Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

v3.10.0.1
DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
9 Months Ended
Sep. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Asset and liability derivatives included in accrued income and other assets
 
September 30, 2018
December 31, 2017
(dollar amounts in millions)
Asset
 
Liability
 
Asset
 
Liability
Derivatives designated as Hedging Instruments
 
 
 
 
 
 
 
Interest rate contracts
$
15

 
$
65

 
$
22

 
$
121

Derivatives not designated as Hedging Instruments
 
 
 
 
 
 
 
Interest rate contracts
294

 
198

 
187

 
100

Foreign exchange contracts
28

 
22

 
18

 
18

Commodities contracts
157

 
152

 
92

 
87

Equity contracts
4

 
4

 
3

 
5

Total Contracts
$
498

 
$
441

 
$
322

 
$
331

Gains and (losses) recognized in other comprehensive income (loss) (OCI) for derivatives designated as effective cash flow hedges
The following table presents the amount of gain or loss recognized in income for derivatives not designated as hedging instruments under ASC Subtopic 815-10 in the Unaudited Condensed Consolidated Income Statement for the three-month and nine-month periods ended September 30, 2018.
 
 
Location of Gain or (Loss) Recognized in Income on Derivative
 
Amount of Gain or (Loss) Recognized in Income on Derivative
(dollar amounts in millions)
 
 
 
Three Months Ended September 30, 2018
 
Nine Months Ended September 30, 2018
Interest rate contracts:
 

 
 
 
 
Customer
 
Capital markets fees
 
$
11

 
$
30

Mortgage Banking
 
Mortgage banking income
 
5

 
(3
)
Foreign exchange contracts
 
Capital markets fees
 
6

 
18

Commodities contracts
 
Capital markets fees
 
1

 
3

Equity contracts
 
Other noninterest expense
 

 
3

Total
 
 
 
$
23

 
$
51

Gross notional values of derivatives used in asset and liability management activities
The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at September 30, 2018 and December 31, 2017, identified by the underlying interest rate-sensitive instruments.
 
September 30, 2018
(dollar amounts in millions)
Fair Value Hedges
 
Cash Flow Hedges
 
Total
Instruments associated with:
 
 
 
 
 
Investment securities

 
$
12

 
$
12

Subordinated notes
375

 

 
375

Long-term debt
5,340

 

 
5,340

Total notional value at September 30, 2018
$
5,715

 
$
12

 
$
5,727

 
 
 
 
 
 
 
December 31, 2017
(dollar amounts in millions)
Fair Value Hedges
 
Cash Flow Hedges
 
Total
Instruments associated with:
 
 
 
 
 
Subordinated notes
$
950

 

 
$
950

Long-term debt
7,425

 

 
7,425

Total notional value at December 31, 2017
$
8,375

 
$

 
$
8,375

Additional information about the interest rate swaps used in asset and liability management activities
The following table presents additional information about the interest rate swaps used in Huntington’s asset and liability management activities at September 30, 2018 and December 31, 2017.
 
September 30, 2018
 
 
 
 
 
 
 
Weighted-Average Rate
(dollar amounts in millions)
Notional Value
 
Average Maturity (years)
 
Fair Value
 
Receive
 
Pay
Asset conversion swaps
 
 
 
 
 
 
 
 
 
Receive fixed—generic
$
12

 
1.5

 
$

 
2.20
%
 
2.16
%
Liability conversion swaps
 
 
 
 
 
 
 
 
 
Receive fixed—generic
5,715

 
2.5

 
(50
)
 
2.08

 
2.26

Total swap portfolio at September 30, 2018
$
5,727

 
2.5

 
$
(50
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
Weighted-Average Rate
(dollar amounts in millions)
Notional Value
 
Average Maturity (years)
 
Fair Value
 
Receive
 
Pay
Liability conversion swaps
 
 
 
 
 
 
 
 
 
Receive fixed—generic
$
8,375

 
2.5

 
$
(99
)
 
1.56
%
 
1.44
%
Total swap portfolio at December 31, 2017
$
8,375

 
2.5

 
$
(99
)
 
 
 
 
Increase or (decrease) to interest expense for derivatives designated as fair value hedges
The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2018 and 2017.
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(dollar amounts in millions)
2018
 
2017
 
2018
 
2017
Interest rate contracts
 
 
 
 
 
 
 
Change in fair value of interest rate swaps hedging subordinated notes (1)
$
(2
)
 
$
(2
)
 
$
22

 
$
(5
)
Change in fair value of hedged subordinated notes (1)
2

 
4

 
(22
)
 
7

Change in fair value of interest rate swaps hedging other long-term debt (1)
(9
)
 
(6
)
 
33

 
(1
)
Change in fair value of hedged other long-term debt (1)
10

 
7

 
(27
)
 
(1
)
(1)
Recognized in Interest expense—subordinated notes and other long-term debt in the Unaudited Condensed Consolidated Statements of Income.
Amounts recorded on the balance sheet related to cumulative basis adjustments
As of September 30, 2018, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.
 
Carrying Amount of the Hedged Liabilities
 
Cumulative Amount of Fair Value Hedging Adjustment To Hedged Liabilities
(dollar amounts in millions)
September 30, 2018
 
September 30, 2018
Long-term debt
$
5,637

 
$
(67
)
The cumulative amount of fair value hedging adjustments remaining for any hedged assets and liabilities for which hedge accounting has been discontinued is $(135) million at September 30, 2018.
Offsetting of financial assets and derivatives assets
The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017.
Offsetting of Financial Assets and Derivative Assets
 
 
 
 
Gross amounts
offset in the
condensed
consolidated
balance sheets
 
Net amounts of
assets
presented in
the condensed
consolidated
balance sheets
 
Gross amounts not offset in
the condensed consolidated
balance sheets
 
 
(dollar amounts in millions)
 
Gross amounts
of recognized
assets
 
 
 
Financial
instruments
 
Cash collateral
received
 
Net amount
September 30, 2018
Derivatives
$
498

 
$
(318
)
 
$
180

 
$
(2
)
 
$
(59
)
 
$
119

December 31, 2017
Derivatives
322

 
(190
)
 
132

 
(11
)
 
(18
)
 
103

Offsetting of financial liabilities and derivative liabilities

Offsetting of Financial Liabilities and Derivative Liabilities
 
 
 
 
Gross amounts
offset in the
condensed
consolidated
balance sheets
 
Net amounts of
liabilities
presented in
the condensed
consolidated
balance sheets
 
Gross amounts not offset in
the condensed consolidated
balance sheets
 
 
(dollar amounts in millions)
 
Gross amounts
of recognized
liabilities
 
 
 
Financial
instruments
 
Cash collateral
delivered
 
Net amount
September 30, 2018
Derivatives
$
441

 
$
(221
)
 
$
220

 
$

 
$
(15
)
 
$
205

December 31, 2017
Derivatives
331

 
(245
)
 
86

 

 
(21
)
 
65