Part III of this Form 10-K incorporates by reference certain information from the registrant’s definitive Proxy Statement for the 2020 Annual Shareholders’ Meeting.

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Consumer and Business Banking: The Consumer and Business Banking segment provides a wide array of financial products and services to consumer and small business customers including but not limited to checking accounts, savings accounts, money market accounts, certificates of deposit, investments, consumer loans, credit cards, and small business loans. Other financial services available to customers include mortgages, insurance, interest rate risk protection, foreign exchange, and treasury management. Huntington serves customers through our network of branches. In addition to our extensive branch network, customers can access Huntington through online banking, mobile banking, telephone banking, and ATMs.

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Commercial Banking: Through a relationship banking model, this segment provides a wide array of products and services to the middle market, large corporate, real estate and government public sector customers located primarily within our geographic footprint. The segment is divided into six business units: Middle Market/Asset Based Lending, Specialty Banking, Asset Finance, Capital Markets/Institutional Corporate Banking, Commercial Real Estate, and Treasury Management.

•	Vehicle Finance: Our products and services include providing financing to consumers for the purchase of automobiles, light-duty trucks, recreational vehicles, and marine craft at franchised and other select

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Regional Banking and The Huntington Private Client Group: Regional Banking and The Huntington Private Client Group is closely aligned with our regional banking markets. A fundamental point of differentiation is our commitment to be actively engaged within our local markets - building connections with community and business leaders and offering a uniquely personal experience delivered by colleagues working within those markets.

•	Treasury / Other: The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense.

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CET1 Risk-Based Capital Ratio, equal to the ratio of CET1 capital to risk-weighted assets. CET1 capital primarily includes common shareholders’ equity subject to certain regulatory adjustments and deductions, including goodwill, intangible assets, certain deferred tax assets, and AOCI. In July 2019, the FDIC, the Federal Reserve, and OCC issued final rules that simplify the capital treatment of mortgage servicing assets, deferred tax assets arising from temporary differences that an institution could not realize through net operating loss carrybacks, and investments in the capital of unconsolidated financial institutions, as well as simplify the recognition and calculation of minority interests that are includable in regulatory capital, for non-advanced approaches banking organizations, including Huntington and the Bank. Banking organizations may adopt these changes beginning on January 1, 2020, and are required to adopt them for the quarter beginning April 1, 2020. In addition, in December 2018, the U.S. federal banking agencies finalized rules that permits BHCs and banks to phase-in, which Huntington and the Bank have elected, the day-one retained earnings impact of the new CECL accounting rule over a period of three years for regulatory capital purposes. For further discussion of the new CECL accounting rule, see Note 2 of the Notes to Consolidated Financial Statements.

•	Tier 1 Risk-Based Capital Ratio, equal to the ratio of Tier 1 capital to risk-weighted assets. Tier 1 capital is primarily comprised of CET1 capital, perpetual preferred stock, and certain qualifying capital instruments.

•	Total Risk-Based Capital Ratio, equal to the ratio of total capital, including CET1 capital, Tier 1 capital, and Tier 2 capital, to risk-weighted assets. Tier 2 capital primarily includes qualifying subordinated debt and qualifying ALLL. Tier 2 capital also includes, among other things, certain trust preferred securities.

•	Tier 1 Leverage Ratio, equal to the ratio of Tier 1 capital to quarterly average assets (net of goodwill, certain other intangible assets, and certain other deductions).

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(1)	Reflects the fully phased-in capital conservation buffer of 2.5% applicable during 2019.

(2)	Reflects the well-capitalized standard applicable to Huntington under Federal Reserve Regulation Y and the well-capitalized standard applicable to the Bank.

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•	Credit risk, which is the risk of loss due to loan and lease customers or other counterparties not being able to meet their financial obligations under agreed upon terms;

•	Market risk, which occurs when fluctuations in interest rates impact earnings and capital. Financial impacts are realized through changes in the interest rates of balance sheet assets and liabilities (net interest margin) or directly through valuation changes of capitalized MSR and/or trading assets (noninterest income);

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Liquidity risk, which is the risk to current or anticipated earnings or capital arising from an inability to meet obligations when they come due. Liquidity risk includes the inability to access funding sources or manage fluctuations in funding levels. Liquidity risk also results from the failure to recognize or address changes in market conditions that affect our ability to liquidate assets quickly and with minimal loss in value;

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Operational risk, which is the risk of loss arising from inadequate or failed internal processes or systems, including information security breaches or cyberattacks, human errors or misconduct, or adverse external events. Operational losses result from internal fraud, external fraud, inadequate or inappropriate employment practices and workplace safety, failure to meet professional obligations involving customers, products, and business practices, damage to physical assets, business disruption and systems failures, and failures in execution, delivery, and process management;

•	Compliance risk, which exposes us to money penalties, enforcement actions, or other sanctions as a result of non-conformance with laws, rules, and regulations that apply to the financial services industry;

•	Strategic risk, which is defined as risk to current or anticipated earnings, capital, or enterprise value arising from adverse business decisions, improper implementation of business decisions or lack of responsiveness to industry / market changes; and

•	Reputation risk, which is the risk that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.

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•	A decrease in the demand for loans and other products and services offered by us;

•	A decrease in customer savings generally and in the demand for savings and investment products offered by us; and

•	An increase in the number of customers and counterparties who become delinquent, file for protection under bankruptcy laws, or default on their loans or other obligations to us.

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•	Adversely affect the interest rates paid or received on, the revenue and expenses associated with or the value of Huntington’s LIBOR-based assets and liabilities, which include certain variable rate loans, Huntington’s Series B preferred stock, certain of Huntington’s junior subordinated debentures, certain of the Bank’s senior notes and certain other securities or financial arrangements;

•	Adversely affect the interest rates paid or received on, the revenue and expenses associated with or the value of other securities or financial arrangements, given LIBOR’s role in determining market interest rates globally;

•	Prompt inquiries or other actions from regulators in respect of Huntington’s preparation and readiness for the replacement of LIBOR with an alternative reference rate; and

•	Result in disputes, litigation or other actions with counterparties regarding the interpretation and enforceability of certain fallback language in LIBOR-based contracts and securities.

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(1)	The reported shares were repurchased pursuant to Huntington’s publicly-announced share repurchase authorization.

(2)	The number shown represents, as of the end of each period, the approximate dollar value of Common Stock that may yet be purchased under publicly-announced share repurchase authorizations. The shares may be purchased, from time-to-time, depending on market conditions.

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(1)	Comparisons for presented periods are impacted by a number of factors. Refer to the “Significant Items” in the Discussion of Results of Operations for additional discussion regarding these key factors.

(2)	On an FTE basis assuming a 21% tax rate and a 35% tax rate for periods prior to January 1, 2018.

(3)	Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax.

(4)	Noninterest expense less amortization of intangibles divided by the sum of FTE net interest income and noninterest income excluding securities gains (Non-GAAP).

(5)	Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(6)	Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(7)

Tier 1 common equity, tangible equity, tangible common equity, and tangible assets are non-GAAP financial measures. Additionally, any ratios utilizing these financial measures are also non-GAAP. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. Other companies may calculate these financial measures differently.

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(1)	Comparisons for presented periods are impacted by a number of factors. Refer to “Significant Items” in the Discussion of Results of Operations.

(2)	On a fully-taxable equivalent (FTE) basis assuming a 21% tax rate and a 35% tax rate for the period prior to January 1, 2018.

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1.	Mergers and Acquisitions. Significant events relating to mergers and acquisitions, and the impacts of those events on our reported results, were as follows:

•	During 2017, $154 million of noninterest expense and $2 million of noninterest income was recorded related to the acquisition of FirstMerit. This resulted in a negative impact of $0.09 per common share in 2017.

2.	Federal tax reform-related tax benefit. Significant events relating to federal tax reform-related tax benefits, and the impacts of those events on our reported results, were as follows:

•	During 2017, $123 million of federal tax reform-related tax benefit was recorded as provision for income taxes. This resulted in a positive impact of $0.11 per common share in 2017.

(1)	Based upon the annual average outstanding diluted common shares.

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(1)	The change in interest income or expense due to both rate and volume has been allocated between the factors in proportion to the relationship of the absolute dollar amounts of the change in each.

(2)	Calculated assuming a 21% tax rate.

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(1)	FTE yields are calculated assuming a 21% tax rate and a 35% tax rate for periods prior to January 1, 2018.

(2)	Deposits in Federal Reserve Bank were treated as non-earning assets prior to 4Q 2018.

(3)	For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans.

(4)	Includes consumer certificates of deposit of $250,000 or more.

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(1)	FTE yields are calculated assuming a 21% tax rate and a 35% tax rate for the period prior to January 1, 2018.

(2)	Deposits in Federal Reserve Bank were treated as non-earning assets prior to 4Q 2018 and the associated interest income was not material.

(3)	For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans.

(4)	Includes consumer certificates of deposit of $250,000 or more.

(5)	Rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

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The Audit Committee oversees the integrity of the consolidated financial statements, including policies, procedures, and practices regarding the preparation of financial statements, the financial reporting process, disclosures, and internal control over financial reporting. The Audit Committee also provides assistance to the board in overseeing the internal audit division and the independent registered public accounting firm’s qualifications and independence; compliance with our Financial Code of Ethics for the chief executive officer and senior financial officers; and compliance with corporate securities trading policies.

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The Risk Oversight Committee (ROC) assists the board of directors in overseeing management of material risks, the approval and monitoring of the Company’s capital position and plan supporting our overall aggregate moderate-to-low risk profile, the risk governance structure, compliance with applicable laws and regulations, and determining adherence to the board’s stated risk appetite. The committee has oversight responsibility with respect to the full range of inherent risks: credit, market, liquidity, legal, compliance/regulatory, operational, strategic, and reputational. The ROC provides assistance to the Board in overseeing the credit review division. This committee also oversees our capital management and planning process, ensures that the amount and quality of capital are adequate in relation to expected and unexpected risks, and that our capital levels exceed “well-capitalized” requirements.

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The Technology Committee assists the board of directors in fulfilling its oversight responsibilities with respect to all technology, cyber security, and third-party risk management strategies and plans. The committee is charged with evaluating Huntington’s capability to properly perform all technology functions necessary for its business plan, including projected growth, technology capacity, planning, operational execution, product development, and management capacity. The committee provides oversight of technology investments and plans to drive efficiency as well as to meet defined standards for risk, information security, and redundancy. The Committee oversees the allocation of technology costs and ensures that they are understood by the board of directors. The Technology Committee monitors and evaluates innovation and technology trends that may affect the Company’s strategic plans, including monitoring of overall industry trends. The Technology Committee reviews and provides oversight of the Company’s continuity and disaster recovery planning and preparedness.

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(1)	Amounts include $3.7 billion and $3.6 billion of auto dealer services loans at December 31, 2019 and December 31, 2018, respectively.

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(1)	Other nonperforming assets include certain impaired investment securities and/or nonaccrual loans held-for-sale.

(2)	Nonperforming assets divided by the sum of loans and leases, other real estate owned, and other NPAs.

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(1)	Amounts include Huntington Technology Finance administrative lease delinquencies and accruing purchase impaired loans related to acquisitions.

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(1)	Percentages represent the percentage of each loan and lease category to total loans and leases.

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(1)	The policy limit for the -100 basis point scenario changed from -4.0%, which was in effect at December 31, 2018, to -2.0% as of September 30, 2019.

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(1)	Consists of FHLB and FRB restricted stock holding carried at par.

(2)	The average duration assumes a market driven prepayment rate on securities subject to prepayment.

(1)	Weighted average yields were calculated using amortized cost on a fully-taxable equivalent basis, assuming a 21% tax rate where applicable.

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(1)	December 31, 2018 includes $210 million of noninterest-bearing and $662 million of interesting bearing deposits classified as held-for-sale.

(2)	Includes consumer certificates of deposit of $250,000 or more.

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(1)	Amounts do not include associated interest payments.

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(1)	Other intangible assets are net of deferred tax liability.

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(1)	Other intangible assets are net of deferred tax liability.

(2)	Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability.

(3)	Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).

(4)	Presented on a FTE basis assuming a 21% tax rate.

(5)	Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(6)	Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(7)

Tangible equity, tangible common equity, and tangible assets are non-GAAP financial measures. Additionally, any ratios utilizing these financial measures are also non-GAAP. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. Other companies may calculate these financial measures differently.

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(1)	Weighted average diluted shares outstanding for the quarterly period ending March 31, 2018, includes the dilutive impact of the convertible preferred stock issued in April of 2008 until the date of conversion, February 22, 2018.

(2)	Other intangible assets are net of deferred tax.

(3)	Net income applicable to common shares excluding expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax.

(4)	Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).

(5)	Presented on a FTE basis assuming a 21% tax rate.

(6)	Tangible common equity (total common equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(7)	Tangible equity (total equity less goodwill and other intangible assets) divided by tangible assets (total assets less goodwill and other intangible assets). Other intangible assets are net of deferred tax.

(8)

Tangible equity, tangible common equity, and tangible assets are non-GAAP financial measures. Additionally, any ratios utilizing these financial measures are also non-GAAP. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. Other companies may calculate these financial measures differently.

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•	Tangible common equity to tangible assets,

•	Tangible equity to tangible assets, and

•	Tangible common equity to risk-weighted assets using Basel III definitions.

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(1)	Amounts represent loans for which Huntington has elected the fair value option. See Note 18.

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Nature of Operations — Huntington Bancshares Incorporated (Huntington or the Company) is a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), Huntington is engaged in providing full-service commercial, small business, consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. Huntington’s banking offices are located in Ohio, Illinois, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Select financial services and other activities are also conducted in various other states. International banking services are available through the headquarters office in Columbus, Ohio.

Basis of Presentation — The Consolidated Financial Statements include the accounts of Huntington and its majority-owned subsidiaries and are presented in accordance with GAAP. All intercompany transactions and balances are eliminated in consolidation. Entities in which Huntington holds a controlling financial interest are consolidated. For a voting interest entity, a controlling financial interest is generally where Huntington holds, directly or indirectly, more than 50 percent of the outstanding voting shares. For a variable interest entity (VIE), a controlling financial interest is where Huntington has the power to direct the activities of an entity that most significantly impact the entity’s economic performance and has an obligation to absorb losses or the right to receive benefits from the VIE. For consolidated entities where Huntington holds less than a 100% interest, Huntington recognizes non-controlling interest (included in shareholders’ equity) for the equity held by minority shareholders and non-controlling profit or loss (included in noninterest expense) for the portion of the entity’s earnings attributable to minority interests. Investments in companies that are not consolidated are accounted for using the equity method when Huntington has the ability to exert significant influence. Investments in nonmarketable equity securities for which Huntington does not have the ability to exert significant influence are generally accounted for using the cost method adjusted for change in observable prices. Investments in private investment partnerships that are accounted for under the equity method or the cost method are included in other assets and Huntington’s earnings in equity investments are included in other noninterest income. Investments accounted for under the cost and equity methods are periodically evaluated for impairment.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that significantly affect amounts reported in the Consolidated Financial Statements. Huntington utilizes processes that involve the use of significant estimates and the judgments of management in determining the amount of its allowance for credit losses, income taxes, as well as fair value measurements of investment securities, derivative instruments, goodwill, other intangible assets, pension assets and liabilities, short-term borrowings, mortgage servicing rights, and loans held for sale. As with any estimate, actual results could differ from those estimates.

For statements of cash flows purposes, cash and cash equivalents are defined as the sum of cash and due from banks and interest-bearing deposits at Federal Reserve Bank.

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Resale and Repurchase Agreements — Securities purchased under agreements to resell and securities sold under agreements to repurchase are treated as collateralized financing transactions and are recorded at the amounts at which the securities were acquired or sold plus accrued interest. The fair value of collateral either received from or provided to a third-party is monitored and additional collateral is obtained or requested to be returned to Huntington in accordance with the agreement.

Securities — Securities purchased with the intention of recognizing short-term profits or which are actively bought and sold are classified as trading account securities and reported at fair value. The unrealized gains or losses on trading account securities are recorded in other noninterest income, except for gains and losses on trading account securities used to economically hedge the fair value of MSRs, which are included in mortgage banking

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income. Debt securities purchased that Huntington has the positive intent and ability to hold to their maturity are classified as held-to-maturity securities. Held-to-maturity securities are recorded at amortized cost.  All other debt and equity securities are classified as available-for-sale securities and other securities, respectively. Unrealized gains or losses on available-for-sale securities are reported as a separate component of accumulated OCI in the Consolidated Statements of Changes in Shareholders’ Equity. Credit-related declines in the value of debt securities that are considered OTTI are recorded in noninterest income.

Huntington evaluates its investment securities portfolio on a quarterly basis for indicators of OTTI.  Huntington assesses whether OTTI has occurred when the fair value of a debt security is less than the amortized cost at the balance sheet date. Management reviews the amount of unrealized loss, the length of time the security has been in an unrealized loss position, the credit rating history, market trends of similar security classes, time remaining to maturity, and the source of both interest and principal payments to identify securities which could potentially be impaired.  For those debt securities that Huntington intends to sell or is more likely than not required to sell, before the recovery of their amortized cost bases, the difference between fair value and amortized cost is considered to be OTTI and is recognized in noninterest income. For those debt securities that Huntington does not intend to sell or is not more likely than not required to sell, prior to expected recovery of amortized cost bases, the credit portion of the OTTI is recognized in noninterest income while the noncredit portion is recognized in OCI. In determining the credit portion, Huntington uses a discounted cash flow analysis, which includes evaluating the timing and amount of the expected cash flows. Non-credit-related OTTI results from other factors, including increased liquidity spreads and higher interest rates. Presentation of OTTI is made in the Consolidated Statements of Income on a gross basis with a reduction for the amount of OTTI recognized in OCI.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). The carrying value plus any related accumulated OCI balance of sold securities is used to compute realized gains and losses. Interest on securities, including amortization of premiums and accretion of discounts using the effective interest method over the period to maturity, is included in interest income.

Non-marketable equity securities include stock held for membership and regulatory purposes, such as FHLB stock and FRB stock. These securities are accounted for at cost, evaluated for impairment, and are included in other securities. Other securities also include mutual funds and other marketable equity securities. These securities are carried at fair value, with changes in fair value recognized in other noninterest income.

Loans and Leases — Loans and direct financing leases for which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. Except for purchase credit impaired loans and loans for which the fair value option has been elected, loans and leases are carried at the principal amount outstanding, net of charge-offs, unamortized deferred loan origination fees and costs, premiums and discounts, and unearned income. Direct financing leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases. Interest income is accrued as earned using the interest method. Huntington defers the fees it receives from the origination of loans and leases, as well as the direct costs of those activities. Huntington also acquires loans at premiums and/or discounts to their contractual values. Huntington amortizes loan discounts, premiums, and net loan origination fees and costs over the contractual lives of the related loans using the effective interest method.

Troubled debt restructurings are loans for which the original contractual terms have been modified to provide a concession to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided are not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs. Modifications resulting in troubled debt restructurings may include changes to one or more terms of the loan, including but not limited to, a change in interest rate, an extension of the repayment period, a reduction in payment amount, and partial forgiveness or deferment of principal or accrued interest.

Impairment of the residual values of direct financing leases is evaluated quarterly, with impairment arising if the expected fair value is less than the carrying amount. Huntington assesses net investments in leases (including residual values) for impairment and recognizes impairment losses in accordance with the impairment guidance for financial instruments. As such, net investments in leases may be reduced by an allowance for credit losses, with changes recognized as provision expense.

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For leased equipment, the residual component of a direct financing lease represents the estimated fair value of the leased equipment at the end of the lease term. Huntington uses industry data, historical experience, and independent appraisals to establish these residual value estimates. Additional information regarding product life cycle, product upgrades, as well as insight into competing products are obtained through relationships with industry contacts and are factored into residual value estimates where applicable.

Loans Held for Sale — Loans in which Huntington does not have the intent and ability to hold for the foreseeable future are classified as loans held for sale. Loans held for sale are carried at (a) the lower of cost or fair value less costs to sell, or (b) fair value where the fair value option is elected. The fair value option is generally elected for mortgage loans originated with the intent to sell to facilitate hedging of the loans. The fair value of such loans is estimated based on the inputs that include prices of mortgage backed securities adjusted for other variables such as, interest rates, expected credit defaults and market discount rates. The adjusted value reflects the price we expect to receive from the sale of such loans.

Nonaccrual and Past Due Loans — Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date.

Any loan in any portfolio may be placed on nonaccrual status prior to the policies described below when collection of principal or interest is in doubt. When a borrower with debt is discharged in a Chapter 7 bankruptcy and the debt is not reaffirmed by the borrower, the loan is determined to be collateral dependent and placed on nonaccrual status, unless there is a co-borrower or the repayment is likely to occur based on objective evidence.

All classes within the C&I and CRE portfolios are placed on nonaccrual status at 90-days past due. First-lien home equity loans are placed on nonaccrual status at 150-days past due. Junior-lien home equity loans are placed on nonaccrual status at the earlier of 120-days past due or when the related first-lien loan has been identified as nonaccrual. Automobile, RV and marine and other consumer loans are placed on non-accrual, if not charged off, when the loan is 120-days past due. Residential mortgage loans are placed on nonaccrual status at 150-days past due, with the exception of residential mortgages guaranteed by government agencies which continue to accrue interest at the rate guaranteed by the government agency.

For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest income, to the extent it is recognized in the current year, is reversed and charged to interest income.

For all classes within all loan portfolios, cash receipts on NALs are applied against principal until the loan or lease has been collected in full, including the charged-off portion, after which time any additional cash receipts are recognized as interest income. However, for secured non-reaffirmed debt in a Chapter 7 bankruptcy, payments are applied to principal and interest when the borrower has demonstrated a capacity to continue payment of the debt and collection of the debt is reasonably assured. For unsecured non-reaffirmed debt in a Chapter 7 bankruptcy where the carrying value has been fully charged-off, payments are recorded as loan recoveries.

Within the C&I and CRE portfolios, the determination of a borrower’s ability to make the required principal and interest payments is based on an examination of the borrower’s current financial statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer loan portfolio, the determination of a borrower’s ability to make the required principal and interest payments is based on multiple factors, including number of days past due and, in some instances, an evaluation of the borrower’s financial condition. When, in management’s judgment, the borrower’s ability to make required principal and interest payments resumes and collectability is no longer in doubt, supported by sustained repayment history, the loan is returned to accrual status. For loans that are returned to accrual status, cash receipts are applied according to the contractual terms of the loan.

