NEW YORK, July 23, 2026, 3:22 p.m. EDT
- U.S. markets stayed open, with Huntington shares falling 5.1% to $17.33.
- Organic deposits increased by $4.0 billion, yet funding expenses and margins deteriorated.
Shares of Huntington dropped 5.1% on Thursday, lagging behind the performance of regional banks. The SPDR S&P Regional Banking ETF (NYSEARCA:KRE) declined 0.9%. Market participants pointed to higher funding costs and weaker interest-income forecasts as key concerns.
The bank reported organic deposit growth of $4.0 billion, almost double its $2.2 billion rise in organic loans. However, net interest margin declined by three basis points to 3.21%.
The cost of interest-bearing deposits increased by eight basis points to 2.29%. Yields on average earning assets edged up just one basis point to 5.28%. The core spread contracted by five basis points.
KeyCorp’s recent quarter highlights the reasons Huntington faced a stronger reaction.
| Second-quarter metric | Huntington | KeyCorp NYSE:KEY |
|---|---|---|
| Interest-bearing deposit cost | 2.29% (up 8 bp) | 2.01% (unchanged) |
| Total deposit cost | 1.88% (up 6 bp) | 1.63% (down 2 bp) |
| Net interest margin | 3.21% (down 3 bp) | 2.89% (up 2 bp) |
| Thursday share move | -5.1% | -1.8% |
Percentage changes are measured quarter-on-quarter; bp stands for basis point. Company disclosures provide the figures, except for moves in intraday shares.
The contrast is significant. Huntington secured greater funding but did so at progressively higher costs. KeyCorp, meanwhile, reduced overall deposit expenses and improved its margin.
Chief Financial Officer Zach Wasserman stated, “The biggest single change in our outlook around NIM is deposit costs and the pricing environment around that.” The statement led to a shift in expectations. Investing.com UK
Management currently projects that full-year net interest income will likely land at the lower end of the guidance range, and may end slightly below that point. Average loan balances are pacing at or above the higher end of expectations, and fee income is on track to meet or surpass the top of the anticipated range.
Performance for the quarter remained solid. Net income climbed 39% from the previous quarter, reaching $727 million. Adjusted earnings added two cents to stand at 39 cents per share.
Net interest income increased by 9% to $2.05 billion, while noninterest income advanced 15% to $785 million. Fee-generating operations now contribute a greater share to second-half earnings.
Chief Executive Steve Steinour stated that Huntington’s pipelines remained “robust” heading into the second half. The management team anticipates a margin in the low 3.20% range for the third quarter, and projects the margin to move into the mid-to-high 3.20% range by the end of the year. Huntington Bancshares Incorporated
Based on quarter-end share counts, Thursday’s drop in equity value is estimated at almost $1.9 billion—roughly 12 times the $152 million pretax charge for acquisitions recorded for the quarter. The magnitude suggests the impact goes further than just integration costs.
The stock was priced at $17.33, or about 1.80 times its tangible book value. That ratio compared with around 1.89 times before the earnings report. Both figures are based on Huntington’s stated tangible book value per share of $9.65.
Credit losses stayed manageable, with net charge-offs dropping by one basis point to 0.25% of average loans.
Risks: Nonperforming assets increased to 0.85% from 0.72%. Huntington’s estimated CET1 ratio edged down to 10.0% from 10.2%. Ongoing competition for deposits may delay the expected recovery in margin.
The second-half challenge is clear. Huntington needs to convert deposit growth into lower-cost marginal funding. Thursday’s market response indicates that volume by itself is insufficient.
