Quarterly report pursuant to Section 13 or 15(d)

LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES

v3.3.0.814
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
9 Months Ended
Sep. 30, 2015
Receivables [Abstract]  
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
Loans and leases for which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Unaudited Condensed Consolidated Balance Sheets as loans and leases. Except for loans which are accounted for at fair value, loans are carried at the principal amount outstanding, net of unamortized premiums and discounts and deferred loan fees and costs, which resulted in a net premium of $246.6 million and $230.2 million at September 30, 2015 and December 31, 2014, respectively.
Loan and Lease Portfolio Compositioln
The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2015 and December 31, 2014:
(dollar amounts in thousands)
September 30,
2015
 
December 31,
2014
Loans and leases:
 
 
 
Commercial and industrial
$
20,039,429

 
$
19,033,146

Commercial real estate
5,404,274

 
5,197,403

Automobile
9,160,241

 
8,689,902

Home equity
8,460,989

 
8,490,915

Residential mortgage
6,071,356

 
5,830,609

Other consumer
519,620

 
413,751

Loans and leases
49,655,909

 
47,655,726

Allowance for loan and lease losses
(591,938
)
 
(605,196
)
Net loans and leases
$
49,063,971

 
$
47,050,530


As shown in the table above, the primary loan and lease portfolios are: C&I, CRE, automobile, home equity, residential mortgage, and other consumer. For ACL purposes, these portfolios are further disaggregated into classes. The classes within each portfolio are as follows:
Portfolio
Class
Commercial and industrial
Owner occupied
 
Purchased credit-impaired
 
Other commercial and industrial
 
 
Commercial real estate
Retail properties
 
Multi family
 
Office
 
Industrial and warehouse
 
Purchased credit-impaired
 
Other commercial real estate
 
 
Automobile
NA (1)
 
 
Home equity
Secured by first-lien
 
Secured by junior-lien
 
 
Residential mortgage
Residential mortgage
 
Purchased credit-impaired
 
 
Other consumer
Other consumer
 
Purchased credit-impaired
(1)
Not applicable. The automobile loan portfolio is not further segregated into classes.
Huntington Technology Finance acquisition
On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which was re-branded Huntington Technology Finance. Lease receivables with a fair value of $838.6 million, including a lease residual value of approximately $200 million, were acquired by Huntington. These leases were recorded at fair value. The fair values for the leases were estimated using discounted cash flow analyses using interest rates currently being offered for leases with similar terms (Level 3), and reflected an estimate of credit and other risk associated with the leases.
Camco Financial acquisition
On March 1, 2014, Huntington completed its acquisition of Camco Financial. Loans with a fair value of $559.4 million were transferred to Huntington.
Fidelity Bank acquisition
On March 30, 2012, Huntington acquired the loans of Fidelity Bank located in Dearborn, Michigan from the FDIC. Under the agreement, loans with a fair value of $523.9 million were acquired by Huntington.
Purchased Credit-Impaired Loans
Purchased loans with evidence of deterioration in credit quality since origination for which it is probable at acquisition that we will be unable to collect all contractually required payments are considered to be credit impaired. Purchased credit-impaired loans are initially recorded at fair value, which is estimated by discounting the cash flows expected to be collected at the acquisition date. Because the estimate of expected cash flows reflects an estimate of future credit losses expected to be incurred over the life of the loans, an allowance for credit losses is not recorded at the acquisition date. The excess of cash flows expected at acquisition over the estimated fair value, referred to as the accretable yield, is recognized in interest income over the remaining life of the loan, or pool of loans, on a level-yield basis. The difference between the contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. A subsequent decrease in the estimate of cash flows expected to be received on purchased credit-impaired loans generally results in the recognition of an allowance for credit losses. Subsequent increases in cash flows result in reversal of any nonaccretable difference (or allowance for loan and lease losses to the extent any has been recorded) with a positive impact on interest income subsequently recognized. The measurement of cash flows involves assumptions and judgments for interest rates, prepayments, default rates, loss severity, and collateral values. All of these factors are inherently subjective and significant changes in the cash flow estimates over the life of the loan can result.
The following table presents a rollforward of the accretable yield for purchased credit impaired loans by acquisition for the three-month and nine-month periods ended September 30, 2015 and 2014:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(dollar amounts in thousands)
2015
 
2014
 
2015
 
2014
Fidelity Bank
 
 
 
 
 
 
 
Balance, beginning of period
$
19,312

 
$
24,596

 
$
19,388

 
$
27,995

Accretion
(2,818
)
 
(3,070
)
 
(8,682
)
 
(10,722
)
Reclassification (to) from nonaccretable difference
1,089

 
(6
)
 
6,877

 
4,247

Balance, end of period
$
17,583

 
$
21,520

 
$
17,583

 
$
21,520

Camco Financial
 
 
 
 
 
 
 
Balance, beginning of period
$
681

 
$
154

 
$
824

 
$

Impact of acquisition/purchase on March 1, 2014

 

 

 
143

Accretion
(106
)
 
(153
)
 
(1,357
)
 
(5,335
)
Reclassification (to) from nonaccretable difference
(393
)
 
816

 
715

 
6,009

Balance, end of period
$
182

 
$
817

 
$
182

 
$
817


The allowance for loan losses recorded on the purchased credit-impaired loan portfolio at September 30, 2015 and December 31, 2014 was $0.7 million and $4.1 million, respectively. The following table reflects the ending and unpaid balances of all contractually required payments and carrying amounts of the acquired loans by acquisition at September 30, 2015 and December 31, 2014:
 
September 30, 2015
 
December 31, 2014
(dollar amounts in thousands)
Ending
Balance
 
Unpaid
Balance
 
Ending
Balance
 
Unpaid
Balance
Fidelity Bank
 
 
 
 
 
 
 
Commercial and industrial
$
19,484

 
$
28,812

 
$
22,405

 
$
33,622

Commercial real estate
24,619

 
67,413

 
36,663

 
87,250

Residential mortgage
1,513

 
2,292

 
1,912

 
3,096

Other consumer
50

 
107

 
51

 
123

Total
$
45,666

 
$
98,624

 
$
61,031

 
$
124,091

Camco Financial
 
 
 
 
 
 
 
Commercial and industrial
$

 
$

 
$
823

 
$
1,685

Commercial real estate
1,156

 
1,499

 
1,708

 
3,826

Residential mortgage

 

 

 

Other consumer

 

 

 

Total
$
1,156

 
$
1,499

 
$
2,531

 
$
5,511


Loan Purchases and Sales
The following table summarizes portfolio loan purchase and sale activity for the three-month and nine-month periods ended September 30, 2015 and 2014. The table below excludes mortgage loans originated for sale.
(dollar amounts in thousands)
Commercial
and Industrial
 
Commercial
Real Estate
 
Automobile
 
 
Home
Equity
 
 
Residential
Mortgage
 
Other
Consumer
 
Total
Portfolio loans and leases purchased or transferred from held for sale during the:
Three-month period ended September 30, 2015
$
180,036

 
$

 
$


 
$



 
$
57,388

 
$

 
$
237,424

Nine-month period ended September 30, 2015
224,532

 

 
262,037

(2)
 



 
164,425

 
$

 
650,994

Three-month period ended September 30, 2014
64,668

 

 

 
 



 
2,224

 
$

 
66,892

Nine-month period ended September 30, 2014
$
270,272

 
$

 
$

 
 
$



 
$
16,547

 
$

 
$
286,819

Portfolio loans and leases sold or transferred to loans held for sale during the:
Three-month period ended September 30, 2015
$
98,117

 
$

 
$

 
 
$
96,786

(3
)
 
$

 
$

 
$
194,903

Nine-month period ended September 30, 2015
284,019

 

 
1,026,195

(1)
 
96,786



 

 

 
1,407,000

Three-month period ended September 30, 2014
179,065

 

 

 
 



 

 

 
179,065

Nine-month period ended September 30, 2014
$
283,796

 
$
7,434

 
$

 
 
