OTHER COMPREHENSIVE INCOME
The components of Huntington's OCI for the three-month periods ended March 31, 2018 and 2017, were as follows:
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Three Months Ended
March 31, 2018 |
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Tax (Expense) |
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(dollar amounts in millions) |
Pretax |
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Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
— |
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|
$ |
— |
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|
$ |
— |
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Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
(206 |
) |
|
45 |
|
|
(161 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
15 |
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|
(3 |
) |
|
12 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(191 |
) |
|
42 |
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|
(149 |
) |
Net change in pension and other post-retirement obligations |
1 |
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|
— |
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|
1 |
|
Total other comprehensive income (loss) |
$ |
(190 |
) |
|
$ |
42 |
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|
$ |
(148 |
) |
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Three Months Ended
March 31, 2017 |
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Tax (Expense) |
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
1 |
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|
$ |
— |
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|
$ |
1 |
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Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
9 |
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|
(3 |
) |
|
6 |
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Less: Reclassification adjustment for net losses (gains) included in net income |
6 |
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|
(2 |
) |
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4 |
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Net change in unrealized holding gains (losses) on available-for-sale debt securities |
16 |
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|
(5 |
) |
|
11 |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
(2 |
) |
|
1 |
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|
(1 |
) |
Less: Reclassification adjustment for net (gains) losses included in net income |
1 |
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|
(1 |
) |
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— |
|
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
(1 |
) |
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— |
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(1 |
) |
Net change in pension and other post-retirement obligations |
— |
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|
— |
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— |
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Total other comprehensive income (loss) |
$ |
15 |
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|
$ |
(5 |
) |
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$ |
10 |
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Activity in accumulated OCI for the three-month periods ended March 31, 2018 and 2017, were as follows:
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(dollar amounts in millions) |
Unrealized gains
and (losses) on
debt securities
(1)
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Unrealized
gains and
(losses) on
cash flow
hedging
derivatives
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Unrealized gains
(losses) for
pension and
other post-
retirement
obligations
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Total |
December 31, 2016 |
$ |
(193 |
) |
|
$ |
(3 |
) |
|
$ |
(205 |
) |
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$ |
(401 |
) |
Other comprehensive income before reclassifications |
7 |
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|
(1 |
) |
|
— |
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|
6 |
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Amounts reclassified from accumulated OCI to earnings |
4 |
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— |
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— |
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4 |
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Period change |
11 |
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|
(1 |
) |
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— |
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|
10 |
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March 31, 2017 |
$ |
(182 |
) |
|
$ |
(4 |
) |
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$ |
(205 |
) |
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$ |
(391 |
) |
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December 31, 2017 |
$ |
(278 |
) |
|
$ |
— |
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|
$ |
(250 |
) |
|
$ |
(528 |
) |
Cumulative-effect adjustments (ASU 2016-01) |
(1 |
) |
|
— |
|
|
— |
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|
(1 |
) |
Other comprehensive income before reclassifications |
(161 |
) |
|
— |
|
|
— |
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|
(161 |
) |
Amounts reclassified from accumulated OCI to earnings |
12 |
|
|
— |
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|
1 |
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|
13 |
|
Period change |
(149 |
) |
|
— |
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|
1 |
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|
(148 |
) |
March 31, 2018 |
$ |
(428 |
) |
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$ |
— |
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|
$ |
(249 |
) |
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$ |
(677 |
) |
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(1) |
AOCI amounts at March 31, 2018, December 31, 2017 and March 31, 2017 include $147 million, $95 million and $81 million, respectively, of net unrealized gains on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized gains will be recognized in earnings over the remaining life of the security using the effective interest method.
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The following table presents the reclassification adjustments out of accumulated OCI included in net income and the impacted line items as listed on the Unaudited Condensed Consolidated Statements of Income for the three-month periods ended March 31, 2018 and 2017:
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Reclassifications out of accumulated OCI |
Accumulated OCI components |
Amounts reclassified from accumulated OCI |
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Location of net gain (loss) reclassified from
accumulated OCI into earnings
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Three Months Ended |
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(dollar amounts in millions) |
March 31, 2018 |
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March 31, 2017 |
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Gains (losses) on debt securities: |
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Amortization of unrealized gains (losses) |
$ |
(3 |
) |
|
$ |
(4 |
) |
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Interest income - held-to-maturity securities - taxable |
Realized gain (loss) on sale of securities |
(12 |
) |
|
(2 |
) |
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Noninterest income - net gains (losses) on sale of securities |
OTTI recorded |
— |
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|
— |
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Noninterest income - net gains (losses) on sale of securities |
Total before tax |
(15 |
) |
|
(6 |
) |
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Tax (expense) benefit |
3 |
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|
2 |
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Net of tax |
$ |
(12 |
) |
|
$ |
(4 |
) |
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Gains (losses) on cash flow hedging relationships: |
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Interest rate contracts |
$ |
— |
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|
$ |
(1 |
) |
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Interest income - loans and leases |
Total before tax |
— |
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|
(1 |
) |
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Tax (expense) benefit |
— |
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|
1 |
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Net of tax |
$ |
— |
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$ |
— |
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Amortization of defined benefit pension and post-retirement items: |
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Actuarial gains (losses) |
$ |
2 |
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$ |
(1 |
) |
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Noninterest expense - personnel costs |
Net periodic benefit costs |
(1 |
) |
|
1 |
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Noninterest expense - personnel costs |
Total before tax |
1 |
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|
— |
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Tax (expense) benefit |
— |
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|
— |
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Net of tax |
$ |
1 |
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|
$ |
— |
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