| LOANS AND LEASES AND ALLOWANCE FOR CREDIT LOSSES |
LOANS AND LEASES AND ALLOWANCE FOR CREDIT LOSSES
Except for loans which are accounted for at fair value, loans are carried at the principal amount outstanding, net of unamortized premiums and discounts and deferred loan fees and costs, which resulted in a net premium of $262 million and $230 million, at December 31, 2015 and 2014, respectively.
Loan and Lease Portfolio Composition
The table below summarizes the Company’s primary portfolios. For ACL purposes, these portfolios are further disaggregated into classes which are also summarized in the table below.
|
|
|
Portfolio |
Class |
Commercial and industrial |
Owner occupied |
|
Purchased credit-impaired |
|
Other commercial and industrial |
|
|
Commercial real estate |
Retail properties |
|
Multi family |
|
Office |
|
Industrial and warehouse |
|
Purchased credit-impaired |
|
Other commercial real estate |
|
|
Automobile |
NA (1) |
|
|
Home equity |
Secured by first-lien |
|
Secured by junior-lien |
|
|
Residential mortgage |
Residential mortgage |
|
Purchased credit-impaired |
|
|
Other consumer |
Other consumer |
|
Purchased credit-impaired |
|
|
(1) |
Not applicable. The automobile loan portfolio is not further segregated into classes. |
Direct Financing Leases
Huntington’s loan and lease portfolio includes lease financing receivables consisting of direct financing leases on equipment, which are included in C&I loans. Net investments in lease financing receivables by category at December 31, 2015 and 2014 were as follows:
|
|
|
|
|
|
|
|
|
|
At December 31, |
(dollar amounts in thousands) |
2015 |
|
2014 |
Commercial and industrial: |
|
|
|
Lease payments receivable |
$ |
1,551,885 |
|
|
$ |
1,051,744 |
|
Estimated residual value of leased assets |
711,181 |
|
|
483,407 |
|
Gross investment in commercial lease financing receivables |
2,263,066 |
|
|
1,535,151 |
|
Net deferred origination costs |
7,068 |
|
|
2,557 |
|
Unearned income |
(208,669 |
) |
|
(131,027 |
) |
Total net investment in commercial lease financing receivables |
$ |
2,061,465 |
|
|
$ |
1,406,681 |
|
The future lease rental payments due from customers on direct financing leases at December 31, 2015, totaled $1.6 billion and therefore were as follows: $0.5 billion in 2016, $0.4 billion in 2017, $0.3 billion in 2018, $0.2 billion in 2019, $0.1 billion in 2020, and $0.1 billion thereafter.
Huntington Technology Finance acquisition
On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which was re-branded Huntington Technology Finance. Lease receivables with a fair value of $839 million, including a lease residual value of approximately $200 million, were acquired by Huntington. These leases were recorded at fair value. The fair values of the leases were estimated using discounted cash flow analyses using interest rates currently being offered for leases with similar terms (Level 3), and reflected an estimate of credit and other risk associated with the leases.
Camco Financial acquisition
On March 1, 2014, Huntington completed its acquisition of Camco Financial. Loans with a fair value of $559 million were acquired by Huntington.
Purchased Credit-Impaired Loans
The following table presents a rollforward of the accretable yield by acquisition for the year ended December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
2015 |
|
2014 |
Fidelity Bank |
|
|
|
Balance at January 1, |
$ |
19,388 |
|
|
$ |
27,995 |
|
Accretion |
(11,032 |
) |
|
(13,485 |
) |
Reclassification from nonaccretable difference |
7,856 |
|
|
4,878 |
|
Balance at December 31, |
$ |
16,212 |
|
|
$ |
19,388 |
|
Camco Financial |
|
|
|
Balance at January 1, |
$ |
824 |
|
|
$ |
— |
|
Impact of acquisition on March 1, 2014 |
— |
|
|
143 |
|
Accretion |
(1,380 |
) |
|
(5,597 |
) |
Reclassification from nonaccretable difference |
556 |
|
|
6,278 |
|
Balance at December 31, |
$ |
