HUNTINGTON BANCSHARES INC /MD/ (HBAN) stock intrinsic value fair value estimate & owner earnings analysis

Huntington Bancshares is a Columbus, Ohio regional bank that gathers deposits and makes consumer, commercial and real-estate loans across the Midwest, and now across Texas and the South. It earns the spread between what it pays depositors and what it earns on loans and securities, plus fees from payments, wealth management and capital markets. The business changed shape twice in five months: Veritex Holdings (Dallas, $12.0 billion of assets) closed in October 2025, and Cadence Bank (Houston and Tupelo, $54 billion of assets, $37 billion of loans) closed on February 1, 2026 in an all-stock deal worth about $8.1 billion. Shares outstanding rose from about 1.45 billion at the end of 2024 to about 2.03 billion by March 2026, and loans are now roughly $187 billion. How we measure earnings. For a bank, the cash-flow statement adds back the whole provision for credit losses, while the loans that actually go bad leave through investing cash flows. We therefore start from operating cash flow, strip out timing swings (trading securities, loans held for sale, other assets and other liabilities), and then deduct share-based pay, the capital spending needed to maintain branches and systems, actual net charge-offs, the yearly amortization of affordable-housing tax-credit investments (funded through other assets), and preferred dividends. On that basis, owner earnings per share were $1.53 (2019), $1.33 (2020), $0.69 (2021, a year of reserve releases and TCF merger costs), $1.88 (2022, helped by a one-time swing in deferred taxes), $1.45 (2023), $1.40 (2024) and $1.37 (2025). Each year ties exactly to the filed cash-flow statement. We anchor on the 2019-2025 median of $1.40. That window covers the 2020 pandemic credit shock and a full swing in interest rates. Owner earnings per share fell about 2% in 2025, so the base case starts year one 2.2% lower, at about $1.37. The mergers. We have no filed full-year earnings for Cadence, so we do not assume the deals add to earnings per share. The check we can make is revenue per share: about $5.43 in 2025 and an annualized $5.41 in the first quarter of 2026, with Cadence included for two months. On that evidence, the larger bank earns about what the old one did per share. Management's cost-saving targets are not counted, because they have not yet been delivered. The new core-deposit intangibles are a wasting asset, but our anchor comes from years before these deals, so it gives no credit for their non-cash amortization. Debt. For a bank, deposits and borrowings are the raw material of the business, and interest is already deducted in the figures above. We therefore subtract no debt. The $2.9 billion of preferred stock that ranks ahead of common shareholders is charged through its dividends. Leverage is carried in the bear case instead. Base case ($23.82): Earnings start at about $1.37 a share and grow 1% a year for ten years, close to the roughly 1.2% a year that owner earnings per share have actually grown since 2016. We deduct the extra capital a bank must retain to grow its balance sheet (about 1% of roughly $9.50 of tangible common equity per share each year). After year ten, earnings stay flat at about $1.50. A deposit franchise that has operated since 1866 is the named reason they persist, but we credit no further growth. The business is worth $23.82 a share, it owes nothing beyond its banking liabilities, and the difference is $23.82. Bear case ($17.84): A recession in years two and three drives net charge-offs to about 1.5% of loans, compared with 0.23% in 2025 and 0.56% at the 2020 peak. That costs roughly $0.88 a share after tax in the worst year, on a book now concentrated in two new markets still being integrated. Huntington's own history shows how this ends for shareholders: in 2008-2010 it cut its dividend to a penny and more than doubled its share count to rebuild capital. We assume a 25% dilutive capital raise, after which earnings settle at about $1.12 a share and stay flat. The bear value is $17.84 a share, with nothing further subtracted. Bull case ($27.57): The Veritex and Cadence integrations go smoothly, and earnings start at $1.45, the median of 2022-2025. They then grow 3% a year for ten years, below the roughly 4.5% annual growth in net income per share from 2017 to 2025, and we deduct the capital retained to fund that growth. After year ten they stay flat at about $1.89. The bull value is $27.57 a share. What would make this wrong. The Cadence book in Texas and the Gulf South is new to Huntington, and its credit record under Huntington's ownership is less than a year old. A sharp drop in interest rates would squeeze the margin. Commercial real estate losses could run above the 2020 experience. On the upside, a successful integration could lift earnings per share well above the pre-merger level, and the bull case only partly credits that.