds Movement and Fraud Risk Committee, an Information and Technology Risk Committee, a
Regulatory and Data Oversight Committee, and a Third Party Risk Management Committee. The responsibilities of
these committees, among other duties, include establishing and maintaining management information systems to
monitor material risks and to identify potential concerns, risks, or trends that may have a significant impact and
ensuring that recommendations are developed to address the identified issues. In addition, we have a Model Risk
Oversight Committee that is responsible for policies and procedures describing how model risk is evaluated and
managed and the application of the governance process to implement these practices throughout the enterprise.
These committees report any significant findings and remediation recommendations to the Risk Management
Committee. Potential concerns may be escalated to our ROC and our Audit Committee, as appropriate.
The goal of this framework is to implement effective operational risk monitoring; minimize operational, fraud,
and legal losses; minimize the impact of inadequately designed models; and enhance our overall performance.
Cybersecurity
Cybersecurity represents an important component of Huntington's overall cross-functional approach to risk
management. We actively manage a cybersecurity operation designed to detect, contain, and respond to
cybersecurity threats and incidents in a prompt and effective manner with the goal of minimizing disruptions to our
business. We actively monitor for cyberattacks, such as attempts related to online deception and loss of sensitive
customer data. We evaluate our technology, processes, and controls to mitigate loss from cyberattacks. Although to
date we have not experienced any material losses due to cyberattacks, with the increasing sophistication,
acceleration, and complexity of cyber events, including from developments in artificial intelligence and other
emerging technologies, we cannot ensure that there will not be a material loss in the future. Cybersecurity threats
continue to evolve and increase across the entire digital landscape. In response to the evolving threat landscape, we
continue to enhance our cybersecurity, operational resilience, and third-party risk management capabilities,
including efforts designed to improve the speed of vulnerability identification, remediation, monitoring, and
recovery. We actively monitor our environment for malicious content and implement specific cybersecurity and
fraud capabilities, including the monitoring of phishing email campaigns. In addition, we have implemented specific
cybersecurity and fraud monitoring of remote connections by geography and volume of connections to detect
anomalous remote logins, since a portion of our workforce works remotely from time to time.
Our objective for managing cybersecurity risk is to avoid or minimize the impacts of both internal and external
threat events or other efforts to penetrate our systems. We work to achieve this objective by hardening networks
and systems against attack and by diligently managing visibility and monitoring controls within our data and
communications environment to recognize events and respond before the attacker has the opportunity to plan and
execute on its own goals. To this end, we employ a set of defense-in-depth strategies, which include efforts to make
us less attractive as a target and less vulnerable to threats, while investing in threat analytic capabilities for rapid
detection and response. Potential concerns related to cybersecurity may be escalated to our board-level ROC and/or
Technology Committee, as appropriate.
As a complement to the overall cybersecurity risk management, we use a number of internal training methods,
both formally through mandatory courses and informally through written communications and other updates, to
ensure awareness of the risks of cybersecurity threats at all levels across the organization. Internal policies and
procedures have been implemented to encourage the reporting of potential phishing attacks or other security risks.
We also use third-party services to test the effectiveness of our cybersecurity risk management framework, and any
such third-parties are required to comply with our policies regarding information security and confidentiality.
2026 3Q Form 10-Q 29
Compliance Risk
Compliance risk arises from the possibility that we may fail to comply with the extensive federal and state laws,
rules, and regulations that govern our operations. These requirements span a broad range of obligations, including
anti-money laundering, consumer protection, lending and servicing standards, client privacy, fair lending,
prohibitions against unfair, deceptive, or abusive acts or practices, protections for military service members, and
community reinvestment expectations.
We maintain a comprehensive compliance management framework designed to identify, assess, monitor, and
report compliance risk across the Company. This framework is supported by dedicated compliance professionals
who partner with our business segments to implement and maintain effective policies, procedures, and controls
consistent with applicable regulatory requirements. Our colleagues receive mandatory training on core regulatory
obligations such as anti-money laundering and customer privacy, with additional targeted training for those engaged
in lending activities, including flood disaster protection, equal credit opportunity, and fair lending.