Allowance for Credit Losses — Huntington maintains two reserves, both of which reflect management’s judgment regarding the appropriate level necessary to absorb credit losses inherent in our loan and lease portfolio: the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases, consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous loans and leases, all of which may be susceptible to change.

The appropriateness of the ACL is based on management’s current judgments about the credit quality of the loan portfolio. These judgments consider on-going evaluations of the loan and lease portfolio, including such factors

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as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. Further, management evaluates the impact of changes in interest rates and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date.

The ALLL consists of two components: (1) the transaction reserve and (2) the general reserve. The transaction reserve component includes both (1) an estimate of loss based on pools of commercial and consumer loans and leases with similar characteristics and (2) an estimate of loss based on an impairment review of each impaired C&I and CRE loan where obligor balance is greater than $1 million. For the C&I and CRE portfolios, the estimate of loss based on pools of loans and leases with similar characteristics is made by applying PD and LGD factors to each individual loan based on a regularly updated loan grade, using a standardized loan grading system. The PD and LGD factors are determined for each loan grade using statistical models based on historical performance data. The PD factor considers on-going reviews of the financial performance of the specific borrower, including cash flow, debt-service coverage ratio, earnings power, debt level, and equity position, in conjunction with an assessment of the borrower’s industry and future prospects. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. These reserve factors are developed based on credit migration models that track historical movements of loans between loan ratings over time and a combination of long-term average loss experience of our own portfolio and external industry data.

In the case of more homogeneous portfolios, such as automobile loans, home equity loans, and residential mortgage loans, the determination of the transaction reserve also incorporates PD and LGD factors. The estimate of loss is based on pools of loans and leases with similar characteristics. The PD factor considers current credit scores unless the account is delinquent, in which case a higher PD factor is used driven by the associated delinquency status. The credit score provides a basis for understanding the borrower’s past and current payment performance, and this information is used to estimate expected losses over the loss emergence period. The performance of first-lien loans ahead of our junior-lien loans is available to use as part of our updated score process. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. Credit scores, models, analyses, and other factors used to determine both the PD and LGD factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as required.

The general reserve consists of various risk-profile reserve components. The risk-profile components consider items unique to our structure, policies, processes, and portfolio composition, as well as qualitative measurements and assessments of the loan portfolios including, but not limited to, concentrations, portfolio composition, industry comparisons, and internal review functions.

The estimate for the AULC is determined using the same procedures and methodologies as used for the ALLL. The loss factors used in the AULC are the same as the loss factors used in the ALLL while also considering historical utilization of unused commitments. The AULC is recorded in other liabilities in the Consolidated Balance Sheets.

Charge-off of Uncollectible Loans — Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment. Additionally, discharged, collateral dependent non-reaffirmed debt in Chapter 7 bankruptcy filings will result in a charge-off to estimated collateral value, less anticipated selling costs, unless the repayment is likely to occur based on objective evidence.

C&I and CRE loans are generally either charged-off or written down to net realizable value at 90-days past due. Automobile, RV and marine and other consumer loans are generally charged-off at 120-days past due. First-lien and junior-lien home equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the collateral at 150-days past due.

Impaired Loans — For all classes within the C&I and CRE portfolios, loans with an obligor balance of $1 million or greater are evaluated on a quarterly basis for impairment. Except for TDRs, consumer loans within any class are

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generally not individually evaluated on a regular basis for impairment. All TDRs, regardless of the outstanding balance amount, are also considered to be impaired.

Once a loan has been identified for an assessment of impairment, the loan is considered impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. This determination requires significant judgment and use of estimates, and the eventual outcome may differ significantly from those estimates.

When a loan in any class has been determined to be impaired, the amount of the impairment is measured using the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the observable market price of the loan, or the fair value of the collateral, less anticipated selling costs, if the loan is collateral dependent. A specific reserve is established as a component of the ALLL when a loan has been determined to be impaired. Subsequent to the initial measurement of impairment, if there is a significant change to the impaired loan’s expected future cash flows, or if actual cash flows are significantly different from the cash flows previously estimated, Huntington recalculates the impairment and appropriately adjusts the specific reserve. Similarly, if Huntington measures impairment based on the observable market price of an impaired loan or the fair value of the collateral of an impaired collateral dependent loan, Huntington will adjust the specific reserve as appropriate.

When a loan within any class is impaired, the accrual of interest income is discontinued unless the receipt of principal and interest is no longer in doubt. Interest income on TDRs is accrued when all principal and interest is expected to be collected under the post-modification terms. Cash receipts on nonaccruing impaired loans within any class are generally applied entirely against principal until the loan has been collected in full (including any portion charged-off) or the loan is deemed current, after which time any additional cash receipts are recognized as interest income. Cash receipts on accruing impaired loans within any class are applied in the same manner as accruing loans that are not considered impaired.

Collateral — We pledge assets as collateral as required for various transactions including security repurchase agreements, public deposits, loan notes, derivative financial instruments, short-term borrowings and long-term borrowings. Assets that have been pledged as collateral, including those that can be sold or repledged by the secured party, continue to be reported on our Consolidated Balance Sheets.

We also accept collateral, primarily as part of various transactions including derivative instruments and security resale agreements. Collateral accepted by us is excluded from our Consolidated Balance Sheets.

The market value of collateral we have accepted or pledged is regularly monitored and additional collateral is obtained or provided as necessary to ensure appropriate collateral coverage in these transactions.

Premises and Equipment — Premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed principally by the straight-line method over the estimated useful lives of the related assets. Buildings and building improvements are depreciated over an average of 30 to 40 years and 10 to 30 years, respectively. Land improvements and furniture and fixtures are depreciated over an average of 5 to 20 years, while equipment is depreciated over a range of 3 to 10 years. Leasehold improvements are amortized over the lesser of the asset’s useful life or the lease term, including any renewal periods for which renewal is reasonably assured. Maintenance and repairs are charged to expense as incurred, while improvements that extend the useful life of an asset are capitalized and depreciated over the remaining useful life. Amounts in premises and equipment may include items classified as held-for-sale, which are carried at lower of cost or fair value, less costs to sell. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Mortgage Servicing Rights — Huntington recognizes the rights to service mortgage loans as an asset when servicing is contractually separated from the underlying mortgage loans by sale or securitization of the loans with servicing rights retained or when purchased. MSRs are included in servicing rights and other intangible assets in the Consolidated Balance Sheets.

For loan sales with servicing retained, a servicing asset is recorded on the day of the sale, at fair value, for the right to service the loans sold. To determine the fair value of a MSR, Huntington uses an option adjusted spread cash flow analysis incorporating market implied forward interest rates to estimate the future direction of mortgage and

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market interest rates. The forward rates utilized are derived from the current yield curve for U.S. dollar interest rate swaps and are consistent with pricing of capital markets instruments. The current and projected mortgage interest rate influences the prepayment rate and, therefore, the timing and magnitude of the cash flows associated with the MSR. Servicing revenues on mortgage loans are included in mortgage banking income.

At the time of initial capitalization, MSRs may be grouped into servicing classes based on the availability of market inputs used in determining fair value and the method used for managing the risks of the servicing assets. MSR assets are recorded using the fair value method or the amortization method. The election of the fair value or amortization method is made at the time each servicing class is established. All newly created MSRs since 2009 were recorded using the amortization method. Any change in the fair value of MSRs carried under the fair value method, as well as amortization and impairment of MSRs under the amortization method, during the period is recorded in mortgage banking income. Huntington economically hedges the value of certain MSRs using derivative instruments and trading securities. Changes in fair value of these derivatives and trading securities are reported as a component of mortgage banking income.

Goodwill and Other Intangible Assets — Under the acquisition method of accounting, the net assets of entities acquired by Huntington are recorded at their estimated fair value at the date of acquisition. The excess cost of consideration paid over the fair value of net assets acquired is recorded as goodwill. Other intangible assets with finite useful lives are amortized either on an accelerated or straight-line basis over their estimated useful lives. Goodwill is evaluated for impairment on an annual basis at October 1^st of each year or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Derivative Financial Instruments — A variety of derivative financial instruments, principally interest rate swaps, caps, floors, and collars, are used in asset and liability management activities to protect against the risk of adverse price or interest rate movements. These instruments provide flexibility in adjusting Huntington’s sensitivity to changes in interest rates without exposure to loss of principal and higher funding requirements.

Huntington also uses derivatives, principally loan sale commitments, in hedging its mortgage loan interest rate lock commitments and its mortgage loans held for sale. Mortgage loan sale commitments and the related interest rate lock commitments are carried at fair value on the Consolidated Balance Sheets with changes in fair value reflected in mortgage banking income. Huntington also uses certain derivative financial instruments to offset changes in value of its MSRs. These derivatives consist primarily of forward interest rate agreements and forward mortgage contracts. The derivative instruments used are not designated as qualifying hedges. Accordingly, such derivatives are recorded at fair value with changes in fair value reflected in mortgage banking income.

Derivative financial instruments are recorded in the Consolidated Balance Sheets as either an asset or a liability (in other assets and other liabilities, respectively) and measured at fair value. On the date a derivative contract is entered into, we designate it as either:

•	a qualifying hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge);

•	a qualifying hedge of the variability of cash flows to be received or paid related to a recognized asset, liability or forecasted transaction (cash flow hedge); or

•	a trading instrument or a non-qualifying (economic) hedge.

Changes in the fair value of a derivative that has been designated and qualifies as a fair value hedge, along with the changes in the fair value of the hedged asset or liability that is attributable to the hedged risk, are recorded in current period earnings. Changes in the fair value of a derivative that has been designated and qualifies as a cash flow hedge are recorded in other comprehensive income, net of income taxes, and reclassified into earnings in the period during which the hedged item affects earnings. Changes in the fair value of derivatives held for trading purposes or which do not qualify for hedge accounting are reported in current period earnings.

For those derivatives to which hedge accounting is applied, Huntington formally documents the hedging relationship and the risk management objective and strategy for undertaking the hedge. This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged, and, unless the hedge meets all of the criteria to assume there is no ineffectiveness, the method that will be used to assess the

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effectiveness of the hedging instrument. The methods utilized to assess retrospective hedge effectiveness, as well as the frequency of testing, vary based on the type of item being hedged and the designated hedge period. For specifically designated fair value hedges of certain fixed-rate debt, Huntington utilizes the short-cut method when certain criteria are met. For other fair value hedges of fixed-rate debt, Huntington utilizes the regression method to evaluate hedge effectiveness on a quarterly basis.

Hedge accounting is discontinued prospectively when:

•	the derivative is no longer effective or expected to be effective in offsetting changes in the fair value or cash flows of a hedged item (including firm commitments or forecasted transactions);

•	the derivative expires or is sold, terminated, or exercised;

•	the forecasted transaction is no longer probable of occurring;

•	the hedged firm commitment no longer meets the definition of a firm commitment; or

•	the designation of the derivative as a hedging instrument is removed.

When hedge accounting is discontinued and the derivative no longer qualifies as an effective fair value or cash flow hedge, the derivative continues to be carried on the balance sheet at fair value.

In the case of a discontinued fair value hedge of a recognized asset or liability, as long as the hedged item continues to exist on the balance sheet, the hedged item will no longer be adjusted for changes in fair value. The basis adjustment that had previously been recorded to the hedged item during the period from the hedge designation date to the hedge discontinuation date is recognized as an adjustment to the yield of the hedged item over the remaining life of the hedged item.

In the case of a discontinued cash flow hedge of a recognized asset or liability, as long as the hedged item continues to exist on the balance sheet, the changes in fair value of the hedging derivative will no longer be recorded to other comprehensive income. The balance applicable to the discontinued hedging relationship will be recognized in earnings over the remaining life of the hedged item as an adjustment to yield. If the discontinued hedged item was a forecasted transaction that is not expected to occur, any amounts recorded in accumulated other comprehensive income are immediately reclassified to current period earnings.

In the case of either a fair value hedge or a cash flow hedge, if the previously hedged item is sold or extinguished, the basis adjustment to the underlying asset or liability or any remaining unamortized AOCI balance will be recognized in the current period earnings.

In all other situations in which hedge accounting is discontinued, the derivative will be carried at fair value on the consolidated balance sheets, with changes in its fair value recognized in current period earnings unless re-designated as a qualifying hedge.

Like other financial instruments, derivatives contain an element of credit risk, which is the possibility that Huntington will incur a loss because the counterparty fails to meet its contractual obligations. Notional values of interest rate swaps and other off-balance sheet financial instruments significantly exceed the credit risk associated with these instruments and represent contractual balances on which calculations of amounts to be exchanged are based. Credit exposure is limited to the sum of the aggregate fair value of positions that have become favorable to Huntington, including any accrued interest receivable due from counterparties. Potential credit losses are mitigated through careful evaluation of counterparty credit standing, selection of counterparties from a limited group of high quality institutions, collateral agreements, and other contract provisions. Huntington considers the value of collateral held and collateral provided in determining the net carrying value of derivatives.

Huntington offsets the fair value amounts recognized for derivative instruments and the fair value for the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instrument(s) recognized at fair value executed with the same counterparty under a master netting arrangement.

Fair Value Measurements — The Company records or discloses certain of its assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are classified within one of three levels in a valuation hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

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•	Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•	Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•	Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Bank Owned Life Insurance — Huntington’s bank owned life insurance policies are recorded at their cash surrender value. Huntington recognizes tax-exempt income from the periodic increases in the cash surrender value of these policies and from death benefits.  A portion of the cash surrender value is supported by holdings in separate accounts.  Book value protection for the separate accounts is provided by the insurance carriers and a highly rated major bank.

Transfers of Financial Assets and Securitizations — Transfers of financial assets in which we have surrendered control over the transferred assets are accounted for as sales. In assessing whether control has been surrendered, we consider whether the transferee would be a consolidated affiliate, the existence and extent of any continuing involvement in the transferred financial assets, and the impact of all arrangements or agreements made contemporaneously with, or in contemplation of, the transfer, even if they were not entered into at the time of transfer. Control is generally considered to have been surrendered when (i) the transferred assets have been legally isolated from us or any of our consolidated affiliates, even in bankruptcy or other receivership, (ii) the transferee (or, if the transferee is an entity whose sole purpose is to engage in securitization or asset-backed financing that is constrained from pledging or exchanging the assets it receives, each third-party holder of its beneficial interests) has the right to pledge or exchange the assets (or beneficial interests) it received without any constraints that provide more than a trivial benefit to us, and (iii) neither we nor our consolidated affiliates and agents have (a) both the right and obligation under any agreement to repurchase or redeem the transferred assets before their maturity, (b) the unilateral ability to cause the holder to return specific financial assets that also provides us with a more-than-trivial benefit (other than through a cleanup call) or (c) an agreement that permits the transferee to require us to repurchase the transferred assets at a price so favorable that it is probable that it will require us to repurchase them.

If the sale criteria are met, the transferred financial assets are removed from our balance sheet and a gain or loss on sale is recognized. If the sale criteria are not met, the transfer is recorded as a secured borrowing in which the assets remain on our balance sheet and the proceeds from the transaction are recognized as a liability. For the majority of financial asset transfers, it is clear whether or not we have surrendered control. For other transfers, such as in the case of complex transactions or where we have continuing involvement, we generally obtain a legal opinion as to whether the transfer results in a true sale by law.

Gains and losses on the loans and leases sold and servicing rights associated with loan and lease sales are determined when the related loans or leases are sold to either a securitization trust or third-party. For loan or lease sales with servicing retained, a servicing asset is recorded at fair value for the right to service the loans sold.

Pension and Other Postretirement Benefits — Huntington recognizes the funded status of the postretirement benefit plans on the Consolidated Balance Sheets. Net postretirement benefit cost charged to current earnings related to these plans is predominantly based on various actuarial assumptions regarding expected future experience.

Certain employees are participants in various defined contribution and other non-qualified supplemental retirement plans. Contributions to defined contribution plans are charged to current earnings.

In addition, we maintain a 401(k) plan covering substantially all employees. Employer contributions to the plan are charged to current earnings.

Noninterest Income — Huntington recognizes revenue when the performance obligations related to the transfer of goods or services under the terms of a contract are satisfied. Some obligations are satisfied at a point in

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time while others are satisfied over a period of time. Revenue is recognized as the amount of consideration to which Huntington expects to be entitled to in exchange for transferring goods or services to a customer. When consideration includes a variable component, the amount of consideration attributable to variability is included in the transaction price only to the extent it is probable that significant revenue recognized will not be reversed when uncertainty associated with the variable consideration is subsequently resolved. Generally, the variability relating to the consideration is explicitly stated in the contracts, but may also arise from Huntington’s customer business practices, for example, waiving certain fees related to customer’s deposit accounts such as NSF fees. Huntington’s contracts generally do not contain terms that require significant judgement to determine the variability impacting the transaction price.

Revenue is segregated based on the nature of product and services offered as part of contractual arrangements. Revenue from contracts with customers is broadly segregated as follows:

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Service charges on deposit accounts include fees and other charges Huntington receives to provide various services, including but not limited to, maintaining an account with a customer, providing overdraft services, wire transfer, transferring funds, and accepting and executing stop-payment orders. The consideration includes both fixed (e.g., account maintenance fee) and transaction fees (e.g., wire-transfer fee). The fixed fee is recognized over a period of time while the transaction fee is recognized when a specific service (e.g., execution of wire-transfer) is rendered to the customer. Huntington may, from time to time, waive certain fees (e.g., NSF fee) for customers but generally does not reduce the transaction price to reflect variability for future reversals due to the insignificance of the amounts. Waiver of fees reduces the revenue in the period the waiver is granted to the customer.

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Card and payment processing income includes interchange fees earned on debit cards and credit cards. All other fees (e.g., annual fees), and interest income are recognized in accordance with ASC 310. Huntington recognizes interchange fees for services performed related to authorization and settlement of a cardholder’s transaction with a merchant. Revenue is recognized when a cardholder’s transaction is approved and settled.

Certain volume or transaction based interchange expenses (net of rebates) paid to the payment network reduce the interchange revenue and are presented net on the income statement. Similarly, rewards payable under a reward program to cardholders are recognized as a reduction of the transaction price and are presented net against the interchange revenue.

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Trust and investment management services includes fee income generated from personal, corporate and institutional customers. Huntington also provides investment management services, cash management services and tax reporting to customers. Services are rendered over a period of time, over which revenue is recognized. Huntington may also recognize revenue from referring a customer to outside third-parties including mutual fund companies that pay distribution (12b-1) fees and other expenses. 12b-1 fees are received upon initially placing account holder’s funds with a mutual fund company as well as in the future periods as long as the account holder (i.e., the fund investor), remains invested in the fund. The transaction price includes variable consideration which is considered constrained as it is not probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur. Accordingly, those fees are recognized as revenue when the uncertainty associated with the variable consideration is subsequently resolved, that is, initial fees are recognized in the initial period while the future fees are recognized in future periods.

•

Insurance income includes agency commissions that are recognized when Huntington sells insurance policies to customers. Huntington is also entitled to renewal commissions and, in some cases, profit sharing which are recognized in subsequent periods. The initial commission is recognized when the insurance policy is sold to a customer. Renewal commission is variable consideration and is recognized in subsequent periods when the uncertainty around variable consideration is subsequently resolved (i.e., when customer renews the policy). Profit sharing is also a variable consideration that is not recognized until the variability surrounding realization of revenue is resolved (i.e., Huntington has reached a minimum volume of sales). Another source of variability is the ability of the policy holder to cancel the policy anytime. In such cases, Huntington may be required, under the terms of the contract, to return part of the commission received. A policy cancellation reserve is established for such expected cancellations.

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•	Other noninterest income includes a variety of other revenue streams including capital markets revenue, miscellaneous consumer fees and marketing allowance revenue. Revenue is recognized when, or as, a performance obligation is satisfied. Inherent variability in the transaction price is not recognized until the uncertainty affecting the variability is resolved.

Control is transferred to a customer either at a point in time or over time. A performance obligation is deemed satisfied when the control over goods or services is transferred to the customer. To determine when control is transferred at a point in time, Huntington considers indicators, including but not limited to the right to payment for the asset, transfer of significant risk and rewards of ownership of the asset and acceptance of the asset by the customer.

Revenue is recorded in the business segment responsible for the related product or service. Fee sharing arrangements exist to allocate portions of such revenue to other business segments involved in selling to, or providing service to, customers. Business segment results are determined based upon management’s reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around Huntington’s organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions.

Income Taxes — Income taxes are accounted for under the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future book and tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are determined using enacted tax rates expected to apply in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income at the time of enactment of such change in tax rates.

Any interest or penalties due for payment of income taxes are included in the provision for income taxes. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is recorded. All positive and negative evidence is reviewed when determining how much of a valuation allowance is recognized on a quarterly basis. In determining the requirements for a valuation allowance, sources of possible taxable income are evaluated including future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in appropriate carryback years, and tax-planning strategies. Huntington applies a more likely than not recognition threshold for all tax uncertainties.

Share-Based Compensation — Huntington uses the fair value based method of accounting for awards of HBAN stock granted to employees under various share-based compensation plans. Share-based compensation costs are recognized prospectively for all new awards granted under these plans. Compensation expense relating to stock options is calculated using a methodology that is based on the underlying assumptions of the Black-Scholes option pricing model and is charged to expense over the requisite service period (e.g., vesting period). Compensation expense relating to restricted stock awards is based upon the fair value of the awards on the date of grant and is charged to earnings over the requisite service period (e.g., vesting period) of the award.

Stock Repurchases — Acquisitions of Huntington stock are recorded at cost.

