Annual report pursuant to Section 13 and 15(d)

INVESTMENT SECURITIES AND OTHER SECURITIES

v3.10.0.1
INVESTMENT SECURITIES AND OTHER SECURITIES
12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Disclosure [Text Block]
INVESTMENT SECURITIES AND OTHER SECURITIES
Debt securities purchased in which Huntington has the positive intent and ability to hold to their maturity are classified as held-to-maturity securities.  All other debt and equity securities are classified as available-for-sale or other securities.
The following tables provide amortized cost, fair value, and gross unrealized gains and losses by investment category at December 31, 2018 and 2017:
 
 
 
Unrealized
 
 
(dollar amounts in millions)
Amortized
Cost
 
Gross
Gains
 
Gross
Losses
 
Fair Value
December 31, 2018
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
U.S. Treasury
$
5

 
$

 
$

 
$
5

Federal agencies:
 
 
 
 
 
 
 
Residential CMO
7,185

 
15

 
(201
)
 
6,999

Residential MBS
1,261

 
9

 
(15
)
 
1,255

Commercial MBS
1,641

 

 
(58
)
 
1,583

Other agencies
128

 

 
(2
)
 
126

Total U.S. Treasury, federal agency and other agency securities
10,220

 
24

 
(276
)
 
9,968

Municipal securities
3,512

 
6

 
(78
)
 
3,440

Asset-backed securities
318

 
1

 
(4
)
 
315

Corporate debt
54

 

 
(1
)
 
53

Other securities/Sovereign debt
4

 

 

 
4

Total available-for-sale securities
$
14,108

 
$
31

 
$
(359
)
 
$
13,780

 
 
 
 
 
 
 
 
Held-to-maturity securities:
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
Residential CMO
$
2,124

 
$

 
$
(47
)
 
$
2,077

Residential MBS
1,851

 
2

 
(42
)
 
1,811

Commercial MBS
4,235

 

 
(186
)
 
4,049

Other agencies
350

 

 
(6
)
 
344

Total federal agency and other agency securities
8,560

 
2

 
(281
)
 
8,281

Municipal securities
5

 

 

 
5

Total held-to-maturity securities
$
8,565

 
$
2

 
$
(281
)
 
$
8,286

 
 
 
 
 
 
 
 
Other securities, at cost:
 
 
 
 
 
 
 
Non-marketable equity securities:
 
 
 
 
 
 
 
Federal Home Loan Bank stock
$
248

 
$

 
$

 
$
248

Federal Reserve Bank stock
295

 

 

 
295

Other securities, at fair value
 
 
 
 
 
 
 
Mutual funds
20

 

 

 
20

Marketable equity securities
1

 
1

 

 
2

Total other securities
$
564

 
$
1

 
$

 
$
565

 
 
 
Unrealized
 
 
(dollar amounts in millions)
Amortized
Cost
 
Gross
Gains
 
Gross
Losses
 
Fair Value
December 31, 2017
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
U.S. Treasury
$
5

 
$

 
$

 
$
5

Federal agencies:
 
 
 
 
 
 
 
Residential CMO
6,661

 
1

 
(178
)
 
6,484

Residential MBS
1,371

 
1

 
(5
)
 
1,367

Commercial MBS
2,539

 

 
(52
)
 
2,487

Other agencies
69

 
1

 

 
70

Total U.S. Treasury, federal agency and other agency securities
10,645

 
3

 
(235
)
 
10,413

Municipal securities
3,892

 
21

 
(35
)
 
3,878

Asset-backed securities
482

 
1

 
(16
)
 
467

Corporate debt
106

 
3

 

 
109

Other securities/Sovereign debt
2

 

 

 
2

Total available-for-sale securities
$
15,127

 
$
28

 
$
(286
)
 
$
14,869

 
 
 
 
 
 
 
 
Held-to-maturity securities:
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
Residential CMO
$
3,714

 
$
1

 
$
(58
)
 
$
3,657

Residential MBS
1,049

 
2

 
(7
)
 
1,044

Commercial MBS
3,791

 

 
(55
)
 
3,736

Other agencies
532

 
1

 
(4
)
 
529

Total federal agency and other agency securities
9,086

 
4

 
(124
)
 
8,966

Municipal securities
5

 

 

 
5

Total held-to-maturity securities
$
9,091

 
$
4

 
$
(124
)
 
$
8,971

 
 
 
 
 
 
 
 
Other securities, at cost:
 
 
 
 
 
 
 
Non-marketable equity securities:
 
 
 
 
 
 
 
Federal Home Loan Bank stock
$
287

 
$

 
$

 
$
287

Federal Reserve Bank stock
294

 

 

 
294

Other securities, at fair value
 
 
 
 
 
 
 
Mutual funds
18

 

 

 
18

Marketable equity securities
1

 

 

 
1

Total other securities
$
600

 
$

 
$

 
$
600



The following table provides the amortized cost and fair value of securities by contractual maturity at December 31, 2018. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.
 