We continue to invest in systems, processes, and governance to support compliance with evolving regulatory
expectations. Ongoing changes in regulatory requirements and supervisory priorities may affect our compliance risk
profile. We remain committed to maintaining strong compliance practices and to enhancing our compliance
program as necessary to align with applicable laws, rules, and regulations and to support our aggregate
moderate-to-low, through-the-cycle risk appetite.
CAPITAL
Our primary capital objective is to maintain appropriate levels of capital within our Board-approved risk appetite
to support the Bank's operations, absorb unanticipated losses and declines in asset values, and provide protection to
uninsured depositors and debt holders in the event of liquidation, while also funding organic growth and providing
appropriate returns to our shareholders. We manage regulatory capital and shareholders' equity at the Bank and on
a consolidated basis. We have an active program for managing capital, and we maintain a comprehensive process
for assessing our overall capital adequacy, including the monitoring and reporting of capital risk metrics to the Board
and ROC that we believe are useful for evaluating capital adequacy and making capital decisions. In addition to as-
reported regulatory capital and tangible common equity metrics, we also actively monitor other measures of capital,
such as tangible common equity including the mark-to-market impact on HTM securities and CET1 including the
impact of AOCI excluding cash flow hedges. We believe our current levels of both regulatory capital and
shareholders' equity are adequate.
30 Huntington Bancshares Incorporated
The following table presents certain regulatory capital information at both the consolidated and Bank level.
Table 23 - Regulatory Capital Information
(dollar amounts in millions)
At September 30, 2026
At December 31, 2025
Consolidated:
CET1 risk-based capital ratio
10.1%
10.4%
Tier 1 risk-based capital ratio
11.5
12.0
Total risk-based capital ratio
13.7
14.2
Tier 1 leverage ratio
9.0
9.3
CET1 risk-based capital
$21,684
$17,286
Tier 1 risk-based capital
24,575
20,027
Total risk-based capital
29,376
23,593
Total risk-weighted assets
214,442
166,684
Bank:
CET1 risk-based capital ratio
11.9%
11.7%
Tier 1 risk-based capital ratio
12.1
12.4
Total risk-based capital ratio
14.0
14.0
Tier 1 leverage ratio
9.5
9.6
CET1 risk-based capital
$25,523
$19,426
Tier 1 risk-based capital
25,944
20,626
Total risk-based capital
29,830
23,165
Total risk-weighted assets
213,584
165,701
At September 30, 2026, Huntington and the Bank maintained capital ratios in excess of the well-capitalized
standards established by the Federal Reserve. Our consolidated CET1 risk-based capital ratio was 10.1% at
September 30, 2026, compared to 10.4% at December 31, 2025, with the decrease driven by higher risk-weighted
assets primarily resulting from loan growth, the impact of the Cadence acquisition, and share repurchases, partially
offset by an increase in regulatory capital from current period earnings, net of dividends. The Bank CET1 risk-based
capital ratio of 11.9% increased approximately 20 basis points from year-end driven by bank earnings, net of
upstream dividends to the parent, and a $780 million capital contribution from the parent, which the Bank in turn
used to redeem its outstanding preferred stock held by the parent, partially offset by higher risk-weighted assets
and the impact of the Cadence acquisition.
We are authorized to make capital distributions that are consistent with the requirements in the Federal
Reserve's capital rule, including the SCB requirement. Our SCB requirement is 2.5%.
Shareholders' Equity
We generate shareholders' equity primarily through the retention of earnings, net of dividends and share
repurchases. Other potential sources of shareholders' equity include issuances of common and preferred stock. Our
objective is to maintain capital at an amount commensurate with our risk appetite and risk tolerance objectives, to
meet both regulatory and market expectations, and to provide the flexibility needed for future growth and business
opportunities.
Shareholders' equity totaled $32.2 billion at September 30, 2026, an increase of $7.8 billion, or 32%, when
compared with December 31, 2025. The increase was primarily driven by $8.3 billion of common and preferred
equity issued as consideration for the Cadence acquisition, in addition to earnings, net of dividends, that were
partially offset by share repurchases and a reduction in accumulated other comprehensive income driven by
changes in interest rates. Our common dividend and total payout ratios were 52% and 74%, respectively, for the first
nine-month period of 2026, compared to 43% for both ratios for the same period of 2025. The year-over-year
increase in the common dividend payout ratio was due to the impact of acquisition-related expenses on earnings.