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Accounting standards adopted in current period

Standard	Summary of guidance	Effects on financial statements
ASU 2016-02 - Leases. Issued February 2016	- New lease accounting model for lessees and lessors. For lessees, virtually all leases will be required to be recognized on the balance sheet by recording a right-of-use asset and lease liability. Subsequent accounting for leases varies depending on whether the lease is classified as an operating lease or a finance lease. - Accounting applied by a lessor is largely unchanged from that applied under previous guidance. - Requires additional qualitative and quantitative disclosures with the objective of enabling users of the financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.	-  Management adopted the guidance on January 1, 2019, and elected certain practical expedients offered by the FASB, including foregoing the restatement of comparative periods upon adoption. Management also excluded short-term leases from the recognition of right-of-use asset and lease liabilities. Additionally, Huntington elected the transition relief allowed by FASB in foregoing reassessment of the following: whether any existing contracts were or contained leases, the classification of existing leases, and the determination of initial direct costs for existing leases. - Huntington recognized right-of-use assets of approximately $200 million and lease liabilities of approximately $250 million upon adoption, representing substantially all of its operating lease commitments, with the difference attributable to transition adjustments required by ASC Topic 842 relating to previously recognized amounts for deferred rent and lease exit costs (recorded pursuant to ASC Topic 420). Right-of-use assets and lease liabilities were based, primarily, on the present value of unpaid future minimum lease payments. Additionally, the amounts were impacted by assumptions around renewals and/or extensions, and the interest rate used to discount those future lease obligations. Impact to the income statement was not material in the period of adoption. - Existing sale and leaseback guidance, including the detailed guidance applicable to sale-leasebacks of real estate, was replaced with a new model applicable to all assets, which will apply equally to both lessees and lessors. Under the ASU, if the transaction meets sale criteria, the seller-lessee will recognize the sale based on the new revenue recognition guidance (when control transfers to the buyer-lessor), derecognizing the asset sold and replacing it with a right-of-use asset and lease liability for the leaseback. If the transaction is at fair value, the seller-lessee shall recognize a gain or loss on sale at that time. - Costs related to exiting an operating lease before the end of its contractual term have been historically accounted for pursuant to ASC Topic 420, with the recognition of a liability measured at the present value of remaining lease payments reduced by any expected sublease income upon the exit of that space. ASC Topic 842 changes the accounting for such costs, with entities evaluating the impairment of right-of-use assets using the guidance in ASC Topic 360. Such an impairment analysis would occur once the entity commits to a plan to abandon the space, which may accelerate the timing of these costs. - The guidance defines initial direct costs as those that would not have been incurred if the lease had not been obtained. Certain incremental costs previously eligible for capitalization, such as internal overhead, will now be expensed.
ASU 2017-04 - Simplifying the Test for Goodwill Impairment. Issued January 2017	- Simplifies the goodwill impairment test by eliminating Step 2 of the goodwill impairment process, which requires an entity to determine the implied fair value of its goodwill by assigning fair value to all its assets and liabilities. - Entities will instead recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. - Entities will still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary.	- Effective for annual and interim goodwill tests performed in fiscal years beginning after December 15, 2019. Early adoption is permitted. - The guidance was adopted in the current period and did not have an impact on Huntington's Consolidated Financial Statements.

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Standard	Summary of guidance	Effects on financial statements
ASU 2018-16 - Derivatives and Hedging - Inclusion of SOFR as Benchmark Interest Rate for Hedge Accounting Purposes. Issued October 2018	- Permits use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815 in addition to the U.S. Treasury, the LIBOR swap rate, the OIS rate based on the Fed Funds Effective Rate, and the SIFMA Municipal Swap Rate.	- The guidance was adopted in the current period and did not have a material impact on Huntington's Consolidated Financial Statements.
ASU 2018-20 - Narrow-Scope Improvements for Lessors Issued December 2018	- The ASU creates a lessor practical expedient applicable to sales and other similar taxes incurred in connection with a lease, and simplifies lessor accounting for lessor costs paid by the lessee. - Permits lessors, as an entity-wide accounting policy election, to present sales and other similar taxes that arise from a specific leasing transaction on a net basis. - Requires lessors to present lessor costs paid by the lessee directly to a third party on a net basis – regardless of whether the lessor knows, can determine or can reliably estimate those costs. - Requires lessors to present lessor costs paid by the lessee to the lessor (e.g. through direct reimbursement or as part of the fixed lease payments) on a gross basis	- Huntington elected to present sales and other similar taxes that arise from specific leasing transactions, when paid by the lessee directly to a third party, on a net basis. - Management will present property taxes on a gross basis where such taxes are paid by Huntington and reimbursed by the lessee, and has assessed the impact of that change to Huntington’s consolidated financial statements. - Huntington adopted the guidance concurrent with the adoption of ASU 2016-02 on January 1, 2019. The ASU did not have a material impact on Huntington's Consolidated Financial Statements.
ASU 2019-01 - Leases (ASC Topic 842): Codification Improvements Issued: March 2019	- Notes that lessors that are not manufacturers or dealers will apply the fair value exception in a manner similar to what they did prior to the implementation of ASC Topic 842. - Clarifies that lessors in the scope of ASC Topic 942 (Financial Services - Depository & Lending) must classify principal payments received from sales-type and direct financing leases in investing activities in the statement of cash flows. - Eliminates certain interim transition disclosure requirements related to the effect of an accounting change on certain interim period financial information.	- The ASU relating to lessor accounting is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. - Huntington adopted the guidance effective January 1, 2019. The ASU did not have a material impact on Huntington's Consolidated Financial Statements.

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Accounting standards yet to be adopted

Standard	Summary of guidance	Effects on financial statements
ASU 2016-13 - Financial Instruments - Credit Losses. Issued June 2016	- Eliminates the probable recognition threshold for credit losses on financial assets measured at amortized cost, replacing the current incurred loss framework with an expected credit loss model. - Requires those financial assets subject to the new guidance to be presented at the net amount expected to be collected (i.e., net of expected credit losses). - Measurement of expected credit losses should be based on relevant information including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. - The guidance will require additional quantitative and qualitative disclosures related to the credit risk inherent in Huntington’s portfolio and how management monitors the portfolio’s credit quality.	- Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. - Adoption will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. - Management adopted the guidance on January 1, 2020 and implemented changes to relevant systems, processes, and controls where necessary. - Huntington has completed the process of developing credit models with model implementation and validation completed during the fourth quarter of 2019. In addition, management is in the final stages of implementing the accounting, reporting, and governance processes to comply with the new guidance. - Based on the portfolio composition as of December 31, 2019, the adoption of CECL resulted in an increase to our total ACL of approximately $393 million. The estimated ACL of $1,280 million as of January 1, 2020 represents an increase of approximately 44% from the 2019 year end ACL level of $887 million. The increase in the allowance is largely attributable to the consumer portfolio, given the longer asset duration associated with many of these products, and the use of multiple economic scenarios when determining the Bank’s economic forecast. - The ASU eliminates the current accounting model for purchased-credit-impaired loans, but requires an allowance to be recognized for purchased-credit-deteriorated (PCD) assets (those that have experienced more-than-insignificant deterioration in credit quality since origination). Huntington did not have any loans accounted for as PCD upon adoption. - At adoption, Huntington did not record an allowance with respect to HTM securities as the portfolio consists almost entirely of agency-backed securities that inherently have minimal nonpayment risk.

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ASU 2019-04 - Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Issued: April 2019	- Clarifies various implementation issues related to Recognition and Measurement of Financial Instruments (ASC Topic 825), Current Expected Credit Losses (ASC Topic 326) and Derivatives and Hedging (ASC Topic 815).  - Provides additional implementation guidance on CECL issues that include, among others, (a) measurement of credit allowance on accrued interest; (b) treatment of credit allowance upon transfers between classifications or categories for loans and debt securities; (c) inclusion of recoveries in determining credit allowance amounts; (d) using projections of rate change for variable rate instruments; (e) vintage disclosures for lines-of-credit; (f) contractual extensions and renewals; (g) consideration of prepayments in calculating effective interest rate; and (h) consideration of costs to sell if the entity intends to sell the collateral when foreclosure is probable.  - Clarifies for Topic 815, among others, that (a) only interest rate risk may be hedged in a partial-term fair value hedge; (b) amortization of fair value basis adjustment may begin before the fair value hedge is discontinued; (c) hedged AFS securities should be disclosed at amortized cost for disclosures related to hedged assets; and (d) contractually specified interest rate should be considered when applying hypothetical derivative method while assessing hedge effectiveness.  - Clarifies among others, that (a) using observable price under measurement alternative provided by ASC Topic 321 is a non-recurring fair value measurement and entities should adhere to non-recurring fair value disclosure requirements of Topic 820; and (b) equity securities without readily determinable fair value accounted for under measurement alternative should be remeasured using historical exchange rates.	- Effective dates and transition requirements for amendments related to CECL (ASC Topic 326) are the same as effective dates and transition requirements for ASU 2016-13.  - Amendments related to Derivatives and Hedging (ASC Topic 815) are effective as of the beginning of first annual period after the issuance date of this Update (ASU 2019-04). Earlier adoption is permitted, including adoption on any date on or after the issuance of this Update.  - Amendment related to Recognition and Measurement of Financial Instruments (ASC Topic 825) should be applied on a modified-retrospective basis effective for fiscal years, including interim period within those fiscal years, beginning after December 15, 2019. Earlier adoption is permitted.  - Amendments in this Update are not expected to have a material impact on Huntington's Consolidated Financial Statements.
ASU 2019-05 - Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief Issued: May 2019	- Provides entities that have certain instruments within the scope of ASC Subtopic 326-20 with an option to irrevocably elect fair value option, applied on instrument-by-instrument basis. The fair value option does not apply to held-to-maturity debt securities.	- The effective date is the same as the effective date of ASU 2016-13.  - The ASU did not have a material impact on Huntington's Consolidated Financial Statements.
ASU 2019-08 - Compensation - Codification Improvements - Share-based Consideration Payable to a Customer Issued: November 2019	- The ASU requires that an entity measure and classify share-based payment awards granted to a customer by applying the guidance in Topic 718.  - The amount of share-based payment awards should be recorded as a reduction of the transaction price and is required to be measured on the basis of grant-date fair value of the share-based payment awards in accordance with Topic 718.  - The classification and subsequent measurement of the award are subject to the guidance in Topic 718 unless the share-based payment award is subsequently modified and the grantee is no longer a customer.	- The Update is effective in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.  - The Update is not expected to have a material impact on Huntington’s Consolidated Financial Statements.

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ASU 2019-11 - Financial Instruments - Credit Losses (Topic 326): Codification Improvements to Topic 326 Issued: November 2019	- The ASU clarifies or addresses stakeholders’ specific issues related to ASU 2016-13 as described below:  - Clarifies that the allowance for purchased financial assets with credit deterioration should include expected recoveries. If a method other than a discounted cash flow method is used to calculate allowance, expected recoveries should not result in an acceleration of the noncredit discount.  - Provides transition relief by permitting entities an accounting policy election to adjust the effective interest rate on existing TDRs using prepayment assumptions on the date of adoption of Topic 326 rather than the prepayment assumptions in effect immediately before the restructuring.  - Extends the disclosure relief for accrued interest receivable balances to additional relevant disclosures involving amortized cost basis.  - Clarifies that an entity should assess whether it reasonably expects the borrower will be able to continually replenish collateral securing the financial asset to apply the practical expedient related to collateral maintenance provision.	- The effective dates for the Update is the same as the effective dates of ASU 2016-13. The ASU was applied on a modified-retrospective basis.  - The Update did not have a material impact on Huntington's Consolidated Financial Statements.
ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Issued: December 2019	- This Update simplifies the accounting for income taxes by removing exceptions to the: (a) Incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items; (b) Requirement to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity method investment; (c) Ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (d) General methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year.  - This Update also simplifies various other aspects of the accounting for income taxes.	- This Update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.  - Early adoption of the ASU is permitted, including adoption in any interim period for which financial statements have not yet been issued. An entity that elects to early adopt in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period.  - The Update is not expected to have a material impact on Huntington's Consolidated Financial Statements.

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Loans and leases which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Consolidated Balance Sheets as loans and leases. The total balance of unamortized premiums, discounts, fees, and costs, recognized as part of loans and leases, was a net premium of $525 million and $428 million at December 31, 2019 and 2018, respectively.

Loan and Lease Portfolio Composition

The following table provides a detailed listing of Huntington’s loan and lease portfolio at December 31, 2019 and December 31, 2018.

	At December 31,
(dollar amounts in millions)	2019				2018
Loans and leases:
Commercial and industrial	$	30,664			$	30,605
Commercial real estate	6,674				6,842
Automobile	12,797				12,429
Home equity	9,093				9,722
Residential mortgage	11,376				10,728
RV and marine	3,563				3,254
Other consumer	1,237				1,320
Loans and leases	75,404				74,900
Allowance for loan and lease losses	(783		)		(772		)
Net loans and leases	$	74,621			$	74,128

Equipment Leases

Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in C&I loans. These leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases. Renewal options for leases are at the option of the lessee, and are not included in the measurement of lease receivables as they are not considered reasonably certain of exercise. Purchase options are typically at fair value, and as such those options are not considered in the measurement of lease receivables or in lease classification.

For leased equipment, the residual component of a direct financing lease represents the estimated fair value of the leased equipment at the end of the lease term. Huntington uses industry data, historical experience, and independent appraisals to establish these residual value estimates. Additional information regarding product life cycle, product upgrades, as well as insight into competing products are obtained through relationships with industry contacts and are factored into residual value estimates where applicable. Upon expiration of a lease, residual assets are remarketed, resulting in an extension of the lease by the lessee, a lease to a new customer, or purchase of the residual asset by the lessee or another party. Huntington also purchases insurance guaranteeing the value of certain residual assets.

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The following table presents net investments in lease financing receivables by category at December 31, 2019 and 2018:

	At December 31,
(dollar amounts in millions)	2019				2018
Commercial and industrial:
Lease payments receivable	$	1,841			$	1,747
Estimated residual value of leased assets	728				726
Gross investment in commercial and industrial lease financing receivables	2,569				2,473
Deferred origination costs	19				20
Deferred fees	(249		)		(250		)
Total net investment in commercial and industrial lease financing receivables	$	2,339			$	2,243

The carrying value of residual values guaranteed was $95 million as of December 31, 2019. The future lease rental payments due from customers on sales-type and direct financing leases at December 31, 2019, totaled $1.8 billion and were due as follows: $0.7 billion in 2020, $0.4 billion in 2021, $0.3 billion in 2022, $0.2 billion in 2023, $0.1 billion in 2024, and $0.1 billion thereafter. Interest income recognized for these types of leases was $108 million and $100 million for the years ended December 31, 2019 and December 31, 2018, respectively.

Nonaccrual and Past Due Loans

The following table presents NALs by loan class at December 31, 2019 and 2018: 

	December 31,
(dollar amounts in millions)	2019				2018
Commercial and industrial	$	323			$	188
Commercial real estate	10				15
Automobile	4				5
Home equity	59				62
Residential mortgage	71				69
RV and marine	1				1
Other consumer	—				—
Total nonaccrual loans	$	468			$	340

The amount of interest that would have been recorded under the original terms for total NAL loans was $26 million, $22 million, and $21 million for 2019, 2018, and 2017, respectively. The total amount of interest recorded to interest income for NAL loans was $9 million, $12 million, and $18 million in 2019, 2018, and 2017, respectively.

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The following table presents an aging analysis of loans and leases, including past due loans and leases, by loan class at December 31, 2019 and 2018 :

	December 31, 2019
	Past Due (1)																				Loans Accounted for Under FVO				Total Loans and Leases				90 or more days past due and accruing
(dollar amounts in millions)	30-59 Days				60-89  Days				90 or  more days				Total				Current
Commercial and industrial	$	65			$	31			$	69			$	165			$	30,499			$	—			$	30,664			$	11		(2)
Commercial real estate	3				1				7				11				6,663				—				6,674				—
Automobile	95				19				11				125				12,672				—				12,797				8
Home equity	50				19				51				120				8,972				1				9,093				14
Residential mortgage	103				49				170				322				10,974				80				11,376				129			(3)
RV and marine	13				4				2				19				3,544				—				3,563				2
Other consumer	13				6				7				26				1,211				—				1,237				7
Total loans and leases	$	342			$	129			$	317			$	788			$	74,535			$	81			$	75,404			$	171

	December 31, 2018
	Past Due (1)																				Loans Accounted for Under FVO				Total Loans and Leases				90 or more days past due and accruing
(dollar amounts in millions)	30-59 Days				60-89  Days				90 or  more days				Total				Current
Commercial and industrial	$	72			$	17			$	51			$	140			$	30,465			$	—			$	30,605			$	7		(2)
Commercial real estate	10				—				5				15				6,827				—				6,842				—
Automobile	95				19				10				124				12,305				—				12,429				8
Home equity	51				21				56				128				9,593				1				9,722				17
Residential mortgage	108				47				168				323				10,327				78				10,728				131			(3)
RV and marine	12				3				2				17				3,237				—				3,254				1
Other consumer	14				7				6				27				1,293				—				1,320				6
Total loans and leases	$	362			$	114			$	298			$	774			$	74,047			$	79			$	74,900			$	170

(1)	NALs are included in this aging analysis based on the loan’s past due status.

(2)	Amounts include Huntington Technology Finance administrative lease delinquencies.

(3)	Amounts include mortgage loans insured by U.S. government agencies.

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Allowance for Credit Losses

The following table presents ALLL and AULC activity by portfolio segment for the years ended December 31, 2019, 2018, and 2017:

(dollar amounts in millions)		Commercial				Consumer				Total
Year ended December 31, 2019:
ALLL balance, beginning of period		$	542			$	230			$	772
Loan charge-offs		(165		)		(197		)		(362		)
Recoveries of loans previously charged-off		40				57				97
Provision for loan and lease losses		135				142				277
Allowance for loans sold or transferred to loans held for sale		—				(1		)		(1		)
ALLL balance, end of period		$	552			$	231			$	783
AULC balance, beginning of period		$	94			$	2			$	96
Provision (reduction in allowance) for unfunded loan commitments and letters of credit		10				—				10
Unfunded commitment losses		(2		)		—				(2		)
AULC balance, end of period		$	102			$	2			$	104
ACL balance, end of period		$	654			$	233			$	887
Year ended December 31, 2018:
ALLL balance, beginning of period		$	482			$	209			$	691
Loan charge-offs		(79		)		(189		)		(268		)
Recoveries of loans previously charged-off		65				58				123
Provision for loan and lease losses		74				152				226
ALLL balance, end of period		$	542			$	230			$	772
AULC balance, beginning of period		$	84			$	3			$	87
Provision (reduction in allowance) for unfunded loan commitments and letters of credit		10				(1		)		9
AULC balance, end of period		$	94			$	2			$	96
ACL balance, end of period		$	636			$	232			$	868
Year ended December 31, 2017:
ALLL balance, beginning of period		$	451			$	187			$	638
Loan charge-offs		(72		)		(180		)		(252		)
Recoveries of loans previously charged-off		41				52				93
Provision for loan and lease losses		62				150				212
ALLL balance, end of period		$	482			$	209			$	691
AULC balance, beginning of period		$	87			$	11			$	98
Provision (reduction in allowance) for unfunded loan commitments and letters of credit		(3		)		(8		)		(11		)
AULC balance, end of period		$	84			$	3			$	87
ACL balance, end of period		$	566			$	212			$	778

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Credit Quality Indicators

To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following internally defined categories of credit grades:

•	Pass - Higher quality loans that do not fit any of the other categories described below.

•	OLEM - The credit risk may be relatively minor yet represents a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or the collateral may be inadequate to protect Huntington’s position in the future. For these reasons, Huntington considers the loans to be potential problem loans.

•	Substandard - Inadequately protected loans resulting from the borrower’s ability to repay, equity, and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified weaknesses are not mitigated.

•	Doubtful - Loans that have all of the weaknesses inherent in those loans classified as Substandard, with the added elements of the full collection of the loan is improbable and that the possibility of loss is high.

Loans are generally assigned a category of “Pass” rating upon initial approval and subsequently updated as appropriate based on the borrower’s financial performance.

Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are both considered Classified loans.

For all classes within the consumer loan portfolios, loans are assigned pool level PD factors based on the FICO range within which the borrower’s most recent credit bureau score falls. A credit bureau score is a credit score developed by FICO based on data provided by the credit bureaus. The credit bureau score is widely accepted as the standard measure of consumer credit risk used by lenders, regulators, rating agencies, and consumers. The higher the credit bureau score, the higher likelihood of repayment and therefore, an indicator of higher credit quality.

Huntington assesses the risk in the loan portfolio by utilizing numerous risk characteristics. The classifications described above, and also presented in the table below, represent one of those characteristics that are closely monitored in the overall credit risk management processes.

The following tables present each loan and lease class by credit quality indicator at December 31, 2019 and 2018:

	December 31, 2019
	Credit Risk Profile by UCS Classification
(dollar amounts in millions)	Pass				OLEM				Substandard				Doubtful				Total
Commercial and industrial	$	28,477			$	634			$	1,551			$	2			$	30,664
Commercial real estate	6,487				98				88				1				6,674
	Credit Risk Profile by FICO Score (1), (2)
	750+				650-749				<650				Other (3)				Total
Automobile	6,759				4,661				1,377				—				12,797
Home equity	5,763				2,772				557				—				9,092
Residential mortgage	7,976				2,742				578				—				11,296
RV and marine	2,391				1,053				119				—				3,563
Other consumer	546				571				120				—				1,237

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	December 31, 2018
	Credit Risk Profile by UCS Classification
(dollar amounts in millions)	Pass				OLEM				Substandard				Doubtful				Total
Commercial and industrial	$	28,807			$	518			$	1,269			$	11			$	30,605
Commercial real estate	6,586				181				74				1				6,842
	Credit Risk Profile by FICO Score (1), (2)
	750+				650-749				<650				Other (3)				Total
Automobile	6,254				4,520				1,373				282				12,429
Home equity	6,098				2,975				591				56				9,720
Residential mortgage	7,159				2,801				612				78				10,650
RV and marine	2,074				990				105				85				3,254
Other consumer	501				633				129				57				1,320

(1)	Excludes loans accounted for under the fair value option.

(2)	Reflects updated customer credit scores.

(3)	As of December 31, 2019, amounts previously reported in Other were identified and aligned with the appropriate loan balance classification. Amounts as of December 31, 2018, reflects deferred fees and costs, loans in process, etc.

Impaired Loans

The following tables present the balance of the ALLL attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance for the years ended December 31, 2019 and 2018:

(dollar amounts in millions)		Commercial				Consumer				Total
ALLL at December 31, 2019
Portion of ALLL balance:
Attributable to loans individually evaluated for impairment		$	61			$	8			$	69
Attributable to loans collectively evaluated for impairment		491				223				714
Total ALLL balance		$	552			$	231			$	783
Loan and Lease Ending Balances at December 31, 2019 (1)
Portion of loan and lease ending balances:
Individually evaluated for impairment		$	600			$	574			$	1,174
Collectively evaluated for impairment		36,738				37,411				74,149
Total loans and leases evaluated for impairment		$	37,338			$	37,985			$	75,323

(1)	Excludes loans accounted for under the fair value option.