— |
|
|
$ |
824 |
|
The allowance for loan losses recorded on the purchased credit-impaired loan portfolio at December 31, 2015 and 2014 was $3 million and $4 million, respectively. The following table reflects the ending and unpaid balances of all contractually required payments and carrying amounts of the acquired loans by acquisition at December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
(dollar amounts in thousands) |
Ending
Balance |
|
Unpaid
Balance |
|
Ending
Balance |
|
Unpaid
Balance |
Fidelity Bank |
|
|
|
|
|
|
|
Commercial and industrial |
$ |
21,017 |
|
|
$ |
30,676 |
|
|
$ |
22,405 |
|
|
$ |
33,622 |
|
Commercial real estate |
13,758 |
|
|
55,358 |
|
|
36,663 |
|
|
87,250 |
|
Residential mortgage |
1,454 |
|
|
2,189 |
|
|
1,912 |
|
|
3,096 |
|
Other consumer |
52 |
|
|
101 |
|
|
51 |
|
|
123 |
|
Total |
$ |
36,281 |
|
|
$ |
88,324 |
|
|
$ |
61,031 |
|
|
$ |
124,091 |
|
Camco Financial |
|
|
|
|
|
|
|
Commercial and industrial |
$ |
— |
|
|
$ |
— |
|
|
$ |
823 |
|
|
$ |
1,685 |
|
Commercial real estate |
— |
|
|
— |
|
|
1,708 |
|
|
3,826 |
|
Residential mortgage |
— |
|
|
— |
|
|
— |
|
|
— |
|
Other consumer |
— |
|
|
— |
|
|
— |
|
|
— |
|
Total |
$ |
— |
|
|
$ |
— |
|
|
$ |
2,531 |
|
|
$ |
5,511 |
|
Loan Purchases and Sales
The following table summarizes significant portfolio loan purchase and sale activity for the years ended December 31, 2015 and 2014. The table below excludes mortgage loans originated for sale.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
and Industrial
|
|
Commercial
Real Estate
|
|
Automobile |
(1) |
Home
Equity
|
|
Residential
Mortgage
|
|
Other
Consumer
|
|
Total |
(dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio loans purchased during the: |
Year ended December 31, 2015 |
$ |
316,252 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
20,463 |
|
|
$ |
— |
|
|
$ |
336,715 |
|
Year ended December 31, 2014 |
326,557 |
|
|
— |
|
|
— |
|
|
— |
|
|
18,482 |
|
|
— |
|
|
345,039 |
|
Portfolio loans sold or transferred to loans held for sale during the: |
Year ended December 31, 2015 |
380,713 |
|
|
— |
|
|
764,540 |
|
|
96,786 |
|
|
— |
|
|
— |
|
|
1,242,039 |
|
Year ended December 31, 2014 |
352,062 |
|
|
8,447 |
|
|
— |
|
|
— |
|
|
— |
|
|
7,592 |
|
|
368,101 |
|
(1) Reflects the transfer of approximately $1.0 billion of automobile loans to loans held-for-sale at March 31, 2015, net of approximately $262 million of automobile loans transferred to loans and leases in the 2015 second quarter.
NALs and Past Due Loans
The following table presents NALs by loan class for the years ended December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
December 31, |
(dollar amounts in thousands) |
2015 |
|
2014 |
Commercial and industrial: |
|
|
|
Owner occupied |
$ |
35,481 |
|
|
$ |
41,285 |
|
Other commercial and industrial |
139,714 |
|
|
30,689 |
|
Total commercial and industrial |
175,195 |
|
|
71,974 |
|
Commercial real estate: |
|
|
|
Retail properties |
7,217 |
|
|
21,385 |
|
Multi family |
5,819 |
|
|
9,743 |
|
Office |
10,495 |
|
|
7,707 |
|
Industrial and warehouse |
2,202 |
|
|
3,928 |
|
Other commercial real estate |
3,251 |
|
|
5,760 |
|
Total commercial real estate |
28,984 |
|
|
48,523 |
|
Automobile |
6,564 |
|
|
4,623 |
|
Home equity: |
|
|
|
Secured by first-lien |
35,389 |
|
|
46,938 |
|
Secured by junior-lien |
30,889 |
|
|
31,622 |
|
Total home equity |
66,278 |
|
|
78,560 |
|
Residential mortgage |
94,560 |
|
|
96,564 |
|
Other consumer |
— |
|
|
— |
|
Total nonaccrual loans |
$ |
371,581 |
|
|
$ |
300,244 |
|
The amount of interest that would have been recorded under the original terms for total NAL loans was $20 million, $21 million, and $23 million for 2015, 2014, and 2013, respectively. The total amount of interest recorded to interest income for these loans was $10 million, $8 million, and $5 million in 2015, 2014, and 2013, respectively.
