Bigger bank, bigger integration test
- Cadence Bank is now inside Huntington, making this the first report for the combined company.
- Q1 2026 GAAP EPS was $0.25, held down by $263 million of acquisition-related expenses.
- Core bank earnings looked better than the headline, with FTE net interest margin rising to 3.24%.
- Credit losses stayed calm for now, with net charge-offs at 0.26% of average loans and leases.
- The main worry is the acquired Cadence loan book, which added $295 million of nonperforming assets.
Cadence changes the story
Huntington is no longer just a steady Midwestern regional bank story. The completed Cadence Bank deal makes it larger, more complex, and more exposed to Texas and other newer markets. The first quarter of 2026 was the first clean look at that combined bank, but the numbers were noisy.
The bull case is simple: if Huntington can fold in Cadence without major credit or technology problems, the larger bank should earn more. Q1 gave some support to that view. FTE net interest margin, which is the spread between what the bank earns on assets and pays on funding, rose to 3.24%. Consumer & Regional Banking net income rose 40% year over year, and Commercial Banking net income rose 47%.
The bear case is also simple: bank mergers can hide problems until after closing. Nonperforming assets rose by $412 million from year-end 2025, and management tied $295 million of that increase to Cadence. Net charge-offs stayed flat at 0.26%, so the problem has not yet shown up as large realized losses. But investors need proof that the acquired loans perform as expected.
This is why Finn's view is mixed rather than glowing. Huntington has better growth potential after the deals, but the scorecard still reflects average performance, only fair financial health, and real execution risk.
Loans funded by deposits
Huntington makes most of its money the classic bank way. It gathers deposits, lends that money out, and keeps the spread between loan yields and deposit costs. That spread is called net interest income.
Fees add a second source of income. Huntington earns fees from payments, cash management, wealth management, capital markets advisory, mortgage banking, insurance, and other services. These fees help, but the bank is still highly tied to loan demand, deposit costs, and credit quality.
The strategy leans on a stable, low-cost core deposit base and a mix of branches and digital banking. Huntington has about 970 full-service branches and private client offices, plus mobile and online channels.
M&A is now central to the model. Huntington bought Veritex and Cadence, expanding its footprint and asset base. Cadence pushed total assets above $250 billion, which brings tougher Category III banking standards after a transition period.
What Huntington sells
Consumer deposits
Checking, savings, and other deposit accounts are the base of the bank. They provide funding that can be cheaper and steadier than wholesale borrowing.
Consumer lending
Huntington offers residential mortgages, home equity lines, and secured loans for autos, RVs, and marine craft. These products tie earnings to household credit health.
Commercial lending
The bank lends to middle-market, large corporate, and institutional clients. Cadence and Veritex increased average loans in both main segments by 33% in Q1 2026.
Treasury management and payments
Commercial clients use Huntington for cash management, payments, and related services. These deepen client ties and can add fee income beyond loans.
Wealth, trust, brokerage, and insurance
These services give Huntington fee income from clients who need investing, trust, brokerage, or insurance products. They are useful add-ons, not the core earnings driver.
Capital markets and advisory
Huntington offers investment banking and capital markets advisory services to commercial clients. Results can vary with deal activity and market conditions.
Two main engines
The mix shown uses Q1 2026 net income from Huntington's two primary operating segments, excluding the Treasury / Other loss. Treasury / Other lost $269 million in Q1 2026, mainly because of $263 million in Cadence acquisition-related expenses.
What could break
Cadence credit surprise
High impact · Medium oddsThe biggest watch item is the loan book Huntington bought with Cadence. Nonperforming assets rose $412 million from December 31, 2025 to March 31, 2026, and $295 million of the increase came from Cadence. If those problem loans turn into charge-offs, earnings and capital could take a hit.
Systems conversion misstep
High impact · Medium oddsBank mergers depend on moving accounts, data, payments, and customer service onto common systems. A bad conversion can cause customer losses, higher costs, and control issues. Huntington has not yet removed this risk.
Expense savings arrive late
Medium impact · Medium oddsQ1 2026 included $263 million of acquisition-related expenses. Some of that is one-time, but the combined bank could still run with higher costs than planned. If cost savings are delayed, investors may stop looking past the noisy GAAP earnings.
Category III rule burden
Medium impact · High oddsCadence pushed Huntington above $250 billion in total assets. That size is expected to bring Category III banking standards after a transition period. Higher rules can mean more compliance cost, more liquidity needs, and less balance sheet flexibility.
Deposit cost pressure
Medium impact · Medium oddsHuntington benefits when it can fund loans with stable, low-cost deposits. If customers demand higher deposit rates or move money elsewhere, the net interest margin can shrink. That would weaken the main earnings engine.
In one breath
What does Huntington Bancshares do?
Huntington is a regional bank holding company. It offers consumer banking, commercial banking, loans, deposits, wealth services, payments, and capital markets services.
Why does the Cadence Bank deal matter?
Cadence made Huntington larger and expanded its loan and deposit base. It also added integration risk, more nonperforming assets, and tougher regulation because the combined company exceeds $250 billion in assets.
Was Q1 2026 a good quarter for Huntington?
The answer is mixed. GAAP EPS was only $0.25 because of acquisition costs, but core signs were better: FTE net interest margin reached 3.24%, and net charge-offs stayed at 0.26%.
What should investors watch next?
The key items are the Cadence systems conversion, expense savings, and credit quality. Nonperforming assets and net charge-offs will show whether the acquired loan book is stable.