FAIR VALUES OF ASSETS AND LIABILITIES

v3.8.0.1

FAIR VALUES OF ASSETS AND LIABILITIES	12 Months Ended
	Dec. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUES OF ASSETS AND LIABILITIES	FAIR VALUES OF ASSETS AND LIABILITIES 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 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 in accordance with ASC 825 to allow for operational efficiencies not normally associated with purchased credit impaired loans. The 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 uses prices obtained from third-party pricing services and recent trades to determine the fair value of securities. AFS and trading securities are classified as Level 1 using quoted market prices (unadjusted) in active markets for identical securities that Huntington has the ability to access 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. 78% of the positions in these portfolios are Level 2, and consist of U.S. Government and agency debt securities, agency mortgage backed securities, asset-backed securities other than the CDO-preferred securities portfolio, certain municipal securities and other securities. For Level 2 securities Huntington uses various methods and techniques to corroborate prices obtained from the pricing service, including references to dealer or other market quotes, and by reviewing valuations of comparable instruments. 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. 21% of our positions are Level 3, and consist of CDO-preferred securities and 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 municipal securities portion that is classified as Level 3 uses significant estimates to determine the fair value of these securities which results in greater subjectivity. The fair value is determined by utilizing third-party valuation services. The third-party service provider reviews credit worthiness, prevailing market rates, analysis of similar securities, and projected cash flows. The third-party service provider also incorporates industry and general economic conditions into their analysis. Huntington evaluates the analysis provided for reasonableness. The CDO-preferred securities portfolios are classified as Level 3 and as such use significant estimates to determine the fair value of these securities which results in greater subjectivity. The CDO-preferred securities portfolio are subjected to a quarterly review of the projected cash flows. These reviews are supported with analysis from independent third parties, and are used as a basis for impairment analysis. MSRs MSRs do not trade in an active 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 an income approach 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. The determination of fair value 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. 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, 2017 and 2016 are summarized below:   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   December 31, 2017 (dollar amounts in millions) Level 1   Level 2   Level 3     Assets                   Loans held for sale $ —   $ 413   $ —   $ —   $ 413 Loans held for investment —   55   38   —   93 Trading account securities:                   Other securities 83   3   —   —   86   83   3   —   —   86 Available-for-sale and other securities:                   U.S. Treasury securities 5   —   —   —   5 Residential CMOs —   6,484   —   —   6,484 Residential MBS     1,367           1,367 Commercial MBS     2,487           2,487 Other agencies —   70   —   —   70 Municipal securities —   711   3,167   —   3,878 Asset-backed securities —   443   24   —   467 Corporate debt —   109   —   —   109 Other securities 20   1   —   —   21   25   11,672   3,191   —   14,888 MSRs —   —   11   —   11 Derivative assets —   316   6   (190 )   132 Liabilities                   Derivative liabilities —   326   5   (245 )   86 Short-term borrowings —   —   —   —   —   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   December 31, 2016 (dollar amounts in millions) Level 1   Level 2   Level 3     Assets                   Loans held for sale $ —   $ 438   $ —   $ —   $ 438 Loans held for investment —   34   48   —   82 Trading account securities:                   Municipal securities —   1   —   —   1 Other securities 132   —   —   —   132   132   1   —   —   133 Available-for-sale and other securities:                   U.S. Treasury securities 6   —   —   —   6 Residential CMOs —   6,810   —   —   6,810 Residential MBS     200           200 Commercial MBS     3,663           3,663 Other agencies —   73   —   —   73 Municipal securities —   452   2,798   —   3,250 Asset-backed securities —   718   76   —   794 Corporate debt —   199   —   —   199 Other securities 16   4   —   —   20   22   12,119   2,874   —   15,015 MSRs —   —   14   —   14 Derivative assets —   414   6   (182 )   238 Liabilities                   Derivative liabilities —   363   8   (272 )   99 Short-term borrowings —   —   —   —   — (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, 2017, 2016, and 2015 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, 2017           Available-for-sale securities     (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities   Asset- backed securities   Loans held for investment Opening balance $ 14   $ (2 )   $ 2,798   $ 76   $ 48 Transfers into Level 3 —   —   —   —   — 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 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 is transferred to loans held for sale, which is classified as Level 2.   