FAIR VALUES OF ASSETS AND LIABILITIES

v3.20.1

FAIR VALUES OF ASSETS AND LIABILITIES	3 Months Ended
	Mar. 31, 2020
Fair Value Disclosures [Abstract]
FAIR VALUES OF ASSETS AND LIABILITIES	FAIR VALUES OF ASSETS AND LIABILITIES See Note 18 “Fair Value of Assets and Liabilities” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2019 for a description of the valuation methodologies used for instruments measured at fair value. Assets and liabilities measured at fair value rarely transfer between Level 1 and Level 2 measurements. There were no such transfers during the three-month periods ended March 31, 2020 and 2019. Assets and Liabilities measured at fair value on a recurring basis Assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019 are summarized below:   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   March 31, 2020 (dollar amounts in millions) Level 1   Level 2   Level 3     Assets                   Trading account securities:                   Municipal securities $ —   $ 28   $ —   $ —   $ 28 Other securities 8   —   —   —   8   8   28   —   —   36 Available-for-sale securities:                   U.S. Treasury securities 8   —   —   —   8 Residential CMOs —   5,723   —   —   5,723 Residential MBS —   4,304   —   —   4,304 Commercial MBS —   849   —   —   849 Other agencies —   147   —   —   147 Municipal securities —   55   2,937   —   2,992 Private-label CMO —   —   2   —   2 Asset-backed securities —   478   69   —   547 Corporate debt —   47   —   —   47 Other securities/sovereign debt —   3   —   —   3   8   11,606   3,008   —   14,622 Other securities 50   —   —   —   50 Loans held for sale —   836   —   —   836 Loans held for investment —   55   26   —   81 MSRs —   —   165   —   165 Derivative assets —   2,342   42   (1,302 )   1,082 Liabilities                   Derivative liabilities —   1,369   3   (1,066 )   306   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   December 31, 2019 (dollar amounts in millions) Level 1   Level 2   Level 3     Assets                   Trading account securities:                   Federal agencies: Other agencies $ —   $ 4   $ —   $ —   $ 4 Municipal securities —   63   —   —   63 Other securities 30   2   —   —   32   30   69   —   —   99 Available-for-sale securities:                   U.S. Treasury securities 10   —   —   —   10 Residential CMOs —   5,085   —   —   5,085 Residential MBS —   4,222   —   —   4,222 Commercial MBS —   976   —   —   976 Other agencies —   165   —   —   165 Municipal securities —   56   2,999   —   3,055 Private-label CMO —   —   2   —   2 Asset-backed securities —   531   48   —   579 Corporate debt —   51   —   —   51 Other securities/sovereign debt —   4   —   —   4   10   11,090   3,049   —   14,149 Other securities 54   —   —   —   54 Loans held for sale —   781   —   —   781 Loans held for investment —   55   26   —   81 MSRs —   —   7   —   7 Derivative assets —   848   8   (404 )   452 Liabilities                   Derivative liabilities —   519   2   (417 )   104 (1) Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties. The tables below present a rollforward of the balance sheet amounts for the three-month periods ended March 31, 2020 and 2019, for financial instruments measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 measurements may also include observable components of value that can be validated externally. Accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.   Level 3 Fair Value Measurements Three Months Ended March 31, 2020           Available-for-sale securities     (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities   Private- label CMO   Asset-backed securities   Loans held for investment Opening balance $ 7   $ 6   $ 2,999   $ 2   $ 48   $ 26 Fair value election for servicing assets previously measured using the amortized method 205   —   —   —   —   — Transfers out of Level 3 (1) —   (20 )   —   —   —   — Total gains/losses for the period:                       Included in earnings (47 )   53   (1 )   —   —   — Included in OCI —   —   (68 )   —   —   — Purchases/originations —   —   73   —   27   — Sales —   —   —   —   —   — Repayments —   —   —   —   —   — Settlements —   —   (66 )   —   (6 )   — Closing balance $ 165   $ 39   $ 2,937   $ 2   $ 69   $ 26 Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ (47 )   $ 34   $ —   $ —   $ —   $ — Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —   $ —   $ (68 )   $ —   $ —   $ —   Level 3 Fair Value