2026 3Q Form 10-Q 31
Share Repurchases
From time to time, our Board of Directors authorizes the Company to repurchase shares of our common stock.
Although we announce when our Board authorizes share repurchases, we typically do not give any public notice
before we repurchase our shares at any particular time. Share repurchases may include open market purchases,
through block trades, in privately negotiated transactions, and pursuant to any trading plan that may be adopted by
the Company's management in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or
otherwise, and is subject to the Federal Reserve's capital regulations. The timing of repurchases will be discretionary
and depend on several factors, including the macroeconomic and interest rate environment, the pace of loan
growth, and other factors.
On April 22, 2026, our Board approved the repurchase of up to $3.0 billion of common shares with no expiration
date. During the nine months ended September 30, 2026, we repurchased 24.8 million shares totaling $409 million.
As of September 30, 2026, we had $2.85 billion of common shares remaining for repurchase under the current
Board-approved authorization.
BUSINESS SEGMENT DISCUSSION
Overview
Our business segments are based on our internally aligned segment leadership structure, which is how
management monitors results and assesses performance. We have two business segments: Consumer & Regional
Banking and Commercial Banking. All other items not included within our two business segments are reported
within the Treasury / Other function, which primarily includes technology and operations and other unallocated
assets, liabilities, revenue, and expense.
Business segment results are determined based on our management practices, which assign balance sheet and
income statement items to each of the business segments. The process is designed around our organizational and
management structure and, accordingly, the results derived are not necessarily comparable with similar information
published by other financial institutions.
Revenue Sharing
Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is
recorded to allocate portions of such revenue to other business segments involved in selling to or providing service
to customers. Results of operations for the business segments reflect these fee-sharing allocations.
Expense Allocation
The management process that develops the business segment reporting utilizes various estimates and allocation
methodologies to measure the performance of the business segments. Expenses are allocated to business segments
using a two-phase approach. The first phase consists of measuring and assigning unit costs (activity-based costs) to
activities related to product origination and servicing. These activity-based costs are then extended, based on
volumes, with the resulting amount allocated to business segments that own the related products. The second
phase consists of the allocation of overhead costs to the business segments from Treasury / Other. We utilize a full-
allocation methodology, where all Treasury / Other expenses, except reported acquisition-related expenses, if any,
and a small amount of other residual unallocated expenses, are allocated to the business segments.
Funds Transfer Pricing (FTP)
We use an active and centralized FTP methodology to attribute appropriate net interest income to the business
segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by
providing modeled duration funding of assets and liabilities. The result is to centralize the financial impact,
management, and reporting of interest rate risk in the Treasury / Other function where it can be centrally monitored
and managed. The Treasury / Other function charges (credits) an internal cost of funds for assets held in (or pays for
funding provided by) each business segment. The FTP rate is based on prevailing market interest rates for
comparable duration assets (or liabilities). The primary components of the FTP rate include a base (market) rate, a
liquidity premium, contingent liquidity and collateral charges, and option cost.
32 Huntington Bancshares Incorporated
Net Income (Loss) by Business Segment
Net income (loss) by business segment is presented in the following table.