$



 
$

 
$
7,592

 
$
298,822

(1)
Reflects the transfer of approximately $1.0 billion automobile loans to loans held-for-sale at March 31, 2015.
(2)
Includes loans Huntington no longer has the intent to sell and, therefore transferred back to the portfolio in the 2015 second quarter.
(3)
Reflects the transfer of approximately $96.8 million home equity TDRs from loans to loans held for sale at September 30, 2015.
NALs 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 not reaffirmed by the borrower, the loan is determined to be collateral dependent and placed on nonaccrual status.
All classes within the C&I and CRE portfolios (except for purchased credit-impaired loans) are placed on nonaccrual status at 90-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 organizations. 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 and other consumer loans are generally charged-off when the loan is 120-days past due.
For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest income is reversed with current year accruals charged to interest income, and prior year amounts are recognized as a credit loss.
For all classes within all loan portfolios, cash receipts received on NALs are applied entirely against principal until the loan or lease has been collected in full, 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.
Regarding all classes 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 or lease is returned to accrual status. For these loans that have been returned to accrual status, cash receipts are applied according to the contractual terms of the loan.
The following table presents NALs by loan class at September 30, 2015 and December 31, 2014:
(dollar amounts in thousands)
September 30,
2015
 
December 31,
2014
Commercial and industrial:
 
 
 
Owner occupied
$
42,231

 
$
41,285

Other commercial and industrial
115,671

 
30,689

Total commercial and industrial
157,902

 
71,974

Commercial real estate:
 
 
 
Retail properties
$
7,887

 
$
21,385

Multi family
9,183

 
9,743

Office
5,414

 
7,707

Industrial and warehouse
1,147

 
3,928

Other commercial real estate
3,885

 
5,760

Total commercial real estate
27,516

 
48,523

Automobile
5,551

 
4,623

Home equity:
 
 
 
Secured by first-lien
33,974

 
46,938

Secured by junior-lien
32,472

 
31,577

Total home equity
66,446

 
78,515

Residential mortgage
98,908

 
96,609

Other consumer
154

 

Total nonaccrual loans
$
356,477

 
$
300,244


The following table presents an aging analysis of loans and leases, including past due loans, by loan class at September 30, 2015 and December 31, 2014: (1)
 
September 30, 2015
 
Past Due
 
 
 
Total Loans
and Leases
 
90 or more
days past due
and accruing
 
(dollar amounts in thousands)
30-59 Days
 
60-89 Days
 
90 or more days
Total
 
Current
 
 
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
5,500

 
$
3,742

 
$
11,195

 
$
20,437

 
$
4,056,263

 
$
4,076,700

 
$

 
Purchased credit-impaired
802

 
1,622

 
3,412

 
5,836

 
13,648

 
19,484

 
3,412

(3)
Other commercial and industrial
54,302

 
21,742

 
17,901

 
93,945

 
15,849,300

 
15,943,245

 
3,159

(2)
Total commercial and industrial
60,604

 
27,106

 
32,508

 
120,218

 
19,919,211

 
20,039,429

 
6,571

 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
10,095

 
297

 
3,769

 
14,161

 
1,408,479

 
1,422,640

 
$

 
Multi family
1,078

 
3,620

 
2,605

 
7,303

 
1,210,792

 
1,218,095

 

 
Office
5,889

 
1,094

 
2,211

 
9,194

 
916,636

 
925,830

 

 
Industrial and warehouse
22

 
146

 
369

 
537

 
535,228

 
535,765

 

 
Purchased credit-impaired
364

 
1,052

 
12,178

 
13,594

 
12,181

 
25,775

 
12,178

(3)
Other commercial real estate
188

 

 
3,137

 
3,325

 
1,272,844

 
1,276,169

 

 
Total commercial real estate
17,636

 
6,209

 
24,269

 
48,114

 
5,356,160

 
5,404,274

 
12,178

 
Automobile
58,391

 
14,051

 
6,934

 
79,376

 
9,080,865

 
9,160,241

 
6,873

 
Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured by first-lien
13,269

 
7,241

 
26,321

 
46,831

 
5,110,070

 
5,156,901

 
4,207

 
Secured by junior-lien
21,693

 
10,523

 
32,952

 
65,168

 
3,238,920

 
3,304,088

 
6,557

 
Total home equity
34,962

 
17,764

 
59,273

 
111,999

 
8,348,990

 
8,460,989

 
10,764

 
Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
92,163

 
37,313

 
123,097

 
252,573

 
5,817,270

 
6,069,843

 
68,135

(4)
Purchased credit-impaired

 

 

 

 
1,513

 
1,513

 

 
Total residential mortgage
92,163

 
37,313

 
123,097

 
252,573

 
5,818,783

 
6,071,356

 
68,135

 
Other consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other consumer
6,411

 
1,547

 
1,241

 
9,199

 
510,371

 
519,570

 
1,087

 
Purchased credit-impaired

 

 

 

 
50

 
50

 

 
Total other consumer
6,411

 
1,547

 
1,241

 
9,199

 
510,421

 
519,620

 
1,087

 
Total loans and leases
$
270,167

 
$
103,990

 
$
247,322

 
$
621,479

 
$
49,034,430

 
$
49,655,909

 
$
105,608

 
 
December 31, 2014
 
Past Due
 
 
 
Total Loans
and Leases
 
90 or more
days past due
and accruing
 
(dollar amounts in thousands)
30-59 Days
 
60-89 Days
 
90 or more days
Total
 
Current
 
 
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
5,232

 
$
2,981

 
$
18,222

 
$
26,435

 
$
4,228,440

 
$
4,254,875

 
$

 
Purchased credit-impaired
846

 

 
4,937

 
5,783

 
17,445

 
23,228

 
4,937

(3)
Other commercial and industrial
15,330

 
1,536

 
9,101

 
25,967

 
14,729,076

 
14,755,043

 

 
Total commercial and industrial
21,408

 
4,517

 
32,260

 
58,185

 
18,974,961

 
19,033,146

 
4,937


Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
7,866

 

 
4,021

 
11,887

 
1,345,859

 
1,357,746

 
$

 
Multi family
1,517

 
312

 
3,337

 
5,166

 
1,085,250

 
1,090,416

 

 
Office
464

 
1,167

 
4,415

 
6,046

 
974,257

 
980,303

 

 
Industrial and warehouse
688

 

 
2,649

 
3,337

 
510,064

 
513,401

 

 
Purchased credit-impaired
89

 
289

 
18,793

 
19,171

 
19,200

 
38,371

 
18,793

(3)
Other commercial real estate
847

 
1,281

 
3,966

 
6,094

 
1,211,072

 
1,217,166

 

 
Total commercial real estate
11,471

 
3,049

 
37,181

 
51,701

 
5,145,702

 
5,197,403

 
18,793


Automobile
56,272

 
10,427

 
5,963

 
72,662

 
8,617,240

 
8,689,902

 
5,703

 
Home equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured by first-lien
15,036

 
8,085

 
33,014

 
56,135

 
5,072,669

 
5,128,804

 
4,471

 
Secured by junior-lien
22,473

 
12,297

 
33,406

 
68,176

 
3,293,935

 
3,362,111

 
7,688

 
Total home equity
37,509

 
20,382

 
66,420

 
124,311

 
8,366,604

 
8,490,915

 
12,159

 
Residential mortgage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
102,702

 
42,009

 
139,379

 
284,090

 
5,544,607

 
5,828,697

 
88,052

(5)
Purchased credit-impaired

 

 

 

 
1,912

 
1,912

 

 
Total residential mortgage
102,702

 
42,009

 
139,379

 
284,090

 
5,546,519

 
5,830,609

 
88,052


Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other consumer
5,491

 
1,086

 
837

 
7,414

 
406,286

 
413,700

 
837

 
Purchased credit-impaired

 

 

 

 
51

 
51

 