Level 3 Fair Value Measurements Year Ended December 31, 2016           Available-for-sale securities     (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities   Asset- backed securities   Loans held for investment Opening balance $ 18   $ 6   $ 2,095   $ 100   $ 2 Transfers into Level 3 —   —   —   —   — Transfers out of Level 3 (1) —   (7 )   —   —   — Total gains/losses for the period:                   Included in earnings (4 )   (1 )   7   (2 )   (2 ) Included in OCI —   —   (28 )   6   — Purchases/originations —   —   1,399   —   56 Sales —   —   (37 )   (25 )   — Repayments —   —   —   —   (8 ) Settlements —   —   (638 )   (3 )   — Closing balance $ 14   $ (2 )   $ 2,798   $ 76   $ 48 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 $ (4 )   $ (1 )   $ (33 )   $ 4   $ — (1) Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that is transferred to loans held for sale, which is classified as Level 2.   Level 3 Fair Value Measurements Year Ended December 31, 2015           Available-for-sale securities     (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities   Private label CMO   Asset- backed securities   Loans held for investment Balance, beginning of year $ 23   $ 3   $ 1,418   $ 30   $ 83   $ 10 Transfers into Level 3 —   —   —   —   —   — Transfers out of Level 3 (1) —   (2 )   —   —   —   — Total gains/losses for the period:                       Included in earnings (5 )   5   —   —   (3 )   — Included in OCI —   —   (4 )   2   25   — Purchases/originations —   —   1,002   —   —   — Sales —   —   (10 )   (30 )   —   — Repayments —   —   —   —   —   (8 ) Settlements —   —   (311 )   (2 )   (5 )   — Balance, end of year $ 18   $ 6   $ 2,095   $ —   $ 100   $ 2 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 $ (5 )   $ 5   $ —   $ —   $ (3 )   $ — (1) Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that is transferred to loans held for sale, which is classified as Level 2. 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, 2017, 2016, and 2015:   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 $ (3 )   $ 16   $ —   $ —   $ — Securities gains (losses) —   —   —   (5 )   — Interest and fee income —   —   (2 )   —   — Noninterest income —   —   —   —   1 Total $ (3 )   $ 16   $ (2 )   $ (5 )   $ 1   Level 3 Fair Value Measurements Year Ended December 31, 2016           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 $ (4 )   $ (1 )   $ —   $ —   $ — Securities gains (losses) —   —   1   (2 )   — Interest and fee income —   —   —   —   — Noninterest income —   —   6   —   (2 ) Total $ (4 )   $ (1 )   $ 7   $ (2 )   $ (2 )   Level 3 Fair Value Measurements Year Ended December 31, 2015           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) $ (5 )   $ 5   $ —   $ —   $ — Securities gains (losses) —   —   —   (3 )   — Interest and fee income —   —   —   —   — Noninterest income —   —   —   —   — Total $ (5 )   $ 5   $ —   $ (3 )   $ — Assets and liabilities under the fair value option The following table presents the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:    December 31, 2017   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 $ 413   $ 400   $ 13   $ 1   $ 1   $ — Loans held for investment 93   102   (9 )   10   11   (1 )   December 31, 2016   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 $ 438   $ 434   $ 4   $ —   $ —   $ — Loans held for investment 82   92   $ (10 )   8   11   $ (3 ) The following tables present the net gains (losses) from fair value changes, including net gains (losses) associated with instrument specific credit risk for the years ended December 31, 2017, 2016, and 2015:    Net gains (losses) from fair value changes Year Ended December 31, (dollar amounts in millions) 2017   2016   2015 Assets           Loans held for sale $ 8   $ 7   $ (2 ) 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. For the year ended December 31, 2017, assets measured at fair value on a nonrecurring basis 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, 2017 MSRs $ 190   $ —   $ —   $ 190   $ 1 Impaired loans 36   —   —   36   (5 ) Other real estate owned 33   —   —   33   (2 ) MSRs accounted for under the amortization method are subject to nonrecurring fair value measurement when the fair value is lower than the carrying amount. Periodically, 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. Other real estate owned properties are included in accrued income and other assets and valued based on appraisals and third-party price opinions. The appraisals supporting the fair value of the collateral to recognize loan impairment or unrealized loss on other real estate owned properties may not have been obtained as of December 31, 2017. 