Huntington Bancshares: A Fortress in Turbulent Markets

The U.S. economy faces a precarious balancing act: near-term headwinds from trade tensions and interest rate volatility contrast with long-term structural strengths. Amid this uncertainty, Huntington Bancshares (HBAN) has emerged as a compelling example of a bank leveraging disciplined strategy and financial resilience to navigate choppy waters. Its strong Q1 2025 results, underpinned by robust loan growth, deposit cost discipline, and a conservative risk appetite, position it as a potential safe haven for investors seeking stability in a volatile sector. Here's why Huntington stands out.

Financial Resilience: Growth Without Compromise

Huntington's first-quarter performance underscored its ability to grow sustainably even as macro risks loom. Total loans rose 7.3% year-over-year to $130.9 billion, driven by strategic expansions in commercial lending and new markets. Notably, half of quarterly loan growth stemmed from initiatives like its Financial Institutions Group and Texas operations, showcasing management's success in diversifying revenue streams.

Deposits grew 7% annually to $161.6 billion, with costs declining 13 basis points to 2.03%—a testament to effective pricing strategies. This allowed the bank to self-fund loans while maintaining a net interest margin (NIM) of 3.10%, up 7 basis points sequentially.

The bank's conservative risk management further bolsters its resilience. Net charge-offs remained a meager 0.26%, and the allowance for loan losses sits at 1.87% of total loans—a prudent buffer against potential economic shocks. A CET1 ratio of 10.6% and a $1 billion share repurchase authorization reflect confidence in its capital strength.

Strategic Positioning: Diversification as a Shield

Huntington's geographic and sectoral diversification mitigates exposure to trade-related risks. Its core markets in the Midwest and Southeast, along with expansions into Texas and Carolinas, anchor its commercial lending growth. These regions are less dependent on export-heavy industries vulnerable to tariffs, instead benefiting from domestic infrastructure spending and a robust housing market.

Meanwhile, its foray into capital markets and wealth management—driven by talent hires like Chris Wood—has added high-margin fee income. Wealth management fees rose 15% year-over-year, while capital markets revenue surged 20%, diversifying revenue away from traditional lending.

The bank's hedging strategy, reducing interest rate sensitivity to “near neutral,” further insulates it from rate fluctuations. This contrasts with peers more exposed to rising rates or trade-sensitive sectors, positioning Huntington as a stable operator in all economic cycles.

Navigating Tariff Uncertainty

While tariffs and trade tensions dominate headlines, Huntington's focus on domestic lending and fee-based services limits direct exposure to cross-border trade. Its loan book is concentrated in sectors like commercial real estate and middle-market businesses, which rely more on U.S. demand.

Moreover, its deposit franchise—a key competitive advantage—ensures it can fund growth organically. With $11 billion in annual deposit growth, Huntington avoids costly external funding, a luxury many regional peers lack. This self-sufficiency allows it to maintain a disciplined approach to risk, avoiding aggressive lending in volatile markets.

Investment Thesis: A Value Play with Upside

Huntington's stock, trading at a P/E of 11.08, remains undervalued relative to its fundamentals. Its 55-year dividend streak and 13% annual growth in tangible book value signal a commitment to shareholder returns, amplified by its recent share repurchase plan.

The bank's 2025 guidance—5-7% loan growth, 4-6% fee revenue expansion, and a targeted CET1 ratio of 9-10%—supports this optimism. Even if tariffs weigh on broader financials, Huntington's diversified revenue streams and conservative underwriting should allow it to outperform peers.

Conclusion: A Bank Built for Volatility

Huntington Bancshares is a rare combination of growth and prudence. Its Q1 results highlight a bank that has mastered the art of expanding profitably while hedging against macro risks. For investors seeking stability in a turbulent market, HBAN offers a compelling mix of valuation, resilience, and long-term growth potential. As trade tensions and interest rates remain unpredictable, Huntington's fortress-like balance sheet and diversified earnings make it a standout play in regional banking.

Consider Huntington Bancshares as a core holding for investors prioritizing safety and steady returns in an uncertain economy.