 
Total other consumer
5,491

 
1,086

 
837

 
7,414

 
406,337

 
413,751

 
837

 
Total loans and leases
$
234,853

 
$
81,470

 
$
282,040

 
$
598,363

 
$
47,057,363

 
$
47,655,726

 
$
130,481

 
(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 represent accruing purchased impaired loans related to acquisitions. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status.
(4)
Includes $50,643 thousand guaranteed by the U.S. government.
(5)
Includes $55,012 thousand guaranteed by the U.S. government.
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 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. In addition to general economic conditions and the other factors described above, additional factors also considered include: the impact of increasing or decreasing residential real estate values; the diversification of CRE loans; the development of new or expanded Commercial business segments such as healthcare, ABL, and energy, and the overall condition of the manufacturing industry. Management’s determinations regarding the appropriateness of the ACL are reviewed and approved by the Company’s board of directors.
The ALLL consists of two components: (1) the transaction reserve, which includes a loan level allocation, specific reserves related to loans considered to be impaired, and loans involved in troubled debt restructurings, 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 greater than $1.0 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 a PD factor and a LGD factor to each individual loan based on a regularly updated loan grade, using a standardized loan grading system. The PD factor and an LGD factor 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 and updated periodically 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 other 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. 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 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. Models utilized in the ALLL estimation process are subject to the Company’s model validation policies.
The general reserve consists of our risk-profile reserve components, which includes 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, management quality, 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 a historical utilization of unused commitments. The AULC is reflected in accrued expenses and other liabilities in the Unaudited Condensed Consolidated Balance Sheet.
The ACL is increased through a provision for credit losses that is charged to earnings, based on Management’s quarterly evaluation of the factors previously mentioned, and is reduced by charge-offs, net of recoveries, and the ACL associated with securitized or sold loans.
During the 2015 first quarter, we reviewed our existing commercial and consumer credit models and enhanced certain processes and methods of ACL estimation. During this review, we analyzed the loss emergence periods used for consumer receivables collectively evaluated for impairment and, as a result, extended our loss emergence periods for products within these portfolios. As part of these enhancements to our credit reserve process, we evaluated the methods used to separately estimate economic risks inherent in our portfolios and decided to no longer utilize these separate estimation techniques. Economic risks are incorporated in our loss estimates elsewhere in our reserve calculation. The enhancements made to our credit reserve processes during the quarter allow for increased segmentation and analysis of the estimated incurred losses within our loan portfolios. The net ACL impact of these enhancements was immaterial.
During the 2015 third quarter, we reviewed our existing commercial and consumer credit models and completed a periodic reassessment of certain ACL assumptions.  Specifically, we updated our analysis of the loss emergence periods used for commercial receivables collectively evaluated for impairment.  Based on our observed portfolio experience, we extended our loss emergence periods for the C&I portfolio and CRE portfolios.  We also updated loss factors in our consumer home equity and residential mortgage portfolios based on more recently observed portfolio experience.  The net ACL impact of these enhancements was immaterial.
The following table presents ALLL and AULC activity by portfolio segment for the three-month and nine-month periods ended September 30, 2015 and 2014:
(dollar amounts in thousands)
Commercial
and Industrial
 
Commercial
Real Estate
 
Automobile
 
Home
Equity
 
Residential
Mortgage
 
Other
Consumer
 
Total
Three-month period ended September 30, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLL balance, beginning of period
$
285,041

 
$
92,060

 
$
39,102

 
$
111,178

 
$
51,679

 
$
20,482

 
$
599,542

Loan charge-offs
(26,016
)
 
(3,976
)
 
(9,084
)
 
(10,164
)
 
(3,192
)
 
(8,443
)
 
(60,875
)
Recoveries of loans previously charged-off
16,158

 
17,797

 
4,176

 
4,295

 
1,182

 
1,104

 
44,712

Provision (reduction in allowance) for loan and lease losses
9,146

 
4,086

 
9,755

 
(13,406
)
 
(6,875
)
 
10,918

 
13,624

Write-downs of loans sold or transferred to loans held for sale

 

 

 
(5,065
)
 

 

 
(5,065
)
ALLL balance, end of period
$
284,329

 
$
109,967

 
$
43,949

 
$
86,838

 
$
42,794

 
$
24,061

 
$
591,938

AULC balance, beginning of period
$
41,849

 
$
5,778

 
$

 
$
2,522

 
$
17

 
$
5,205

 
$
55,371

Provision (reduction in allowance) for unfunded loan commitments and letters of credit
6,794

 
1,965

 

 
(619
)
 

 
712

 
8,852

AULC balance, end of period
$
48,643

 
$
7,743

 
$

 
$
1,903

 
$
17

 
$
5,917

 
$
64,223

ACL balance, end of period
$
332,972

 
$
117,710

 
$
43,949

 
$
88,741

 
$
42,811

 
$
29,978

 
$
656,161

Nine-month period ended September 30, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLL balance, beginning of period
$
286,995

 
$
102,839

 
$
33,466

 
$
96,413

 
$
47,211

 
$
38,272

 
$
605,196

Loan charge-offs
(62,841
)
 
(14,277
)
 
(24,878
)
 
(27,379
)
 
(11,665
)
 
(21,880
)
 
(162,920
)
Recoveries of loans previously charged-off
37,169

 
26,585

 
12,280

 
12,235

 
4,697

 
3,984

 
96,950

Provision (reduction in allowance) for loan and lease losses
23,006

 
(5,180
)
 
25,373

 
10,634

 
2,551

 
3,685

 
60,069

Write-downs of loans sold or transferred to loans held for sale

 

 
(2,292
)
 
(5,065
)
 

 

 
(7,357
)
ALLL balance, end of period
$
284,329

 
$
109,967

 
$
43,949

 
$
86,838

 
$
42,794

 
$
24,061

 
$
591,938

AULC balance, beginning of period
$
48,988

 
$
6,041

 
$

 
$
1,924

 
$
8

 
$
3,845

 
$
60,806

Provision for (reduction in allowance) unfunded loan commitments and letters of credit
(345
)
 
1,702

 

 
(21
)
 
9

 
2,072

 
3,417

AULC balance, end of period
$
48,643

 
$
7,743

 
$

 
$
1,903

 
$
17

 
$
5,917

 
$
64,223

ACL balance, end of period
$
332,972

 
$
117,710

 
$
43,949

 
$
88,741

 
$
42,811

 
$
29,978

 
$
656,161

(dollar amounts in thousands)
Commercial
and Industrial
 
Commercial
Real Estate
 
Automobile
 
Home
Equity
 
Residential
Mortgage
 
Other
Consumer
 
Total
Three-month period ended September 30, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLL balance, beginning of period
$
278,512

 
$
137,346

 
$
27,158

 
$
105,943

 
$
47,191

 
$
38,951

 
$
635,101

Loan charge-offs
(20,723
)
 
(4,664
)
 
(7,292
)
 
(9,584
)
 
(6,477
)
 
(9,771
)
 
(58,511
)
Recoveries of loans previously charged-off
8,136

 
10,671

 
3,316

 
3,136

 
1,049

 
2,180

 
28,488

Provision for (reduction in allowance) loan and lease losses
25,476

 
(27,881
)
 
7,550

 
880

 
10,895

 
9,038

 
25,958

Allowance for loans sold or transferred to loans held for sale

 

 

 

 

 

 

ALLL balance, end of period
$
291,401

 
$
115,472

 
$
30,732

 
$
100,375

 
$
52,658

 
$
40,398

 
$
631,036

AULC balance, beginning of period
$
44,750

 
$
7,530

 
$

 
$
1,977

 
$
8

 
$
2,662

 
$
56,927

Provision for (reduction in allowance) unfunded loan commitments and letters of credit
(1,545
)
 
(552
)
 

 
(18
)
 
2

 
635

 
(1,478
)
AULC balance, end of period
$
43,205

 
$
6,978

 
$

 
$
1,959

 
$
10

 
$
3,297

 
$
55,449

ACL balance, end of period
$
334,606

 
$
122,450

 
$
30,732

 
$
102,334

 
$
52,668

 
$
43,695

 
$
686,485

Nine-month period ended September 30, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLL balance, beginning of period
$
265,801

 
$
162,557

 
$
31,053

 
$
111,131

 
$
39,577

 
$
37,751

 
$
647,870

Loan charge-offs
(60,305
)
 
(17,772
)
 
(21,969
)
 
(43,844
)
 
(21,525
)
 
(24,934
)
 
(190,349
)
Recoveries of loans previously charged-off
28,515

 
26,957

 
10,425

 
13,218

 
4,832

 
4,750

 
88,697

Provision for (reduction in allowance) loan and lease losses
57,390

 
(56,270
)
 
11,223

 
19,870

 
29,774

 
23,958

 
85,945

Allowance for loans sold or transferred to loans held for sale

 

 

 

 

 
(1,127
)
 
(1,127
)
ALLL balance, end of period
$
291,401

 
$
115,472

 
$
30,732

 
$
100,375

 
$
52,658

 
$
40,398

 
$
631,036

AULC balance, beginning of period
$
49,596

 
$
9,891

 
$

 
$
1,763

 
$
9

 
$
1,640

 
$
62,899

Provision for (reduction in allowance) unfunded loan commitments and letters of credit
(6,391
)
 
(2,913
)
 

 
196

 
1

 
1,657

 
(7,450
)
AULC balance, end of period
$
43,205

 
$
6,978

 
$

 
$
1,959

 
$
10

 
$
3,297

 
$
55,449

ACL balance, end of period
$
334,606

 
$
122,450

 
$
30,732

 
$
102,334

 
$
52,668

 
$
43,695

 
$
686,485


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.
C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due. Automobile loans and other consumer loans are charged-off or written down to net realizable value 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, less anticipated selling costs, at 150-days past due.
Credit Quality Indicators
To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following 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 represent 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 by 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.
The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of the loan or lease and subsequently updated as appropriate.
Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are also considered Classified loans.
For all classes within all consumer loan portfolios, each loan is assigned a specific PD factor that is partially based on the borrower’s most recent credit bureau score, which we update quarterly. A credit bureau score is a credit score developed by Fair Isaac Corporation 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 table presents each loan and lease class by credit quality indicator at September 30, 2015 and December 31, 2014:
 