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, 2017:   Quantitative Information about Level 3 Fair Value Measurements at December 31, 2017 (dollar amounts in millions) Fair Value   Valuation Technique   Significant Unobservable Input   Range (Weighted Average) Measured at fair value on a recurring basis:         MSRs $ 11   Discounted cash flow   Constant prepayment rate   8% - 33% (12%)           Spread over forward interest rate swap rates   8% - 10% (8%) Derivative assets 6   Consensus Pricing   Net market price   -5% - 20% (2%)           Estimated Pull through %   3% - 100% (75%) Derivative liabilities 5   Discounted cash flow   Estimated conversion factor   165%           Estimated growth rate of Visa Class A shares   7%            Discount rate   3%           Timing of the resolution of the litigation   12/31/2017 - 06/30/2020 Municipal securities 3,167   Discounted cash flow   Discount rate   0% - 10% (4%)           Cumulative default   0% - 64% (3%)           Loss given default   5% - 90% (24%) Asset-backed securities 24   Discounted cash flow   Discount rate   7% - 7% (7%)           Cumulative prepayment rate   0% - 72% (7%)           Cumulative default   3% - 53% (7%)           Loss given default   90% - 100% (98%)           Cure given deferral   50% - 50% (50%) Loans held for investment 38   Discounted cash flow   Discount rate   7% - 18% (8%)           Constant prepayment rate   2% - 22% (9%) Measured at fair value on a nonrecurring basis:         MSRs 190   Discounted cash flow   Constant prepayment rate   6% - 21% (8%)           Spread over forward interest rate swap rates   2% - 20% (10%) Impaired loans 36   Appraisal value   NA   NA Other real estate owned 33   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. A significant change in the unobservable inputs may result in a significant change in the ending fair value measurement of Level 3 instruments. In general, prepayment rates increase when market interest rates decline and decrease when market interest rates rise and higher prepayment rates generally resulting in lower fair values for MSR assets asset-backed securities. 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 that are carried either at fair value or cost at December 31, 2017 and December 31, 2016:   December 31, 2017   December 31, 2016   Carrying   Fair   Carrying   Fair (dollar amounts in millions) Amount   Value   Amount   Value Financial Assets:               Cash and short-term assets $ 1,567   $ 1,567   $ 1,443   $ 1,443 Trading account securities 86   86   133   133 Loans held for sale 488   491   513   516 Available-for-sale and other securities 15,469   15,469   15,563   15,563 Held-to-maturity securities 9,091   8,971   7,807   7,787 Net loans and direct financing leases 69,426   69,146   66,324   66,295 Derivatives 132   132   238   238 Financial Liabilities:               Deposits 77,041   77,010   75,608   76,161 Short-term borrowings 5,056   5,056   3,693   3,693 Long-term debt 9,206   9,402   8,309   8,387 Derivatives 86   86   98   98 The following table presents the level in the fair value hierarchy for the estimated fair values of Huntington’s financial instruments at fair value at December 31, 2017 and December 31, 2016:   Estimated Fair Value Measurements at Reporting Date Using   December 31, 2017 (dollar amounts in millions) Level 1   Level 2   Level 3   Financial Assets:               Trading account securities $ 83   $ 3       $ 86 Loans held for sale —   413   78   491 Available-for-sale and other securities 25   11,672   3,191   14,888 Held-to-maturity securities —   8,971   —   8,971 Net loans and direct financing leases —   —   69,146   69,146 Financial Liabilities:               Deposits —   73,975   3,035   77,010 Short-term borrowings —   —   5,056   5,056 Long-term debt —   8,944   458   9,402   Estimated Fair Value Measurements at Reporting Date Using   December 31, 2016 (dollar amounts in millions) Level 1   Level 2   Level 3   Financial Assets:               Held-to-maturity securities $ —   $ 7,787   $ —   $ 7,787 Net loans and direct financing leases —   —   66,295   66,295 Financial Liabilities:               Deposits —   72,319   3,842   76,161 Short-term borrowings 1   —   3,692   3,693 Long-term debt —   7,980   407   8,387 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, and 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 and nonmortgage 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. The following methods and assumptions were used by Huntington to estimate the fair value of the remaining classes of financial instruments: Held-to-maturity securities Fair values are determined by using models that are based on security-specific details, as well as relevant industry and economic factors. The most significant of these inputs are quoted market prices, and interest rate spreads on relevant benchmark securities. Loans and Direct Financing Leases Variable-rate loans that reprice frequently are based on carrying amounts, as adjusted for estimated credit losses. The fair values for other loans and leases are estimated using discounted cash flow analyses and employ discount rates based on current interest rates offered for loans and leases for similar terms. The rates take into account the position of the yield curve, as well as an adjustment for prepayment risk, operating costs, and profit. This value is also reduced by an estimate of expected losses and the credit risk associated in the loan and lease portfolio. The valuation of the loan portfolio reflected discounts that Huntington believed are consistent with transactions occurring in the marketplace. Deposits Demand deposits, savings accounts, and money market deposits are, by definition, equal to the amount payable on demand. The fair values of fixed-rate time deposits are estimated by discounting cash flows using interest rates currently being offered on certificates with similar maturities. Debt Long-term debt is based upon quoted market prices, which are inclusive of Huntington’s credit risk. In the absence of quoted market prices, discounted cash flows using market rates for similar debt with the same maturities are used in the determination of fair value.