Huntington CFO says loan growth is boosting profit as businesses proceed with ‘cautious optimism’ amid tariff uncertainty

Good morning. There’s increasing uncertainty surrounding tariffs. However, many small businesses and middle-market companies continue to seek growth opportunities.

Customers are showing resilience, said Zachary Wasserman, CFO of Huntington Bancshares Inc. (No. 375 on the Fortune 500), a $210 billion asset regional bank holding company headquartered in Columbus, Ohio. Huntington operates 968 branches in 13 states.

What he's hearing from clients is “cautious optimism” and, particularly on the business side, a lot of strong preparation to manage through an uncertain environment, Wasserman said. But for companies in industries with supply chains that are most exposed to the impact of tariffs, “there's more trepidation,” he added. 

Small businesses have less resilience in terms of their financial strength, so there’s somewhat more concern, Wasserman said. “Generally what we're seeing in sentiment and in words is not fully being reflected in activity,” he said. “We continue to see growth. We continue to see expansion."

The bank's loan pipeline, a projection of the likely closings of loans, grew by about 5% in the first two weeks of Q2. “That's an indication that there's still an expectation for expansion and for investment on the part of commercial customers,” he said. 

For Q1, Huntington reported on Thursday that net income was $527 million, marking a 26% increase year over year, while net interest income grew 11% year over year, due to strong loan and deposit growth. Average total loans increased 7% to $130.9 billion year over year. Commercial loans grew $2.2 billion or 3% from the prior quarter and 8% year over year to $5.8 billion.

For net interest income, Huntington increased its full-year 2025 guidance to a 5%-7% growth range, up from the previously stated 4%-6% range. In response to the earnings beat, its shares were up by 3% at market close on Thursday.

Opportunity amid uncertainty

During times of uncertainty, it’s critical to mitigate risk. But there's also an opportunity to innovate and create paths to future growth. “We generally operate from a position of opportunity,” Wasserman told me. 

In March 2023, three regional banks—Silicon Valley Bank (SVB), Signature Bank, and First Republic—failed in just a few days. It was triggered by SVB’s bank run, the biggest in more than a decade. It created a ripple effect across the financial industry. Global industry regulators had to step in to prevent the situation from affecting more regional banks.

But Hungtington saw the events of 2023 as an opportunity. When many banks pulled back due to liquidity, capital, or credit concerns, Huntington chose to invest for long-term growth, CEO Stephen Steinour said on Thursday’s earnings call. “We took share and accelerated new customer acquisition,” he explained. “We hired hundreds of talented bankers, added capabilities and expertise and executed very well.” This has prepared Huntington for the current uncertain times, Steinour said. “Those efforts are now helping us deliver leading deposit and loan growth,” he said. 

Huntington’s “risk appetite,” is defined as aggregate, moderate to low, Wasserman said. “It's designed to help us to live throughout an entire economic cycle,” he said. As CFO, I asked him what external factors he’ll be closely monitoring.

“I think the path of inflation and, therefore, interest rates is something we'll need to watch very carefully,” Wasserman said. “We need to see a resolution to some of the discussions around tariffs, which are uncertain at this point, and it's mainly the uncertainty that is causing some potential risk.”

Have a good weekend. See you on Monday.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com