September 30, 2015
 
Credit Risk Profile by UCS Classification
(dollar amounts in thousands)
Pass
 
OLEM
 
Substandard
 
Doubtful
 
Total
Commercial and industrial:
 
 
 
 
 
 
 
 
 
Owner occupied
$
3,763,002

 
$
96,338

 
$
213,755

 
$
3,605

 
$
4,076,700

Purchased credit-impaired
4,321

 
641

 
14,522

 

 
19,484

Other commercial and industrial
15,031,737

 
289,321

 
616,708

 
5,479

 
15,943,245

Total commercial and industrial
18,799,060

 
386,300

 
844,985

 
9,084

 
20,039,429

Commercial real estate:
 
 
 
 
 
 
 
 
 
Retail properties
1,372,078

 
10,659

 
39,903

 

 
1,422,640

Multi family
1,162,776

 
32,220

 
22,733

 
366

 
1,218,095

Office
861,564

 
27,713

 
35,267

 
1,286

 
925,830

Industrial and warehouse
527,047

 
268

 
8,374

 
76

 
535,765

Purchased credit-impaired
8,333

 
189

 
15,456

 
1,797

 
25,775

Other commercial real estate
1,240,034

 
7,114

 
28,460

 
561

 
1,276,169

Total commercial real estate
5,171,832

 
78,163

 
150,193

 
4,086

 
5,404,274

 
Credit Risk Profile by FICO Score (1)
 
750+
 
650-749
 
<650
 
Other (2)
 
Total
Automobile
4,465,597

 
3,388,521

 
1,053,464

 
252,659

 
9,160,241

Home equity:
 
 
 
 
 
 
 
 
 
Secured by first-lien
3,314,317

 
1,436,522

 
252,179

 
153,883

 
5,156,901

Secured by junior-lien
1,829,202

 
1,035,173

 
336,424

 
103,289

 
3,304,088

Total home equity
5,143,519

 
2,471,695

 
588,603

 
257,172

 
8,460,989

Residential mortgage:
 
 
 
 
 
 
 
 
 
Residential mortgage
3,563,718

 
1,859,268

 
602,172

 
44,685

 
6,069,843

Purchased credit-impaired
422

 
731

 
360

 

 
1,513

Total residential mortgage
3,564,140

 
1,859,999

 
602,532

 
44,685

 
6,071,356

Other consumer:
 
 
 
 
 
 
 
 
 
Other consumer
216,820

 
248,734

 
48,239

 
5,777

 
519,570

Purchased credit-impaired

 
50

 

 

 
50

Total other consumer
$
216,820

 
$
248,784

 
$
48,239

 
$
5,777

 
$
519,620

 
December 31, 2014
 
Credit Risk Profile by UCS Classification
(dollar amounts in thousands)
Pass
 
OLEM
 
Substandard
 
Doubtful
 
Total
Commercial and industrial:
 
 
 
 
 
 
 
 
 
Owner occupied
$
3,959,046

 
$
117,637

 
$
175,767

 
$
2,425

 
$
4,254,875

Purchased credit-impaired
3,915

 
741

 
14,901

 
3,671

 
23,228

Other commercial and industrial
13,925,334

 
386,666

 
440,036

 
3,007

 
14,755,043

Total commercial and industrial
17,888,295

 
505,044

 
630,704

 
9,103

 
19,033,146

Commercial real estate:
 
 
 
 
 
 
 
 
 
Retail properties
1,279,064

 
10,204

 
67,911

 
567

 
1,357,746

Multi family
1,044,521

 
12,608

 
32,322

 
965

 
1,090,416

Office
902,474

 
33,107

 
42,578

 
2,144

 
980,303

Industrial and warehouse
487,454

 
7,877

 
17,781

 
289

 
513,401

Purchased credit-impaired
6,914

 
803

 
25,460

 
5,194

 
38,371

Other commercial real estate
1,166,293

 
9,635

 
40,019

 
1,219

 
1,217,166

Total commercial real estate
4,886,720

 
74,234

 
226,071

 
10,378

 
5,197,403

 
Credit Risk Profile by FICO Score (1)
 
750+
 
650-749
 
<650
 
Other (2)
 
Total
Automobile
4,165,811

 
3,249,141

 
1,028,381

 
246,569

 
8,689,902

Home equity:
 
 
 
 
 
 
 
 
 
Secured by first-lien
3,255,088

 
1,426,191

 
283,152

 
164,373

 
5,128,804

Secured by junior-lien
1,832,663

 
1,095,332

 
348,825

 
85,291

 
3,362,111

Total home equity
5,087,751

 
2,521,523

 
631,977

 
249,664

 
8,490,915

Residential mortgage
 
 
 
 
 
 
 
 
 
Residential mortgage
3,285,310

 
1,785,137

 
666,562

 
91,688

 
5,828,697

Purchased credit-impaired
594

 
1,135

 
183

 

 
1,912

Total residential mortgage
3,285,904

 
1,786,272

 
666,745

 
91,688

 
5,830,609

Other consumer
 
 
 
 
 
 
 
 
 
Other consumer
195,128

 
187,781

 
30,582

 
209

 
413,700

Purchased credit-impaired

 
51

 

 

 
51

Total other consumer
$
195,128

 
$
187,832

 
$
30,582

 
$
209

 
$
413,751

(1)
Reflects currently updated customer credit scores.
(2)
Reflects deferred fees and costs, loans in process, loans to legal entities, etc.
Impaired Loans
For all classes within the C&I and CRE portfolios, all loans with an outstanding balance of $1.0 million or greater are considered for individual evaluation on a quarterly basis for impairment. Generally, consumer loans within any class are not individually evaluated on a regular basis for impairment. All TDRs, regardless of the outstanding balance amount, are also considered to be impaired. Loans acquired with evidence of deterioration of credit quality since origination for which it is probable at acquisition that all contractually required payments will not be collected 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. When the present value of expected future cash flows is used, the effective interest rate is the original contractual interest rate of the loan adjusted for any premium, discount, fees, or costs. A specific reserve is established as a component of the ALLL when a commercial 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. The consumer portfolios are assessed on a pooled basis using a discounted cash flow basis.
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 received on nonaccruing impaired loans within any class are generally applied entirely against principal until the loan has been collected in full, after which time any additional cash receipts are recognized as interest income. Cash receipts received on accruing impaired loans within any class are applied in the same manner as accruing loans that are not considered impaired.
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 at September 30, 2015 and December 31, 2014:
(dollar amounts in thousands)
Commercial
and
Industrial
 
Commercial
Real Estate
 
Automobile
 
Home
Equity
 
Residential
Mortgage
 
Other
Consumer
 
Total
ALLL at September 30, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of ALLL balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to purchased credit-impaired loans
$
547

 
$
42

 
$

 
$

 
$
70

 
$

 
$
659

Attributable to loans individually evaluated for impairment
12,824

 
10,458

 
1,446

 
21,346

 
10,186

 
142

 
56,402

Attributable to loans collectively evaluated for impairment
270,958

 
99,467

 
42,503

 
65,492

 
32,538

 
23,919

 
534,877

Total ALLL balance
$
284,329

 
$
109,967

 
$
43,949

 
$
86,838

 
$
42,794

 
$
24,061

 
$
591,938

Loan and Lease Ending Balances at September 30, 2015:
 
 
 
 
 
 
 
 
 
 
 
 
Portion of loan and lease ending balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to purchased credit-impaired loans
$
19,484

 
$
25,775

 
$

 
$

 
$
1,513

 
$
50

 
$
46,822

Individually evaluated for impairment
454,648

 
134,397

 
29,938

 
240,886

 
383,718

 
4,720

 
1,248,307

Collectively evaluated for impairment
19,565,297

 
5,244,102

 
9,130,303

 
8,220,103

 
5,686,125

 
514,850

 
48,360,780

Total loans and leases evaluated for impairment
$
20,039,429


$
5,404,274


$
9,160,241


$
8,460,989


$
6,071,356


$
519,620


$
49,655,909

(dollar amounts in thousands)
Commercial
and
Industrial
 
Commercial
Real Estate
 
Automobile
 
Home
Equity
 
Residential
Mortgage
 
Other
Consumer
 
Total
ALLL at December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of ALLL balance:
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to purchased credit-impaired loans
$
3,846