(dollar amounts in millions)		Commercial				Consumer				Total
ALLL at December 31, 2018
Portion of ALLL balance:
Attributable to loans individually evaluated for impairment		$	33			$	10			$	43
Attributable to loans collectively evaluated for impairment		509				220				729
Total ALLL balance:		$	542			$	230			$	772
Loan and Lease Ending Balances at December 31, 2018 (1)
Portion of loan and lease ending balances:
Individually evaluated for impairment		$	516			$	591			$	1,107
Collectively evaluated for impairment		36,931				36,783				73,714
Total loans and leases evaluated for impairment		$	37,447			$	37,374			$	74,821

(1)	Excludes loans accounted for under the fair value option.

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The following tables present by class the ending balance, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized for impaired loans and leases for the years ended December 31, 2019 and 2018 (1):

													Year Ended
	December 31, 2019												December 31, 2019
(dollar amounts in millions)	Ending Balance				Unpaid Principal Balance (2)				Related Allowance (3)				Average Balance				Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	181			$	215			$	—			$	204			$	19
Commercial real estate	25				26				—				32				8
With an allowance recorded:
Commercial and industrial	366				425				60				312				11
Commercial real estate	28				31				1				31				2
Automobile	43				46				2				40				3
Home equity	284				281				9				300				14
Residential mortgage	293				329				4				288				11
RV and marine	4				4				—				3				—
Other consumer	11				11				2				10				—
Total
Commercial and industrial (4)	547				640				60				516				30
Commercial real estate (5)	53				57				1				63				10
Automobile (6)	43				46				2				40				3
Home equity (7)	284				281				9				300				14
Residential mortgage (7)	293				329				4				288				11
RV and marine (6)	4				4				—				3				—
Other consumer (6)	11				11				2				10				—

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													Year Ended
	December 31, 2018												December 31, 2018
(dollar amounts in millions)	Ending Balance				Unpaid Principal Balance (2)				Related Allowance (3)				Average Balance				Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	224			$	261			$	—			$	256			$	22
Commercial real estate	36				45				—				47				8
With an allowance recorded:
Commercial and industrial	221				240				31				272				11
Commercial real estate	35				39				2				45				2
Automobile	38				42				2				37				2
Home equity	314				356				10				326				14
Residential mortgage	287				323				4				297				11
RV and marine	2				3				—				2				—
Other consumer	9				9				3				8				—
Total
Commercial and industrial (4)	445				501				31				528				33
Commercial real estate (5)	71				84				2				92				10
Automobile (6)	38				42				2				37				2
Home equity (7)	314				356				10				326				14
Residential mortgage (7)	287				323				4				297				11
RV and marine (6)	2				3				—				2				—
Other consumer (6)	9				9				3				8				—

(1)	These tables do not include loans fully charged-off.

(2)	The differences between the ending balance and unpaid principal balance amounts primarily represent partial charge-offs.

(3)	Impaired loans in the consumer portfolio are evaluated in pools and not at the loan level. Thus, these loans do not have an individually assigned allowance and as such are all classified as with an allowance in the tables above.

(4)	At December 31, 2019 and December 31, 2018, C&I loans of $322 million and $366 million, respectively, were considered impaired due to their status as a TDR.

(5)	At December 31, 2019 and December 31, 2018, CRE loans of $43 million and $60 million, respectively, were considered impaired due to their status as a TDR.

(6)	All automobile, RV and marine and other consumer impaired loans included in these tables are considered impaired due to their status as a TDR.

(7)	Includes home equity and residential mortgages considered impaired due to their non-accrual status and collateral dependent designation as well as home equity and mortgage loans considered impaired due to their status as a TDR.

TDR Loans

The amount of interest that would have been recorded under the original terms for total accruing TDR loans was $52 million, $51 million, and $49 million for 2019, 2018, and 2017, respectively. The total amount of actual interest recorded to interest income for these loans was $49 million, $48 million, and $45 million for 2019, 2018, and 2017, respectively.

TDR Concession Types

The Company’s standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analyses, and collateral valuations. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time. All commercial TDRs are reviewed and approved by our SAD.

Following is a description of TDRs by the different loan types:

Commercial loan TDRs – Our strategy involving commercial TDR borrowers includes working with these borrowers to allow them to refinance elsewhere, as well as allow them time to improve their financial position and remain a Huntington customer through refinancing their notes according to market terms and conditions in the future.  A subsequent refinancing or modification of a loan may occur when either the loan matures according to the terms of the TDR-modified agreement or the borrower requests a change to the loan agreements. At that time, the

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loan is evaluated to determine if the borrower is creditworthy. It is subjected to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. 

Consumer loan TDRs – Residential mortgage TDRs represent loan modifications associated with traditional first-lien mortgage loans in which a concession has been provided to the borrower. The primary concessions given to residential mortgage borrowers are amortization or maturity date changes and interest rate reductions. Residential mortgages identified as TDRs involve borrowers unable to refinance their mortgages through the Company’s normal mortgage origination channels or through other independent sources. Some, but not all, of the loans may be delinquent. The Company may make similar interest rate, term, and principal concessions for Automobile, Home Equity, RV and Marine and Other Consumer loan TDRs.

TDR Impact on Credit Quality

Huntington’s ALLL is largely determined by risk ratings assigned to commercial loans, updated borrower credit scores on consumer loans, and borrower delinquency history in both the commercial and consumer portfolios. These risk ratings and credit scores consider the default history of the borrower, including payment redefaults. As such, the provision for credit losses is impacted primarily by changes in borrower payment performance rather than the TDR classification. TDRs can be classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs whereas accruing TDRs are excluded from NALs as it is probable that all contractual principal and interest due under the restructured terms will be collected.

The Company’s TDRs may include multiple concessions and the disclosure classifications are presented based on the primary concession provided to the borrower. The majority of the concessions for the C&I and CRE portfolios are the extension of the maturity date, but could also include an interest rate concession. In these instances, the primary concession is the maturity date extension.

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The following table presents, by class and modification type, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the years ended December 31, 2019 and 2018.

	New Troubled Debt Restructurings (1)
	Year Ended December 31, 2019
	Number of Contracts			Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)				Interest rate reduction				Amortization or maturity date change				Chapter 7 bankruptcy				Other				Total
Commercial and industrial	482			$	—			$	172			$	—			$	7			$	179
Commercial real estate	29			—				13				—				—				13
Automobile	2,971			—				19				7				—				26
Home equity	306			—				9				8				—				17
Residential mortgage	330			—				35				2				—				37
RV and marine	139			—				1				2				—				3
Other consumer	972			8				—				—				—				8
Total new TDRs	5,229			$	8			$	249			$	19			$	7			$	283
	Year Ended December 31, 2018
	Number of Contracts			Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)				Interest rate reduction				Amortization or maturity date change				Chapter 7 bankruptcy				Other				Total
Commercial and industrial	725			$	—			$	352			$	—			$	—			$	352
Commercial real estate	102			—				82				—				—				82
Automobile	2,867			—				15				8				—				23
Home equity	602			—				25				11				—				36
Residential mortgage	345			—				34				3				—				37
RV and marine	117			—				—				1				—				1
Other consumer	1,633			8				—				—				—				8
Total new TDRs	6,391			$	8			$	508			$	23			$	—			$	539

(1)	TDRs may include multiple concessions. The disclosure classification is based on the primary concession provided to the borrower.

(2)	Post-modification balances approximate pre-modification balances. The aggregate amount of charge-offs as a result of a restructuring are not significant.

The financial effects of modification represent the impact on the provision (recovery) for loan and lease losses. Amounts for the years ended December 31, 2019 and December 31, 2018 were $(2) million and $(15) million, respectively.

Pledged Loans and Leases

The Bank has access to the Federal Reserve’s discount window and advances from the FHLB. As of December 31, 2019 and 2018, these borrowings and advances are secured by $39.6 billion and $46.5 billion, respectively, of loans and securities.

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The following tables provide amortized cost, fair value, and gross unrealized gains and losses by investment category at December 31, 2019 and 2018:

					Unrealized
(dollar amounts in millions)	Amortized Cost				Gross Gains				Gross Losses				Fair Value
December 31, 2019
Available-for-sale securities:
U.S. Treasury	$	10			$	—			$	—			$	10
Federal agencies:
Residential CMO	5,055				48				(18		)		5,085
Residential MBS	4,180				45				(3		)		4,222
Commercial MBS	979				1				(4		)		976
Other agencies	165				1				(1		)		165
Total U.S. Treasury, federal agency and other agency securities	10,389				95				(26		)		10,458
Municipal securities	3,044				34				(23		)		3,055
Private-label CMO	2				—				—				2
Asset-backed securities	575				6				(2		)		579
Corporate debt	49				2				—				51
Other securities/Sovereign debt	4				—				—				4
Total available-for-sale securities	$	14,063			$	137			$	(51	)		$	14,149
Held-to-maturity securities:
Federal agencies:
Residential CMO	$	2,351			$	33			$	(3	)		$	2,381
Residential MBS	2,463				50				—				2,513
Commercial MBS	3,959				34				—				3,993
Other agencies	293				2				—				295
Total federal agency and other agency securities	9,066				119				(3		)		9,182
Municipal securities	4				—				—				4
Total held-to-maturity securities	$	9,070			$	119			$	(3	)		$	9,186
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock	$	90			$	—			$	—			$	90
Federal Reserve Bank stock	297				—				—				297
Other securities, at fair value
Mutual funds	53				—				—				53
Marketable equity securities	1				—				—				1
Total other securities	$	441			$	—			$	—			$	441

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					Unrealized
(dollar amounts in millions)	Amortized Cost				Gross Gains				Gross Losses				Fair Value
December 31, 2018
Available-for-sale securities:
U.S. Treasury	$	5			$	—			$	—			$	5
Federal agencies:
Residential CMO	7,185				15				(201		)		6,999
Residential MBS	1,261				9				(15		)		1,255
Commercial MBS	1,641				—				(58		)		1,583
Other agencies	128				—				(2		)		126
Total U.S. Treasury, federal agency and other agency securities	10,220				24				(276		)		9,968
Municipal securities	3,512				6				(78		)		3,440
Asset-backed securities	318				1				(4		)		315
Corporate debt	54				—				(1		)		53
Other securities/Sovereign debt	4				—				—				4
Total available-for-sale securities	$	14,108			$	31			$	(359	)		$	13,780
Held-to-maturity securities:
Federal agencies:
Residential CMO	$	2,124			$	—			$	(47	)		$	2,077
Residential MBS	1,851				2				(42		)		1,811
Commercial MBS	4,235				—				(186		)		4,049
Other agencies	350				—				(6		)		344
Total federal agency and other agency securities	8,560				2				(281		)		8,281
Municipal securities	5				—				—				5
Total held-to-maturity securities	$	8,565			$	2			$	(281	)		$	8,286
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock	$	248			$	—			$	—			$	248
Federal Reserve Bank stock	295				—				—				295
Other securities, at fair value
Mutual funds	20				—				—				20
Marketable equity securities	1				1				—				2
Total other securities	$	564			$	1			$	—			$	565

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The following table provides the amortized cost and fair value of securities by contractual maturity at December 31, 2019 and 2018. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.

	2019								2018
(dollar amounts in millions)	Amortized Cost				Fair Value				Amortized Cost				Fair Value
Available-for-sale securities:
Under 1 year	$	231			$	229			$	186			$	185
After 1 year through 5 years	1,196				1,189				1,057				1,039
After 5 years through 10 years	1,594				1,606				1,838				1,802
After 10 years	11,042				11,125				11,027				10,754
Total available-for-sale securities	$	14,063			$	14,149			$	14,108			$	13,780
Held-to-maturity securities:
Under 1 year	$	—			$	—			$	—			$	—
After 1 year through 5 years	17				17				11				11
After 5 years through 10 years	300				305				362				356
After 10 years	8,753				8,864				8,192				7,919
Total held-to-maturity securities	$	9,070			$	9,186			$	8,565			$	8,286

The following tables provide detail on investment securities with unrealized losses aggregated by investment category and the length of time the individual securities have been in a continuous loss position at December 31, 2019 and 2018:

	Less than 12 Months								Over 12 Months								Total
(dollar amounts in millions)	Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses
December 31, 2019
Available-for-sale securities:
Federal agencies:
Residential CMO	$	1,206			$	(10	)		$	519			$	(8	)		$	1,725			$	(18	)
Residential MBS	1,169				(3		)		9				—				1,178				(3		)
Commercial MBS	472				(2		)		272				(2		)		744				(4		)
Other agencies	86				(1		)		—				—				86				(1		)
Total federal agency and other agency securities	2,933				(16		)		800				(10		)		3,733				(26		)
Municipal securities	273				(4		)		1,204				(19		)		1,477				(23		)
Asset-backed securities	116				(1		)		37				(1		)		153				(2		)
Corporate debt	1				—				—				—				1				—
Total temporarily impaired securities	$	3,323			$	(21	)		$	2,041			$	(30	)		$	5,364			$	(51	)
Held-to-maturity securities:
Federal agencies:
Residential CMO	$	218			$	(1	)		$	112			$	(2	)		$	330			$	(3	)
Residential MBS	317				—				—				—				317				—
Commercial MBS	81				—				—				—				81				—
Other agencies	58				—				—				—				58				—
Total federal agency and other agency securities	674				(1		)		112				(2		)		786				(3		)
Municipal securities	4				—				—				—				4				—
Total temporarily impaired securities	$	678			$	(1	)		$	112			$	(2	)		$	790			$	(3	)

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	Less than 12 Months								Over 12 Months								Total
(dollar amounts in millions)	Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses				Fair Value				Gross Unrealized Losses
December 31, 2018
Available-for-sale securities:
Federal agencies:
Residential CMO	$	425			$	(3	)		$	5,943			$	(198	)		$	6,368			$	(201	)
Residential MBS	259				(6		)		319				(9		)		578				(15		)
Commercial MBS	10				—				1,573				(58		)		1,583				(58		)
Other agencies	—				—				124				(2		)		124				(2		)
Total federal agency and other agency securities	694				(9		)		7,959				(267		)		8,653				(276		)
Municipal securities	1,425				(24		)		1,602				(54		)		3,027				(78		)
Asset-backed securities	95				(2		)		117				(2		)		212				(4		)
Corporate debt	40				—				1				(1		)		41				(1		)
Total temporarily impaired securities	$	2,254			$	(35	)		$	9,679			$	(324	)		$	11,933			$	(359	)
Held-to-maturity securities:
Federal agencies:
Residential CMO	$	12			$	—			$	2,004			$	(47	)		$	2,016			$	(47	)
Residential MBS	16				—				1,457				(42		)		1,473				(42		)
Commercial MBS	—				—				4,041				(186		)		4,041				(186		)
Other agencies	113				(2		)		205				(4		)		318				(6		)
Total federal agency and other agency securities	141				(2		)		7,707				(279		)		7,848				(281		)
Municipal securities	—				—				4				—				4				—
Total temporarily impaired securities	$	141			$	(2	)		$	7,711			$	(279	)		$	7,852			$	(281	)

At December 31, 2019 and December 31, 2018, the market value of investment securities pledged to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements totaled $3.8 billion and $4.5 billion, respectively. There were no securities of a single issuer, which were not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at either December 31, 2019 or December 31, 2018.

The following table is a summary of realized securities gains and losses for the years ended December 31, 2019, 2018, and 2017:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Gross gains on sales of securities	$	11			$	7			$	10
Gross losses on sales of securities	(35		)		(28		)		(10		)
Net gain (loss) on sales of securities	$	(24	)		$	(21	)		$	—
OTTI recognized in earnings	—				—				(4		)
Net securities (losses)	$	(24	)		$	(21	)		$	(4	)

Security Impairment

Huntington evaluates the securities portfolio for impairment on a quarterly basis. As of December 31, 2019 and December 31, 2018, the Company has evaluated available-for-sale and held-to-maturity securities which have gross unrealized losses for impairment and concluded less than $1 million and no OTTI was required, respectively.

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Residential Mortgage Portfolio

The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended December 31, 2019, 2018, and 2017:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Residential mortgage loans sold with servicing retained	$	4,841			$	3,846			$	3,985
Pretax gains resulting from above loan sales (1)	119				87				99

(1)	Recorded in mortgage banking income.

The following table summarizes the changes in MSRs recorded using the amortization method for the years ended December 31, 2019 and 2018:

(dollar amounts in millions)	2019				2018
Carrying value, beginning of year	$	211			$	191
New servicing assets created	52				44
Impairment (charge) recovery	(14		)		6
Amortization and other	(44		)		(30		)
Carrying value, end of year	$	205			$	211
Fair value, end of year	$	206			$	212
Weighted-average life (years)	6.4				6.7

MSRs do not trade in an active, open market with readily observable prices. Therefore, the fair value of MSRs is estimated using a discounted future cash flow model. Changes in the assumptions used may have a significant impact on the valuation of MSRs. MSR values are highly sensitive to movement in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which can be greatly impacted by the level of prepayments.

For MSRs under the amortization method, a summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at December 31, 2019, and 2018 follows:

	December 31, 2019											December 31, 2018
				Decline in fair value due to											Decline in fair value due to
(dollar amounts in millions)	Actual			10% adverse change				20% adverse change				Actual			10% adverse change				20% adverse change
Constant prepayment rate (annualized)	12.20	%		$	(8	)		$	(16	)		9.40	%		$	(6	)		$	(12	)
Spread over forward interest rate swap rates	855	bps		(6		)		(12		)		934	bps		(7		)		(13		)

Additionally, Huntington held MSRs recorded using the fair value method of $7 million and $10 million at December 31, 2019 and 2018, respectively. The change in fair value representing time decay, payoffs and changes in valuation inputs and assumptions for the years ended December 31, 2019 and 2018 was $3 million and $1 million, respectively.

Total servicing, late and other ancillary fees included in mortgage banking income was $63 million, $60 million, and $56 million for the years ended December 31, 2019, 2018, and 2017, respectively. The unpaid principal balance of residential mortgage loans serviced for third parties was $22.4 billion, $21.0 billion, and $19.8 billion at December 31, 2019, 2018, and 2017, respectively.

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Business segments are based on segment leadership structure, which reflects how segment performance is monitored and assessed. We have four major business segments: Consumer and Business Banking, Commercial Banking, Vehicle Finance, and Regional Banking and The Huntington Private Client Group (RBHPCG). The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense.

A rollforward of goodwill by business segment for the years ended December 31, 2019 and 2018, is presented in the table below:

	Consumer &
	Business				Commercial				Vehicle								Treasury/				Huntington
(dollar amounts in millions)	Banking				Banking				Finance				RBHPCG				Other				Consolidated
Balance, January 1, 2018	$	1,398			$	425			$	—			$	170			$	—			$	1,993
Goodwill acquired during the period	—				1				—				—				—				1
Adjustments	(5		)		—				—				—				—				(5		)
Balance, December 31, 2018	1,393				426				—				170				—				1,989
Goodwill acquired during the period	—				—				—				—				—				—
Adjustments	—				1				—				—				—				1
Balance, December 31, 2019	$	1,393			$	427			$	—			$	170			$	—			$	1,990

On October 1, 2018, Huntington completed its acquisition of HSE. As part of the transaction, Huntington recorded $1 million of goodwill, which was subsequently adjusted during the measurement period.

During the fourth quarter of 2018, Huntington reclassified $5 million of goodwill in the Consumer & Business Banking segment related to the held for sale disposal group.

Goodwill is not amortized but is evaluated for impairment on an annual basis at October 1 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. No impairment was recorded in 2019 or 2018.

At December 31, 2019 and 2018, Huntington’s other intangible assets consisted of the following:

(dollar amounts in millions)	Gross Carrying Amount				Accumulated Amortization				Net Carrying Value
December 31, 2019
Core deposit intangible	$	310			$	(120	)		$	190
Customer relationship	115				(73		)		42
Total other intangible assets	$	425			$	(193	)		$	232
December 31, 2018
Core deposit intangible	$	314			$	(93	)		$	221
Customer relationship	182				(122		)		60
Total other intangible assets	$	496			$	(215	)		$	281

The estimated amortization expense of other intangible assets for the next five years is as follows:

(dollar amounts in millions)	Amortization Expense
2020	$	41
2021	38
2022	36
2023	34
2024	32

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At December 31, 2019, Huntington was obligated under noncancelable leases for branch and office space. These leases are all classified as operating due to the amount of time such spaces are occupied relative to the underlying assets useful lives. Many of these leases contain renewal options, most of which are not included in measurement of the right-of-use asset as they are not considered reasonably certain of exercise (i.e., Huntington does not currently have a significant economic incentive to exercise these options). Some leases contain escalation clauses calling for rentals to be adjusted for increased real estate taxes and other operating expenses or proportionately adjusted for increases in the consumer or other price indices. Occasionally, Huntington will sublease the land and buildings for which it has obtained the right to use; substantially all of those sublease arrangements are classified as operating, with sublease income recognized on a straight-line basis over the contractual term of the arrangement. Huntington has elected not to include non-lease components in the measurement of right-of-use assets, and as such allocates the costs attributable to such components, where those costs are not separately identifiable, via per-square-foot costing analysis developed by the entity for owned and leased spaces. Huntington uses a portfolio approach to develop discount rates as its lease portfolio is comprised of substantially all branch space and office space used in the entity’s operations. That rate, an input used in the measurement of the entity’s right-of-use assets, leverages an incremental borrowing rate of appropriate tenor and collateralization.