Table 24 - Net Income (Loss) by Business Segment
Nine Months Ended
(dollar amounts in millions)
September 30,
2026
September 30,
2025
Consumer & Regional Banking
$1,494
$998
Commercial Banking
1,116
Treasury / Other
(639)
(199)
Net income attributable to Huntington
$1,971
$1,692
Consumer & Regional Banking
Table 25 - Key Performance Indicators for Consumer & Regional Banking
Nine Months Ended
Change
(dollar amounts in millions)
September 30,
2026
September 30,
2025
Amount
Percent
Net interest income
$4,274
$3,018
$1,256
42%
Provision for credit losses
(37)
(12)
Net interest income after provision for credit losses
4,005
2,712
1,293
Noninterest income
1,285
1,059
Noninterest expense:
Direct personnel costs
1,210
Other noninterest expense, including corporate allocations
2,189
1,601
Total noninterest expense
3,399
2,508
Income before income taxes
1,891
1,263
Provision for income taxes
Net income attributable to Huntington
$1,494
$998
$496
50%
Number of employees (average full-time equivalent)
13,813
11,240
2,573
23%
Total average assets
$110,921
$79,149
$31,772
Total average loans/leases
101,045
73,176
27,869
Total average deposits
146,892
111,416
35,476
Net interest margin
3.79%
3.56%
0.23%
NCOs
$291
$181
$110
NCOs as a % of average loans and leases
0.38%
0.33%
0.05%
Total assets under management (in billions)-eop
$48.7
$37.0
$11.7
Total trust assets (in billions)-eop
67.8
57.5
10.3
Consumer & Regional Banking net income was $1.5 billion in the nine-month period of 2026, an increase of $496
million, or 50%, compared to the year-ago period. Segment net interest income increased $1.3 billion, or 42%,
primarily due to a $27.9 billion, or 38%, increase in average loans and leases, which includes the Cadence and
Veritex acquisitions, and a 23 basis point increase in NIM. Provision for credit losses decreased $37 million due to
changes in the loan portfolio, partially offset by higher net charge-offs and loan growth. Noninterest income
increased $226 million, or 21%, primarily due to the impact of the Cadence and Veritex acquisitions, as well as
growth in customer deposit fee income, wealth and asset management revenue, and payments and cash
management revenue. Noninterest expense increased $891 million, or 36%, primarily due to incremental expenses
associated with the Cadence and Veritex acquisitions, along with higher indirect expense allocations and personnel
costs.
2026 3Q Form 10-Q 33
Commercial Banking
Table 26 - Key Performance Indicators for Commercial Banking
Nine Months Ended
Change
(dollar amounts in millions)
September 30,
2026
September 30,
2025
Amount
Percent
Net interest income
$2,065
$1,564
$501
32%
Provision for credit losses
Net interest income after provision for credit losses
1,922
1,530
Noninterest income
Noninterest expense:
Direct personnel costs
Other noninterest expense, including corporate allocations
Total noninterest expense
1,278
Income before income taxes
1,427
1,148
Provision for income taxes
Income attributable to non-controlling interest
(3)
(21)
Net income attributable to Huntington
$1,116
$893
$223
25%
Number of employees (average full-time equivalent)
2,719
2,200
24%
Total average assets
$93,545
$69,522
$24,023
Total average loans/leases
82,775
59,933
22,842
Total average deposits
61,333
44,129
17,204
Net interest margin
3.25%
3.33%
(0.08)%
(2)
NCOs
$84
$46
$38
NCOs as a % of average loans and leases
0.14%
0.10%
0.04%
Commercial Banking net income was $1.1 billion in the first nine-month period of 2026, an increase of $223
million, or 25%, compared to the year-ago period. Segment net interest income increased $501 million, or 32%,
primarily driven by a $22.8 billion, or 38%, increase in average loans and leases, partially offset by a $17.2 billion, or
39%, increase in average deposits. The increases in loans and leases and deposits were driven by the impact of the
Cadence and Veritex acquisitions, as well as organic growth. The provision for credit losses increased $109 million
primarily due to loan and lease growth. Noninterest income increased $226 million, or 41%, primarily due to the
contributions of Cadence and Veritex, and an additional increase in capital markets and advisory fees, which
included the impact of three strategic business units acquired from Janney in January 2026. Customer deposit and
loan fees and payment and cash management revenue were also higher. Noninterest expense increased $339
million, or 36%, primarily driven by higher personnel expense related to the recent acquisitions and higher allocated
overhead.
Treasury / Other
The Treasury / Other function includes revenue and expense related to assets, liabilities, derivatives (including
mark-to-market of interest rate swaps, as applicable), and equity not directly assigned or allocated to one of the
business segments. Assets include investment securities and bank-owned life insurance.
Net interest income includes the impact of administering our investment securities portfolios, the net impact of
derivatives used to hedge interest rate sensitivity, and the financial impact associated with our FTP methodology, as
described above. Noninterest income includes miscellaneous fee income not allocated to other business segments,
such as bank-owned life insurance income and securities and trading asset gains or losses. Noninterest expense
includes certain corporate administrative expenses, acquisition-related expenses, if any, and other miscellaneous
expenses not allocated to other business segments. The provision for income taxes for the business segments is
calculated at a statutory 21% tax rate, although our overall effective tax rate is lower.