 
$

 
$

 
$

 
$
8

 
$
245

 
$
4,099

Attributable to loans individually evaluated for impairment
11,049

 
18,887

 
1,531

 
26,027

 
16,535

 
214

 
74,243

Attributable to loans collectively evaluated for impairment
272,100

 
83,952

 
31,935

 
70,386

 
30,668

 
37,813

 
526,854

Total ALLL balance:
$
286,995

 
$
102,839

 
$
33,466

 
$
96,413

 
$
47,211

 
$
38,272

 
$
605,196

Loan and Lease Ending Balances at December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of loan and lease ending balances:
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to purchased credit-impaired loans
$
23,228

 
$
38,371

 
$

 
$

 
$
1,912

 
$
51

 
$
63,562

Individually evaluated for impairment
216,993

 
217,262

 
30,612

 
310,446

 
369,577

 
4,088

 
1,148,978

Collectively evaluated for impairment
18,792,925

 
4,941,770

 
8,659,290

 
8,180,469

 
5,459,120

 
409,612

 
46,443,186

Total loans and leases evaluated for impairment
$
19,033,146

 
$
5,197,403

 
$
8,689,902

 
$
8,490,915

 
$
5,830,609

 
$
413,751

 
$
47,655,726


The following tables present by class the ending, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized only for loans and leases individually evaluated for impairment and purchased credit-impaired loans: (1), (2)
 
September 30, 2015
 
Three Months Ended September 30, 2015
 
Nine Months Ended September 30, 2015
(dollar amounts in thousands)
Ending
Balance
 
Unpaid
Principal
Balance (5)
 
Related
Allowance
 
Average
Balance
 
Interest
Income
Recognized
 
Average
Balance
 
Interest
Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
45,595

 
$
55,449

 
$

 
$
42,137

 
$
149

 
$
25,142

 
$
296

Purchased credit-impaired

 

 

 

 

 

 

Other commercial and industrial
101,805

 
132,213

 

 
90,885

 
561

 
68,114

 
1,398

Total commercial and industrial
147,400


187,662


$


133,022


710


93,256


1,694

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
42,412

 
64,421

 

 
45,483

 
526

 
51,315

 
1,485

Multi family

 

 

 

 

 

 

Office
9,112

 
12,993

 

 
8,815

 
34

 
7,336

 
151

Industrial and warehouse
2,018

 
2,039

 

 
673

 
10

 
400

 
17

Purchased credit-impaired

 

 

 

 

 

 

Other commercial real estate
2,250

 
2,282

 

 
1,956

 
20

 
2,716

 
81

Total commercial real estate
55,792


81,735




56,927


590


61,767


1,734

Other consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
Other consumer

 

 

 

 

 

 

Purchased credit-impaired
50

 
107

 

 
50

 
3

 
51

 
11

Total other consumer
$
50


$
107


$


$
50


$
3


$
51


$
11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial: (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
57,048

 
$
67,187

 
$
3,544

 
$
53,136

 
$
524

 
$
54,622

 
$
1,458

Purchased credit-impaired
19,484

 
28,812

 
547

 
19,803

 
1,216

 
21,053

 
4,176

Other commercial and industrial
250,200

 
264,320

 
9,280

 
225,478

 
1,680

 
185,312

 
4,054

Total commercial and industrial
326,732

 
360,319

 
13,371

 
298,417

 
3,420

 
260,987

 
9,688

Commercial real estate: (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
20,938

 
25,945

 
3,175

 
32,387

 
332

 
39,074

 
1,112

Multi family
14,388

 
19,067

 
1,506

 
15,320

 
161

 
15,582

 
515

Office
12,508

 
16,324

 
1,122

 
20,639

 
201

 
37,272

 
1,214

Industrial and warehouse
6,266

 
6,751

 
1,014

 
6,296

 
84

 
6,949

 
246

Purchased credit-impaired
25,775

 
68,912

 
42

 
26,684

 
1,611

 
31,770

 
5,531

Other commercial real estate
24,505

 
30,567

 
3,641

 
25,368

 
306

 
27,974

 
994

Total commercial real estate
104,380

 
167,566

 
10,500

 
126,694

 
2,695

 
158,621

 
9,612

Automobile
29,938

 
30,470

 
1,446

 
29,371

 
554

 
29,878

 
1,659

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured by first-lien
48,690

 
53,885

 
3,984

 
99,474

 
417

 
123,010

 
3,716

Secured by junior-lien
192,196

 
225,689

 
17,362

 
189,211

 
2,308

 
179,798

 
6,525

Total home equity
240,886

 
279,574

 
21,346

 
288,685

 
2,725

 
302,808

 
10,241

Residential mortgage (6):
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
383,718

 
426,569

 
10,186

 
374,250

 
3,209

 
372,946

 
9,309

Purchased credit-impaired
1,513

 
2,292

 
70

 
1,776

 
94

 
1,908

 
321

Total residential mortgage
385,231

 
428,861

 
10,256

 
376,026

 
3,303

 
374,854

 
9,630

Other consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other consumer
4,720

 
4,753

 
142

 
4,801

 
64

 
4,683

 
191

Purchased credit-impaired

 

 

 

 

 

 

Total other consumer
$
4,720

 
$
4,753

 
$
142

 
$
4,801

 
$
64

 
$
4,683

 
$
191


 
December 31, 2014
 
Three Months Ended
September 30, 2014
 
Nine Months Ended
September 30, 2014
(dollar amounts in thousands)
Ending
Balance
 
Unpaid
Principal
Balance (5)
 
Related
Allowance
 
Average
Balance
 
Interest
Income
Recognized
 
Average
Balance
 
Interest
Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
13,536

 
$
13,536

 
$

 
$
5,365

 
$
50

 
$
4,650

 
$
134

Purchased credit-impaired

 

 

 

 

 

 

Other commercial and industrial
24,309

 
26,858

 

 
5,137

 
70

 
6,768

 
256

Total commercial and industrial
37,845


40,394


$


10,502


120


11,418


390

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
61,915

 
91,627

 

 
50,023

 
617

 
53,117

 
1,854

Multi family

 

 

 

 

 

 

Office
1,130

 
3,574

 

 
4,040

 
49

 
4,280

 
279

Industrial and warehouse
3,447

 
3,506

 

 
3,619

 
45

 
5,940

 
221

Purchased credit-impaired
38,371

 
91,075

 

 

 

 

 

Other commercial real estate
6,608

 
6,815

 

 
7,962

 
85

 
6,879

 
221

Total commercial real estate
111,471


196,597




65,644


796


70,216


2,575

Other consumer

 

 

 

 

 

 

Purchased credit-impaired

 

 

 
53

 
2

 
91

 
11

Total other consumer
$


$


$


$
53


$
2


$
91


$
11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial: (3)
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
$
44,869

 
$
53,639

 
$
4,220

 
$
39,001

 
$
383

 
$
39,653

 
$
1,172

Purchased credit-impaired
23,228

 
35,307

 
3,846

 
33,056

 
1,306

 
34,509

 
6,508

Other commercial and industrial
134,279

 
162,908

 
6,829

 
108,856

 
658

 
79,925

 
1,937

Total commercial and industrial
202,376

 
251,854

 
14,895

 
180,913

 
2,347

 
154,087

 
9,617

Commercial real estate: (4)
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail properties
37,081

 
38,397

 
3,536

 
67,589

 
505

 
66,780

 
1,569

Multi family
17,277

 
23,725

 
2,339

 
17,551

 
172

 
16,472

 
488

Office
52,953

 
56,268

 
8,399

 
53,262

 
624

 
52,981

 
1,771

Industrial and warehouse
8,888

 
10,396

 
720

 
9,279

 
90

 
9,198

 
199

Purchased credit-impaired

 

 

 
49,979

 
1,813

 
64,688

 
9,034

Other commercial real estate
27,963

 
33,472

 
3,893

 
41,661

 
469

 
45,316

 
1,483

Total commercial real estate
144,162

 
162,258

 
18,887

 
239,321

 
3,673

 
255,435

 
14,544

Automobile
30,612

 
32,483

 
1,531

 
36,209

 
632

 
35,643

 
2,034

Home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured by first-lien
145,566