The following table presents an aging analysis of loans and leases, including past due loans and leases, by loan class for the years ended December 31, 2015 and 2014 (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
Past Due |
|
|
|
Total Loans
and Leases |
|
90 or more
days past due
and accruing |
|
(dollar amounts in thousands) |
30-59 Days |
|
60-89 Days |
|
90 or more days |
Total |
|
Current |
|
|
|
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner occupied |
$ |
11,947 |
|
|
$ |
3,613 |
|
|
$ |
13,793 |
|
|
$ |
29,353 |
|
|
$ |
3,983,447 |
|
|
$ |
4,012,800 |
|
|
$ |
— |
|
|
Purchased credit-impaired |
292 |
|
|
1,436 |
|
|
5,949 |
|
|
7,677 |
|
|
13,340 |
|
|
21,017 |
|
|
5,949 |
|
(3) |
Other commercial and industrial |
32,476 |
|
|
8,531 |
|
|
27,236 |
|
|
68,243 |
|
|
16,457,774 |
|
|
16,526,017 |
|
|
2,775 |
|
(2) |
Total commercial and industrial |
44,715 |
|
|
13,580 |
|
|
46,978 |
|
|
105,273 |
|
|
20,454,561 |
|
|
20,559,834 |
|
|
8,724 |
|
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail properties |
1,823 |
|
|
195 |
|
|
3,637 |
|
|
5,655 |
|
|
1,501,054 |
|
|
1,506,709 |
|
|
— |
|
|
Multi family |
961 |
|
|
1,137 |
|
|
2,691 |
|
|
4,789 |
|
|
1,073,429 |
|
|
1,078,218 |
|
|
— |
|
|
Office |
5,022 |
|
|
256 |
|
|
3,016 |
|
|
8,294 |
|
|
886,331 |
|
|
894,625 |
|
|
— |
|
|
Industrial and warehouse |
93 |
|
|
— |
|
|
373 |
|
|
466 |
|
|
503,701 |
|
|
504,167 |
|
|
— |
|
|
Purchased credit-impaired |
102 |
|
|
3,818 |
|
|
9,549 |
|
|
13,469 |
|
|
289 |
|
|
13,758 |
|
|
9,549 |
|
(3) |
Other commercial real estate |
1,231 |
|
|
315 |
|
|
2,400 |
|
|
3,946 |
|
|
1,267,228 |
|
|
1,271,174 |
|
|
— |
|
|
Total commercial real estate |
9,232 |
|
|
5,721 |
|
|
21,666 |
|
|
36,619 |
|
|
5,232,032 |
|
|
5,268,651 |
|
|
9,549 |
|
|
Automobile |
69,553 |
|
|
14,965 |
|
|
7,346 |
|
|
91,864 |
|
|
9,388,814 |
|
|
9,480,678 |
|
|
7,162 |
|
|
Home equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured by first-lien |
18,349 |
|
|
7,576 |
|
|
26,304 |
|
|
52,229 |
|
|
5,139,256 |
|
|
5,191,485 |
|
|
4,499 |
|
|
Secured by junior-lien |
18,128 |
|
|
9,329 |
|
|
29,996 |
|
|
57,453 |
|
|
3,221,544 |
|
|
3,278,997 |
|
|
4,545 |
|
|
Total home equity |
36,477 |
|
|
16,905 |
|
|
56,300 |
|
|
109,682 |
|
|
8,360,800 |
|
|
8,470,482 |
|
|
9,044 |
|
|
Residential mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
102,670 |
|
|
34,298 |
|
|
119,354 |
|
|
256,322 |
|
|
5,740,624 |
|
|
5,996,946 |
|
|
69,917 |
|
(4) |
Purchased credit-impaired |
103 |
|
|
— |
|
|
— |
|
|
103 |
|
|
1,351 |
|
|
1,454 |
|
|
— |
|
|
Total residential mortgage |
102,773 |
|
|
34,298 |
|
|
119,354 |
|
|
256,425 |
|
|
5,741,975 |
|
|
5,998,400 |
|
|
69,917 |
|
|
Other consumer: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other consumer |
6,469 |
|
|
1,852 |
|
|
1,395 |
|
|
9,716 |
|
|
553,286 |
|
|
563,002 |
|
|
1,394 |
|
|
Purchased credit-impaired |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
52 |
|
|
52 |
|
|
— |
|
|
Total other consumer |
6,469 |
|
|
1,852 |
|
|
1,395 |
|
|
9,716 |
|
|
553,338 |
|
|
563,054 |
|
|
1,394 |
|
|
Total loans and leases |
$ |
269,219 |
|
|
$ |
87,321 |
|
|
$ |
253,039 |
|
|
$ |
609,579 |
|
|
$ |
49,731,520 |
|
|
$ |
50,341,099 |
|
|
$ |
105,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
Past Due |
|
|
|
Total Loans
and Leases |
|
90 or more
days past due
and accruing |
|
(dollar amounts in thousands) |
30-59 Days |
|
60-89 Days |
|
90 or more days |
Total |
|
Current |
|
|
|
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owner occupied |
$ |
5,232 |
|
|
$ |
2,981 |
|
|
$ |
18,222 |
|
|
$ |
26,435 |
|
|
$ |
4,228,440 |
|
|
$ |
4,254,875 |
|
|
$ |
— |
|
|
Purchased credit-impaired |
846 |
|
|
— |
|
|
4,937 |
|
|
5,783 |
|
|
17,445 |
|
|
23,228 |
|
|
4,937 |
|
(3) |
Other commercial and industrial |
15,330 |
|
|
1,536 |
|
|
9,101 |
|
|
25,967 |
|
|
14,729,076 |
|
|
14,755,043 |
|
|
— |
|
|
Total commercial and industrial |
21,408 |
|
|
4,517 |
|
|
32,260 |
|
|
58,185 |
|
|
18,974,961 |
|
|
19,033,146 |
|
|
4,937 |
|
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail properties |
7,866 |
|
|
— |
|
|
4,021 |
|
|
11,887 |
|
|
1,345,859 |
|
|
1,357,746 |
|
|
— |
|
|
Multi family |
1,517 |
|
|
312 |
|
|
3,337 |
|
|
5,166 |
|
|
1,085,250 |
|
|
1,090,416 |
|
|
— |
|
|
Office |
464 |
|
|
1,167 |
|
|
4,415 |
|
|
6,046 |