34 Huntington Bancshares Incorporated
Table 27 - Key Performance Indicators for Treasury / Other
Nine Months Ended
Change
(dollar amounts in millions)
September 30,
2026
September 30,
2025
Amount
Percent
Net interest loss
$(327)
$(183)
$(144)
(79)%
Noninterest income
(23)
Noninterest expense:
Direct personnel costs
1,201
Other noninterest expense, including corporate allocations
(523)
(655)
Total noninterest expense
Loss before income taxes
(885)
(354)
(531)
(150)
Benefit for income taxes
(246)
(155)
(91)
(59)
Net loss attributable to Huntington
$(639)
$(199)
$(440)
(221)%
Number of employees (average full-time equivalent)
9,117
6,758
2,359
35%
Total average assets
$71,912
$58,901
$13,011
Treasury / Other had a net loss of $639 million in the first nine-month period of 2026, compared to a net loss of
$199 million in the year-ago period, driven by acquisition-related expenses, an increase in net interest loss, and a
reduction in corporate allocations, partially offset by higher noninterest income and an increase in the benefit for
income taxes. Net interest loss increased $144 million primarily due to the net impact of FTP credits assigned to each
business segment. The increase in noninterest income was largely due to the addition of Cadence and Veritex, while
the increase in noninterest expense was largely due to acquisition-related expenses. The benefit for income taxes
increased $91 million primarily due to an increase in pre-tax loss.
ADDITIONAL DISCLOSURES
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including MD&A, contains certain forward-looking statements, including,
but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and
are subject to numerous assumptions, risks, estimates, and uncertainties that are beyond the control of Huntington.
Statements that do not describe historical or current facts, including statements about beliefs and expectations, are
forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate,
continue, believe, intend, estimate, plan, trend, objective, target, goal, or similar expressions, or future or
conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking
statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933,
Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
2026 3Q Form 10-Q 35
While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain
factors which could cause actual results to differ materially from those contained or implied in the forward-looking
statements or historical performance: changes in general economic, political, regulatory, or industry conditions;
deterioration in business and economic conditions, including persistent inflation, supply chain issues or labor
shortages, instability in global economic conditions and geopolitical conditions, including U.S. direct involvement in
war and other conflicts, as well as volatility in financial markets; changes in U.S. trade policies, including the
imposition of tariffs and retaliatory tariffs; the impact of pandemics and other catastrophic events or disasters on
the global economy and financial market conditions and our business, results of operations, and financial condition;
the impacts related to or resulting from bank failures and other volatility, including potential increased regulatory
requirements and costs, such as FDIC special assessments, long-term debt requirements and heightened capital
requirements; potential impacts to macroeconomic conditions, which could affect the ability of depository
institutions, including us, to attract and retain depositors and to borrow or raise capital; unexpected outflows of
deposits which may require us to sell investment securities at a loss; changing interest rates which could negatively
impact the value of our portfolio of investment securities; the loss of value of our investment portfolio which could
negatively impact market perceptions of us and could lead to deposit withdrawals; market perceptions of us and
banks generally, including from the effects of social media; cybersecurity risks; uncertainty in U.S. fiscal and
monetary policy, including the interest rate policies of the Federal Reserve; volatility and disruptions in global
capital, foreign exchange, and credit markets; movements in interest rates; competitive pressures on product pricing
and services; success, impact, and timing of our business strategies, including market acceptance of any new
products or services including those implementing our "Fair Play" banking philosophy; introduction of new
competitive products, such as stablecoins, and new competitors, such as financial technology companies and other
"nontraditional" bank competitors; changes in policies and standards for regulatory review of bank mergers; the
nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and
interpretations, including those related to the Dodd-Frank Act and the Basel III regulatory capital reforms, as well as
those involving the SEC, the OCC, the Federal Reserve, the FDIC, the CFPB, and state-level regulators; the possibility
that the anticipated benefits of recent or proposed acquisitions are not realized when expected or at all, including as
a result of the impact of, or problems arising from, the integration of the companies or as a result of the strength of
the economy and competitive factors in the areas where the companies do business; and other factors that may
affect the future results of Huntington.
All forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth
above. Forward-looking statements speak only as of the date they are made and are based on information available
at that time. Huntington does not assume any obligation to update forward-looking statements to reflect actual
results, new information or future events, changes in assumptions or changes in circumstances or other factors
affecting forward-looking statements that occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required by federal securities laws. If Huntington updates
one or more forward-looking statements, no inference should be drawn that Huntington will make additional
updates with respect to those or other forward-looking statements. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Non-GAAP Financial Measures
This document contains GAAP financial measures and non-GAAP financial measures, including FTE net interest
income, FTE total revenue, FTE net interest margin, and the efficiency and tangible common equity ratios, where
management believes it to be helpful in understanding our results of operations or financial position. Where non-
GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the
comparable GAAP financial measure, for FTE net interest income and FTE total revenue can be found in Table 1 in
this report and in the reconciliation below for the efficiency and tangible common equity ratios.
36 Huntington Bancshares Incorporated
Fully-Taxable Equivalent Basis
Interest income, yields, and ratios on an FTE basis are considered non-GAAP financial measures. Management
believes net interest income on an FTE basis provides an insightful picture of the interest margin for comparison
purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable
and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21%. We encourage readers to
consider the Unaudited Consolidated Financial Statements and other financial information contained in this Form
10-Q in their entirety, and not to rely on any single financial measure.
Non-Regulatory Capital Ratios
In addition to capital ratios defined by banking regulators, the Company considers various other measures when
evaluating capital utilization and adequacy, including tangible common equity to tangible assets.
Non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of
capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows
readers to compare our capitalization to other financial services companies. These ratios differ from capital ratios
defined by banking regulators principally in that the numerator excludes goodwill and other intangible assets, the
nature and extent of which varies among different financial services companies. These ratios are not defined in
GAAP or federal banking regulations. As a result, non-regulatory capital ratios disclosed by the Company are
considered non-GAAP financial measures.
Because there are no standardized definitions for non-regulatory capital ratios, the Company's calculation
methods may differ from those used by other financial services companies. Also, there may be limits in the
usefulness of these measures to investors. As a result, we encourage readers to consider the Unaudited
Consolidated Financial Statements and other financial information contained in this Form 10-Q in their entirety, and
not to rely on any single financial measure.
The following table provides a reconciliation of the Company's tangible common equity to tangible assets ratio.
September 30,
December 31,
(dollar amounts in millions)
2026
2025
Calculation of tangible equity / asset ratio:
Total Huntington shareholders' equity
$32,179
$24,342
Goodwill and other intangible assets
(10,393)
(6,142)
Deferred tax liability on other intangible assets (1)
Total tangible equity
21,968
18,230
Preferred equity
(2,881)
(2,731)
Total tangible common equity
$19,087
$15,499
Total assets
$287,833
$225,106
Goodwill and other intangible assets
(10,393)
(6,142)
Deferred tax liability on other intangible assets (1)
Total tangible assets
$277,622
$218,994
Shareholders' equity / total assets
11.2%
10.8%
Tangible equity / tangible asset ratio
7.9
8.3
Tangible common equity / tangible asset ratio
6.9
7.1
(1)Deferred tax liability related to other intangible assets is calculated at a 21% tax rate.
2026 3Q Form 10-Q 37
Efficiency Ratio
The following table provides a reconciliation of the Company's efficiency ratio.
Three Months Ended
Nine Months Ended
(amounts in millions)
September 30,
2026
September 30,
2025
September 30,
2026
September 30,
2025
Noninterest expense (GAAP)
$1,772
$1,246
$5,355
$3,595
Less: Intangible amortization
Noninterest expense less amortization of intangibles (non-GAAP)
$1,723
$1,235
$5,211
$3,562
Net interest income
$2,069
$1,506
$6,012
$4,399
Noninterest income
2,189
1,593
Total Revenue (GAAP)
2,791
2,134
8,201
5,992
Add: FTE adjustment (1)
Less: Gains (losses) on sales of securities
-
-
(58)
FTE revenue less gains (losses) on sales of securities (non-GAAP)
$2,812
$2,151
$8,246
$6,098
Efficiency Ratio (2)
61.2%
57.4%
63.2%
58.4%
(1)Calculated on an FTE basis, which represents a non-GAAP measure, assuming a 21% tax rate.