 
157,978

 
8,296

 
131,301

 
1,391

 
121,861

 
4,001

Secured by junior-lien
164,880

 
208,118

 
17,731

 
144,919

 
1,678

 
124,254

 
4,539

Total home equity
310,446

 
366,096

 
26,027

 
276,220

 
3,069

 
246,115

 
8,540

Residential mortgage (6):
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
369,577

 
415,280

 
16,535

 
391,288

 
2,813

 
384,787

 
8,661

Purchased credit-impaired
1,912

 
3,096

 
8

 
2,369

 
101

 
2,373

 
504

Total residential mortgage
371,489

 
418,376

 
16,543

 
393,657

 
2,914

 
387,160

 
9,165

Other consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Other consumer
4,088

 
4,209

 
214

 
3,502

 
53

 
2,473

 
146

Purchased credit-impaired
51

 
123

 
245

 

 

 

 

Total other consumer
$
4,139

 
$
4,332

 
$
459

 
$
3,502

 
$
53

 
$
2,473

 
$
146

(1)
These tables do not include loans fully charged-off or transferred to loans held for sale.
(2)
All automobile, home equity, residential mortgage, and other consumer impaired loans included in these tables are considered impaired due to their status as a TDR.
(3)
At September 30, 2015, $95,616 thousand of the $326,732 thousand commercial and industrial loans with an allowance recorded were considered impaired due to their status as a TDR. At December 31, 2014, $62,737 thousand of the $202,376 thousand commercial and industrial loans with an allowance recorded were considered impaired due to their status as a TDR.
(4)
At September 30, 2015, $45,578 thousand of the $104,380 thousand commercial real estate loans with an allowance recorded were considered impaired due to their status as a TDR. At December 31, 2014, $27,423 thousand of the $144,162 thousand commercial real estate loans with an allowance recorded were considered impaired due to their status as a TDR.
(5)
The differences between the ending balance and unpaid principal balance amounts represent partial charge-offs.
(6)
At September 30, 2015, $31,767 thousand of the $385,231 thousand residential mortgages loans with an allowance recorded were guaranteed by the U.S. government. At December 31, 2014, $24,470 thousand of the $371,489 thousand residential mortgage loans with an allowance recorded were guaranteed by the U.S. government.
TDR Loans
TDRs are modified loans where a concession was provided 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.
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. The types of concessions provided to borrowers include:
Interest rate reduction: A reduction of the stated interest rate to a nonmarket rate for the remaining original life of the debt.
Amortization or maturity date change beyond what the collateral supports, including any of the following:
(1)
Lengthens the amortization period of the amortized principal beyond market terms. This concession reduces the minimum monthly payment and could increase the amount of the balloon payment at the end of the term of the loan. Principal is generally not forgiven.
(2)
Reduces the amount of loan principal to be amortized and increases the amount of the balloon payment at the end of the term of the loan. This concession also reduces the minimum monthly payment. Principal is generally not forgiven.
(3)
Extends the maturity date or dates of the debt beyond what the collateral supports. This concession generally applies to loans without a balloon payment at the end of the term of the loan.
Chapter 7 bankruptcy: A bankruptcy court’s discharge of a borrower’s debt is considered a concession when the borrower does not reaffirm the discharged debt.
Other: A concession that is not categorized as one of the concessions described above. These concessions include, but are not limited to: principal forgiveness, collateral concessions, covenant concessions, and reduction of accrued interest.
Principal forgiveness may result from any TDR modification of any concession type. However, the aggregate amount of principal forgiven as a result of loans modified as TDRs during the three-month and nine-month periods ended September 30, 2015 and 2014, was not significant.
Following is a description of TDRs by the different loan types:
Commercial loan TDRs – Commercial accruing TDRs often result from loans receiving a concession with terms that are not considered a market transaction to Huntington. The TDR remains in accruing status as long as the customer is less than 90-days past due on payments per the restructured loan terms and no loss is expected.
Commercial nonaccrual TDRs result from either: (1) an accruing commercial TDR being placed on nonaccrual status, or (2) a workout where an existing commercial NAL is restructured and a concession is given. At times, these workouts restructure the NAL so that two or more new notes are created. The primary note is underwritten based upon our normal underwriting standards and is sized so projected cash flows are sufficient to repay contractual principal and interest. The terms on the secondary note(s) vary by situation, and may include notes that defer principal and interest payments until after the primary note is repaid. Creating two or more notes often allows the borrower to continue a project and allows Huntington to right-size a loan based upon the current expectations for a borrower’s or project’s performance.
Our strategy involving 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 our 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 loan is evaluated to determine if it 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. A new loan is considered for removal of the TDR designation, whereas a continuation of the prior note requires a continuation of the TDR designation. In order for a TDR designation to be removed, the borrower must no longer be experiencing financial difficulties and the terms of the refinanced loan must not represent a concession.
Residential Mortgage 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.
Automobile, Home Equity, and Other Consumer loan TDRs – The Company may make similar interest rate, term, and principal concessions as with residential mortgage loan TDRs.
TDR Impact on Credit Quality
Huntington’s ALLL is largely determined by updated 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 updated 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.
Our TDRs may include multiple concessions and the disclosure classifications are presented based on the primary concession provided to the borrower. The majority of our concessions for the C&I and CRE portfolios are the extension of the maturity date, but could also include an increase in the interest rate. In these instances, the primary concession is the maturity date extension.
TDR concessions may also result in the reduction of the ALLL within the C&I and CRE portfolios. This reduction is derived from payments and the resulting application of the reserve calculation within the ALLL. The transaction reserve for non-TDR C&I and CRE loans is calculated based upon several estimated probability factors, such as PD and LGD, both of which were previously discussed. Upon the occurrence of a TDR in our C&I and CRE portfolios, the reserve is measured based on discounted expected cash flows or collateral value, less anticipated selling costs, of the modified loan in accordance with ASC 310-10. The resulting TDR ALLL calculation often results in a lower ALLL amount because (1) the discounted expected cash flows or collateral value, less anticipated selling costs, indicate a lower estimated loss, (2) if the modification includes a rate increase, the discounting of the cash flows on the modified loan, using the pre-modification interest rate, exceeds the carrying value of the loan, or (3) payments may occur as part of the modification. The ALLL for C&I and CRE loans may increase as a result of the modification, as the discounted cash flow analysis may indicate additional reserves are required.
TDR concessions on consumer loans may increase the ALLL. The concessions made to these borrowers often include interest rate reductions, and therefore, the TDR ALLL calculation results in a greater ALLL compared with the non-TDR calculation as the reserve is measured based on the estimation of the discounted expected cash flows or collateral value, less anticipated selling costs, on the modified loan in accordance with ASC 310-10. The resulting TDR ALLL calculation often results in a higher ALLL amount because (1) the discounted expected cash flows or collateral value, less anticipated selling costs, indicate a higher estimated loss or, (2) due to the rate decrease, the discounting of the cash flows on the modified loan, using the pre-modification interest rate, indicates a reduction in the expected cash flows or collateral value, less anticipated selling costs. In certain instances, the ALLL may decrease as a result of payments made in connection with the modification.
Commercial loan TDRs – In instances where the bank substantiates that it will collect its outstanding balance in full, the note is considered for return to accrual status upon the borrower sustaining sufficient cash flows for a six-month period of time. This six-month period could extend before or after the restructure date. If a charge-off was taken as part of the restructuring, any interest or principal payments received on that note are applied to first reduce the bank’s outstanding book balance and then to recoveries of charged-off principal, unpaid interest, and/or fee expenses while the TDR is in nonaccrual status.
Residential Mortgage, Automobile, Home Equity, and Other Consumer loan TDRs – Modified loans identified as TDRs are aggregated into pools for analysis. Cash flows and weighted average interest rates are used to calculate impairment at the pooled-loan level. Once the loans are aggregated into the pool, they continue to be classified as TDRs until contractually repaid or charged-off.