|
|
974,257 |
|
|
980,303 |
|
|
— |
|
|
Industrial and warehouse |
688 |
|
|
— |
|
|
2,649 |
|
|
3,337 |
|
|
510,064 |
|
|
513,401 |
|
|
— |
|
|
Purchased credit-impaired |
89 |
|
|
289 |
|
|
18,793 |
|
|
19,171 |
|
|
19,200 |
|
|
38,371 |
|
|
18,793 |
|
(3) |
Other commercial real estate |
847 |
|
|
1,281 |
|
|
3,966 |
|
|
6,094 |
|
|
1,211,072 |
|
|
1,217,166 |
|
|
— |
|
|
Total commercial real estate |
11,471 |
|
|
3,049 |
|
|
37,181 |
|
|
51,701 |
|
|
5,145,702 |
|
|
5,197,403 |
|
|
18,793 |
|
|
Automobile |
56,272 |
|
|
10,427 |
|
|
5,963 |
|
|
72,662 |
|
|
8,617,240 |
|
|
8,689,902 |
|
|
5,703 |
|
|
Home equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured by first-lien |
15,036 |
|
|
8,085 |
|
|
33,014 |
|
|
56,135 |
|
|
5,072,669 |
|
|
5,128,804 |
|
|
4,471 |
|
|
Secured by junior-lien |
22,473 |
|
|
12,297 |
|
|
33,406 |
|
|
68,176 |
|
|
3,293,935 |
|
|
3,362,111 |
|
|
7,688 |
|
|
Total home equity |
37,509 |
|
|
20,382 |
|
|
66,420 |
|
|
124,311 |
|
|
8,366,604 |
|
|
8,490,915 |
|
|
12,159 |
|
|
Residential mortgage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
102,702 |
|
|
42,009 |
|
|
139,379 |
|
|
284,090 |
|
|
5,544,607 |
|
|
5,828,697 |
|
|
88,052 |
|
(5) |
Purchased credit-impaired |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,912 |
|
|
1,912 |
|
|
— |
|
|
Total residential mortgage |
102,702 |
|
|
42,009 |
|
|
139,379 |
|
|
284,090 |
|
|
5,546,519 |
|
|
5,830,609 |
|
|
88,052 |
|
|
Other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other consumer |
5,491 |
|
|
1,086 |
|
|
837 |
|
|
7,414 |
|
|
406,286 |
|
|
413,700 |
|
|
837 |
|
|
Purchased credit-impaired |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
51 |
|
|
51 |
|
|
— |
|
|
Total other consumer |
5,491 |
|
|
1,086 |
|
|
837 |
|
|
7,414 |
|
|
406,337 |
|
|
413,751 |
|
|
837 |
|
|
Total loans and leases |
$ |
234,853 |
|
|
$ |
81,470 |
|
|
$ |
282,040 |
|
|
$ |
598,363 |
|
|
$ |
47,057,363 |
|
|
$ |
47,655,726 |
|
|
$ |
130,481 |
|
|
|
|
(1) |
NALs are included in this aging analysis based on the loan’s past due status. |
|
|
(2) |
Amounts include Huntington Technology Finance administrative lease delinquencies. |
|
|
(3) |
Amounts represent accruing purchased impaired loans related to acquisitions. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status. |
|
|
(4) |
Includes $56 million guaranteed by the U.S. government.
|
|
|
(5) |
Includes $55 million guaranteed by the U.S. government.
|
Allowance for Credit Losses
The ACL is increased through a provision for credit losses that is charged to earnings, based on Management’s quarterly evaluation of the factors disclosed in Note 1. Significant Accounting Policies and is reduced by charge-offs, net of recoveries, and the ACL associated with securitized or sold loans.
During the 2015 first quarter, we reviewed our existing commercial and consumer credit models and enhanced certain processes and methods of ACL estimation. During this review, we analyzed the loss emergence periods used for consumer receivables collectively evaluated for impairment and, as a result, extended our loss emergence periods for products within these portfolios. As part of these enhancements to our credit reserve process, we also evaluated the methods used to separately estimate economic risks inherent in our portfolios and decided to no longer utilize these separate estimation techniques. Rather, we now incorporate economic risks in our loss estimates elsewhere in our reserve calculation. The enhancements made to our credit reserve processes during the quarter allow for increased segmentation and analysis of the estimated incurred losses within our loan portfolios. The net ACL impact of these enhancements was immaterial.
During the 2015 third quarter, we reviewed our existing commercial and consumer credit models and completed a periodic reassessment of certain ACL assumptions. Specifically, we updated our analysis of the loss emergence periods used for commercial receivables collectively evaluated for impairment. Based on our observed portfolio experience, we extended our loss emergence periods for the C&I portfolio and CRE portfolios. We also updated loss factors in our consumer home equity and residential mortgage portfolios based on more recently observed portfolio experience. The net ACL impact of these enhancements was immaterial.