Net lease assets and liabilities at December 31, 2019 are as follows:

(dollar amounts in millions)		Classification		December 31, 2019
Assets
Operating lease assets		Other assets		$	210
Liabilities
Lease liabilities		Other liabilities		$	233

Net lease cost for the year ended December 31, 2019 are as follows:

(dollar amounts in millions)		Classification		Year Ended December 31, 2019
Operating lease cost		Net occupancy		$	47
Short-term lease cost		Net occupancy		1
Sublease income		Net occupancy		(3		)
Net lease cost				$	45

Maturity of lease liabilities at December 31, 2019 are as follows:

(dollar amounts in millions)		Total
2020		$	48
2021		43
2022		38
2023		33
2024		28
Thereafter		86
Total lease payments		$	276
Less: Interest		(43		)
Total lease liabilities		$	233

Lease term and discount rate as of December 31, 2019 are as follows:

		December 31, 2019
Weighted-average remaining lease term (years) for Operating leases		7.31
Weighted-average discount rate for Operating leases		4.56	%

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Cash flow supplemental information at December 31, 2019 are as follows:

(dollar amounts in millions)		Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities for Operating cash flows		$	(54	)
Right-of-use assets obtained in exchange for lease obligations for Operating leases		40

Premises and equipment were comprised of the following at December 31, 2019 and 2018:

	At December 31,
(dollar amounts in millions)	2019				2018
Land and land improvements	$	189			$	188
Buildings	587				579
Leasehold improvements	205				199
Equipment	742				739
Total premises and equipment	1,723				1,705
Less accumulated depreciation and amortization	(960		)		(915		)
Net premises and equipment	$	763			$	790

Depreciation and amortization charged to expense and rental income credited to net occupancy expense for the three years ended December 31, 2019, 2018, and 2017 were:

(dollar amounts in millions)	2019				2018				2017
Total depreciation and amortization of premises and equipment	$	116			$	130			$	123
Rental income credited to occupancy expense	11				13				14

Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following at December 31, 2019 and 2018: 

	At December 31,
(dollar amounts in millions)	2019				2018
Federal funds purchased and securities sold under agreements to repurchase	$	1,041			$	2,004
Federal Home Loan Bank advances	1,500				—
Other borrowings	65				13
Total short-term borrowings	$	2,606			$	2,017

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Huntington’s long-term debt consisted of the following:

	At December 31,
(dollar amounts in millions)	2019				2018
The Parent Company:
Senior Notes:
3.19% Huntington Bancshares Incorporated medium-term notes due 2021	$	993			$	969
2.33% Huntington Bancshares Incorporated senior notes due 2022	972				946
2.67% Huntington Bancshares Incorporated senior notes due 2024	798				—
4.05% Huntington Bancshares Incorporated senior notes due 2025	528				507
Subordinated Notes:
7.00% Huntington Bancshares Incorporated subordinated notes due 2020	305				305
3.55% Huntington Bancshares Incorporated subordinated notes due 2023	247				239
Sky Financial Capital Trust IV 3.31% junior subordinated debentures due 2036 (1)	74				74
Sky Financial Capital Trust III 3.31% junior subordinated debentures due 2036 (1)	72				72
Huntington Capital I Trust Preferred 2.61% junior subordinated debentures due 2027 (2)	70				69
Huntington Capital II Trust Preferred 2.53% junior subordinated debentures due 2028 (3)	32				31
Camco Financial Statutory Trust I 3.24% due 2037 (4)	4				4
Total notes issued by the parent	4,095				3,216
The Bank:
Senior Notes:
3.60% Huntington National Bank senior notes due 2023	778				756
3.33% Huntington National Bank senior notes due 2021	759				750
2.47% Huntington National Bank senior notes due 2020	699				692
2.55% Huntington National Bank senior notes due 2022	691				672
3.16% Huntington National Bank senior notes due 2022	507				—
2.43% Huntington National Bank senior notes due 2020	500				493
2.97% Huntington National Bank senior notes due 2020	499				491
2.42% Huntington National Bank senior notes due 2020 (5)	300				300
2.46% Huntington National Bank senior notes due 2021 (6)	299				—
2.23% Huntington National Bank senior notes due 2019	—				498
Subordinated Notes:
3.86% Huntington National Bank subordinated notes due 2026	231				229
5.45% Huntington National Bank subordinated notes due 2019	—				76
Total notes issued by the bank	5,263				4,957
FHLB Advances:
3.01% weighted average rate, varying maturities greater than one year	5				6
Other:
Huntington Technology Finance nonrecourse debt, 4.08% weighted average interest rate, varying maturities	312				322
3.79% Huntington Preferred Capital II - Class F securities (7)	74				74
3.79% Huntington Preferred Capital II - Class G securities (7)	50				50
3.91% Huntington Preferred Capital II - Class I securities (8)	50				—
Total other	486				446
Total long-term debt	$	9,849			$	8,625

(1)	Variable effective rate at December 31, 2019, based on three-month LIBOR +1.40%.

(2)	Variable effective rate at December 31, 2019, based on three-month LIBOR +0.70%

(3)	Variable effective rate at December 31, 2019, based on three-month LIBOR +0.625%.

(4)	Variable effective rate at December 31, 2019, based on three-month LIBOR +1.33%.

(5)	Variable effective rate at December 31, 2019, based on three-month LIBOR + 0.51%

(6)	Variable effective rate at December 31, 2019, based on three-month LIBOR +0.55%.

(7)	Variable effective rate at December 31, 2019, based on three-month LIBOR +1.88%.

(8)	Variable effective rate at December 31, 2019, based on three-month LIBOR +2.00%.

Amounts above are net of unamortized discounts and adjustments related to hedging with derivative financial instruments. We use interest rate swaps to hedge interest rate risk of certain fixed-rate debt by converting the debt

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to a variable rate. See Note 19 - “Derivative Financial Instruments“ for more information regarding such financial instruments.

The following table presents senior notes issued during 2019:

Date of Issuance

Issuer

Amount

% of face value

Interest Rate

Term

Maturity

January 2019

Bank

$

300

million

100

%

three-month LIBOR + 0.55%

variable

February 5, 2021

February 2019

Bank

500

million

99.909

3.125

fixed

April 1, 2022

August 2019

Parent

800

million

99.781

2.625

fixed

August 6, 2024

Long-term debt maturities for the next five years and thereafter are as follows:

(dollar amounts in millions)	2020				2021				2022				2023				2024				Thereafter				Total
The Parent Company:
Senior notes	$	—			$	1,000			$	1,000			$	—			$	800			$	500			$	3,300
Subordinated notes	300				—				—				250				—				253				803
The Bank:
Senior notes	2,000				1,050				1,200				750				—				—				5,000
Subordinated notes	—				—				—				—				—				250				250
FHLB Advances	2				—				1				1				—				1				5
Other	105				61				95				123				101				1				486
Total	$	2,407			$	2,111			$	2,296			$	1,124			$	901			$	1,005			$	9,844

These maturities are based upon the par values of the long-term debt.

The terms of certain long-term debt obligations contain various restrictive covenants including limitations on the acquisition of additional debt, dividend payments, and the disposition of subsidiaries. As of December 31, 2019, Huntington was in compliance with all such covenants.

The components of Huntington’s OCI in the three years ended December 31, 2019, 2018, and 2017, were as follows:

	2019
	Tax (expense)
(dollar amounts in millions)	Pretax				Benefit				After-tax
Unrealized holding gains (losses) on available-for-sale securities arising during the period	$	403			$	(89	)		$	314
Less: Reclassification adjustment for realized net losses (gains) included in net income	26				(5		)		21
Net change in unrealized holding gains (losses) on available-for-sale securities	429				(94		)		335
Net change in fair value on cash flow hedges	26				(3		)		23
Net change in pension and other post-retirement obligations	(7		)		2				(5		)
Total other comprehensive income (loss)	$	448			$	(95	)		$	353

	2018
					Tax (expense)
(dollar amounts in millions)	Pretax				Benefit				After-tax
Unrealized holding gains (losses) on available-for-sale securities arising during the period	$	(151	)		$	35			$	(116	)
Less: Reclassification adjustment for realized net losses (gains) included in net income	41				(9		)		32
Net change in unrealized holding gains (losses) on available-for-sale securities	(110		)		26				(84		)
Net change in pension and other post-retirement obligations	4				—				4
Total other comprehensive income (loss)	$	(106	)		$	26			$	(80	)

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	2017
					Tax (expense)
(dollar amounts in millions)	Pretax				Benefit				After-tax
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold	$	4			$	(2	)		$	2
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period	(87		)		31				(56		)
Less: Reclassification adjustment for net gains (losses) included in net income	26				(9		)		17
Net change in unrealized holding gains (losses) on available-for-sale debt securities	(57		)		20				(37		)
Net change in unrealized holding gains (losses) on available-for-sale equity securities	1				(1		)		—
Unrealized gains and losses on derivatives used in cash flow hedging relationships arising during the period	3				(1		)		2
Less: Reclassification adjustment for net losses (gains) losses included in net income	1				—				1
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships	4				(1		)		3
Net change in pension and post-retirement obligations	—				—				—
Total other comprehensive income (loss)	$	(52	)		$	18			$	(34	)

Activity in accumulated OCI for the two years ended December 31, 2019 and 2018 were as follows:

(dollar amounts in millions)	Unrealized gains (losses) on debt securities (1)				Change in fair value related to cash flow hedges				Unrealized gains (losses) for pension and other  post-retirement obligations				Total
December 31, 2017	$	(278	)		$	—			$	(250	)		$	(528	)
Cumulative-effect adjustments (ASU 2016-01)	(1		)										(1		)
Other comprehensive income before reclassifications	(116		)		—				—				(116		)
Amounts reclassified from accumulated OCI to earnings	32				—				4				36
Period change	(84		)		—				4				(80		)
December 31, 2018	(363		)		—				(246		)		(609		)
Other comprehensive income before reclassifications	314				23				—				337
Amounts reclassified from accumulated OCI to earnings	21				—				(5		)		16
Period change	335				23				(5		)		353
December 31, 2019	$	(28	)		$	23			$	(251	)		$	(256	)

(1)	AOCI amounts at December 31, 2019, 2018, and 2017 include $121 million, $137 million, and $95 million, respectively, net of unrealized losses on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized losses will be recognized in earnings over the remaining life of the security using the effective interest method.

The following is a summary of Huntington’s non-cumulative, non-voting, perpetual preferred stock outstanding as of December 31, 2019.

(dollar amounts in millions, share amounts in thousands)
Series		Issuance Date		Total Shares Outstanding			Carrying Amount				Dividend Rate			Earliest Redemption Date
Series B		12/28/2011		35,500			$	23			3-mo. LIBOR + 270 bps			1/15/2017
Series D		3/21/2016		400,000			386				6.25	%		7/15/2021
Series D		5/5/2016		200,000			199				6.25			7/15/2021
Series C		8/16/2016		100,000			100				5.875			1/15/2022
Series E		2/27/2018		5,000			495				5.70			4/15/2023
Total				740,500			$	1,203

Series B, D, and C of preferred stock has a liquidation value and redemption price per share of $1,000, plus any declared and unpaid dividends. Series E preferred stock has a liquidation value and redemption price per share of $100,000, plus any declared and unpaid dividends. All preferred stock has no stated maturity and redemption is solely at the option of the Company. Under current rules, any redemption of the preferred stock is subject to prior approval of the FRB.

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Basic earnings per common share is the amount of earnings (adjusted for dividends declared on preferred stock) available to each share of common stock outstanding during the reporting period. Diluted earnings per common share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, restricted stock units and awards, distributions from deferred compensation plans, and the conversion of the Company’s convertible preferred stock. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive.

The 2018 and 2017 total diluted average common shares issued and outstanding was impacted by using the if-converted method. The calculation of basic and diluted earnings per share for each of the three years ended December 31 was as follows:

	Year Ended December 31,
(amounts in millions, except per share data, share count in thousands)	2019				2018				2017
Basic earnings per common share:
Net income	$	1,411			$	1,393			$	1,186
Preferred stock dividends	(74		)		(70		)		(76		)
Net income available to common shareholders	$	1,337			$	1,323			$	1,110
Average common shares issued and outstanding	1,038,840				1,081,542				1,084,686
Basic earnings per common share	$	1.29			$	1.22			$	1.02
Diluted earnings per common share:
Net income available to common shareholders	$	1,337			$	1,323			$	1,110
Effect of assumed preferred stock conversion	—				—				31
Net income applicable to diluted earnings per share	$	1,337			$	1,323			$	1,141
Average common shares issued and outstanding	1,038,840				1,081,542				1,084,686
Dilutive potential common shares
Stock options and restricted stock units and awards	12,994				16,529				17,883
Shares held in deferred compensation plans	4,245				3,511				3,160
Dilutive impact of Preferred Stock	—				4,403				30,330
Other	—				—				127
Dilutive potential common shares	17,239				24,443				51,500
Total diluted average common shares issued and outstanding	1,056,079				1,105,985				1,136,186
Diluted earnings per common share	$	1.27			$	1.20			$	1.00
Anti-dilutive awards (1)	5,253				2,307				1,009

(1)	Reflects the total number of shares related to outstanding options that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.

Huntington earns a variety of revenue including interest and fees from customers as well as revenues from non-customers. Certain sources of revenue are recognized within interest or fee income and are outside of the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Other sources of revenue fall within the scope of ASC 606 and are generally recognized within noninterest income. These revenues are included within various sections of the Consolidated Financial Statements. The following table shows Huntington’s total noninterest income segregated between contracts with customers within the scope of ASC 606 and those within the scope of other GAAP Topics.

(dollar amounts in millions)		Year Ended December 31, 2019				Year Ended December 31, 2018
Noninterest income
Noninterest income from contracts with customers		$	939			$	881
Noninterest income within the scope of other GAAP topics		515				440
Total noninterest income		$	1,454			$	1,321

The following table illustrates the disaggregation by operating segment and major revenue stream and reconciles

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disaggregated revenue to segment revenue presented in Note 24 - “Segment Reporting”:

	Year Ended December 31, 2019
(dollar amounts in millions)	Consumer & Business Banking				Commercial Banking				Vehicle Finance				RBHPCG				Treasury / Other				Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts	$	297			$	64			$	7			$	4			$	—			$	372
Card and payment processing income	218				15				—				—				—				233
Trust and investment management services	34				4				—				139				1				178
Insurance income	34				6				—				47				1				88
Other noninterest income	32				24				4				6				2				68
Net revenue from contracts with customers	$	615			$	113			$	11			$	196			$	4			$	939
Noninterest income within the scope of other GAAP topics	210				246				1				2				56				515
Total noninterest income	$	825			$	359			$	12			$	198			$	60			$	1,454
	Year Ended December 31, 2018
(dollar amounts in millions)	Consumer & Business Banking				Commercial Banking				Vehicle Finance				RBHPCG				Treasury / Other				Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts	$	290			$	64			$	5			$	4			$	—			$	363
Card and payment processing income	198				11				—				—				—				209
Trust and investment management services	28				4				—				139				—				171
Insurance income	34				5				—				41				2				82
Other noninterest income	38				6				3				8				1				56
Net revenue from contracts with customers	$	588			$	90			$	8			$	192			$	3			$	881
Noninterest income within the scope of other GAAP topics	156				231				3				1				49				440
Total noninterest income	$	744			$	321			$	11			$	193			$	52			$	1,321

Huntington generally provides services for customers in which it acts as principal. Payment terms and conditions vary amongst services and customers, and thus impact the timing and amount of revenue recognition. Some fees may be paid before any service is rendered and accordingly, such fees are deferred until the obligations pertaining to those fees are satisfied. Most Huntington contracts with customers are cancelable by either party without penalty or they are short-term in nature, with a contract duration of less than one year. Accordingly, most revenue deferred for the reporting period ended December 31, 2019 is expected to be earned within one year. Huntington does not have significant balances of contract assets or contract liabilities and any change in those balances during the reporting period ended December 31, 2019 was determined to be immaterial.

Huntington sponsors nonqualified and incentive share based compensation plans. These plans provide for the granting of stock options, restricted stock awards, restricted stock units, performance share units and other awards to officers, directors, and other employees. Compensation costs are included in personnel costs on the Consolidated Statements of Income.

Huntington issues shares to fulfill stock option exercises and restricted stock unit and award vesting from available authorized common shares. At December 31, 2019, Huntington believes there are adequate authorized common shares to satisfy anticipated stock option exercises and restricted stock unit award vesting in 2020.

The following table presents total share-based compensation expense and related tax benefit for the three years ended December 31, 2019, 2018, and 2017:

(dollar amounts in millions)	2019				2018				2017
Share-based compensation expense	$	83			$	78			$	92
Tax benefit	15				14				32

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2018 Long-Term Incentive Plan

In 2018, shareholders approved the Huntington Bancshares Incorporated 2018 Long-Term Incentive Plan (the 2018 Plan). Shares remaining under the 2015 Long-Term Incentive Plan have been incorporated into the 2018 Plan. Accordingly, the total number of shares authorized for awards under the 2018 Plan is 33 million shares. At December 31, 2019, 17 million shares from the Plan were available for future grants.

Stock Options

Stock options are granted at the closing market price on the date of the grant. Options granted typically vest ratably over four years or when other conditions are met. Stock options, which represented a portion of the grant values, have no intrinsic value until the stock price increases. Options granted on or after May 1, 2015 have a contractual term of ten years. All options granted on or before April 30, 2015 have a contractual term of seven years.

Huntington uses the Black-Scholes option pricing model to value options in determining the share-based compensation expense. Forfeitures are estimated at the date of grant based on historical rates, and updated as necessary, and reduce the compensation expense recognized. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant. The expected dividend yield is based on the dividend rate and stock price at the date of the grant. Expected volatility is based on the estimated volatility of Huntington’s stock over the expected term of the option.

The following table presents the weighted average assumptions used in the option pricing model at the grant date for options granted in the three years ended December 31, 2019, 2018, and 2017:

Assumptions	2019				2018				2017
Risk-free interest rate	2.41		%		2.88		%		2.04		%
Expected dividend yield	4.36				3.71				3.31
Expected volatility of Huntington’s common stock	22.5				24.0				29.5
Expected option term (years)	6.5				6.5				6.5
Weighted-average grant date fair value per share	$	1.91			$	2.58			$	2.81

Huntington’s stock option activity and related information for the year ended December 31, 2019, was as follows:

(dollar amounts in millions, except per share and options amounts in thousands)	Options			Weighted- Average Exercise Price				Weighted-Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2019	10,617			$	10.64
Granted	3,211			13.77
Exercised	(2,440	)		7.28
Forfeited/expired	(79	)		14.08
Outstanding at December 31, 2019	11,309			$	12.23			6.7		$	32
Expected to vest (1)	5,955			$	13.77			8.6		$	8
Exercisable at December 31, 2019	5,195			$	10.42			4.5		$	24

(1)	The number of options expected to vest reflect an estimate of 159,000 shares expected to be forfeited.

The aggregate intrinsic value represents the amount by which the fair value of underlying stock exceeds the “in-the-money” option exercise price. The total intrinsic value of options exercised for the years ended December 31, 2019, 2018, and 2017 were $16 million, $52 million and $16 million, respectively. For the years ended December 31, 2019, 2018, and 2017, cash received for the exercises of stock options was $2 million, $5 million and $11 million, respectively. The tax benefit realized for the tax deductions from option exercises totaled $3 million, $10 million and $5 million in 2019, 2018, and 2017, respectively.

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Other Restricted Stock Awards

Huntington also grants restricted stock awards, restricted stock units, performance share units, and other stock-based awards. These awards are granted at the closing market price on the date of the grant. Restricted stock units and awards are issued at no cost to the recipient, and can be settled only in shares at the end of the vesting period. Restricted stock awards provide the holder with full voting rights and cash dividends during the vesting period. Restricted stock units do not provide the holder with voting rights or cash dividends during the vesting period, but do accrue a dividend equivalent that is paid upon vesting, and are subject to certain service restrictions. Performance share units are payable contingent upon Huntington achieving certain predefined performance objectives over the three-year measurement period. The fair value of these awards reflects the closing market price of Huntington’s common stock on the grant date.

The following table summarizes the status of Huntington’s restricted stock awards, units, and performance share units as of December 31, 2019, and activity for the year ended December 31, 2019:

	Restricted Stock Awards							Restricted Stock Units							Performance Share Units
(amounts in thousands, except per share amounts)	Quantity			Weighted- Average Grant Date Fair Value Per Share				Quantity			Weighted- Average Grant Date Fair Value Per Share				Quantity			Weighted- Average Grant Date Fair Value Per Share
Nonvested at January 1, 2019	201			$	9.68			15,480			$	12.51			2,958			$	11.75
Granted	—			—				5,581			13.93				680			13.77
Vested	(199	)		9.68				(5,267	)		11.17				(854	)		10.07
Forfeited	(2	)		9.68				(505	)		13.47				(15	)		14.30
Nonvested at December 31, 2019	—			$	—			15,289			$	13.42			2,769			$	13.49

The weighted-average fair value at grant date of nonvested shares granted for the years ended December 31, 2019, 2018, and 2017 were $13.91, $14.98, and $11.13, respectively. The total fair value of awards vested during the years ended December 31, 2019, 2018, and 2017 was $69 million, $62 million, and $53 million, respectively. As of December 31, 2019, the total unrecognized compensation cost related to nonvested shares was $97 million with a weighted-average expense recognition period of 2.4 years.

Huntington sponsors a non-contributory defined benefit pension plan covering substantially all employees hired or rehired prior to January 1, 2010. The plan, which was modified in 2013, no longer accrues service benefits to participants and provides benefits based upon length of service and compensation levels. Huntington’s funding policy is to contribute an annual amount that is at least equal to the minimum funding requirements but not more than the amount deductible under the Internal Revenue Code. There were no required minimum contributions during 2019.

The following table shows the weighted-average assumptions used to determine the benefit obligation at December 31, 2019 and 2018, and the net periodic benefit cost for the years then ended:

	Pension Benefits
	2019			2018
Weighted-average assumptions used to determine benefit obligations
Discount rate	3.40	%		4.41	%
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate	4.41			3.73
Expected return on plan assets	5.25			5.75

The expected long-term rate of return on plan assets is an assumption reflecting the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of return is established at the beginning of the plan year based upon historical returns and projected returns on the underlying mix of invested assets.

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The following table reconciles the beginning and ending balances of the benefit obligation of the Plan with the amounts recognized in the consolidated balance sheets at December 31:

	Pension Benefits
(dollar amounts in millions)	2019				2018
Projected benefit obligation at beginning of measurement year	$	821			$	900
Changes due to:
Service cost	2				3
Interest cost	32				29
Benefits paid	(29		)		(26		)
Settlements	(14		)		(18		)
Actuarial assumptions and gains (losses)	111				(67		)
Total changes	102				(79		)
Projected benefit obligation at end of measurement year	$	923			$	821

The following table reconciles the beginning and ending balances of the fair value of Plan assets at the December 31, 2019 and 2018 measurement dates:

	Pension Benefits
(dollar amounts in millions)	2019				2018
Fair value of plan assets at beginning of measurement year	$	828			$	903
Changes due to:
Actual return on plan assets	145				(30		)
Settlements	(13		)		(19		)
Benefits paid	(29		)		(26		)
Total changes	103				(75		)
Fair value of plan assets at end of measurement year	$	931			$	828

As of December 31, 2019, the difference between the accumulated benefit obligation and the fair value of Huntington’s plan assets was $8 million and is recorded in other assets.

The following table shows the components of net periodic benefit costs recognized in the three years ended December 31, 2019, 2018 and 2017:

	Pension Benefits (1)
(dollar amounts in millions)	2019				2018				2017
Service cost	$	2			$	3			$	3
Interest cost	32				29				30
Expected return on plan assets	(44		)		(49		)		(55		)
Amortization of loss	6				9				7
Settlements	5				7				11
Benefit costs	$	1			$	(1	)		$	(4	)

(1)	The pension costs for 2019 and 2018 were recorded in noninterest income - other income. For 2017 the costs were recorded in noninterest expense - personnel costs, in the Consolidated Statements of Income.

