Huntington Earnings: Strong 2024 Finish, Outlook Mostly in Line With Our Expectations

Key Morningstar Metrics for Huntington Bancshares

• Fair Value Estimate: $14.50
• Morningstar Rating: ★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Medium

What We Thought of Huntington Bancshares’ Earnings

Huntington Bancshares HBAN reported strong fourth-quarter results, with net income to common shareholders of $498 million, or $0.34 per diluted share, on $1.97 billion of taxable-equivalent revenue. The bank reported a strong finish for 2024 and a 2025 outlook that is mostly in line with our expectations. As we incorporate these results, we don’t expect a material change to our fair value estimate of $14.50 per share, and we currently view shares as slightly overvalued.

Net interest income came in at $1.4 billion in the fourth quarter, up 6% year over year. This was mostly driven by 6% year-over-year average loan growth for the quarter and continued fixed asset repricing. We think Huntington’s organic growth efforts continue to pay off, and we should see momentum in 2025. We forecast loan growth of around 4%, slightly lower than management’s guidance of 5% to 7% growth. In addition to strong asset growth, Huntington’s NII should benefit from a steepening yield curve in 2025.

Fourth-quarter noninterest income was 9% higher than in the prior quarter, and 2024 fees were 10% higher than in 2023. We believe Huntington’s success with increasing penetration with existing clients and expansion efforts in fast-growing geographic areas, like Texas and the Carolinas, will carry over into 2025. However, we believe management’s goal of high-single-digit to low-double-digit long-term growth in the payments, wealth management, and capital markets businesses is a bit lofty. We will wait for a more detailed plan from the bank on its Feb. 6 investor day.

Huntington’s 2024 core expenses ticked up 5% compared with the prior year. We think the bank will have to continue to spend more on its organic expansion initiatives in new markets. Our expectation for 2025 expense growth is in line with management’s guidance of 3.5%-4.5%, which is above its regional bank peers but a slowdown from 2024.