Measurements Three Months Ended March 31, 2019           Available-for-sale securities     (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities   Loans held for investment Opening balance $ 10   $ 2   $ 3,165   $ 30 Transfers out of Level 3 (1) —   (9 )   —   — Total gains/losses for the period:               Included in earnings —   12   1   — Included in OCI —   —   43   — Purchases/originations —   —   81   — Sales —   —   —   — Repayments —   —   —   (1 ) Settlements —   —   (53 )   — Closing balance $ 10   $ 5   $ 3,237   $ 29 Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ —   $ 2   $ —   $ — Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —   $ —   $ 43   $ — (1) Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that is transferred to loans held for sale, which is classified as Level 2. The tables below summarize the classification of gains and losses due to changes in fair value, recorded in earnings for Level 3 assets and liabilities for the three-month periods ended March 31, 2020 and 2019:   Level 3 Fair Value Measurements Three Months Ended March 31, 2020           Available-for-sale securities (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities Classification of gains and losses in earnings:           Mortgage banking income $ (47 )   $ 53   $ — Interest and fee income —   —   (1 ) Total $ (47 )   $ 53   $ (1 )   Level 3 Fair Value Measurements Three Months Ended March 31, 2019           Available-for-sale securities (dollar amounts in millions) MSRs   Derivative instruments   Municipal securities Classification of gains and losses in earnings:           Mortgage banking income $ —   $ 12   $ — Interest and fee income —   —   1 Total $ —   $ 12   $ 1 Assets and liabilities under the fair value option The following tables present the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:   March 31, 2020 (dollar amounts in millions) Total Loans   Loans that are 90 or more days past due Assets Fair value carrying amount   Aggregate unpaid principal   Difference   Fair value carrying amount   Aggregate unpaid principal   Difference Loans held for sale $ 836   $ 791   $ 45   $ 1   $ 1   $ — Loans held for investment 81   86   (5 )   5   5   —   December 31, 2019 (dollar amounts in millions) Total Loans   Loans that are 90 or more days past due Assets Fair value carrying amount   Aggregate unpaid principal   Difference   Fair value carrying amount   Aggregate unpaid principal   Difference Loans held for sale $ 781   $ 755   $ 26   $ 2   $ 2   $ — Loans held for investment 81   87   (6 )   3   4   (1 ) The following tables present the net gains (losses) from fair value changes for the three-month periods ended March 31, 2020 and 2019.     Net gains (losses) from fair value changes (dollar amounts in millions)   Three Months Ended March 31, Assets   2020   2019 Loans held for sale (1)   $ 19   $ (2 ) (1) The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited Condensed Consolidated Statements of Income. Assets and Liabilities measured at fair value on a nonrecurring basis Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The amounts presented represent the fair value on the various measurement dates throughout the period. The gains (losses) represent the amounts recorded during the period regardless of whether the asset is still held at period end. The amounts measured at fair value on a nonrecurring basis at March 31, 2020 were as follows:       Fair Value Measurements Using     (dollar amounts in millions) Fair Value   Quoted Prices In Active Markets for Identical Assets (Level 1)   Significant Other Observable Inputs (Level 2)   Significant Other Unobservable Inputs (Level 3)   Total Gains/(Losses) Three Months Ended March 31, 2020 Collateral-dependent loans 63   —   —   63   (17 ) Loans held for sale 11   —   —   11   (2 ) Huntington records nonrecurring adjustments of collateral-dependent loans held for investment. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Appraisals are generally obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties and cost of construction. Periodically, in cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized in the form of a charge-off. Loans held for sale are measured at lower of cost or fair value less costs to sell. The fair value of loans held for sale is based on binding or non-binding bids for the respective loans or similar loans. Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis The table below presents quantitative information about the significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2020 and December 31, 2019:   Quantitative Information about Level 3 Fair Value Measurements at March 31, 2020 (1) (dollar amounts in millions) Fair Value   Valuation Technique   Significant Unobservable Input   Range   Weighted Average Measured at fair value on a recurring basis: MSRs $ 165   Discounted cash flow   Constant prepayment rate   12  % - 37 %   18 %           Spread over forward interest rate swap rates   5  % - 11 %   8 % Derivative assets 42   Consensus Pricing   Net market price   (5 )% - 13 %   4 %           Estimated Pull through %   3  % - 100 %   85 % Municipal securities 2,937   Discounted cash flow   Discount rate   3  % - 3 %   3 % Asset-backed securities 69       Cumulative default   0  % - 39 %   4 %           Loss given default   5  % - 80 %   24 % Measured at fair value on a nonrecurring basis: Collateral-dependent loans 63   Appraisal value   NA           NA (1) Certain disclosures related to quantitative level 3 fair value measurements do not include those deemed to be immaterial.   Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019 (1) (dollar amounts in millions) Fair Value   Valuation Technique   Significant Unobservable Input   Range   Weighted Average Measured at fair value on a recurring basis:         MSRs $ 7   Discounted cash flow   Constant prepayment rate   —  % - 26 %   8 %           Spread over forward interest rate swap rates   5  % - 11 %   8 % Derivative assets 8   Consensus Pricing   Net market price   (2 )% - 11 %   2 %           Estimated Pull through %   2  % - 100 %   91 % Municipal securities 2,999   Discounted cash flow   Discount rate   2  % - 3 %   2 % Asset-backed securities 48       Cumulative default   —  % - 39 %   4 %           Loss given default   5  % - 80 %   24 % Measured at fair value on a nonrecurring basis:         MSRs 206   Discounted cash flow   Constant prepayment rate   10  % - 31 %   12 %           Spread over forward interest rate swap rates   5  % - 11 %   9 % Impaired loans 26   Appraisal value   NA           NA (1) Certain disclosures related to quantitative level 3 fair value measurements do not include those deemed to be immaterial. The following provides a general description of the impact of a change in an unobservable input on the fair value measurement and the interrelationship between unobservable inputs, where relevant/significant. Interrelationships may also exist between observable and unobservable inputs. Credit loss estimates, such as probability of default, constant default, cumulative default, loss given default, cure given deferral, and loss severity, are driven by the ability of the borrowers to pay their loans and the value of the underlying collateral and are impacted by changes in macroeconomic conditions, typically increasing when economic conditions worsen and decreasing when conditions improve. An increase in the estimated prepayment rate typically results in a decrease in estimated credit losses and vice versa. Higher credit loss estimates generally result in lower fair values. Credit spreads generally increase when liquidity risks and market volatility increase and decrease when liquidity conditions and market volatility improve. Discount rates and spread over forward interest rate swap rates typically increase when market interest rates increase and/or credit and liquidity risks increase and decrease when market interest rates decline and/or credit and liquidity conditions improve. Higher discount rates and credit spreads generally result in lower fair market values. Net market price and pull through percentages generally increase when market interest rates increase and decline when market interest rates decline. Higher net market price and pull through percentages generally result in higher fair values. Fair values of financial instruments The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments at March 31, 2020 and December 31, 2019:   March 31, 2020 (dollar amounts in millions) Amortized Cost   Lower of Cost or Market   Fair Value or Fair Value Option   Total Carrying Amount   Estimated Fair Value Financial Assets                   Cash and short-term assets $ 1,904   $ —   $ —   $ 1,904   $ 1,904 Trading account securities —   —   36   36   36 Available-for-sale securities —   —   14,622   14,622   14,622 Held-to-maturity securities 10,193   —   —   10,193   10,523 Other securities 