Included in benefit costs above are $3 million, $2 million, and $2 million of plan expenses that were recognized in each of the three years ended December 31, 2019, 2018, and 2017. It is Huntington’s policy to recognize settlement gains and losses as incurred. Assuming no cash contributions are made to the Plan during 2020, Huntington expects net periodic pension benefit, excluding any expense of settlements, to approximate $4 million for 2020.

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At December 31, 2019 and 2018, The Huntington National Bank, as trustee, held all Plan assets. The Plan assets consisted of investments in a variety of corporate and government fixed income investments, money market funds, and mutual funds as follows:

	Fair Value
(dollar amounts in millions)	2019							2018
Cash equivalents:
Mutual funds-money market	$	7			1	%		$	4			—	%
U.S. Treasury bills	—				—			4				1
Fixed income:
Corporate obligations	460				49			272				33
U.S. Government obligations	199				21			298				36
Municipal obligations	5				1			—				—
U.S. Government agencies	—				—			22				3
Collective trust funds	105				11			—				—
Equities:
Mutual funds-equities	78				8			64				8
Common stock	53				6			98				12
Preferred stock	5				1			5				1
Exchange traded funds	—				—			45				5
Limited Partnerships	19				2			16				1
Fair value of plan assets	$	931			100	%		$	828			100	%

Investments of the Plan are accounted for at cost on the trade date and are reported at fair value. The valuation methodologies used to measure the fair value of pension plan assets vary depending on the type of asset. At December 31, 2019, cash equivalent money market funds and U.S. Treasury bills are valued at the closing price reported from an actively traded exchange and are classified as Level 1. Mutual funds and exchange traded funds are valued at quoted market prices that represent the net asset value of shares held by the Plan at year-end. The mutual funds held by the Plan are actively traded and are classified as Level 1. Fixed income investments are valued using unadjusted quoted prices from active markets for similar assets are classified as Level 2. Common and preferred stock are valued using the year-end closing price as determined by a national securities exchange and are classified as Level 1. The investment in the limited partnerships is reported at net asset value per share as determined by the general partners of each limited partnership, based on their proportionate share of the partnership’s fair value as recorded in the partnership’s audited financial statements.

The investment objective of the Plan is to maximize the return on Plan assets over a long-time period, while meeting the Plan obligations. At December 31, 2019, Plan assets were invested 1% in cash equivalents, 17% in equity investments, and 82% in bonds, with an average duration of 15.9 years on bond investments. The estimated life of benefit obligations was 13.0 years. Although it may fluctuate with market conditions, Huntington has targeted a long-term allocation of Plan assets of 20% to 50% in equity investments and 80% to 50% in bond investments. The allocation of Plan assets between equity investments and fixed income investments will change from time to time.

At December 31, 2019, the following table shows when benefit payments were expected to be paid:

(dollar amounts in millions)	Pension Benefits
2020	$	54
2021	52
2022	50
2023	49
2024	49
2025 through 2029	240

Huntington also sponsors an unfunded defined benefit post-retirement plan as well as other nonqualified retirement plans, the most significant being the SRIP and FirstMerit SERP. The SRIP and FirstMerit SERP plans provide certain former officers and directors, with defined pension benefits in excess of limits imposed by federal tax law.

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The following table presents the amounts recognized in the Consolidated Balance Sheets at December 31, 2019 and 2018, for all defined benefit and nonqualified retirement plans:

(dollar amounts in millions)	2019				2018
Other liabilities	$	67			$	63

The following tables present the amounts recognized in OCI as of December 31, 2019, 2018, and 2017, and the changes in accumulated OCI for the years ended December 31, 2019, 2018, and 2017: 

(dollar amounts in millions)	2019				2018				2017
Net actuarial loss	$	(261	)		$	(257	)		$	(264	)
Prior service cost	10				11				14
Defined benefit pension plans	$	(251	)		$	(246	)		$	(250	)

	2019
(dollar amounts in millions)	Pretax				Tax (expense) Benefit				After-tax
Net actuarial (loss) gain:
Amounts arising during the year	$	(17	)		$	5			$	(12	)
Amortization included in net periodic benefit costs	12				(3		)		9
Prior service cost:
Amounts arising during the year	—				—				—
Amortization included in net periodic benefit costs	(2		)		—				(2		)
Total recognized in OCI	$	(7	)		$	2			$	(5	)

	2018
(dollar amounts in millions)	Pretax				Tax (expense) Benefit				After-tax
Net actuarial (loss) gain:
Amounts arising during the year	$	(5	)		$	2			$	(3	)
Amortization included in net periodic benefit costs	13				(3		)		10
Prior service cost:
Amortization included in net periodic benefit costs	(4		)		1				(3		)
Total recognized in OCI	$	4			$	—			$	4

	2017
(dollar amounts in millions)	Pretax				Tax (expense) Benefit				After-tax (1)
Net actuarial (loss) gain:
Amounts arising during the year	$	(16	)		$	6			$	(10	)
Amortization included in net periodic benefit costs	18				(7		)		11
Prior service cost:
Amortization included in net periodic benefit costs	(2		)		1				(1		)
Total recognized in OCI	$	—			$	—			$	—

(1)	TCJA reclassification from AOCI to retained earnings recorded during 2017 was $45 million.

Huntington has a defined contribution plan that is available to eligible employees. Huntington’s expense related to the defined contribution plans for the years ended December 31, 2019, 2018, and 2017 was $51 million, $46 million, and $35 million, respectively.

The following table shows the number of shares, market value, and dividends received on shares of Huntington stock held by the defined contribution plan:

	December 31,
(dollar amounts in millions, share amounts in thousands)	2019				2018
Shares in Huntington common stock	10,334				11,635
Market value of Huntington common stock	$	156			$	139
Dividends received on shares of Huntington stock	6				6

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The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state, city, and foreign jurisdictions. Federal income tax audits have been completed for tax years through 2009. Certain proposed adjustments resulting from the IRS examination of our 2010 through 2011 tax returns have been settled, subject to final approval by the Joint Committee on Taxation of the U.S. Congress. While the statute of limitations remains open for tax years 2012 through 2018, the IRS has advised that tax years 2012 through 2014 will not be audited, and is currently examining the 2015 and 2016 federal income tax returns. Various state and other jurisdictions remain open to examination, including Ohio, Kentucky, Indiana, Michigan, Pennsylvania, West Virginia, and Illinois.

Huntington accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes. Any interest and penalties on income tax assessments or income tax refunds are recognized in the Consolidated Statements of Income as a component of provision for income taxes. The amounts of unrecognized tax benefits and accrued tax-related interest and penalties were immaterial at December 31, 2019 and 2018. Further, the amount of net interest and penalties related to unrecognized tax benefits was immaterial for all periods presented.

The following is a summary of the provision (benefit) for income taxes:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Current tax provision (benefit)
Federal	$	209			$	152			$	41
State	16				20				(1		)
Total current tax provision	225				172				40
Deferred tax provision (benefit)
Federal	24				71				151
State	(1		)		(8		)		17
Total deferred tax provision	23				63				168
Provision for income taxes	$	248			$	235			$	208

The following is a reconciliation for provision for income taxes:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Provision for income taxes computed at the statutory rate	$	348			$	342			$	488
Increases (decreases):
General business credits	(88		)		(80		)		(71		)
Capital loss	(62		)		(60		)		(67		)
Tax-exempt income	(21		)		(23		)		(31		)
Tax-exempt bank owned life insurance income	(14		)		(14		)		(23		)
Stock based compensation	(5		)		(14		)		(13		)
Affordable housing investment amortization, net of tax benefits	70				64				46
State income taxes, net	11				10				11
Impact from TCJA	—				(3		)		(123		)
Other	9				13				(9		)
Provision for income taxes	$	248			$	235			$	208

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The significant components of deferred tax assets and liabilities at December 31, 2019 and 2018 were as follows:

	At December 31,
(dollar amounts in millions)	2019				2018
Deferred tax assets:
Allowances for credit losses	$	184			$	184
Net operating and other loss carryforward	99				95
Fair value adjustments	77				173
Lease liability	47				—
Purchase accounting and other intangibles	33				—
Pension and other employee benefits	12				14
Accrued expense/prepaid	3				16
Partnership investments	3				5
Market discount	2				6
Other assets	3				6
Total deferred tax assets	463				499
Deferred tax liabilities:
Lease financing	359				262
Loan origination costs	119				148
Operating assets	74				69
Right-of-use asset	41				—
Mortgage servicing rights	36				45
Securities adjustments	11				6
Purchase accounting and other intangibles	—				25
Other liabilities	—				2
Total deferred tax liabilities	640				557
Net deferred tax (liability) asset before valuation allowance	(177		)		(58		)
Valuation allowance	(6		)		(6		)
Net deferred tax (liability) asset	$	(183	)		$	(64	)

At December 31, 2019, Huntington’s net deferred tax asset related to loss and other carryforwards was $99 million. This was comprised of federal net operating loss carryforwards of $44 million, which will begin expiring in 2029, $40 million of state net operating loss carryforwards, which will begin expiring in 2020, an alternative minimum tax credit carryforward of less than $1 million, which will be fully utilized or refunded by 2022, and a capital loss carryforward of $15 million, which expires in 2022.

The state valuation allowance was $6 million at both December 31, 2019 and December 31, 2018, as the Company believes that it is more likely than not, portions of the state deferred tax assets and state net operating loss carryforwards will not be realized.

At December 31, 2019, retained earnings included approximately $12 million of base year reserves of acquired thrift institutions, for which no deferred federal income tax liability has been recognized. Under current law, if these bad debt reserves are used for purposes other than to absorb bad debt losses, they will be subject to federal income tax at the corporate tax rate enacted at the time. The amount of unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $3 million at December 31, 2019.

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Following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Loans held for sale

Huntington has elected to apply the fair value option for mortgage loans originated with the intent to sell which are included in loans held for sale. Mortgage loans held for sale are classified as Level 2 and are estimated using security prices for similar product types.

Loans held for investment

Certain mortgage loans originated with the intent to sell for which the FVO was elected have been reclassified to mortgage loans held for investment. These loans continue to be measured at fair value. The fair value is determined using fair value of similar mortgage-backed securities adjusted for loan specific variables.

Huntington elected the fair value option for consumer loans with deteriorated credit quality acquired from FirstMerit. These consumer loans are classified as Level 3. The key assumption used to determine the fair value of the consumer loans is discounted cash flows.

Available-for-sale securities and trading account securities

Securities accounted for at fair value include both the available-for-sale and trading portfolios. Huntington determines the fair value of securities utilizing quoted market prices obtained for identical or similar assets, third-party pricing services, third-party valuation specialists and other observable inputs such as recent trade observations. AFS and trading securities classified as Level 1 use quoted market prices (unadjusted) in active markets for identical securities at the measurement date. Less than 1% of the positions in these portfolios are Level 1, and consist of U.S. Treasury securities and money market mutual funds. When quoted market prices are not available, fair values are classified as Level 2 using quoted prices for similar assets in active markets, quoted prices of identical or similar assets in markets that are not active, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 represents 78% of the positions in these portfolios, which consists of U.S. Government and agency debt securities, agency mortgage backed securities, private-label asset-backed securities, certain municipal securities and other securities. For Level 2 securities Huntington primarily uses prices obtained from third-party pricing services to determine the fair value of securities. Huntington independently evaluates and corroborates the fair value received from pricing services through various methods and techniques, including references to dealer or other market quotes, by reviewing valuations of comparable instruments, and by comparing the prices realized on the sale of similar securities. If relevant market prices are limited or unavailable, valuations may require significant management judgment or estimation to determine fair value, in which case the fair values are classified as Level 3, which represent 22% of the positions. The Level 3 positions predominantly consist of direct purchase municipal securities. A significant change in the unobservable inputs for these securities may result in a significant change in the ending fair value measurement of these securities.

The direct purchase municipal securities are classified as Level 3 and require significant estimates to determine fair value which results in greater subjectivity. The fair value is determined by utilizing a discounted cash flow valuation technique employed by a third-party valuation specialist. The third-party specialist uses assumptions related to yield, prepayment speed, conditional default rates and loss severity based on certain factors such as, credit worthiness of the counterparty, prevailing market rates, and analysis of similar securities. Huntington evaluates the fair values provided by the third-party specialist for reasonableness.

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MSRs

MSRs do not trade in an active, open market with readily observable prices. Accordingly, the fair value of these assets is classified as Level 3. Huntington determines the fair value of MSRs using a discounted cash flow model based upon the month-end interest rate curve and prepayment assumptions. The model utilizes assumptions to estimate future net servicing income cash flows, including estimates of time decay, payoffs, and changes in valuation inputs and assumptions. Servicing brokers and other sources of information (e.g. discussion with other mortgage servicers and industry surveys) are used to obtain information on market practice and assumptions. On at least a quarterly basis, third-party marks are obtained from at least one servicing broker. Huntington reviews the valuation assumptions against this market data for reasonableness and adjusts the assumptions if deemed appropriate. Any recommended change in assumptions and/or inputs are presented for review to the Mortgage Price Risk Subcommittee for final approval.

Derivative assets and liabilities

Derivatives classified as Level 2 consist of foreign exchange and commodity contracts, which are valued using exchange traded swaps and futures market data. In addition, Level 2 includes interest rate contracts, which are valued using a discounted cash flow method that incorporates current market interest rates. Level 2 also includes exchange traded options and forward commitments to deliver mortgage-backed securities, which are valued using quoted prices.

Derivatives classified as Level 3 consist of interest rate lock agreements related to mortgage loan commitments and the Visa^® share swap. The determination of fair value of the interest rate locks includes assumptions related to the likelihood that a commitment will ultimately result in a closed loan, which is a significant unobservable assumption. A significant increase or decrease in the external market price would result in a significantly higher or lower fair value measurement.

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Assets and Liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis at December 31, 2019 and 2018 are summarized below:

	Fair Value Measurements at Reporting Date Using												Netting Adjustments (1)				December 31, 2019
(dollar amounts in millions)	Level 1				Level 2				Level 3
Assets
Trading account securities:
Federal agencies: Other agencies	$	—			$	4			$	—			$	—			$	4
Municipal securities	—				63				—				—				63
Other securities	30				2				—				—				32
	30				69				—				—				99
Available-for-sale securities:
U.S. Treasury securities	10				—				—				—				10
Residential CMOs	—				5,085				—				—				5,085
Residential MBS	—				4,222				—				—				4,222
Commercial MBS	—				976				—				—				976
Other agencies	—				165				—				—				165
Municipal securities	—				56				2,999				—				3,055
Private-label CMO	—				—				2				—				2
Asset-backed securities	—				531				48				—				579
Corporate debt	—				51				—				—				51
Other securities/Sovereign debt	—				4				—				—				4
	10				11,090				3,049				—				14,149
Other securities	54				—				—				—				54
Loans held for sale	—				781				—				—				781
Loans held for investment	—				55				26				—				81
MSRs	—				—				7				—				7
Derivative assets	—				848				8				(404		)		452
Liabilities
Derivative liabilities	—				519				2				(417		)		104

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	Fair Value Measurements at Reporting Date Using												Netting Adjustments (1)				December 31, 2018
(dollar amounts in millions)	Level 1				Level 2				Level 3
Assets
Trading account securities:
Municipal securities	$	1			$	27			$	—			$	—			$	28
Other securities	77				—				—				—				77
	78				27				—				—				105
Available-for-sale securities:
U.S. Treasury securities	5				—				—				—				5
Residential CMOs	—				6,999				—				—				6,999
Residential MBS	—				1,255				—				—				1,255
Commercial MBS	—				1,583				—				—				1,583
Other agencies	—				126				—				—				126
Municipal securities	—				275				3,165				—				3,440
Asset-backed securities	—				315				—				—				315
Corporate debt	—				53				—				—				53
Other securities/Sovereign debt	—				4				—				—				4
	5				10,610				3,165				—				13,780
Other securities	22				—				—				—				22
Loans held for sale	—				613				—				—				613
Loans held for investment	—				49				30				—				79
MSRs	—				—				10				—				10
Derivative assets	21				474				5				(291		)		209
Liabilities
Derivative liabilities	11				390				3				(217		)		187

(1)	Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

The tables below present a rollforward of the balance sheet amounts for the years ended December 31, 2019, 2018, and 2017 for financial instruments measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 measurements may also include observable components of value that can be validated externally. Accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.

	Level 3 Fair Value Measurements Year Ended December 31, 2019
									Available-for-sale securities
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities				Private- label CMO				Asset- backed securities				Loans held for investment
Opening balance	$	10			$	2			$	3,165							$	—			$	30
Transfers out of Level 3 (1)	—				(62		)		—								—				—
Total gains/losses for the period:
Included in earnings	(3		)		66				(1		)						—				1
Included in OCI	—				—				77								—				—
Purchases/originations	—				—				254				2				55				—
Sales	—				—				—								—				—
Repayments	—				—				—								—				(5		)
Settlements	—				—				(496		)						(7		)		—
Closing balance	$	7			$	6			$	2,999			$	2			$	48			$	26
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date	$	(3	)		$	3			$	—			$	—			$	—			$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period	$	—			$	—			$	74			$	—			$	—			$	—

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	Level 3 Fair Value Measurements Year Ended December 31, 2018
									Available-for-sale securities								Loans held for investment
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities				Asset- backed securities
Opening balance	$	11			$	(1	)		$	3,167			$	24			$	38
Transfers out of Level 3 (1)	—				(35		)		—				—				—
Total gains/losses for the period:
Included in earnings	(1		)		35				(3		)		(2		)		—
Included in OCI	—				—				(52		)		11				—
Purchases/originations	—				—				658				—				—
Sales	—				—				—				(33		)		—
Repayments	—				—				—				—				(8		)
Settlements	—				3				(605		)		—				—
Closing balance	$	10			$	2			$	3,165			$	—			$	30
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date	$	(1	)		$	—			$	—			$	—			$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period	$	—			$	—			$	(52	)		$	—			$	—

	Level 3 Fair Value Measurements Year Ended December 31, 2017
									Available-for-sale securities								Loans held for investment
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities				Asset- backed securities
Opening balance	$	14			$	(2	)		$	2,798			$	76			$	48
Transfers out of Level 3 (1)	—				(15		)		—				—				—
Total gains/losses for the period:
Included in earnings	(3		)		16				(2		)		(5		)		1
Included in OCI	—				—				(8		)		14				—
Purchases/originations	—				—				787				—				—
Sales	—				—				—				(60		)		—
Repayments	—				—				—				—				(11		)
Settlements	—				—				(408		)		(1		)		—
Closing balance	$	11			$	(1	)		$	3,167			$	24			$	38
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date	$	(3	)		$	—			$	—			$	(4	)		$	—

(1)	Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.

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The tables below summarize the classification of gains and losses due to changes in fair value, recorded in earnings for Level 3 assets and liabilities for the years ended December 31, 2019, 2018, and 2017:

	Level 3 Fair Value Measurements Year Ended December 31, 2019
									Available-for-sale securities				Loans held for investment
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities
Classification of gains and losses in earnings:
Mortgage banking income	$	(3	)		$	66			$	—			$	—
Interest and fee income	—				—				(1		)		1
Total	$	(3	)		$	66			$	(1	)		$	1

	Level 3 Fair Value Measurements Year Ended December 31, 2018
									Available-for-sale securities
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities				Asset- backed securities
Classification of gains and losses in earnings:
Mortgage banking income	$	(1	)		$	35			$	—			$	—
Securities gains (losses)	—				—				—				(2		)
Interest and fee income	—				—				(3		)		—
Total	$	(1	)		$	35			$	(3	)		$	(2	)

	Level 3 Fair Value Measurements Year Ended December 31, 2017
									Available-for-sale securities
(dollar amounts in millions)	MSRs				Derivative instruments				Municipal securities				Asset- backed securities				Loans held for investment
Classification of gains and losses in earnings:
Mortgage banking income (loss)	$	(3	)		$	16			$	—			$	—			$	—
Securities gains (losses)	—				—				—				(5		)		—
Interest and fee income	—				—				(2		)		—				—
Noninterest income	—				—				—				—				1
Total	$	(3	)		$	16			$	(2	)		$	(5	)		$	1

Assets and liabilities under the fair value option

The following tables presents the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:

	December 31, 2019
	Total Loans												Loans that are 90 or more days past due
(dollar amounts in millions)	Fair value carrying amount				Aggregate unpaid principal				Difference				Fair value carrying amount				Aggregate unpaid principal				Difference
Assets
Loans held for sale	$	781			$	755			$	26			$	2			$	2			$	—
Loans held for investment	81				87				(6		)		3				4				(1		)

	December 31, 2018
	Total Loans												Loans that are 90 or more days past due
(dollar amounts in millions)	Fair value carrying amount				Aggregate unpaid principal				Difference				Fair value carrying amount				Aggregate unpaid principal				Difference
Assets
Loans held for sale	$	613			$	594			$	19			$	—			$	—			$	—
Loans held for investment	79				87				$	(8	)		6				7				$	(1	)

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The following tables present the net gains (losses) from fair value changes for the years ended December 31, 2019, 2018, and 2017: 

	Net gains (losses) from fair value changes Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Assets
Loans held for sale	$	7			$	5			$	8
Loans held for investment	1				—				—

Assets and Liabilities measured at fair value on a nonrecurring basis

Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The amounts presented represent the fair value on the various measurement dates throughout the period. The gains(losses) represent the amounts recorded during the period regardless of whether the asset is still held at period end.

The amounts measured at fair value on a nonrecurring basis at December 31, 2019 were as follows:

					Fair Value Measurements Using
(dollar amounts in millions)	Fair Value				Quoted Prices In Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Other Unobservable Inputs (Level 3)				Total Gains/(Losses) Year Ended December 31, 2019
MSRs	$	206			$	—			$	—			$	206			$	(14	)
Impaired loans	26				—				—				26				(1		)

Huntington records nonrecurring adjustments of collateral-dependent loans measured for impairment when establishing the ALLL. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Appraisals are generally obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties and cost of construction. In cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized.

