Huntington Bancshares Set to Announce Q3 Results Amid Challenges HBAN will reveal its third-quarter results for 2024 on October 17, prior to market opening. Analysts forecast a decline in both revenue and earnings compared to the previous year.

In the most recent quarter, Huntington Bancshares surprised analysts with an earnings beat of 7.14%. The aforementioned results were buoyed by increases in average loans and deposits. Nevertheless, lower net interest income (NII) and high expenses present ongoing challenges.

Historically, HBAN has consistently surpassed earnings estimates, achieving positive results in each of the last four quarters, with an average surprise of 8.87%.

The Zacks Consensus Estimate for HBAN’s upcoming third-quarter earnings stands at 30 cents per share, unchanged over the last week. This figure reflects a 16.67% drop from the same period last year.

Projected revenues are estimated at $1.86 billion, marking a 1.67% decline year over year.

Key Factors Impacting HBAN’s Q3 Performance

Loans & NII: On September 18, the Federal Reserve cut interest rates by 50 basis points, marking the first reduction since March 2020. Although this cut may not significantly impact HBAN’s NII for the quarter, it contributes to a clearer lending environment amidst stabilizing economic conditions.

The Zacks Consensus Estimate for NII is predicted at $1.35 billion, which represents a sequential increase of 3%.

According to the Fed’s recent data, demand for commercial and industrial loans, as well as consumer loans, remained strong in Q3 2024. Conversely, the market for real estate loans struggled.

Given HBAN’s strong focus on commercial loans, the demand in that sector likely provided a boost, even as weak real estate loan interest may have limited overall growth.

The Zacks Consensus Estimate for total earning assets is $180.5 billion, suggesting a 1.4% increase from the previous quarter.

Non-Interest Income: With the drop in interest rates, mortgage rates also decreased, hitting almost 6.2% by the end of Q3. While mortgage originations stayed low, refinancing activity surged due to lower rates, which should benefit HBAN’s mortgage banking fees. The Zacks estimate for mortgage banking income is $30.6 million, indicating a 1.8% rise from the last quarter.

Global mergers and acquisitions saw a rebound in Q3 2024 after slowdowns in 2023 and 2022.

Brought about by solid financial performance and expectations of economic stability, both deal values and volumes were decent in this quarter. Enhanced activity in capital markets, particularly in issuance, also likely boosted HBAN’s capital markets and advisory fees, which are estimated at $76.14 million, a 4.3% increase from the previous quarter.

Moreover, the strong equity market performance is expected to have positively influenced revenues in wealth and asset management, with estimates at $92 million, a growth of 2.3% from the prior quarter.

Consensus estimates for customer deposit and loan fees stand at $84.6 million, reflecting a 1.9% sequential increase. Insurance income is estimated at $18.3 million, indicating a sequential rise of 1.7%.

Total non-interest income is projected at $507.4 million, showing a 3.3% sequential increase.

Expenses: HBAN’s costs are likely to have increased due to higher expenses related to data processing, marketing, and branch expansion into high-growth areas. Although some efficiency efforts may help mitigate these costs, ongoing investments into growth initiatives are also expected to keep expenses elevated.

Asset Quality: Anticipation of an economic slowdown might have led HBAN to allocate more funds for potential delinquent loans, suggesting a proactive approach to asset quality management.

The Zacks Consensus Estimate for total non-performing assets is $780.08 million, showing a slight increase from the last quarter.

Our Analysis for HBAN

From our analysis, the likelihood of HBAN beating estimates this quarter appears limited. A combination of a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold) typically improves the chances for an earnings surprise. Unfortunately, that is not the case for HBAN.

Earnings ESP: HBAN has an Earnings ESP of -2.78%.

Zacks Rank: Currently, HBAN holds a Zacks Rank of 3.

Stocks Worth Considering

Here are some finance stocks to consider. These companies possess the favorable elements for potentially posting earnings beats this quarter.

First Horizon Corporation FHN has an Earnings ESP of +3.18% and holds a Zacks Rank of 3. The company is expected to report its third-quarter 2024 results on October 16.

FHN’s quarterly earnings estimates have remained stable over the past week.

M&T Bank Corporation MTB sports an Earnings ESP of +0.33% and also holds a Zacks Rank of 3, with third-quarter results scheduled for October 17.

The consensus estimate for MTB’s quarterly earnings has not changed in the last week.

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