Residential mortgage loans not guaranteed by a U.S. government agency such as the FHA, VA, and the USDA, including TDR loans, are reported as accrual or nonaccrual based upon delinquency status. Nonaccrual TDRs are those that are greater than 150-days contractually past due. Loans guaranteed by U.S. government organizations continue to accrue interest upon delinquency.
The following tables present by class and by the reason for the modification, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the three-month and nine-month periods ended September 30, 2015 and 2014:
 
New Troubled Debt Restructurings During The Three-Month Period Ended (1)
 
September 30, 2015
 
September 30, 2014
(dollar amounts in thousands)
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
 
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
C&I—Owner occupied:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 
$

 
$

 
2

 
$
360

 
$

Amortization or maturity date change
60

 
29,433

 
303

 
27

 
11,562

 
132

Other

 

 

 
1

 
91

 

Total C&I—Owner occupied
60


29,433


303


30


12,013


132

C&I—Other commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
2

 
89

 
(7
)
 
2

 
4,076

 
(14
)
Amortization or maturity date change
157

 
104,923

 
4,523

 
78

 
35,952

 
(202
)
Other
2

 
338

 
4

 
6

 
683

 
(6
)
Total C&I—Other commercial and industrial
161

 
105,350

 
4,520

 
86

 
40,711

 
(222
)
CRE—Retail properties:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 
1

 
124

 
(1
)
Amortization or maturity date change
8

 
4,360

 
(125
)
 
7

 
1,997

 
(4
)
Other

 

 

 

 

 

Total CRE—Retail properties
8


4,360


(125
)

8


2,121


(5
)
CRE—Multi family:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 
9

 
2,744

 
(75
)
Amortization or maturity date change
6

 
1,296

 
320

 
9

 
5,724

 
(3
)
Other

 

 

 
3

 
470

 
(4
)
Total CRE—Multi family
6


1,296


320


21


8,938


(82
)
CRE—Office:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
356

 
6

 

 

 

Amortization or maturity date change
7

 
26,259

 
178

 
6

 
2,575

 
(7
)
Other

 

 

 
1

 
10,564

 
328

Total CRE—Office
8


26,615


184


7


13,139


321

CRE—Industrial and warehouse:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

 

 

Amortization or maturity date change
4

 
2,692

 
(30
)
 
9

 
3,610

 
(45
)
Other

 

 

 

 

 

Total CRE—Industrial and Warehouse
4


2,692


(30
)

9


3,610


(45
)
CRE—Other commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 
3

 
205

 
95

Amortization or maturity date change
5

 
934

 
40

 
3

 
1,762

 
(6
)
Other

 

 

 

 

 

Total CRE—Other commercial real estate
5

 
934

 
40

 
6

 
1,967

 
89

Automobile:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
5

 
6

 

 
7

 
199

 
2

Amortization or maturity date change
401

 
3,445

 
157

 
381

 
2,531

 
34

Chapter 7 bankruptcy
331

 
2,585

 
84

 
165

 
1,420

 
34

Other

 

 

 

 

 

Total Automobile
737

 
6,036

 
241

 
553

 
4,150

 
70

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
3

 
686

 
(4
)
 
7

 
633

 
10

Amortization or maturity date change
261

 
27,553

 
(147
)
 
64

 
7,723

 
(37
)
Chapter 7 bankruptcy
37

 
3,888

 
5

 
33

 
3,082

 
128

Other
3

 
254

 

 
1

 
106

 

Total Residential mortgage
304

 
32,381

 
(146
)
 
105

 
11,544

 
101

First-lien home equity:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
11

 
800

 
36

 
29

 
2,730

 
42

Amortization or maturity date change
57

 
4,863

 
(147
)
 
69

 
5,518

 
(316
)
Chapter 7 bankruptcy
40

 
2,288

 
99

 
24

 
1,988

 
104

Other

 

 

 

 

 

Total First-lien home equity
108

 
7,951

 
(12
)
 
122

 
10,236

 
(170
)
Junior-lien home equity:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
7

 
301

 
24

 
3

 
320

 
15

Amortization or maturity date change
364

 
13,979

 
(2,029
)
 
412

 
16,092

 
(2,140
)
Chapter 7 bankruptcy
61

 
552

 
1,035

 
49

 
750

 
710

Other

 

 

 

 

 

Total Junior-lien home equity
432

 
14,832

 
(970
)
 
464

 
17,162

 
(1,415
)
Other consumer:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
96

 
3

 
1

 

 

Amortization or maturity date change
1

 
2

 

 
14

 
642

 
33

Chapter 7 bankruptcy
2

 
13

 

 
2

 
5

 

Other

 

 

 

 

 

Total Other consumer
4

 
111

 
3

 
17

 
647

 
33

Total new troubled debt restructurings
1,837

 
$
231,991

 
$
4,328

 
1,428

 
$
126,238

 
$
(1,193
)
(1)
TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.
(2)
Amounts represent the financial impact via provision for loan and lease losses as a result of the modification.
 
New Troubled Debt Restructurings During The Nine-Month Period Ended (1)
 
September 30, 2015
 
September 30, 2014
(dollar amounts in thousands)
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
 
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
C&I—Owner occupied:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
3

 
$
235

 
$
(2
)
 
17

 
$
2,141

 
$
21

Amortization or maturity date change
161

 
76,400

 
(1,799
)
 
64

 
19,899

 
70

Other
3

 
613

 
(29
)
 
5

 
1,906

 
(35
)
Total C&I—Owner occupied
167

 
77,248

 
(1,830
)
 
86

 
23,946

 
56

C&I—Other commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
7

 
524

 
3

 
21

 
49,557

 
(1,936
)
Amortization or maturity date change
427

 
341,148

 
(76,078
)
 
187

 
89,331

 
156

Other
8

 
28,850

 
(430
)
 
16

 
7,354

 
(75
)
Total C&I—Other commercial and industrial
442

 
370,522

 
(76,505
)
 
224

 
146,242

 
(1,855
)
CRE—Retail properties:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
1,657

 
(11
)
 
4

 
11,229

 
420

Amortization or maturity date change
20

 
15,333

 
(1,658
)
 
17

 
24,147

 
(185
)
Other

 

 

 
9

 
13,765

 
(35
)
Total CRE—Retail properties
21

 
16,990

 
(1,669
)
 
30

 
49,141

 
200

CRE—Multi family:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
90

 

 
20

 
3,484

 
(75
)
Amortization or maturity date change
36

 
11,532

 
291

 
20

 
6,104

 
(5
)
Other
8

 
216

 
(6
)
 
7

 
4,770

 
57

Total CRE—Multi family
45

 
11,838

 
285

 
47

 
14,358

 
(23
)
CRE—Office:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
356

 
7

 
2

 
120

 
(1
)
Amortization or maturity date change
19

 
57,332

 
250

 
16

 
11,791

 
(367
)
Other
1

 
30

 
(2
)
 
5

 
35,476

 
(3,153
)
Total CRE—Office
21

 
57,718

 
255

 
23

 
47,387

 
(3,521
)
CRE—Industrial and warehouse:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 
2

 
4,046

 

Amortization or maturity date change
9

 
5,078

 
61

 
14

 
7,166

 
167

Other

 

 

 
1

 
977

 

Total CRE—Industrial and Warehouse
9

 
5,078

 
61

 
17

 
12,189

 
167

CRE—Other commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction

 

 

 
8

 
5,224

 
146

Amortization or maturity date change
22

 
8,665

 
66

 
47

 
74,767

 
(2,781
)
Other
2

 
234

 
(22
)
 
2

 
926

 
(1
)
Total CRE—Other commercial real estate
24

 
8,899

 
44

 
57

 
80,917

 
(2,636
)
Automobile:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
30

 
48

 
2

 
55

 
627

 
10

Amortization or maturity date change
1,213

 
8,929

 
411

 
1,550

 
9,758

 
61

Chapter 7 bankruptcy
621

 
4,946

 
245

 
483

 
3,791

 
(7
)
Other

 

 

 

 

 

Total Automobile
1,864

 
13,923

 
658

 
2,088

 
14,176

 
64

Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
12

 
1,423

 
(60
)
 
22

 
2,866

 
(14
)
Amortization or maturity date change
454

 
50,827

 
(342
)
 
281

 
39,025

 
518

Chapter 7 bankruptcy
106

 
10,948

 
(126
)
 
150

 
15,573

 
503

Other
9

 
962

 

 
4

 
405

 
5

Total Residential mortgage
581

 
64,160

 
(528
)
 
457

 
57,869

 
1,012

First-lien home equity:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
32

 
3,379

 
104

 
124

 
10,696

 
646

Amortization or maturity date change
171

 
14,906

 
(775
)
 
204

 
16,682

 
(647
)
Chapter 7 bankruptcy
88

 
5,143

 
233

 
67

 
4,410

 
204

Other

 

 

 

 

 

Total First-lien home equity
291

 
23,428

 
(438
)
 
395

 
31,788

 
203

Junior-lien home equity:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
15

 
650

 
45

 
171

 
6,142

 
185

Amortization or maturity date change
1,130

 
48,563

 
(7,580
)
 
1,045

 
41,177

 
(5,732
)
Chapter 7 bankruptcy
169

 
1,977

 
3,280

 
152

 
2,363

 
2,148

Other

 

 

 

 

 