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Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis

The table below presents quantitative information about the significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2019 and 2018:

	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019
(dollar amounts in millions)	Fair Value				Valuation Technique		Significant Unobservable Input		Range						Weighted  Average
Measured at fair value on a recurring basis:
MSRs	$	7			Discounted cash flow		Constant prepayment rate		—	%	-	26	%		8	%
							Spread over forward interest rate swap rates		5	%	-	11	%		8	%
Derivative assets	8				Consensus Pricing		Net market price		(2	)%	-	11	%		2	%
							Estimated Pull through %		2	%	-	100	%		91	%
Derivative liabilities	2				Discounted cash flow		Estimated conversion factor								162	%
							Estimated growth rate of Visa Class A shares								7	%
							Discount rate								2	%
							Timing of the resolution of the litigation								6/30/2020
Municipal securities	2,999				Discounted cash flow		Discount rate		2	%	-	3	%		2	%
Asset-backed securities	48						Cumulative default		—	%	-	39	%		4	%
							Loss given default		5	%	-	80	%		24	%
Loans held for investment	26				Discounted cash flow		Discount rate		5	%	-	6	%		5	%
							Constant prepayment rate		9	%	-	12	%		9	%
Measured at fair value on a nonrecurring basis:
MSRs	206				Discounted cash flow		Constant prepayment rate		10	%		31	%		12	%
							Spread over forward interest rate swap rates		5	%		11	%		9	%
Impaired loans	26				Appraisal value		NA								NA

	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2018
(dollar amounts in millions)	Fair Value				Valuation Technique		Significant Unobservable Input		Range						Weighted  Average
Measured at fair value on a recurring basis:
MSRs	$	10			Discounted cash flow		Constant prepayment rate		6	%	-	54	%		8	%
							Spread over forward interest rate swap rates		5	%	-	11	%		8	%
Derivative assets	5				Consensus Pricing		Net market price		(5	)%	-	23	%		2	%
							Estimated Pull through %		1	%	-	100	%		92	%
Derivative liabilities	3				Discounted cash flow		Estimated conversion factor								163	%
							Estimated growth rate of Visa Class A shares								7	%
							Discount rate								4	%
							Timing of the resolution of the litigation								6/30/2020
Municipal securities	3,165				Discounted cash flow		Discount rate		4	%	-	4	%		4	%
							Cumulative default		—	%	-	39	%		3	%
							Loss given default		5	%	-	90	%		25	%
Loans held for investment	30				Discounted cash flow		Discount rate		7	%	-	9	%		9	%
							Constant prepayment rate		9	%	-	9	%		9	%
Measured at fair value on a nonrecurring basis:
Impaired loans	33				Appraisal value		NA								NA
Loans held for sale	121				Discounted cash flow		Discount rate		5	%		6	%		5	%
	24				Appraisal value		NA								NA

The following provides a general description of the impact of a change in an unobservable input on the fair value measurement and the interrelationship between unobservable inputs, where relevant/significant. Interrelationships may also exist between observable and unobservable inputs. Such relationships have not been included in the discussion below.

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Credit loss estimates, such as probability of default, constant default, cumulative default, loss given default, cure given deferral, and loss severity, are driven by the ability of the borrowers to pay their loans and the value of the underlying collateral and are impacted by changes in macroeconomic conditions, typically increasing when economic conditions worsen and decreasing when conditions improve. An increase in the estimated prepayment rate typically results in a decrease in estimated credit losses and vice versa. Higher credit loss estimates generally result in lower fair values. Credit spreads generally increase when liquidity risks and market volatility increase and decrease when liquidity conditions and market volatility improve.

Discount rates and spread over forward interest rate swap rates typically increase when market interest rates increase and/or credit and liquidity risks increase, and decrease when market interest rates decline and/or credit and liquidity conditions improve. Higher discount rates and credit spreads generally result in lower fair market values.

Net market price and pull through percentages generally increase when market interest rates increase and decline when market interest rates decline. Higher net market price and pull through percentages generally result in higher fair values.

Fair values of financial instruments

The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments at December 31, 2019 and December 31, 2018:

	December 31, 2019
(dollar amounts in millions)	Amortized Cost				Lower of Cost or Market				Fair Value or Fair Value Option				Total Carrying Amount				Estimated Fair Value
Financial Assets
Cash and short-term assets	$	1,272			$	—			$	—			$	1,272			$	1,272
Trading account securities	—				—				99				99				99
Available-for-sale securities	—				—				14,149				14,149				14,149
Held-to-maturity securities	9,070				—				—				9,070				9,186
Other securities	387				—				54				441				441
Loans held for sale	—				96				781				877				879
Net loans and leases (1)	74,540				—				81				74,621				75,177
Derivatives	—				—				452				452				452
Financial Liabilities
Deposits	82,347				—				—				82,347				82,344
Short-term borrowings	2,606				—				—				2,606				2,606
Long-term debt	9,849				—				—				9,849				10,075
Derivatives	—				—				104				104				104

	December 31, 2018
(dollar amounts in millions)	Amortized Cost				Lower of Cost or Market				Fair Value or Fair Value Option				Total Carrying Amount				Estimated Fair Value
Financial Assets
Cash and short-term assets	$	2,725			$	—			$	—			$	2,725			$	2,725
Trading account securities	—				—				105				105				105
Available-for-sale securities	—				—				13,780				13,780				13,780
Held-to-maturity securities	8,565				—				—				8,565				8,286
Other securities	543				—				22				565				565
Loans held for sale	—				191				613				804				806
Net loans and leases (1)	74,049				—				79				74,128				73,668
Derivatives	—				—				209				209				209
Financial Liabilities
Deposits	84,774				—				—				84,774				84,731
Short-term borrowings	2,017				—				—				2,017				2,017
Long-term debt	8,625				—				—				8,625				8,718
Derivatives	—				—				187				187				187

(1)	Includes collateral-dependent loans measured for impairment.

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The following table presents the level in the fair value hierarchy for the estimated fair values at December 31, 2019 and December 31, 2018:

	Estimated Fair Value Measurements at Reporting Date Using												December 31, 2019
(dollar amounts in millions)	Level 1				Level 2				Level 3
Financial Assets
Trading account securities	$	30			$	69			$	—			$	99
Available-for-sale securities	10				11,090				3,049				14,149
Held-to-maturity securities	—				9,186				—				9,186
Other securities (1)	54				—				—				54
Loans held for sale	—				781				98				879
Net loans and direct financing leases	—				55				75,122				75,177
Financial Liabilities
Deposits	—				76,790				5,554				82,344
Short-term borrowings	—				—				2,606				2,606
Long-term debt	—				9,439				636				10,075

	Estimated Fair Value Measurements at Reporting Date Using												December 31, 2018
(dollar amounts in millions)	Level 1				Level 2				Level 3
Financial Assets
Trading account securities	$	78			$	27			$	—			$	105
Available-for-sale securities	5				10,610				3,165				13,780
Held-to-maturity securities	—				8,286				—				8,286
Other securities (1)	22				—				—				22
Loans held for sale	—				613				193				806
Net loans and direct financing leases	—				49				73,619				73,668
Financial Liabilities
Deposits	—				76,922				7,809				84,731
Short-term borrowings	1				—				2,016				2,017
Long-term debt	—				8,158				560				8,718

(1)	Excludes securities without readily determinable fair values.

The short-term nature of certain assets and liabilities result in their carrying value approximating fair value. These include trading account securities, customers’ acceptance liabilities, short-term borrowings, bank acceptances outstanding, FHLB advances, and cash and short-term assets, which include cash and due from banks, interest-bearing deposits in banks, interest-bearing deposits at Federal Reserve Bank, federal funds sold, and securities purchased under resale agreements. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses that limit Huntington’s exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value.

Certain assets, the most significant being operating lease assets, bank owned life insurance, and premises and equipment, do not meet the definition of a financial instrument and are excluded from this disclosure. Similarly, mortgage servicing rights, deposit base, and other customer relationship intangibles are not considered financial instruments and are not included above. Accordingly, this fair value information is not intended to, and does not, represent Huntington’s underlying value. Many of the assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by Management. These estimations necessarily involve the use of judgment about a wide variety of factors, including but not limited to, relevancy of market prices of comparable instruments, expected future cash flows, and appropriate discount rates.

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Derivative financial instruments are recorded in the Consolidated Balance Sheets as either an asset or a liability (in other assets or other liabilities, respectively) and measured at fair value.

Derivative financial instruments can be designated as accounting hedges under GAAP. Designating a derivative as an accounting hedge allows Huntington to recognize gains and losses on the hedging instruments in the income statement line item where the gains and losses on the hedged item are recognized. Gains and losses on derivatives that are not designated in an effective hedge relationship under GAAP immediately impact earnings within the period they occur.

The following table presents the fair values of all derivative instruments included in the Consolidated Balance Sheets at December 31, 2019 and December 31, 2018. Amounts in the table below are presented gross without the impact of any net collateral arrangements.

	December 31, 2019								December 31, 2018
(dollar amounts in millions)	Asset				Liability				Asset				Liability
Derivatives designated as Hedging Instruments
Interest rate contracts	$	256			$	36			$	44			$	42
Derivatives not designated as Hedging Instruments
Interest rate contracts	420				314				261				165
Foreign exchange contracts	19				18				23				19
Commodities contracts	155				152				172				168
Equity contracts	6				1				—				10
Total Contracts	$	856			$	521			$	500			$	404

The following table presents the amount of gain or loss recognized in income for derivatives not designated as hedging instruments under ASC Subtopic 815-10 in the Consolidated Income Statement for the years ended December 31, 2019 and 2018.

		Location of Gain or (Loss) Recognized in Income on Derivative
				Year Ended December 31,
(dollar amounts in millions)				2019				2018
Interest rate contracts:
Customer		Capital markets fees		$	49			$	41
Mortgage Banking		Mortgage banking income		37				(19		)
Interest rate floors		Other noninterest income		4				—
Foreign exchange contracts		Capital markets fees		28				27
Commodities contracts		Capital markets fees		(2		)		6
Equity contracts		Other noninterest expense		(4		)		4
Total				$	112			$	59

Derivatives used in asset and liability management activities

Huntington engages in balance sheet hedging activity, principally for asset and liability management purposes. Balance sheet hedging activity is generally arranged to receive hedge accounting treatment that can be classified as either fair value or cash flow hedges. Fair value hedges are executed to hedge changes in fair value of outstanding fixed-rate debt caused by fluctuations in market interest rates. Cash flow hedges are executed to modify interest rate characteristics of designated commercial loans in order to reduce the impact of changes in future cash flows due to market interest rate changes.

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The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at December 31, 2019 and December 31, 2018, identified by the underlying interest rate-sensitive instruments:

	December 31, 2019
(dollar amounts in millions)	Fair Value Hedges				Cash Flow Hedges				Total
Instruments associated with:
Loans	$	—			$	18,375			$	18,375
Investment securities	—				12				12
Long-term debt	7,540				—				7,540
Total notional value at December 31, 2019	$	7,540			$	18,387			$	25,927
	December 31, 2018
(dollar amounts in millions)	Fair Value Hedges				Cash Flow Hedges				Total
Instruments associated with:
Investment securities	$	—			$	12			$	12
Long-term debt	4,865				—				4,865
Total notional value at December 31, 2018	$	4,865			$	12			$	4,877

The following table presents additional information about the interest rate swaps and floors used in Huntington’s asset and liability management activities at December 31, 2019 and December 31, 2018:

	December 31, 2019
					Average Maturity (years)							Weighted-Average Rate
(dollar amounts in millions)	Notional Value							Fair Value				Receive			Pay
Asset conversion swaps
Receive fixed—generic	$	8,637			3.3			$	23			1.66	%		1.06		%
Liability conversion swaps
Receive fixed—generic	7,540				2.3			151				2.20			1.79
Total swap portfolio at December 31, 2019	$	16,177			2.9			$	174			1.91	%		1.40		%
	December 31, 2019
(dollar amounts in millions)	Notional Value							Average Maturity (years)							Fair Value
Interest rate floors
Designated interest rate floors	$	9,750						1.6							$	46
Total floors portfolio at December 31, 2019	$	9,750						1.6							$	46
	December 31, 2018
					Average Maturity (years)							Weighted-Average Rate
(dollar amounts in millions)	Notional Value							Fair Value				Receive			Pay
Asset conversion swaps
Receive fixed—generic	$	12			1.2			$	—			2.20	%		2.46		%
Liability conversion swaps
Receive fixed—generic	4,865				2.6			2				2.24	%		2.54		%
Total swap portfolio at December 31, 2018	$	4,877			2.6			$	2			2.24	%		2.54		%

These derivative financial instruments were entered into for the purpose of managing the interest rate risk of assets and liabilities. Net amounts receivable or payable on contracts hedging either interest earning assets or interest bearing liabilities were accrued as an adjustment to either interest income or interest expense. The net amounts resulted in an increase (decrease) to net interest income of $(53) million, $(36) million, and $23 million for the years ended December 31, 2019, 2018, and 2017, respectively.

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Fair Value Hedges

The changes in fair value of the fair value hedges are recorded through earnings and offset against changes in the fair value of the hedged item.

The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the years ended December 31, 2019 and 2018:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Interest rate contracts
Change in fair value of interest rate swaps hedging long-term debt (1)	$	127			$	112			$	(53	)
Change in fair value of hedged long term debt (1)	(125		)		(104		)		54

(1)	Recognized in Interest expense - long-term debt in the Consolidated Statements of Income.

As of December 31, 2019, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.

	Carrying Amount of the Hedged Liabilities								Cumulative Amount of Fair Value Hedging Adjustment To Hedged Liabilities
(dollar amounts in millions)	December 31, 2019				December 31, 2018				December 31, 2019				December 31, 2018
Long-term debt	$	7,578			$	4,845			$	114			$	(12	)

The cumulative amount of fair value hedging adjustments remaining for any hedged assets and liabilities for which hedge accounting has been discontinued is $(93) million at December 31, 2019 and $(127) million at December 31, 2018.

Cash Flow Hedges

During 2019, Huntington entered into $18.4 billion of interest rate floors and swaps. These are designated as cash flow hedges for variable rate commercial loans indexed to LIBOR. The initial premium paid for the interest rate floor contracts represents the time value of the contracts and is not included in the measurement of hedge effectiveness. Any change in fair value related to time value is recognized in OCI. The initial premium paid is amortized on a straight line basis as a reduction to interest income over the contractual life of these contracts.

Derivatives used in mortgage banking activities

Mortgage loan origination hedging activity

Huntington’s mortgage origination hedging activity is related to economically hedging of Huntington’s mortgage pricing commitments to customers and the secondary sale to third parties. The value of a newly originated mortgage is not firm until the interest rate is committed or locked. Forward commitments to sell economically hedge the possible loss on interest rate lock commitments due to interest rate change. The net asset (liability) position of these derivatives at December 31, 2019 and December 31, 2018 are $6 million and $(4) million, respectively. At December 31, 2019 and 2018, Huntington had commitments to sell residential real estate loans of $1.4 billion and $0.8 billion, respectively. These contracts mature in less than one year.

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MSR hedging activity

Huntington’s MSR economic hedging activity uses securities and derivatives to manage the value of the MSR asset and to mitigate the various types of risk inherent in the MSR asset, including risks related to duration, basis, convexity, volatility, and yield curve. The hedging instruments include forward commitments, interest rate swaps, and options on interest rate swaps.

The notional value of the derivative financial instruments, corresponding trading assets and liabilities, and net trading gains (losses) related to MSR hedging activity is summarized in the following table:

MSR hedging activity
(dollar amounts in millions)	December 31, 2019					December 31, 2018
Notional value	$	778				$	—
Trading assets	19					—
						Year December 31,
(dollar amounts in millions)						2019			2018
Trading gains (losses)						$	30		(8	)

MSR hedging trading assets and liabilities are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets. Trading gains (losses) are included in mortgage banking income in the Consolidated Statement of Income.

Derivatives used in customer related activities

Various derivative financial instruments are offered to enable customers to meet their financing and investing objectives and for their risk management purposes. Derivative financial instruments used in trading activities consist of commodity, interest rate, and foreign exchange contracts. Huntington enters into offsetting third-party contracts with approved, reputable counterparties with substantially matching terms and currencies in order to economically hedge significant exposure related to derivatives used in trading activities.

The interest rate or price risk of customer derivatives is mitigated by entering into similar derivatives having offsetting terms with other counterparties. The credit risk to these customers is evaluated and included in the calculation of fair value. Foreign currency derivatives help the customer hedge risk and reduce exposure to fluctuations in exchange rates. Transactions are primarily in liquid currencies with Canadian dollars and Euros comprising a majority of all transactions. Commodity derivatives help the customer hedge risk and reduce exposure to fluctuations in the price of various commodities. Hedging of energy-related products and base metals comprise the majority of these transactions.

The net fair values of these derivative financial instruments, for which the gross amounts are included in other assets or other liabilities at December 31, 2019 and December 31, 2018, were $87 million and $92 million, respectively. The total notional values of derivative financial instruments used by Huntington on behalf of customers, including offsetting derivatives, were $30 billion and $26 billion at December 31, 2019 and December 31, 2018, respectively. Huntington’s credit risk from customer derivatives was $407 million and $132 million at the same dates, respectively.

Visa^®-related Swaps

In connection with the sale of Huntington’s Class B Visa^® shares, Huntington entered into swap agreements with the purchaser of the shares. The swap agreements adjust for dilution in the conversion ratio of Class B shares resulting from changes in the Visa^® litigation. At December 31, 2019, the fair value of the swap liabilities of $1 million is an estimate of the exposure liability based upon Huntington’s assessment of the potential Visa^® litigation losses and timing of the litigation settlement.

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Financial assets and liabilities that are offset in the Consolidated Balance Sheets

Huntington records derivatives at fair value as further described in Note 18 - “Fair Values of Assets and Liabilities”.

Derivative balances are presented on a net basis taking into consideration the effects of legally enforceable master netting agreements. Additionally, collateral exchanged with counterparties is also netted against the applicable derivative fair values. Huntington enters into derivative transactions with two primary groups: broker-dealers and banks, and Huntington’s customers. Different methods are utilized for managing counterparty credit exposure and credit risk for each of these groups.

Huntington enters into transactions with broker-dealers and banks for various risk management purposes. These types of transactions generally are high dollar volume. Huntington enters into collateral and master netting agreements with these counterparties, and routinely exchanges cash and high quality securities collateral. Huntington enters into transactions with customers to meet their financing, investing, payment and risk management needs. These types of transactions generally are low dollar volume. Huntington enters into master netting agreements with customer counterparties, however collateral is generally not exchanged with customer counterparties.

In addition to the customer derivative credit exposure, aggregate credit risk associated with broker-dealer and bank derivative transactions, net of collateral that has been pledged by the counterparty, was $22 million and $37 million at December 31, 2019 and December 31, 2018, respectively. The credit risk associated with derivatives is calculated after considering master netting agreements.

At December 31, 2019, Huntington pledged $171 million of investment securities and cash collateral to counterparties, while other counterparties pledged $178 million of investment securities and cash collateral to Huntington to satisfy collateral netting agreements. In the event of credit downgrades, Huntington would not be required to provide additional collateral.

The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Consolidated Balance Sheets at December 31, 2019 and December 31, 2018:

Offsetting of Financial Assets and Derivative Assets
						Gross amounts offset in the consolidated balance sheets				Net amounts of assets presented in the consolidated balance sheets				Gross amounts not offset in the consolidated balance sheets
(dollar amounts in millions)		Gross amounts of recognized assets												Financial instruments				Cash collateral received				Net amount
December 31, 2019	Derivatives	$	856			$	(404	)		$	452			$	(65	)		$	(29	)		$	358
December 31, 2018	Derivatives	500				(291		)		209				(4		)		(53		)		152

Offsetting of Financial Liabilities and Derivative Liabilities
						Gross amounts offset in the consolidated balance sheets				Net amounts of liabilities presented in the consolidated balance sheets				Gross amounts not offset in the consolidated balance sheets
(dollar amounts in millions)		Gross amounts of recognized liabilities												Financial instruments				Cash collateral delivered				Net amount
December 31, 2019	Derivatives	$	521			$	(417	)		$	104			$	—			$	(75	)		$	29
December 31, 2018	Derivatives	404				(217		)		187				—				(12		)		175

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Unconsolidated VIEs

The following tables provide a summary of the assets and liabilities included in Huntington’s Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary of, the VIE at December 31, 2019, and 2018:

	December 31, 2019
(dollar amounts in millions)	Total Assets				Total Liabilities				Maximum Exposure to Loss
Trust Preferred Securities	$	14			$	252			$	—
Affordable Housing Tax Credit Partnerships	727				332				727
Other Investments	179				63				179
Total	$	920			$	647			$	906

	December 31, 2018
(dollar amounts in millions)	Total Assets				Total Liabilities				Maximum Exposure to Loss
Trust Preferred Securities	$	14			$	252			$	—
Affordable Housing Tax Credit Partnerships	708				357				708
Other Investments	126				53				126
Total	$	848			$	662			$	834

Trust-Preferred Securities

Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing trust-preferred securities, from which the proceeds are then invested in Huntington junior subordinated debentures, which are reflected in Huntington’s Consolidated Balance Sheet as long-term debt. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Consolidated Financial Statements.

A list of trust-preferred securities outstanding at December 31, 2019 follows:

(dollar amounts in millions)	Rate			Principal amount of subordinated note/ debenture issued to trust (1)				Investment in unconsolidated subsidiary
Huntington Capital I	2.61	%	(2)	$	70			$	6
Huntington Capital II	2.53		(3)	32				3
Sky Financial Capital Trust III	3.31		(4)	72				2
Sky Financial Capital Trust IV	3.31		(4)	74				2
Camco Financial Trust	3.24		(5)	4				1
Total				$	252			$	14

(1)	Represents the principal amount of debentures issued to each trust, including unamortized original issue discount.

(2)	Variable effective rate at December 31, 2019, based on three-month LIBOR + 0.70%.

(3)	Variable effective rate at December 31, 2019, based on three-month LIBOR + 0.625%.

(4)	Variable effective rate at December 31, 2019, based on three-month LIBOR + 1.40%.

(5)	Variable effective rate at December 31, 2019, based on three month LIBOR + 1.33%.

Each issue of the junior subordinated debentures has an interest rate equal to the corresponding trust securities distribution rate. Huntington has the right to defer payment of interest on the debentures at any time, or from time-to-time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the related debentures. During any such extension period, distributions to the trust securities will also be deferred and Huntington’s ability to pay dividends on its common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to trust securities are guaranteed by Huntington to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to all indebtedness of the Company to the same extent as the junior subordinated debt. The guarantee does not place a limitation on the amount of additional indebtedness that may be incurred by Huntington.

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Affordable Housing Tax Credit Partnerships

Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the LIHTC pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity.

