Huntington takes $280M hit on Cadence deal accounting

• Supporting data: Huntington Bancshares said it expects to realize about $100 million of purchase accounting accretion in 2027, about $280 million less than its initial projection.
• What it means: Though the bank scaled back its 2027 earnings-per-share estimate, it said it will have more capital to work with up front.
• Expert quote: "There's a little bit of accounting … Put it aside. It doesn't matter. It all nets to zero at the end of the day, anyway." — Huntington CEO Steve Steinour

Huntington Bancshares says it overestimated by a wide margin the amount of money it will generate next year under an accounting mechanism tied to its just-completed purchase of Cadence Bank.

When Huntington announced the Cadence deal last October, the Columbus, Ohio-based purchaser projected $380 million in purchase accounting accretion for 2027. On Monday, Huntington scaled that target back to $100 million.

In comments at an investor conference on Tuesday, Huntington Chairman and CEO Steven Steinour said investors shouldn't let the variance trouble them.

"I think we've got a very exciting future," Steinour said in remarks at the UBS Financial Services Conference in Key Biscayne, Florida. "There's a little bit of accounting … Put it aside. It doesn't matter. It all nets to zero at the end of the day, anyway."

Huntington, which has $279 billion of assets, closed its $7.4 billion, all-stock purchase of Cadence on Feb. 2.

Ironically, the purchase accretion accounting revision — which prompted Huntington to downsize its estimate of 2027 earnings per share from $2 to between $1.90 and $1.93 — became necessary after Huntington realized the Cadence loan portfolio was more valuable than originally expected, according to Huntington Chief Financial Officer Zach Wasserman.

He explained Tuesday that estimates made during the due-diligence process for a deal are "more top-down," compared with the "more bottom-up" analysis that's done later on.

In the case of the Cadence deal, the later analysis resulted in a lower rate mark on the portfolio, Wasserman said at the UBS conference.

That revised estimate left less room for accretion, but it also burned up less capital in the required mark-to-market calculations. Indeed, estimated tangible-book-value-per-share dilution resulting from the Cadence transaction dropped from 7% to 4.8%.

"Lower discount, more capital up front," Wasserman said.

Analysts were divided over the impact of the new 2027 estimates, which came less than a month after Wasserman reiterated the $2 earnings-per-share projection for 2027. Huntington reported earnings-per-share of $1.39 in 2025.

Piper Sandler analyst Scott Siefers wrote Monday in a research note that it is "hard not to be disappointed that nearly half the originally expected 10% 2027 earnings-per-share accretion seems to have gone away within just a few months …"

Other analysts were more positive.

"We see potential for modest upside to guidance over time, supported by strong execution seen in 2025, which featured multiple beats and raises," wrote Jefferies analyst David Chiaverini. "Overall, we believe 2026 and 2027 guidance is achievable and may prove conservative."

"We see the long-term direction of travel on fundamentals as still very positive," wrote TD Cowen analyst Steven Alexopoulos.

Shares in Huntington were down by 2.26% late Tuesday afternoon, compared with a 1.10% drop in the KBW Nasdaq Bank Index.

Steinour argued that the furor over purchase accounting accretion does nothing to diminish the validity of Huntington's reasons for acquiring Cadence, which had headquarters in both Houston and Tupelo, Mississippi..

Those benefits include expanded scale in Texas and the Southeast, along with the ability to deliver Huntington's more sophisticated commercial, consumer and investment-banking capabilities across a bigger footprint.

"This is a home run transaction for us," Steinour said. He pointed to the deal's 4.8% tangible-book-value-per-share dilution and argued, "we'll earn it back in the same time frame, or shorter, as we get some of these revenue synergies into the equation."

Steinour also said Huntington remains well-positioned to deliver strong results in 2027 and beyond.

"We have meaningful density today, substantial opportunity ahead and every intention to further invest and accelerate growth," he said.

Prior to acquiring Cadence, Huntington purchased Dallas-based Veritex Holdings in a $1.9 billion deal that closed in October 2025.