The following table presents ALLL and AULC activity by portfolio segment for the years ended December 31, 2015, 2014, and 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
Commercial
and Industrial
|
|
Commercial
Real Estate
|
|
Automobile |
|
Home
Equity
|
|
Residential
Mortgage
|
|
Other
Consumer
|
|
Total |
Year ended December 31, 2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLL balance, beginning of period |
$ |
286,995 |
|
|
$ |
102,839 |
|
|
$ |
33,466 |
|
|
$ |
96,413 |
|
|
$ |
47,211 |
|
|
$ |
38,272 |
|
|
$ |
605,196 |
|
Loan charge-offs |
(79,724 |
) |
|
(18,076 |
) |
|
(36,489 |
) |
|
(36,481 |
) |
|
(15,696 |
) |
|
(31,415 |
) |
|
(217,881 |
) |
Recoveries of loans previously charged-off |
51,800 |
|
|
34,619 |
|
|
16,198 |
|
|
16,631 |
|
|
5,570 |
|
|
5,270 |
|
|
130,088 |
|
Provision (reduction in allowance) for loan and lease losses |
39,675 |
|
|
(19,375 |
) |
|
38,621 |
|
|
12,173 |
|
|
5,443 |
|
|
12,142 |
|
|
88,679 |
|
Write-downs of loans sold or transferred to loans held for sale |
— |
|
|
— |
|
|
(2,292 |
) |
|
(5,065 |
) |
|
(882 |
) |
|
— |
|
|
(8,239 |
) |
ALLL balance, end of period |
$ |
298,746 |
|
|
$ |
100,007 |
|
|
$ |
49,504 |
|
|
$ |
83,671 |
|
|
$ |
41,646 |
|
|
$ |
24,269 |
|
|
$ |
597,843 |
|
AULC balance, beginning of period |
$ |
48,988 |
|
|
$ |
6,041 |
|
|
$ |
— |
|
|
$ |
1,924 |
|
|
$ |
8 |
|
|
$ |
3,845 |
|
|
$ |
60,806 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
6,898 |
|
|
1,521 |
|
|
— |
|
|
144 |
|
|
10 |
|
|
2,702 |
|
|
11,275 |
|
AULC balance, end of period |
$ |
55,886 |
|
|
$ |
7,562 |
|
|
$ |
— |
|
|
$ |
2,068 |
|
|
$ |
18 |
|
|
$ |
6,547 |
|
|
$ |
72,081 |
|
ACL balance, end of period |
$ |
354,632 |
|
|
$ |
107,569 |
|
|
$ |
49,504 |
|
|
$ |
85,739 |
|
|
$ |
41,664 |
|
|
$ |
30,816 |
|
|
$ |
669,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2014: |
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLL balance, beginning of period |
$ |
265,801 |
|
|
$ |
162,557 |
|
|
$ |
31,053 |
|
|
$ |
111,131 |
|
|
$ |
39,577 |
|
|
$ |
37,751 |
|
|
$ |
647,870 |
|
Loan charge-offs |
(76,654 |
) |
|
(24,704 |
) |
|
(31,330 |
) |
|
(54,473 |
) |
|
(25,946 |
) |
|
(33,494 |
) |
|
(246,601 |
) |
Recoveries of loans previously charged-off |
44,531 |
|
|
34,071 |
|
|
13,762 |
|
|
17,526 |
|
|
6,194 |
|
|
5,890 |
|
|
121,974 |
|
Provision (reduction in allowance) for loan and lease losses |
53,317 |
|
|
(69,085 |
) |
|
19,981 |
|
|
22,229 |
|
|
27,386 |
|
|
29,254 |
|
|
83,082 |
|
Write-downs of loans sold or transferred to loans held for sale
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,129 |
) |
|
(1,129 |
) |
ALLL balance, end of period |
$ |
286,995 |
|
|
$ |
102,839 |
|
|
$ |
33,466 |
|
|
$ |
96,413 |
|
|
$ |
47,211 |
|
|
$ |
38,272 |
|
|
$ |
605,196 |
|
AULC balance, beginning of period |
$ |
49,596 |
|
|
$ |
9,891 |
|
|
$ |
— |
|
|
$ |
1,763 |
|
|
$ |
9 |
|
|
$ |
1,640 |
|
|
$ |
62,899 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
(608 |
) |
|
(3,850 |
) |
|
— |
|
|
161 |
|
|
(1 |
) |
|
2,205 |
|
|
(2,093 |
) |
AULC balance, end of period |
$ |
48,988 |
|
|
$ |
6,041 |
|
|
$ |
— |
|
|
$ |
1,924 |
|
|
$ |
8 |
|
|
$ |
3,845 |
|
|
$ |
60,806 |
|
ACL balance, end of period |
$ |
335,983 |
|
|
$ |
108,880 |
|
|
$ |
33,466 |
|
|
$ |
98,337 |
|
|
$ |
47,219 |
|
|
$ |
42,117 |
|
|
$ |
666,002 |
|
(dollar amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2013: |
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLL balance, beginning of period |
$ |
241,051 |
|
|
$ |
285,369 |
|
|
$ |
34,979 |
|
|
$ |
118,764 |
|
|
$ |
61,658 |
|
|
$ |
27,254 |
|
|
$ |
769,075 |
|
Loan charge-offs |
(45,904 |
) |
|
(69,512 |
) |
|
(23,912 |
) |
|
(98,184 |
) |
|
(34,236 |
) |
|
(34,568 |
) |
|
(306,316 |
) |
Recoveries of loans previously charged-off |
29,514 |
|
|
44,658 |
|
|
13,375 |
|
|
15,921 |
|
|
7,074 |
|
|
7,108 |
|
|
117,650 |
|
Provision (reduction in allowance) for loan and lease losses |
41,140 |
|
|
(97,958 |
) |
|
6,611 |
|
|
74,630 |
|
|
5,417 |
|
|
37,957 |
|
|
67,797 |
|
Write-downs of loans sold or transferred to loans held for sale
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(336 |
) |
|
— |
|
|
(336 |
) |
ALLL balance, end of period |
$ |
265,801 |
|
|
$ |
162,557 |
|
|
$ |
31,053 |
|
|
$ |
111,131 |
|
|