Huntington uses the proportional amortization method to account for a majority of its investments in these entities. These investments are included in other assets. Investments that do not meet the requirements of the proportional amortization method are accounted for using the equity method. Investment losses related to these investments are included in noninterest income in the Consolidated Statements of Income.

The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at December 31, 2019 and 2018.

(dollar amounts in millions)	December 31, 2019				December 31, 2018
Affordable housing tax credit investments	$	1,242			$	1,147
Less: amortization	(515		)		(439		)
Net affordable housing tax credit investments	$	727			$	708
Unfunded commitments	$	332			$	357

The following table presents other information relating to Huntington’s affordable housing tax credit investments for the years ended December 31, 2019, 2018, and 2017:

	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Tax credits and other tax benefits recognized	$	98			$	92			$	91
Proportional amortization expense included in provision for income taxes	84				79				70

There were no material sales of affordable housing tax credit investments in 2019, 2018 or 2017. Huntington recognized immaterial impairment losses for the years ended December 31, 2019, 2018 and 2017. The impairment losses recognized related to the fair value of the tax credit investments that were less than carrying value.

Other Investments

Other investments determined to be VIE’s include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, renewable energy financings, automobile securitizations, and other miscellaneous investments.

Commitments to extend credit

In the ordinary course of business, Huntington makes various commitments to extend credit that are not reflected in the Consolidated Financial Statements. The contract amounts of these financial agreements at December 31, 2019, and December 31, 2018 were as follows: 

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	At December 31,
(dollar amounts in millions)	2019				2018
Contract amount representing credit risk
Commitments to extend credit:
Commercial	$	18,326			$	17,149
Consumer	14,831				14,974
Commercial real estate	1,364				1,188
Standby letters of credit	587				676
Commercial letters of credit	8				14

Commitments to extend credit generally have fixed expiration dates, are variable-rate, and contain clauses that permit Huntington to terminate or otherwise renegotiate the contracts in the event of a significant deterioration in the customer’s credit quality. These arrangements normally require the payment of a fee by the customer, the pricing of which is based on prevailing market conditions, credit quality, probability of funding, and other relevant factors. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements. The interest rate risk arising from these financial instruments is insignificant as a result of their predominantly short-term, variable-rate nature.

Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third-party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most of these arrangements mature within two years. The carrying amount of deferred revenue associated with these guarantees was $8 million and $13 million at December 31, 2019 and December 31, 2018, respectively.

Commercial letters of credit represent short-term, self-liquidating instruments that facilitate customer trade transactions and generally have maturities of no longer than 90 days. The goods or cargo being traded normally secure these instruments.

Litigation and Regulatory Matters

In the ordinary course of business, Huntington is routinely a defendant in or party to pending and threatened legal and regulatory actions and proceedings.

In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, Huntington generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines, or penalties related to each matter may be.

Huntington establishes an accrued liability when those matters present loss contingencies that are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Huntington continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established.

For certain matters, Huntington is able to estimate a range of possible loss. In cases in which Huntington possesses information to estimate a range of possible loss, that estimate is aggregated and disclosed below. There may be other matters for which a loss is probable or reasonably possible but such an estimate of the range of possible loss may not be possible. For those matters where an estimate of the range of possible loss is possible, management currently estimates the aggregate range of possible loss is $0 to $20 million at December 31, 2019 in excess of the accrued liability (if any) related to those matters. This estimated range of possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. The estimated range of possible loss does not represent Huntington’s maximum loss exposure.

Based on current knowledge, management does not believe that loss contingencies arising from pending matters will have a material adverse effect on the consolidated financial position of Huntington. Further, management believes that amounts accrued are adequate to address Huntington’s contingent liabilities. However, in

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light of the inherent uncertainties involved in these matters, some of which are beyond Huntington’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to Huntington’s results of operations for any particular reporting period.

Huntington and the Bank are subject to certain risk-based capital and leverage ratio requirements under the U.S. Basel III capital rules adopted by the Federal Reserve, for Huntington, and by the OCC, for the Bank. These rules implement the Basel III international regulatory capital standards in the United States, as well as certain provisions of the Dodd-Frank Act. These quantitative calculations are minimums, and the Federal Reserve and OCC may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner.

Under the U.S. Basel III capital rules, Huntington’s and the Bank’s assets, exposures and certain off-balance sheet items are subject to risk weights used to determine the institutions’ risk-weighted assets. These risk-weighted assets are used to calculate the following minimum capital ratios for Huntington and the Bank:

CET1 Risk-Based Capital Ratio, equal to the ratio of CET1 capital to risk-weighted assets. CET1 capital primarily includes common shareholders’ equity subject to certain regulatory adjustments and deductions, including with respect to goodwill, intangible assets, certain deferred tax assets, and AOCI. In July 2019, the FDIC, the Federal Reserve and OCC issued final rules that simplify the capital treatment of mortgage servicing assets, deferred tax assets arising from temporary differences that an institution could not realize through net operating loss carrybacks, and investments in the capital of unconsolidated financial institutions, as well as simplify the recognition and calculation of minority interests that are includable in regulatory capital, for non-advanced approaches banking organizations, including Huntington and the Bank. Banking organizations may adopt these changes beginning on January 1, 2020, and are required to adopt them for the quarter beginning April 1, 2020.

In addition, in December 2018, the U.S. federal banking agencies finalized rules that would permit BHCs and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. For further discussion of the new current expected credit loss accounting rule, see Note 2 of the Notes to Consolidated Financial Statements.

Tier 1 Risk-Based Capital Ratio, equal to the ratio of Tier 1 capital to risk-weighted assets. Tier 1 capital is primarily comprised of CET1 capital, perpetual preferred stock and certain qualifying capital instruments.

Total Risk-Based Capital Ratio, equal to the ratio of total capital, including CET1 capital, Tier 1 capital and Tier 2 capital, to risk-weighted assets. Tier 2 capital primarily includes qualifying subordinated debt and qualifying ALLL. Tier 2 capital also includes, among other things, certain trust preferred securities.

Tier 1 Leverage Ratio, equal to the ratio of Tier 1 capital to quarterly average assets (net of goodwill, certain other intangible assets and certain other deductions).

The total minimum regulatory capital ratios and well-capitalized minimum ratios are reflected on the following page. The Federal Reserve has not yet revised the well-capitalized standard for BHCs to reflect the higher capital requirements imposed under the U.S. Basel III capital rules. For purposes of the Federal Reserve’s Regulation Y, including determining whether a BHC meets the requirements to be an FHC, BHCs, such as Huntington, must maintain a Tier 1 Risk-Based Capital Ratio of 6.0% or greater and a Total Risk-Based Capital Ratio of 10.0% or greater. If the Federal Reserve were to apply the same or a very similar well-capitalized standard to BHCs as that applicable to the Bank, Huntington’s capital ratios as of December 31, 2019 would exceed such a revised well-capitalized standard. The Federal Reserve may require BHCs, including Huntington, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a BHC’s particular condition, risk profile and growth plans.

Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition. Failure to be well-capitalized or to meet minimum capital requirements could

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also result in restrictions on Huntington’s or the Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications.

In addition to meeting the minimum capital requirements, under the U.S. Basel III capital rules Huntington and the Bank must also maintain the required Capital Conservation Buffer to avoid becoming subject to restrictions on capital distributions and certain discretionary bonus payments to management. The Capital Conservation Buffer is calculated as a ratio of CET1 capital to risk-weighted assets, and it effectively increases the required minimum risk-based capital ratios. The Capital Conservation Buffer requirement was phased in over a three-year period that began on January 1, 2016. The phase-in period ended on January 1, 2019, and the Capital Conservation Buffer was at its fully phased-in level of 2.5% throughout 2019.

As of December 31, 2019, Huntington’s and the Bank’s regulatory capital ratios were above the well-capitalized standards and met the then-applicable Capital Conservation Buffer. Please refer to the table below for a summary of Huntington’s and the Bank’s regulatory capital ratios as of December 31, 2019, calculated using the regulatory capital methodology applicable during 2019.

		Minimum			Minimum						Basel III
		Regulatory			Ratio+Capital			Well-			December 31,
		Capital			Conservation			Capitalized			2019							2018
(dollar amounts in millions)		Ratios			Buffer			Minimums			Ratio			Amount				Ratio			Amount
CET 1 risk-based capital	Consolidated	4.50	%		7.00	%		N/A			9.88	%		$	8,647			9.65	%		$	8,271
	Bank	4.50			7.00			6.50	%		11.17			9,747				10.19			8,732
Tier 1 risk-based capital	Consolidated	6.00			8.50			6.00			11.26			9,854				11.06			9,478
	Bank	6.00			8.50			8.00			12.17			10,621				11.21			9,611
Total risk-based capital	Consolidated	8.00			10.50			10.00			13.04			11,413				12.98			11,122
	Bank	8.00			10.50			10.00			13.59			11,864				13.42			11,504
Tier 1 leverage	Consolidated	4.00			N/A			N/A			9.26			9,854				9.10			9,478
	Bank	4.00			N/A			5.00			10.01			10,621				9.23			9,611

Huntington and its subsidiaries are also subject to various regulatory requirements that impose restrictions on cash, debt, and dividends. The Bank is required to maintain cash reserves based on the level of certain of its deposits. This reserve requirement may be met by holding cash in banking offices or on deposit at the FRB. During 2019 and 2018, the average balances of these deposits were $0.6 billion and $0.4 billion, respectively.

Under current Federal Reserve regulations, the Bank is limited as to the amount and type of loans it may make to the parent company and nonbank subsidiaries. At December 31, 2019, the Bank could lend $1.2 billion to a single affiliate, subject to the qualifying collateral requirements defined in the regulations.

Dividends from the Bank are one of the major sources of funds for the Company. These funds aid the Company in the payment of dividends to shareholders, expenses, and other obligations. Payment of dividends and/or return of capital to the parent company is subject to various legal and regulatory limitations. During 2019, the Bank paid dividends of $0.7 billion to the holding company. Also, there are statutory and regulatory limitations on the ability of national banks to pay dividends or make other capital distributions.

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The parent-only financial statements, which include transactions with subsidiaries, are as follows:

Balance Sheets	December 31,
(dollar amounts in millions)	2019				2018
Assets
Cash and due from banks	$	3,119			$	2,352
Due from The Huntington National Bank	47				739
Due from non-bank subsidiaries	34				40
Investment in The Huntington National Bank	12,833				11,493
Investment in non-bank subsidiaries	165				142
Accrued interest receivable and other assets	349				239
Total assets	$	16,547			$	15,005
Liabilities and shareholders’ equity
Long-term borrowings	$	4,095			$	3,216
Dividends payable, accrued expenses, and other liabilities	657				687
Total liabilities	4,752				3,903
Shareholders’ equity (1)	11,795				11,102
Total liabilities and shareholders’ equity	$	16,547			$	15,005

(1)	See Consolidated Statements of Changes in Shareholders’ Equity.

Statements of Income	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Income
Dividends from:
The Huntington National Bank	$	685			$	1,722			$	298
Non-bank subsidiaries	3				—				14
Interest from:
The Huntington National Bank	8				27				20
Non-bank subsidiaries	2				2				2
Other	2				(2		)		4
Total income	700				1,749				338
Expense
Personnel costs	6				2				19
Interest on borrowings	143				124				91
Other	145				118				115
Total expense	294				244				225
Income before income taxes and equity in undistributed net income of subsidiaries	406				1,505				113
Provision (benefit) for income taxes	(63		)		(48		)		(56		)
Income before equity in undistributed net income of subsidiaries	469				1,553				169
Increase (decrease) in undistributed net income (loss) of:
The Huntington National Bank	908				(186		)		1,015
Non-bank subsidiaries	34				26				2
Net income	$	1,411			$	1,393			$	1,186
Other comprehensive income (loss) (1)	353				(80		)		(34		)
Comprehensive income	$	1,764			$	1,313			$	1,152

(1)	See Consolidated Statements of Comprehensive Income for other comprehensive income (loss) detail.

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Statements of Cash Flows	Year Ended December 31,
(dollar amounts in millions)	2019				2018				2017
Operating activities
Net income	$	1,411			$	1,393			$	1,186
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries	(942		)		197				(997		)
Depreciation and amortization	(2		)		(2		)		4
Other, net	(19		)		121				(37		)
Net cash (used for) provided by operating activities	448				1,709				156
Investing activities
Repayments from subsidiaries	701				21				442
Advances to subsidiaries	(11		)		(13		)		(29		)
(Purchases)/Proceeds from sale of securities	(38		)		—				1
Cash paid for acquisitions, net of cash received	—				(15		)		—
Net cash (used for) provided by investing activities	652				(7		)		414
Financing activities
Net proceeds from issuance of medium-term notes	797				501				—
Payment of medium-term notes	—				(400		)		—
Dividends paid on common stock	(671		)		(584		)		(425		)
Repurchases of common stock	(441		)		(939		)		(260		)
Net proceeds from issuance of preferred stock	—				495				—
Other, net	(18		)		(41		)		(20		)
Net cash provided by (used for) financing activities	(333		)		(968		)		(705		)
Increase (decrease) in cash and cash equivalents	767				734				(135		)
Cash and cash equivalents at beginning of year	2,352				1,618				1,753
Cash and cash equivalents at end of year	$	3,119			$	2,352			$	1,618
Supplemental disclosure:
Interest paid	$	135			$	126			$	90

Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The Company has four major business segments: Consumer and Business Banking, Commercial Banking, Vehicle Finance, Regional Banking and The Huntington Private Client Group (RBHPCG). The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense.

Business segment results are determined based upon Huntington’s management reporting system, which assigns balance sheet and income statement items to each of the business segments. The process is designed around the organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities.

Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is recorded to allocate portions of such revenue to other business segments involved in selling to, or providing service to customers. Results of operations for the business segments reflect these fee sharing allocations.

The management process that develops the business segment reporting utilizes various estimates and allocation methodologies to measure the performance of the business segments. Expenses are allocated to business segments using a two-phase approach. The first phase consists of measuring and assigning unit costs (activity-based costs) to activities related to product origination and servicing. These activity-based costs are then extended, based on volumes, with the resulting amount allocated to business segments that own the related products. The second phase consists of the allocation of overhead costs to all four business segments from Treasury / Other. Huntington

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utilizes a full-allocation methodology, where all Treasury / Other expenses, except reported Significant Items, if any, and a small amount of other residual unallocated expenses, are allocated to the four business segments.

The management policies and processes utilized in compiling segment financial information are highly subjective and, unlike financial accounting, are not based on authoritative guidance similar to GAAP. As a result, reported segment results are not necessarily comparable with similar information reported by other financial institutions. Furthermore, changes in management structure or allocation methodologies and procedures result in changes in reported segment financial data. Accordingly, certain amounts have been reclassified to conform to the current period presentation.

Huntington uses an active and centralized FTP methodology to attribute appropriate net interest income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury / Other function where it can be centrally monitored and managed. The Treasury / Other function charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The FTP rate is based on prevailing market interest rates for comparable duration assets (or liabilities). During 2019, the Company updated and refined its FTP methodology primarily related to the allocation of deposit funding costs. Prior period amounts presented below have been restated to reflect the new methodology.

Consumer and Business Banking - The Consumer and Business Banking segment, including Home Lending, provides a wide array of financial products and services to consumer and small business customers including but not limited to checking accounts, savings accounts, money market accounts, certificates of deposit, mortgage loans, consumer loans, credit cards, and small business loans and investment products. Other financial services available to customers include insurance, interest rate risk protection, foreign exchange, and treasury management. Business Banking is defined as serving companies with revenues up to $20 million. Home Lending supports origination and servicing of consumer loans and mortgages for customers who are generally located in our primary banking markets across all segments.

Commercial Banking - Through a relationship banking model, this segment provides a wide array of products and services to the middle market, large corporate, real estate and government public sector customers located primarily within our geographic footprint. The segment is divided into six business units: Middle Market/Asset Based Lending, Specialty Banking, Asset Finance, Capital Markets/Institutional Corporate Banking, Commercial Real Estate, and Treasury Management.

Vehicle Finance - Our products and services include providing financing to consumers for the purchase of automobiles, light-duty trucks, recreational vehicles, and marine craft at franchised and other select dealerships, and providing financing to franchised dealerships for the acquisition of new and used inventory. Products and services are delivered through highly specialized relationship-focused bankers and product partners.

Regional Banking and The Huntington Private Client Group - The core business of The Huntington Private Client Group is The Huntington Private Bank, which consists of Private Banking, Wealth & Investment Management, and Retirement Plan Services. The Huntington Private Bank provides high net-worth customers with deposit, lending (including specialized lending options), and banking services. The Huntington Private Bank also delivers wealth management and legacy planning through investment and portfolio management, fiduciary administration, and trust services. This group also provides retirement plan services to corporate businesses. The Huntington Private Client Group provides corporate trust services and institutional and mutual fund custody services.

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Listed in the table below is certain operating basis financial information reconciled to Huntington’s December 31, 2019, December 31, 2018, and December 31, 2017, reported results by business segment:

Income Statements (dollar amounts in millions)	Consumer & Business Banking				Commercial Banking				Vehicle Finance				RBHPCG				Treasury / Other				Huntington Consolidated
2019
Net interest income	$	1,766			$	1,037			$	397			$	198			$	(185	)		$	3,213
Provision (benefit) for credit losses	114				132				44				(3		)		—				287
Noninterest income	825				359				12				198				60				1,454
Noninterest expense	1,673				564				148				256				80				2,721
Provision (benefit) for income taxes	169				147				45				30				(143		)		248
Net income (loss)	$	635			$	553			$	172			$	113			$	(62	)		$	1,411
2018
Net interest income	$	1,727			$	1,013			$	392			$	203			$	(146	)		$	3,189
Provision (benefit) for credit losses	137				42				55				1				—				235
Noninterest income	744				321				11				193				52				1,321
Noninterest expense	1,699				502				143				244				59				2,647
Provision (benefit) for income taxes	133				166				43				32				(139		)		235
Net income (loss)	$	502			$	624			$	162			$	119			$	(14	)		$	1,393
2017
Net interest income	$	1,581			$	975			$	427			$	209			$	(190	)		$	3,002
Provision (benefit) for credit losses	105				33				63				—				—				201
Noninterest income	740				286				14				189				78				1,307
Noninterest expense	1,641				465				141				239				228				2,714
Provision (benefit) for income taxes	201				267				83				56				(399		)		208
Net income (loss)	$	374			$	496			$	154			$	103			$	59			$	1,186

	Assets at December 31,								Deposits at December 31,
(dollar amounts in millions)	2019				2018				2019				2018
Consumer & Business Banking	$	25,073			$	27,486			$	51,675			$	50,300
Commercial Banking	34,337				34,818				20,762				23,185
Vehicle Finance	20,155				19,435				376				346
RBHPCG	6,665				6,540				6,370				6,809
Treasury / Other	22,772				20,502				3,164				4,134
Total	$	109,002			$	108,781			$	82,347			$	84,774

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Quarterly Results of Operations (unaudited)

The following is a summary of the quarterly results of operations, for the years ended December 31, 2019 and 2018:

	Three Months Ended
	December 31,				September 30,				June 30,				March 31,
(dollar amounts in millions, except per share data)	2019				2019				2019				2019
Interest income	$	1,011			$	1,052			$	1,068			$	1,070
Interest expense	231				253				256				248
Net interest income	780				799				812				822
Provision for credit losses	79				82				59				67
Noninterest income	372				389				374				319
Noninterest expense	701				667				700				653
Income before income taxes	372				439				427				421
Provision for income taxes	55				67				63				63
Net income	317				372				364				358
Dividends on preferred shares	19				18				18				19
Net income applicable to common shares	$	298			$	354			$	346			$	339
Net income per common share — Basic	$	0.29			$	0.34			$	0.33			$	0.32
Net income per common share — Diluted	0.28				0.34				0.33				0.32

	Three Months Ended
	December 31,				September 30,				June 30,				March 31,
(dollar amounts in millions, except per share data)	2018				2018				2018				2018
Interest income	$	1,056			$	1,007			$	972			$	914
Interest expense	223				205				188				144
Net interest income	833				802				784				770
Provision for credit losses	60				53				56				66
Noninterest income	329				342				336				314
Noninterest expense	711				651				652				633
Income before income taxes	391				440				412				385
Provision (benefit) for income taxes	57				62				57				59
Net income	334				378				355				326
Dividends on preferred shares	19				18				21				12
Net income applicable to common shares	$	315			$	360			$	334			$	314
Net income per common share — Basic	$	0.30			$	0.33			$	0.30			$	0.29
Net income per common share — Diluted	0.29				0.33				0.30				0.28

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(1)

All equity compensation plan authorizations for shares of common stock provide for the number of shares to be adjusted for stock splits, stock dividends, and other changes in capitalization. The Huntington Investment and Tax Savings Plan, a broad-based plan qualified under Internal Revenue Code Section 401(a) which includes Huntington common stock as one of a number of investment options available to participants, is excluded from the table.

(2)

The numbers in this column (a) reflect shares of common stock to be issued upon exercise of outstanding stock options and the vesting of outstanding awards of RSUs, and PSUs, and the release of DSUs. The shares of common stock to be issued upon exercise or vesting under equity compensation plans not approved by shareholders include an inducement grant issued outside of the Company’s stock plans, and awards granted under the following plans which are no longer active and for which Huntington has not reserved the right to make subsequent grants or awards: employee and director stock plans of Unizan Financial Corp., Camco Financial Corporation, and FirstMerit Corporation assumed in the acquisitions of these companies.

(3)	The weighted-average exercise prices in this column are based on outstanding options and do not take into account unvested awards of RSUs, RSAs, and PSUs and unreleased DSUs as these awards do not have an exercise price.

(4)

The number of shares in this column (c) reflects the number of shares remaining available for future issuance under Huntington’s 2018 Plan, excluding shares reflected in column (a). The number of shares in this column (c) does not include shares of common stock to be issued under the following compensation plans: the Executive Deferred Compensation Plan, which provides senior officers designated by the Compensation Committee the opportunity to defer up to 90% of base salary, annual bonus compensation and certain equity awards, and up to 90% of long-term incentive awards; the Supplemental Plan under which voluntary participant contributions made by payroll deduction are used to purchase shares; the Deferred Compensation for Huntington Bancshares Incorporated Directors under which directors may defer their director compensation and such amounts may be invested in shares of common stock; and the Deferred Compensation Plan for directors (now inactive) under which directors of selected subsidiaries may defer their director compensation and such amounts may be invested in shares of Huntington common stock. These plans do not contain a limit on the number of shares that may be issued under them.

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