(2)Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding gains (losses) on
sales of securities, which represents a non-GAAP measure.
Critical Accounting Policies and Use of Significant Estimates
Our Unaudited Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of
financial statements in conformity with GAAP requires us to establish accounting policies and make estimates that
affect amounts reported in our Unaudited Consolidated Financial Statements. Note 1 - "Significant Accounting
Policies" of the Notes to Consolidated Financial Statements included in our 2025 Annual Report on Form 10-K, as
supplemented by this report including this MD&A, describes the significant accounting policies we used in our
Unaudited Consolidated Financial Statements.
An accounting estimate requires assumptions and judgments about uncertain matters that could have a material
effect on the Unaudited Consolidated Financial Statements. Estimates are made under facts and circumstances at a
point in time, and changes in those facts and circumstances could produce results substantially different from those
estimates. Our critical accounting policies include the allowance for credit losses, fair value measurements of certain
acquired assets, and goodwill. The following details the policies, assumptions, and judgments related to the
allowance for credit losses and acquisition fair value measurements. The policies, assumptions, and judgments
related to goodwill are described in the Critical Accounting Policies and Use of Significant Estimates section within
the MD&A of Huntington's 2025 Annual Report on Form 10-K.
Allowance for Credit Losses
Our ACL at September 30, 2026 represents our current estimate of the lifetime credit losses expected from our
loan and lease portfolio and our unfunded lending commitments. Management estimates the ACL by projecting
probability of default, loss given default, and exposure at default, conditional on economic parameters, for the
remaining contractual term. Internal factors that impact the quarterly allowance estimate include the level of
outstanding balances, the portfolio performance, and assigned risk ratings. We utilize statistically based models that
employ assumptions about current and future economic conditions throughout the contractual life of our loan
portfolio. As part of our model risk oversight, we perform ongoing monitoring of model performance to assess
modeling approaches and identify potential model enhancements, which may result in updates to our statistically
based models from time to time.
One of the most significant judgments influencing the ACL estimate is the macroeconomic forecasts. Key
external economic parameters that directly impact our loss modeling framework include forecasted unemployment
rates and GDP. Changes in the economic forecasts could significantly affect the estimated credit losses, which could
potentially lead to materially different allowance levels from one reporting period to the next.
38 Huntington Bancshares Incorporated
Given the dynamic relationship between macroeconomic variables within our modeling framework, it is difficult
to estimate the impact of a change in any one individual variable on the allowance. As a result, management uses a
probability-weighted approach that incorporates a baseline, an adverse, and a more favorable economic scenario
when formulating the quantitative estimate.
To illustrate a hypothetical sensitivity analysis, management calculated a quantitative allowance using a 100%
weighting applied to an adverse scenario reflecting an amount of stress in excess of current expectations. Under this
scenario, as an example, the unemployment rate increases significantly from baseline levels peaking in the fourth
quarter of 2027 and GDP declines significantly. The unemployment rate in this adverse scenario is projected to peak
at 8.4% in the fourth quarter of 2027. This is approximately 3.7% higher than the baseline scenario projected peak of
4.7%. In addition, GDP is significantly lower in the adverse scenario, with GDP turning negative for the remainder of
2026 before turning positive in the third quarter of 2027 but staying below 2%.
To demonstrate the sensitivity to key economic parameters used in the calculation of our ACL at September 30,
2026, management calculated the difference between our quantitative ACL and this 100% adverse scenario.
Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in
our ACL of approximately $1.1 billion at September 30, 2026.
The resulting difference is not intended to represent an expected increase in allowance levels for a number of
reasons including the following:
•Management uses a weighted approach applied to multiple economic scenarios for its allowance estimation
process;
•The highly uncertain economic environment;
•The difficulty in predicting the inter-relationships between the economic parameters used in the various
economic scenarios; and
•The sensitivity estimate does not account for any general reserve components and associated risk profile
adjustments incorporated by management as part of its overall allowance framework.