$ |
39,577 |
|
|
$ |
37,751 |
|
|
$ |
647,870 |
|
AULC balance, beginning of period |
$ |
33,868 |
|
|
$ |
4,740 |
|
|
$ |
— |
|
|
$ |
1,356 |
|
|
$ |
3 |
|
|
$ |
684 |
|
|
$ |
40,651 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
15,728 |
|
|
5,151 |
|
|
— |
|
|
407 |
|
|
6 |
|
|
956 |
|
|
22,248 |
|
AULC balance, end of period |
$ |
49,596 |
|
|
$ |
9,891 |
|
|
$ |
— |
|
|
$ |
1,763 |
|
|
$ |
9 |
|
|
$ |
1,640 |
|
|
$ |
62,899 |
|
ACL balance, end of period |
$ |
315,397 |
|
|
$ |
172,448 |
|
|
$ |
31,053 |
|
|
$ |
112,894 |
|
|
$ |
39,586 |
|
|
$ |
39,391 |
|
|
$ |
710,769 |
|
Credit Quality Indicators
To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following categories of credit grades:
Pass - Higher quality loans that do not fit any of the other categories described below.
OLEM - The credit risk may be relatively minor yet represent a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or the collateral may be inadequate to protect Huntington’s position in the future. For these reasons, Huntington considers the loans to be potential problem loans.
Substandard - Inadequately protected loans by the borrower’s ability to repay, equity, and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified weaknesses are not mitigated.
Doubtful - Loans that have all of the weaknesses inherent in those loans classified as Substandard, with the added elements of the full collection of the loan is improbable and that the possibility of loss is high.
The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of the loan or lease and subsequently updated as appropriate.
Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are also considered Classified loans.
For all classes within all consumer loan portfolios, each loan is assigned a specific PD factor that is partially based on the borrower’s most recent credit bureau score, which we update quarterly. A credit bureau score is a credit score developed by Fair Isaac
Corporation based on data provided by the credit bureaus. The credit bureau score is widely accepted as the standard measure of consumer credit risk used by lenders, regulators, rating agencies, and consumers. The higher the credit bureau score, the higher likelihood of repayment and therefore, an indicator of higher credit quality.
Huntington assesses the risk in the loan portfolio by utilizing numerous risk characteristics. The classifications described above, and also presented in the table below, represent one of those characteristics that are closely monitored in the overall credit risk management processes.
The following table presents each loan and lease class by credit quality indicator for the years ended December 31, 2015 and 2014:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
Credit Risk Profile by UCS Classification |
(dollar amounts in thousands) |
Pass |
|
OLEM |
|
Substandard |
|
Doubtful |
|
Total |
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
Owner occupied |
$ |
3,731,113 |
|
|
$ |
114,490 |
|
|
$ |
165,301 |
|
|
$ |
1,896 |
|
|
$ |
4,012,800 |
|
Purchased credit-impaired |
3,051 |
|
|
674 |
|
|
15,661 |
|
|
1,631 |
|
|
21,017 |
|
Other commercial and industrial |
15,523,625 |
|
|
284,175 |
|
|
714,615 |
|
|
3,602 |
|
|
16,526,017 |
|
Total commercial and industrial |
19,257,789 |
|
|
399,339 |
|
|
895,577 |
|
|
7,129 |
|
|
20,559,834 |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
Retail properties |
1,473,014 |
|
|
10,865 |
|
|
22,830 |
|
|
— |
|
|
1,506,709 |
|
Multi family |
1,029,138 |
|
|
28,862 |
|
|
19,898 |
|
|
320 |
|
|
1,078,218 |
|
Office |
822,824 |
|
|
35,350 |
|
|
36,011 |
|
|
440 |
|
|
894,625 |
|
Industrial and warehouse |
493,402 |
|
|
259 |
|
|
10,450 |
|
|
56 |
|
|
504,167 |
|
Purchased credit-impaired |
7,194 |
|
|
397 |
|
|
6,167 |
|
|
— |
|
|
13,758 |
|
Other commercial real estate |
1,240,482 |
|
|
4,054 |
|
|
25,811 |
|
|
827 |
|
|
1,271,174 |
|
Total commercial real estate |
$ |
5,066,054 |
|
|
$ |
79,787 |
|
|
$ |
121,167 |
|
|
$ |
1,643 |
|
|
$ |
5,268,651 |
|
|
|
|
|
|
|
|
|
|
|
|
Credit Risk Profile by FICO Score (1) |
|
750+ |
|
650-749 |
|
<650 |
|
Other (2) |
|
Total |
Automobile |
$ |
4,680,684 |
|
|
$ |
3,454,585 |
|
|
$ |
1,086,914 |
|
|
$ |
258,495 |
|
|
$ |
9,480,678 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
