Direct Answer
Huntington Bancshares (NASDAQ: HBAN) is a regional bank holding company headquartered in Columbus, Ohio, with operations concentrated in the Midwest, primarily Ohio, Michigan, Pennsylvania, Indiana, Illinois, Minnesota, Colorado, and neighboring states. Founded in 1866, Huntington operates approximately 970 branches and provides commercial banking, consumer banking, mortgage, wealth management, and specialty finance services. Following its 2021 acquisition of TCF Financial, it became one of the top 25 U.S. banks by assets.
Company Snapshot
| Ticker | HBAN (Nasdaq) |
|---|---|
| Sector | Financials / Regional Banks |
| Founded | 1866, Columbus, OH |
| Fiscal Year End | December 31 |
| SEC CIK | 0000049196 |
| Total Assets (2024) | ~$195 billion |
| Business Model | Commercial and consumer banking; fee services |
| Key Metrics | Net interest margin, return on assets, efficiency ratio, CET1 |
What Huntington Bancshares Does
Huntington Bancshares operates as the parent company of The Huntington National Bank, which conducts traditional commercial and consumer banking across its Midwest footprint. On the commercial side, Huntington provides loans, treasury management, capital markets, and specialty lending to businesses ranging from middle-market companies to large corporations. On the consumer side, it offers checking and savings accounts, home mortgages, auto loans, credit cards, and personal banking services to individuals and households.
Huntington has several specialty businesses that differentiate it from a plain-vanilla regional bank. Its dealer financial services division finances vehicles for dealerships and is a significant auto floorplan lender in the Midwest. Fleet finance supports corporate vehicle fleet purchases. Huntington's wealth management division serves high-net-worth clients with investment, trust, and estate planning services. The company has also invested in digital banking capabilities, including Huntington's 24-Hour Grace policy (which gives customers extra time to cover overdrafts before fees are assessed), which it markets as a customer-friendly differentiator in consumer banking.
Founded in 1866, Huntington has grown through organic expansion and a series of acquisitions over its history. The 2021 acquisition of TCF Financial was its largest in recent history, expanding its footprint significantly into Michigan and Minnesota while adding TCF's commercial banking capabilities.
Bank Earnings: Net Interest Income and NIM
Huntington's financial model centers on the traditional banking spread: borrowing money (through deposits and wholesale borrowings) at one interest rate and lending it out at a higher rate. The difference between the two is net interest income. Net interest margin (NIM) expresses that difference as a percentage of the bank's average interest-earning assets.
NIM is highly sensitive to the interest rate environment. When the Federal Reserve raises its benchmark federal funds rate, short-term rates rise. Because Huntington holds significant floating-rate commercial loans that reprice upward quickly and deposit accounts whose rates it can set below market, its NIM tends to expand in a rising rate environment (asset-sensitive profile). Conversely, when rates fall, loan yields decline while the bank cannot easily push deposit rates below zero, compressing NIM.
The deposit franchise quality matters a great deal. Banks with large bases of low-cost core deposits (checking accounts, savings accounts) have structural funding cost advantages. Commercial banks like Huntington compete for commercial operating accounts that tend to be stable and low-rate in normal environments. The degree to which deposit costs rise or remain stable in a rate increase cycle (deposit beta) directly determines how much of a rate increase translates into expanded NIM versus flowing back to depositors.
Credit Quality and Loan Loss Provisions
In normal economic conditions, Huntington's credit losses as a percentage of total loans are modest. The bank provisions for estimated future loan losses each quarter (provision expense), building a reserve against the loans it expects will eventually default. When the economy weakens, provision expense increases, directly reducing pre-tax profits.
Commercial real estate (CRE) has been a focus of investor attention for regional banks in the post-pandemic period. Office properties in particular have faced declining occupancy as remote work reduced demand. Banks with significant office CRE loan exposure have faced scrutiny over potential losses. Huntington's CRE exposure is weighted toward non-office property types (multifamily, industrial, retail), which have generally performed better than office, though the sector as a whole carries more risk in a rising vacancy environment.
Capital and the CET1 Ratio
Banks are required to hold minimum levels of capital relative to their risk-weighted assets. The most-watched capital ratio for large banks is the Common Equity Tier 1 (CET1) ratio, which measures high-quality capital (primarily common equity) as a percentage of risk-weighted assets. Regulators have been tightening capital requirements for mid-size and large regional banks following the 2023 bank failures (Silicon Valley Bank, Signature Bank). Huntington's CET1 ratio and its trajectory relative to its operating targets affect how much capital it can return to shareholders through dividends and buybacks versus retaining to meet higher requirements.
Frequently Asked Questions
How does Huntington Bancshares make money?
Huntington Bancshares earns revenue through two primary channels. Net interest income is the spread between interest earned on loans and investments and interest paid on deposits and borrowings. Noninterest income comes from service charges on deposit accounts, card and payment fees, capital markets fees, mortgage origination and servicing, and wealth management. Net interest income typically accounts for roughly 70-75% of total revenue, making Huntington's earnings highly sensitive to interest rate levels and the shape of the yield curve.
What is net interest margin and why does it matter for Huntington?
Net interest margin (NIM) is net interest income divided by average interest-earning assets, expressed as a percentage. It measures how much the bank earns on its loans and investments above what it pays for its funding. A 3% NIM means the bank earns 3 cents per dollar of assets after paying for its funding. Huntington is considered asset-sensitive: when interest rates rise, its variable-rate loan yields reprice upward faster than its deposit costs, expanding NIM. When rates fall, the reverse happens. NIM is the single most watched metric for Huntington investors because it directly drives the largest component of revenue.
What was Huntington's acquisition of TCF Financial?
Huntington Bancshares completed the acquisition of TCF Financial Corporation in June 2021 for approximately $6 billion in an all-stock transaction. TCF was a midsize bank headquartered in Detroit with significant operations in Michigan, Minnesota, Illinois, Colorado, and other states. The deal added approximately $46 billion in assets to Huntington, expanding its presence in the Great Lakes region and giving it a stronger foothold in Michigan, where it had previously had limited retail presence. TCF also brought a large commercial banking operation and a fleet financing business. Integration took approximately two years.
What are the main risks for Huntington Bancshares investors?
Key risks include interest rate sensitivity (falling rates compress NIM, which directly reduces earnings since net interest income is the largest revenue component), credit risk (loan losses can spike in recessions, particularly in commercial real estate), regional economic concentration (heavy exposure to Midwestern states means Huntington is more affected by manufacturing-sector slowdowns than more geographically diversified banks), competition from national banks with larger scale and technology budgets, and regulatory risk from capital requirements and consumer protection rules.
How does Huntington compare to other regional banks?
Huntington Bancshares occupies the large regional bank tier alongside peers like KeyCorp, Regions Financial, and Fifth Third Bancorp. These banks are larger than community banks but smaller than the national megabanks (JPMorgan, Bank of America, Wells Fargo). The large regional tier competes for commercial banking clients that prefer local relationships over national bank standardization, but faces pressure from megabanks' technology investment scale. Huntington differentiates on its Midwest relationships and certain specialty businesses including fleet and dealer finance.