Huntington Bancshares Cuts 2027 Outlook as Margin, Loan Growth Pressures Mount

Huntington Bancshares lowered its 2027 EPS outlook to $1.75–$1.83 as higher funding costs, deposit competition and lending pressures weigh on net interest margin and loan growth.

Organic loan growth has slowed to about 6% from 8%–9%, while commercial real estate paydowns, mortgage weakness and reduced indirect-auto production are creating additional headwinds. Net interest margin is expected to remain near the low-to-mid 3.20% range into 2027. Fee-based businesses, cost reductions and acquisition synergies are providing offsets. Huntington plans to increase its 2027 share-repurchase program by $200 million to $1.3–$1.4 billion as slower loan growth frees up capital.

Huntington Bancshares NASDAQ: HBAN said it has revised its 2027 earnings outlook as higher-for-longer interest rates, deposit pricing pressure and competition in selected lending categories weigh on net interest margin and loan growth expectations. Speaking at the Barclays 2026 Global Financial Services Conference, Chairman and CEO Steve Steinour said the bank’s operating performance has remained solid despite an environment that has become “materially different and more challenging” than management expected at the start of the year.

The company now expects 2027 earnings per share of $1.75 to $1.83, while planning to increase its share repurchase program by $200 million to between $1.3 billion and $1.4 billion next year.

Steinour said Huntington’s primary challenge has been a change in interest-rate and competitive conditions rather than a weakening in the company’s core franchise. Market expectations for Federal Reserve policy shifted from anticipated rate cuts to expectations for rate increases, raising funding costs and contributing to more intense competition for deposits, he said. “The economics of incremental growth have become tighter than we anticipated at the start of the year,” Steinour said.

Chief Financial Officer Zach Wasserman said the bank’s organic loan growth run rate has declined to about 6%, from a prior range of roughly 8% to 9%. He attributed the change in part to accelerated commercial real estate paydowns, residential mortgage pressure and increased competition in indirect auto lending. Wasserman said average daily loan balances are expected to decline by about one-half of 1% in the third quarter from the second quarter, though end-of-period loans are expected to rise sequentially. The company expects full-year loan growth of approximately 36% year over year and deposit growth of approximately 33%, both within its prior stated ranges.

In indirect auto, Steinour said Huntington has reduced production rather than accept returns below its underwriting thresholds. A year ago, the bank was originating roughly $850 million in auto loans at a mid-to-high-teens return, he said. Current production is closer to $500 million, with a 12% return representing the company’s minimum acceptable level. Commercial real estate refinancing has also accelerated beyond expectations, according to Steinour. He said refinancing activity has been about twice what management expected, as borrowers move from floating-rate loans to fixed-rate financing and capital providers such as Fannie Mae and Freddie Mac increase refinancing activity.

Wasserman said Huntington’s net interest margin, which was 3.21% in the second quarter, is expected to increase into...