Secured by first-lien |
3,369,657 |
|
|
1,441,574 |
|
|
258,328 |
|
|
121,926 |
|
|
5,191,485 |
|
Secured by junior-lien |
1,841,084 |
|
|
1,024,851 |
|
|
323,998 |
|
|
89,064 |
|
|
3,278,997 |
|
Total home equity |
5,210,741 |
|
|
2,466,425 |
|
|
582,326 |
|
|
210,990 |
|
|
8,470,482 |
|
Residential mortgage: |
|
|
|
|
|
|
|
|
|
Residential mortgage |
3,563,683 |
|
|
1,813,002 |
|
|
567,688 |
|
|
52,573 |
|
|
5,996,946 |
|
Purchased credit-impaired |
381 |
|
|
777 |
|
|
296 |
|
|
— |
|
|
1,454 |
|
Total residential mortgage |
3,564,064 |
|
|
1,813,779 |
|
|
567,984 |
|
|
52,573 |
|
|
5,998,400 |
|
Other consumer: |
|
|
|
|
|
|
|
|
|
Other consumer |
233,969 |
|
|
269,694 |
|
|
49,650 |
|
|
9,689 |
|
|
563,002 |
|
Purchased credit-impaired |
— |
|
|
52 |
|
|
— |
|
|
— |
|
|
52 |
|
Total other consumer |
$ |
233,969 |
|
|
$ |
269,746 |
|
|
$ |
49,650 |
|
|
$ |
9,689 |
|
|
$ |
563,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014 |
|
Credit Risk Profile by UCS Classification |
(dollar amounts in thousands) |
Pass |
|
OLEM |
|
Substandard |
|
Doubtful |
|
Total |
Commercial and industrial: |
|
|
|
|
|
|
|
|
|
Owner occupied |
$ |
3,959,046 |
|
|
$ |
117,637 |
|
|
$ |
175,767 |
|
|
$ |
2,425 |
|
|
$ |
4,254,875 |
|
Purchased credit-impaired |
3,915 |
|
|
741 |
|
|
14,901 |
|
|
3,671 |
|
|
23,228 |
|
Other commercial and industrial |
13,925,334 |
|
|
386,666 |
|
|
440,036 |
|
|
3,007 |
|
|
14,755,043 |
|
Total commercial and industrial |
17,888,295 |
|
|
505,044 |
|
|
630,704 |
|
|
9,103 |
|
|
19,033,146 |
|
Commercial real estate: |
|
|
|
|
|
|
|
|
|
Retail properties |
1,279,064 |
|
|
10,204 |
|
|
67,911 |
|
|
567 |
|
|
1,357,746 |
|
Multi family |
1,044,521 |
|
|
12,608 |
|
|
32,322 |
|
|
965 |
|
|
1,090,416 |
|
Office |
902,474 |
|
|
33,107 |
|
|
42,578 |
|
|
2,144 |
|
|
980,303 |
|
Industrial and warehouse |
487,454 |
|
|
7,877 |
|
|
17,781 |
|
|
289 |
|
|
513,401 |
|
Purchased credit-impaired |
6,914 |
|
|
803 |
|
|
25,460 |
|
|
5,194 |
|
|
38,371 |
|
Other commercial real estate |
1,166,293 |
|
|
9,635 |
|
|
40,019 |
|
|
1,219 |
|
|
1,217,166 |
|
Total commercial real estate |
$ |
4,886,720 |
|
|
$ |
74,234 |
|
|
$ |
226,071 |
|
|
$ |
10,378 |
|
|
$ |
5,197,403 |
|
|
|
|
|
|
|
|
|
|
|
|
Credit Risk Profile by FICO Score (1) |
|
750+ |
|
650-749 |
|
<650 |
|
Other (2) |
|
Total |
Automobile |
$ |
4,165,811 |
|
|
$ |
3,249,141 |
|
|
$ |
1,028,381 |
|
|
$ |
246,569 |
|
|
$ |
8,689,902 |
|
Home equity: |
|
|
|
|
|
|
|
|
|
Secured by first-lien |
3,255,088 |
|
|
1,426,191 |
|
|
283,152 |
|
|
164,373 |
|
|
5,128,804 |
|
Secured by junior-lien |
1,832,663 |
|
|
1,095,332 |
|
|
348,825 |
|
|
85,291 |
|
|
3,362,111 |
|
Total home equity |
5,087,751 |
|
|
2,521,523 |
|
|
631,977 |
|
|
249,664 |
|
|
8,490,915 |
|
Residential mortgage |
|
|
|
|
|
|
|
|
|
Residential mortgage |
3,285,310 |
|
|
1,785,137 |
|
|
666,562 |
|
|
91,688 |
|
|
5,828,697 |
|
Purchased credit-impaired |
594 |
|
|
1,135 |
|
|
183 |
|
|
— |
|
|
1,912 |
|
Total residential mortgage |
3,285,904 |
|
|
1,786,272 |
|
|
666,745 |
|
|
91,688 |
|
|
5,830,609 |
|
Other consumer |
|
|
|
|
|
|
|
|
|
Other consumer |
195,128 |
|
|
187,781 |
|
|
30,582 |
|
|
209 |
|
|
413,700 |
|
Purchased credit-impaired |
— |
|
|
51 |
|
|
— |
|
|
— |
|
|
51 |
|
Total other consumer |
$ |
195,128 |
|
|
$ |
187,832 |
|
|
$ |
30,582 |
|
|
$ |
209 |
|
|
$ |
413,751 |
|
|
|
(1) |
Reflects most recent customer credit scores. |
|
|
(2) |
Reflects deferred fees and costs, loans in process, loans to legal entities, etc. |
Impaired Loans
For all classes within the C&I and CRE portfolios, all loans with an outstanding balance of $1 million or greater are considered for individual evaluation on a quarterly basis for impairment . Generally, consumer loans within any class are not individually evaluated on a regular basis for impairment. However, certain home equity and residential mortgage loans are measured for impairment based on the underlying collateral value. All TDRs, regardless of the outstanding balance amount, are also considered to be impaired. Loans acquired with evidence of deterioration of credit quality since origination for which it is probable at acquisition that all contractually required payments will not be collected are also considered to be impaired.