Total Junior-lien home equity
1,314

 
51,190

 
(4,255
)
 
1,368

 
49,682

 
(3,399
)
Other consumer:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
96

 
3

 
1

 

 

Amortization or maturity date change
7

 
130

 
6

 
44

 
1,777

 
11

Chapter 7 bankruptcy
7

 
58

 
9

 
21

 
446

 
(51
)
Other

 

 

 

 

 

Total Other consumer
15

 
284

 
18

 
66

 
2,223

 
(40
)
Total new troubled debt restructurings
4,794

 
$
701,278

 
$
(83,904
)
 
4,858

 
$
529,918

 
$
(9,772
)
(1)
TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.
(2)
Amount represents the financial impact via provision for loan and lease losses as a result of the modification.
Any loan within any portfolio or class is considered to be in payment redefault at 90-days past due.
The following tables present TDRs that have defaulted within one year of modification during the three-month and nine-month periods ended September 30, 2015 and 2014:
 
Troubled Debt Restructurings That Have Redefaulted (1)
Within One Year of Modification During The Three Months Ended
 
September 30, 2015
 
September 30, 2014
(dollar amounts in thousands)
Number of
Contracts
 
Ending
Balance
 
Number of
Contracts
 
Ending
Balance
C&I—Owner occupied:
 
 
 
 
 
 
 
Interest rate reduction

 
$

 

 
$

Amortization or maturity date change
2

 
328

 
2

 
388

Other

 

 

 

Total C&I—Owner occupied
2

 
328

 
2

 
388

C&I—Other commercial and industrial:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
11

 
964

 
3

 
88

Other

 

 

 

Total C&I—Other commercial and industrial
11

 
964

 
3

 
88

CRE—Retail Properties:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change

 

 

 

Other

 

 

 

Total CRE—Retail properties

 

 

 

CRE—Multi family:
 
 
 
 
 
 
 
Interest rate reduction


 


 

 

Amortization or maturity date change
2

 
443

 
1

 
138

Other
1

 
140

 

 

Total CRE—Multi family
3

 
583

 
1

 
138

CRE—Office:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
1

 
1,596

 

 

Other

 

 

 

Total CRE—Office
1

 
1,596

 

 

CRE—Industrial and Warehouse:
 
 
 
 
 
 
 
Interest rate reduction

 

 
1

 
1,339

Amortization or maturity date change

 

 

 

Other

 

 

 

Total CRE—Industrial and Warehouse

 

 
1

 
1,339

CRE—Other commercial real estate:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
1

 
93

 
1

 
197

Other

 

 

 

Total CRE—Other commercial real estate
1

 
93

 
1

 
197

Automobile:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
12

 
99

 
13

 
144

Chapter 7 bankruptcy
2

 
10

 
5

 
31

Other

 

 

 

Total Automobile
14

 
109

 
18

 
175

Residential mortgage:
 
 
 
 
 
 
 
Interest rate reduction
2

 
178

 
1

 
118

Amortization or maturity date change
19

 
1,624

 
20

 
2,300

Chapter 7 bankruptcy
3

 
310

 
10

 
1,007

Other

 

 

 

Total Residential mortgage
24

 
2,112

 
31

 
3,425

First-lien home equity:
 
 
 
 
 
 
 
Interest rate reduction
3

 
232

 
1

 
39

Amortization or maturity date change

 

 
6

 
998

Chapter 7 bankruptcy
3

 
265

 
6

 
243

Other

 

 

 

Total First-lien home equity
6

 
497

 
13

 
1,280

Junior-lien home equity:
 
 
 
 
 
 
 
Interest rate reduction
1

 
214

 

 

Amortization or maturity date change
7

 
220

 
8

 
578

Chapter 7 bankruptcy
2

 

 
15

 
24

Other

 

 

 

Total Junior-lien home equity
10

 
434

 
23

 
602

Other consumer:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change

 

 

 

Chapter 7 bankruptcy

 

 

 

Other

 

 

 

Total Other consumer

 

 

 

Total troubled debt restructurings with subsequent redefault
72

 
$
6,716

 
93

 
$
7,632

(1)
Subsequent redefault is defined as a payment redefault within 12 months of the restructuring date. Payment redefault is defined as 90-days past due for any loan within any portfolio or class. Any loan may be considered to be in payment redefault prior to the guidelines noted above when collection of principal or interest is in doubt.
 
Troubled Debt Restructurings That Have Redefaulted (1)
Within One Year of Modification During The Nine Months Ended
 
September 30, 2015
 
September 30, 2014
(dollar amounts in thousands)
Number of
Contracts
 
Ending
Balance
 
Number of
Contracts
 
Ending
Balance
C&I—Owner occupied:
 
 
 
 
 
 
 
Interest rate reduction

 
$

 

 
$

Amortization or maturity date change
5

 
900

 
4

 
788

Other

 

 
1

 
230

Total C&I—Owner occupied
5


900


5


1,018

C&I—Other commercial and industrial:
 
 
 
 
 
 
 
Interest rate reduction
1

 
27

 

 

Amortization or maturity date change
21

 
2,650

 
10

 
1,132

Other

 

 

 

Total C&I—Other commercial and industrial
22


2,677


10


1,132

CRE—Retail Properties:
 
 
 
 
 
 
 
Interest rate reduction
1

 
47

 

 

Amortization or maturity date change
1

 
6,482

 

 

Other

 

 

 

Total CRE—Retail properties
2


6,529





CRE—Multi family:
 
 
 
 
 
 
 
Interest rate reduction

 
$

 

 

Amortization or maturity date change
10

 
1,354

 
2

 
350

Other
1

 
140

 

 

Total CRE—Multi family
11


1,494


2


350

CRE—Office:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
3

 
2,984

 
1

 
493

Other

 

 

 

Total CRE—Office
3


2,984


1


493

CRE—Industrial and Warehouse:
 
 
 
 
 
 
 
Interest rate reduction

 

 
1

 
1,339

Amortization or maturity date change

 

 

 

Other

 

 

 

Total CRE—Industrial and Warehouse




1


1,339

CRE—Other commercial real estate:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change
1

 
93

 
2

 
758

Other

 

 

 

Total CRE—Other commercial real estate
1


93


2


758

Automobile:
 
 
 
 
 
 
 
Interest rate reduction
1

 
4

 

 

Amortization or maturity date change
24

 
298

 
39

 
326

Chapter 7 bankruptcy
16

 
133

 
42

 
262

Other

 

 

 

Total Automobile
41

 
435

 
81

 
588

Residential mortgage:
 
 
 
 
 
 
 
Interest rate reduction
3

 
239

 
4

 
468

Amortization or maturity date change
45

 
4,225

 
64

 
7,354

Chapter 7 bankruptcy
7

 
699

 
33

 
2,952

Other

 

 

 

Total Residential mortgage
55

 
5,163

 
101

 
10,774

First-lien home equity:
 
 
 
 
 
 
 
Interest rate reduction
4

 
387

 
3

 
202

Amortization or maturity date change
4

 
258

 
14

 
1,928

Chapter 7 bankruptcy
26

 
2,191

 
14

 
843

Other

 

 

 

Total First-lien home equity
34

 
2,836

 
31

 
2,973

Junior-lien home equity:
 
 
 
 
 
 
 
Interest rate reduction
3

 
411

 

 

Amortization or maturity date change
27

 
1,018

 
22

 
1,276

Chapter 7 bankruptcy
14

 
401

 
37

 
620

Other

 

 

 

Total Junior-lien home equity
44

 
1,830

 
59

 
1,896

Other consumer:
 
 
 
 
 
 
 
Interest rate reduction

 

 

 

Amortization or maturity date change

 

 

 

Chapter 7 bankruptcy

 

 

 

Other

 

 

 

Total Other consumer

 

 

 

Total troubled debt restructurings with subsequent redefault
218

 
$
24,941

 
293

 
$
21,321

(1)
Subsequent redefault is defined as a payment redefault within 12 months of the restructuring date. Payment redefault is defined as 90-days past due for any loan in any portfolio or class. Any loan in any portfolio or class may be considered to be in payment redefault prior to the guidelines noted above when collection of principal or interest is in doubt.
Pledged Loans and Leases
At September 30, 2015, the Bank has access to the Federal Reserve’s discount window and advances from the FHLB – Cincinnati. As of September 30, 2015, these borrowings and advances are secured by $17.2 billion of loans and securities.
On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which we have re-branded Huntington Technology Finance. Huntington assumed debt associated with two securitizations. As of September 30, 2015, the debt is secured by $221.1 million of leases held by the trusts.