Huntington Bank Profit Warning Sparks Margin Fears

Huntington Bancshares Incorporated saw its stock fall 5.55% on September 16, 2026, following a profit warning issued at a Barclays conference. The bank revised its 2027 earnings per share guidance downward to a range of $1.75-$1.83, from above $1.90 previously. Its 2026 net interest income growth forecast was also reduced to approximately 35% from 39%-43%. These adjustments were attributed to increasing deposit costs and tightening loan pricing, coinciding with the Federal Reserve's first interest rate hike since 2023.

The bank's reduced guidance, citing intense competition for deposits and loans, raises concerns about potential margin pressure across the regional banking sector. Peers like Fifth Third also experienced stock declines on the same afternoon. While rate hikes eventually boost asset yields, immediate increases in deposit yields to retain balances typically squeeze net interest margins in the short term.

Despite the recent headwinds, Huntington Bancshares has demonstrated resilience. Since 2015, its loans have grown to $189 billion from $50 billion, and deposits have reached $222 billion. A significant growth engine, value-added fee income, has compounded at a 14% annual rate since mid-2024, with year-to-date growth near 32%. This fee income helps offset spread pressure and provides a competitive advantage.

The current higher-interest-rate environment presents a double-edged sword for commercial banks. While it drives up deposit expenses, it also expands loan yields as credit assets reprice. The ultimate impact on net interest margins depends on the bank's deposit beta, which measures how much of each benchmark rate increase is passed on to depositors. A lower deposit beta allows fee revenue to better support earnings.