Once a loan has been identified for an assessment of impairment, the loan is considered impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. This determination requires significant judgment and use of estimates, and the eventual outcome may differ significantly from those estimates.
The following tables present the balance of the ALLL attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance for the years ended December 31, 2015 and 2014 (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
Commercial
and
Industrial
|
|
Commercial
Real Estate
|
|
Automobile |
|
Home
Equity
|
|
Residential
Mortgage
|
|
Other
Consumer
|
|
Total |
ALL at December 31, 2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Portion of ALLL balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to purchased credit-impaired loans |
$ |
2,602 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
127 |
|
|
$ |
— |
|
|
$ |
2,729 |
|
Attributable to loans individually evaluated for impairment |
19,314 |
|
|
8,114 |
|
|
1,779 |
|
|
16,242 |
|
|
16,811 |
|
|
176 |
|
|
62,436 |
|
Attributable to loans collectively evaluated for impairment |
276,830 |
|
|
91,893 |
|
|
47,725 |
|
|
67,429 |
|
|
24,708 |
|
|
24,093 |
|
|
532,678 |
|
Total ALLL balance |
$ |
298,746 |
|
|
$ |
100,007 |
|
|
$ |
49,504 |
|
|
$ |
83,671 |
|
|
$ |
41,646 |
|
|
$ |
24,269 |
|
|
$ |
597,843 |
|
Loan and Lease Ending Balances at December 31, 2015: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Portion of loan and lease ending balance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to purchased credit-impaired loans |
$ |
21,017 |
|
|
$ |
13,758 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,454 |
|
|
$ |
52 |
|
|
$ |
36,281 |
|
Individually evaluated for impairment |
481,033 |
|
|
144,977 |
|
|
31,304 |
|
|
248,839 |
|
|
366,995 |
|
|
4,640 |
|
|
1,277,788 |
|
Collectively evaluated for impairment |
20,057,784 |
|
|
5,109,916 |
|
|
9,449,374 |
|
|
8,221,643 |
|
|
5,629,951 |
|
|
558,362 |
|
|
49,027,030 |
|
Total loans and leases evaluated for impairment |
$ |
20,559,834 |
|
|
$ |
5,268,651 |
|
|
$ |
9,480,678 |
|
|
$ |
8,470,482 |
|
|
$ |
5,998,400 |
|
|
$ |
563,054 |
|
|
$ |
50,341,099 |
|
Portion of ending balance of impaired loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
With allowance assigned to the loan and lease balances |
$ |
246,249 |
|
|
$ |
90,475 |
|
|
$ |
31,304 |
|
|
$ |
248,839 |
|
|
$ |
368,449 |
|
|
$ |
4,640 |
|
|
$ |
989,956 |
|
With no allowance assigned to the loan and lease balances |
255,801 |
|
|
68,260 |
|
|
— |
|
|
— |
|
|
— |
|
|
52 |
|
|
324,113 |
|
Total |
$ |
502,050 |
|
|
$ |
158,735 |
|
|
$ |
31,304 |
|
|
$ |
248,839 |
|
|
$ |
368,449 |
|
|
$ |
4,692 |
|
|
$ |
1,314,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average balance of impaired loans |
$ |
382,051 |
|
|
$ |
202,192 |
|
|
$ |
30,163 |
|
|
$ |
292,014 |
|
|
$ |
373,573 |
|
|
$ |
4,726 |
|
|
$ |
1,284,719 |
|
ALLL on impaired loans |
21,916 |
|
|
8,114 |
|
|
1,779 |
|
|
16,242 |
|
|
16,938 |
|
|
176 |
|
|
65,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in thousands) |
Commercial
and
Industrial
|
|
Commercial
Real Estate
|
|
Automobile |
|
Home
Equity
|
|
Residential
Mortgage
|
|
Other
Consumer
|
|
Total |
ALLL at December 31, 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Portion of ALLL balance: |
|