OTHER COMPREHENSIVE INCOME
The components of Huntington’s OCI in the three years ended December 31, 2018, 2017, and 2016, were as follows:
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2018 |
|
Tax (expense) |
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Unrealized holding gains (losses) on available-for-sale debt securities
arising during the period |
$ |
(151 |
) |
|
$ |
35 |
|
|
$ |
(116 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
41 |
|
|
(9 |
) |
|
32 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(110 |
) |
|
26 |
|
|
(84 |
) |
Net change in pension and other post-retirement obligations |
4 |
|
|
— |
|
|
4 |
|
Total other comprehensive income (loss) |
$ |
(106 |
) |
|
$ |
26 |
|
|
$ |
(80 |
) |
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|
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2017 |
|
|
|
Tax (expense) |
|
|
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
4 |
|
|
$ |
(2 |
) |
|
$ |
2 |
|
Unrealized holding gains (losses) on available-for-sale debt securities
arising during the period |
(87 |
) |
|
31 |
|
|
(56 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
26 |
|
|
(9 |
) |
|
17 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(57 |
) |
|
20 |
|
|
(37 |
) |
Net change in unrealized holding gains (losses) on available-for-sale equity securities |
1 |
|
|
(1 |
) |
|
— |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships
arising during the period |
3 |
|
|
(1 |
) |
|
2 |
|
Less: Reclassification adjustment for net (gains) losses included in net income |
1 |
|
|
— |
|
|
1 |
|
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
4 |
|
|
(1 |
) |
|
3 |
|
Net change in pension and other post-retirement obligations |
— |
|
|
— |
|
|
— |
|
Total other comprehensive income (loss) |
$ |
(52 |
) |
|
$ |
18 |
|
|
$ |
(34 |
) |
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2016 |
|
|
|
Tax (expense) |
|
|
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
1 |
|
|
$ |
— |
|
|
$ |
1 |
|
|
Unrealized holding gains (losses) on available-for-sale debt securities
arising during the period
|
(203 |
) |
|
70 |
|
|
(133 |
) |
Less: Reclassification adjustment for net gains (losses) included in net income |
(107 |
) |
|
38 |
|
|
(69 |
) |
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(309 |
) |
|
108 |
|
|
(201 |
) |
|
Unrealized gains and losses on derivatives used in cash flow hedging relationships
arising during the period
|
2 |
|
|
(1 |
) |
|
1 |
|
Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
2 |
|
|
(1 |
) |
|
1 |
|
Net change in pension and post-retirement obligations |
38 |
|
|
(13 |
) |
|
25 |
|
Total other comprehensive income (loss) |
$ |
(269 |
) |
|
$ |
94 |
|
|
$ |
(175 |
) |
Activity in accumulated OCI for the two years ended December 31, 2018 and 2017 were as follows:
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|
|
|
|
(dollar amounts in millions) |
Unrealized
gains (losses) on
debt
securities (1)
|
|
Unrealized
gains (losses) on
cash flow hedging
derivatives
|
|
Unrealized
gains (losses) for
pension and other
post-retirement
obligations
|
|
Total |
December 31, 2016 |
$ |
(193 |
) |
|
$ |
(3 |
) |
|
$ |
(205 |
) |
|
$ |
(401 |
) |
Other comprehensive income before reclassifications |
(54 |
) |
|
2 |
|
|
(10 |
) |
|
(62 |
) |
Amounts reclassified from accumulated OCI to earnings |
17 |
|
|
1 |
|
|
10 |
|
|
28 |
|
Period change |
(37 |
) |
|
3 |
|
|
— |
|
|
(34 |
) |
TCJA, Reclassification from accumulated OCI to retained earnings |
(48 |
) |
|
— |
|
|
(45 |
) |
|
(93 |
) |
December 31, 2017 |
(278 |
) |
|
— |
|
|
(250 |
) |
|
(528 |
) |
Cumulative-effect adjustments (ASU 2016-01) |
(1 |
) |
|
— |
|
|
— |
|
|
(1 |
) |
Other comprehensive income before reclassifications |
(116 |
) |
|
— |
|
|
— |
|
|
(116 |
) |
Amounts reclassified from accumulated OCI to earnings |
32 |
|
|
— |
|
|
4 |
|
|
36 |
|
Period change |
(84 |
) |
|
— |
|
|
4 |
|
|
(80 |
) |
December 31, 2018 |
$ |
(363 |
) |
|
$ |
— |
|
|
$ |
(246 |
) |
|
$ |
(609 |
) |
|
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(1) |
AOCI amounts at December 31, 2018, 2017, and 2016 include $137 million, $95 million, and $82 million of net unrealized losses (before any deferred tax benefits) on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized losses 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 Consolidated Statements of Income for the years ended December 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
|
(dollar amounts in millions) |
2018 |
|
2017 |
|
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Gains (losses) on debt securities: |
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|
|
|
Amortization of unrealized (losses) |
$ |
(13 |
) |
|
$ |
(8 |
) |
|
Interest income—held-to-maturity securities—taxable |
Realized (loss) on sale of securities |
(28 |
) |
|
(14 |
) |
|
Noninterest income—net gains (losses) on sale of securities |
OTTI recorded |
— |
|
|
(4 |
) |
|
Noninterest income—Impairment losses recognized in earnings on available-for-sale securities
|
Total before tax |
(41 |
) |
|
(26 |
) |
|
|
Tax benefit |
9 |
|
|
9 |
|
|
|
Net of tax |
$ |
(32 |
) |
|
$ |
(17 |
) |
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Gains (losses) on cash flow hedging relationships: |
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|
|
|
Interest rate contracts |
$ |
— |
|
|
$ |
(1 |
) |
|
Interest and fee income—loans and leases |
Total before tax |
— |
|
|
(1 |
) |
|
|
Tax benefit |
— |
|
|
— |
|
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|
Net of tax |
$ |
— |
|
|
$ |
(1 |
) |
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Amortization of defined benefit pension and post-retirement items: |
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|
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|
Actuarial losses |
$ |
(13 |
) |
|
$ |
(18 |
) |
|
Noninterest income / expense (1) |
Net periodic benefit costs |
4 |
|
|
2 |
|
|
Noninterest income / expense (1) |
Total before tax |
(9 |
) |
|
(16 |
) |
|
|
Tax benefit |
2 |
|
|
6 |
|
|
|
Net of tax |
$ |
(7 |
) |
|
$ |
(10 |
) |
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(1) |
The activity for 2018 and 2017 is recorded in Noninterest Income - other income and Noninterest Expense - personnel costs, respectively, on the Consolidated Statements of Income. |
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