We regularly review our ACL for appropriateness by performing on-going evaluations of the loan and lease
portfolio. In doing so, we consider factors such as the differing economic risks associated with each loan category,
the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where
applicable, the existence of any guarantees or other documented support. We also evaluate the impact of changes
in key economic parameters and overall economic conditions on the ability of borrowers to meet their financial
obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each
reporting date. Large loan exposures may be addressed through a portfolio heterogeneity reserve. We also consider
how significant changes in underwriting policies and procedures could impact the ACL, including consideration of
material changes in portfolio growth rates or credit terms. Any changes to management and staffing that could
impact lending, collections, or other relevant departments that could increase risk within the allowance process are
also contemplated. Observed changes in the quality of the credit review process identified by the second and third
line reviews are also given appropriate consideration.
There is no certainty that our ACL will be appropriate over time to cover losses in our portfolio as economic and
market conditions may ultimately differ from our reasonable and supportable forecast. Additionally, events
adversely affecting specific customers, industries, or our markets, such as geopolitical instability or risks of elevated
interest rates for longer including a near-term recession, could severely impact our current expectations. If the credit
quality of our customer base materially deteriorates or the risk profile of a market, industry, or group of customers
changes materially, our net income and capital could be materially adversely affected which, in turn could have a
material adverse effect on our financial condition and results of operations. The extent to which the geopolitical
instability and risks of elevated interest rates will continue to negatively impact our businesses, financial condition,
liquidity, and results will depend on future developments, which are highly uncertain and cannot be forecasted with
precision at this time. For more information, see Note 5 - "Loans and Leases" and Note 6 - "Allowance For Credit
Losses" of the Notes to Unaudited Consolidated Financial Statements.
Acquisition Fair Value Measurements
The acquisition method of accounting requires assets and liabilities in business combinations to be recorded at
their estimated fair values as of the date of acquisition. To estimate fair value, we apply various valuation
2026 3Q Form 10-Q 39
methodologies to assets acquired and liabilities assumed that often involve significant judgment. Examples of such
estimates include loans and core deposit intangible assets, both of which we developed using an income approach.
To value loans, management incorporated assumptions such as discount rates, prepayment speeds, expected credit
losses, and recovery speeds based on recent origination and market data. The methodology used to value CDI assets
considered the cost savings generated from the deposits relative to an alternative source of funds. Management
incorporated assumptions in the CDI valuation such as customer attrition, discount rates, alternative cost of funding,
and net maintenance costs. Changes in these assumptions could result in materially different fair value
measurements that may impact the Company's financial condition, results of operations, or disclosures. Discussion
of the assumptions and estimates used by us to assess and determine fair values associated with business
combinations can be found in Note 3 - "Business Combinations" of the Notes to Unaudited Consolidated Financial
Statements.
Goodwill
Subsequent to the completion of our annual impairment test, as described in the Critical Accounting Policies and
Use of Significant Estimates section within the MD&A of Huntington's 2025 Annual Report on Form 10-K, we
completed the acquisitions of Veritex and Cadence effective October 20, 2025, and February 1, 2026, respectively,
which resulted in the recognition of additional goodwill of $450 million and $3.5 billion, respectively. Because this
goodwill arose after our annual testing date, it was not included in the annual impairment analysis performed as of
October 1, 2025. However, the additions of Veritex and Cadence did not change our conclusion with respect to
goodwill impairment and no triggering event occurred through the end of the third quarter of 2026 that required a
reassessment of goodwill. The goodwill recognized in connection with the acquisitions has been assigned to our
reporting units based on our assessment of how the acquired business will be integrated and how its operations will
be managed. For more information, see Note 8 - "Goodwill and Other Intangible Assets" of the Notes to the
Unaudited Consolidated Financial Statements.
Recent Accounting Pronouncements and Developments
Note 2 - "Accounting Standards Update" of the Notes to Unaudited Consolidated Financial Statements discusses,
if applicable, new accounting pronouncements adopted during 2026 and the expected impact of accounting
pronouncements recently issued but not yet required to be adopted. To the extent the adoption of new accounting
standards materially affects financial condition, results of operations, or liquidity, the impacts are discussed in the
applicable section of this MD&A and the Notes to Unaudited Consolidated Financial Statements.
40 Huntington Bancshares Incorporated
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