Here's How Huntington Plans to Achieve Its 18-19% ROTCE Target by 2027

Image Source: Huntington Bancshares Incorporated

A major driver of the ROTCE expansion is expected to be stronger earnings generation. Huntington is targeting earnings per share (EPS) of $1.90-$1.93 for 2027, seeing a 6-9% compound annual growth rate in pre-provision net revenues. For 2026, management has outlined expectations for meaningful growth in both net interest income and non-interest income, creating a larger earnings base from which to generate attractive shareholder returns.

EPS Target

Image Source: Huntington Bancshares Incorporated

The integration of Veritex Holdings and Cadence Bank represents another important profitability lever. Huntington completed the Veritex systems conversion in January 2026 and completed the Cadence acquisition in February. These transactions significantly expanded the bank’s presence in Texas and the southern United States while providing opportunities to eliminate overlapping expenses and cross-sell Huntington’s broader product portfolio.

Management expects acquisition-related cost synergies to reach a $435 million annual run rate by 2027, while revenue synergies are expected to exceed a $300-million run rate by 2028. Such savings should allow revenues to grow faster than expenses, supporting margin and ROTCE expansion. Huntington is targeting 500-600 basis points of positive operating leverage during 2026 and expects its fourth-quarter 2026 efficiency ratio to approach 56%, or below 55% on an adjusted basis.

Recent results indicate that the strategy is gaining traction. Huntington reported 15.1% ROTCE in the second quarter of 2026, representing a substantial improvement from the 11.6% ROTCE reported in the first quarter. 

Finally, disciplined capital deployment should complement operating improvements. Huntington expects stronger tangible book value generation to expand its share-repurchase capacity, which can further improve per-share earnings and returns on equity. Overall, revenue growth, acquisition synergies, better operating efficiency and disciplined capital returns form the core of Huntington’s roadmap toward 18-19% ROTCE in 2027.

ROTCE Targets of Other Banks

Similar to Huntington, several leading banks, including Bank of America BAC and Citizens Financial CFG, have established medium-term ROTCE targets, supported by growth initiatives and operational improvements.

Citizens Financial expects return on average tangible common shareholders’ equity of 16-18% over the medium term. Citizens Financial expects to achieve this objective through the execution of its strategic initiatives, supported by anticipated net interest income tailwinds between 2025 and 2027.

Bank of America also aims to deliver a medium-term ROTCE of 16-18%. Bank of America’s strategy is underpinned by sustainable revenue growth, disciplined expense management and deeper client engagement, reinforcing a credible path toward achieving its profitability target.

HBAN’s Price Performance & Zacks Rank

Shares of the company have gained 6.9% in the past year compared with the industry’s rise of 8.9%.

Price Performance

Image Source: Zacks Investment Research

Huntington’s currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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