2018
(dollar amounts in millions)
Amortized
Cost
 
Fair
Value
Available-for-sale securities:
 
 
 
Under 1 year
$
186

 
$
185

After 1 year through 5 years
1,057

 
1,039

After 5 years through 10 years
1,838

 
1,802

After 10 years
11,027

 
10,754

Total available-for-sale securities
$
14,108

 
$
13,780

 
 
 
 
Held-to-maturity securities:
 
 
 
Under 1 year
$

 
$

After 1 year through 5 years
11

 
11

After 5 years through 10 years
362

 
356

After 10 years
8,192

 
7,919

Total held-to-maturity securities
$
8,565

 
$
8,286


The following tables provide detail on investment securities with unrealized losses aggregated by investment category and the length of time the individual securities have been in a continuous loss position at December 31, 2018 and 2017:
 
Less than 12 Months
 
Over 12 Months
 
Total
(dollar amounts in millions)
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO
$
425

 
$
(3
)
 
$
5,943

 
$
(198
)
 
$
6,368

 
$
(201
)
Residential MBS
259

 
(6
)
 
319

 
(9
)
 
578

 
(15
)
Commercial MBS
10

 

 
1,573

 
(58
)
 
1,583

 
(58
)
Other agencies

 

 
124

 
(2
)
 
124

 
(2
)
Total federal agency and other agency securities
694

 
(9
)
 
7,959

 
(267
)
 
8,653

 
(276
)
Municipal securities
1,425

 
(24
)
 
1,602

 
(54
)
 
3,027

 
(78
)
Asset-backed securities
95

 
(2
)
 
117

 
(2
)
 
212

 
(4
)
Corporate debt
40

 

 
1

 
(1
)
 
41

 
(1
)
Total temporarily impaired securities
$
2,254

 
$
(35
)
 
$
9,679

 
$
(324
)
 
$
11,933

 
$
(359
)
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO
$
12

 
$

 
$
2,004

 
$
(47
)
 
$
2,016

 
$
(47
)
Residential MBS
16

 

 
1,457

 
(42
)
 
1,473

 
(42
)
Commercial MBS

 

 
4,041

 
(186
)
 
4,041

 
(186
)
Other agencies
113

 
(2
)
 
205

 
(4
)
 
318

 
(6
)
Total federal agency and other agency securities
141

 
(2
)
 
7,707

 
(279
)
 
7,848

 
(281
)
Municipal securities

 

 
4

 

 
4

 

Total temporarily impaired securities
$
141

 
$
(2
)
 
$
7,711

 
$
(279
)
 
$
7,852

 
$
(281
)
 
Less than 12 Months
 
Over 12 Months
 
Total
(dollar amounts in millions)
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO
$
1,660

 
$
(19
)
 
$
4,520

 
$
(159
)
 
$
6,180

 
$
(178
)
Residential MBS
1,078

 
(5
)
 
11

 

 
1,089

 
(5
)
Commercial MBS
960

 
(15
)
 
1,527

 
(37
)
 
2,487

 
(52
)
Other agencies
39

 

 

 

 
39

 

Total federal agency and other agency securities
3,737

 
(39
)
 
6,058

 
(196
)
 
9,795

 
(235
)
Municipal securities
1,681

 
(21
)
 
497

 
(14
)
 
2,178

 
(35
)
Asset-backed securities
127

 
(1
)
 
173

 
(15
)
 
300

 
(16
)
Total temporarily impaired securities
$
5,545

 
$
(61
)
 
$
6,728

 
$
(225
)
 
$
12,273

 
$
(286
)
 
 
 
 
 
 
 
 
 
 
 
 
Held-to-maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO
$
2,369

 
$
(26
)
 
$
1,019

 
$
(32
)
 
$
3,388

 
$
(58
)
Residential MBS
974

 
(7
)
 

 

 
974

 
(7
)
Commercial MBS
3,456

 
(49
)
 
253

 
(6
)
 
3,709

 
(55
)
Other agencies
249

 
(2
)
 
139

 
(2
)
 
388

 
(4
)
Total federal agency and other agency securities
7,048

 
(84
)
 
1,411

 
(40
)
 
8,459

 
(124
)
Municipal securities

 

 
5

 

 
5

 

Total temporarily impaired securities
$
7,048

 
$
(84
)
 
$
1,416

 
$
(40
)
 
$
8,464

 
$
(124
)

Upon adoption of ASU 2017-12, Huntington transferred $2.8 billion of securities eligible to be hedged under the last-of-layer method from the HTM portfolio to the AFS portfolio. At the time of the transfer, $26 million of unrealized losses were recognized in OCI. Concurrently, Huntington transferred $2.7 billion of securities from the AFS portfolio to the HTM portfolio. At the time of the transfer, AOCI included $56 million of unrealized losses attributed to these securities. This loss will be amortized into interest income over the remaining life of the securities.
At December 31, 2018, the carrying value of investment securities pledged to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements totaled $4.5 billion. There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at December 31, 2018.
The following table is a summary of realized securities gains and losses for the years ended December 31, 2018, 2017, and 2016:
 
Year Ended December 31,
(dollar amounts in millions)
2018
 
2017
 
2016
Gross gains on sales of securities
$
7

 
$
10

 
$
23

Gross (losses) on sales of securities
(28
)
 
(10
)
 
(21
)
Net gain (loss) on sales of securities
$
(21
)
 
$

 
$
2

OTTI recognized in earnings

 
(4
)
 
(2
)
Net securities (losses)
$
(21
)
 
$
(4
)
 
$


Security Impairment
Huntington evaluates the securities portfolio for impairment on a quarterly basis. As of December 31, 2018, the Company has evaluated available-for-sale and held-to-maturity securities with gross unrealized losses for impairment and concluded no OTTI is required.
Other securities that are carried at cost are reviewed at least annually for impairment, with valuation adjustments recognized in other noninterest income. As of December 31, 2018, the Company concluded no impairment is required.