438   —   50   488   488 Loans held for sale —   161   836   997   1,000 Net loans and leases (1) 76,450   —   81   76,531   77,059 Derivative assets —   —   1,082   1,082   1,082 Financial Liabilities                   Deposits 86,830   —   —   86,830   86,843 Short-term borrowings 2,826   —   —   2,826   2,826 Long-term debt 9,796   —   —   9,796   9,654 Derivative liabilities —   —   306   306   306   December 31, 2019 (dollar amounts in millions) Amortized Cost   Lower of Cost or Market   Fair Value or Fair Value Option   Total Carrying Amount   Estimated Fair Value Financial Assets                   Cash and short-term assets $ 1,272   $ —   $ —   $ 1,272   $ 1,272 Trading account securities —   —   99   99   99 Available-for-sale securities —   —   14,149   14,149   14,149 Held-to-maturity securities 9,070   —   —   9,070   9,186 Other securities 387   —   54   441   441 Loans held for sale —   96   781   877   879 Net loans and leases (1) 74,540   —   81   74,621   75,177 Derivative assets —   —   452   452   452 Financial Liabilities                   Deposits 82,347   —   —   82,347   82,344 Short-term borrowings 2,606   —   —   2,606   2,606 Long-term debt 9,849   —   —   9,849   10,075 Derivative liabilities —   —   104   104   104 (1) Includes collateral-dependent loans. The following table presents the level in the fair value hierarchy for the estimated fair values at March 31, 2020 and December 31, 2019:   Estimated Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)  March 31, 2020 (dollar amounts in millions) Level 1   Level 2   Level 3   Financial Assets                 Trading account securities $ 8   $ 28   $ —     $ 36 Available-for-sale securities 8   11,606   3,008     14,622 Held-to-maturity securities —   10,523   —     10,523 Other securities (2) 50   —   —     50 Loans held for sale —   836   164     1,000 Net loans and direct financing leases —   55   77,004     77,059 Derivative assets —   2,342   42   (1,302 ) 1,082 Financial Liabilities                 Deposits —   82,071   4,772     86,843 Short-term borrowings —   —   2,826     2,826 Long-term debt —   9,004   650     9,654 Derivative liabilities —   1,369   3   (1,066 ) 306   Estimated Fair Value Measurements at Reporting Date Using   Netting Adjustments (1) December 31, 2019 (dollar amounts in millions) Level 1   Level 2   Level 3   Financial Assets                 Trading account securities $ 30   $ 69   $ —     $ 99 Available-for-sale securities 10   11,090   3,049     14,149 Held-to-maturity securities —   9,186   —     9,186 Other securities (2) 54   —   —     54 Loans held for sale —   781   98     879 Net loans and direct financing leases —   55   75,122     75,177 Derivative assets —   848   8   (404 ) 452 Financial Liabilities           Deposits —   76,790   5,554     82,344 Short-term borrowings —   —   2,606     2,606 Long-term debt —   9,439   636     10,075 Derivative liabilities —   519   2   (417 ) 104 (1) Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties. (2) Excludes securities without readily determinable fair values. The short-term nature of certain assets and liabilities result in their carrying value approximating fair value. These include trading account securities, customers’ acceptance liabilities, short-term borrowings, bank acceptances outstanding, FHLB advances, and cash and short-term assets, which include cash and due from banks, interest-bearing deposits in banks, interest-bearing deposits at Federal Reserve Bank, federal funds sold, and securities purchased under resale agreements. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses that limit Huntington’s exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value. Certain assets, the most significant being operating lease assets, bank owned life insurance, and premises and equipment, do not meet the definition of a financial instrument and are excluded from this disclosure. Similarly, mortgage servicing rights, deposit base, and other customer relationship intangibles are not considered financial instruments and are not included above. Accordingly, this fair value information is not intended to, and does not, represent Huntington’s underlying value. Many of the assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by Management. These estimations necessarily involve the use of judgment about a wide variety of factors, including but not limited to, relevancy of market prices of comparable instruments, expected future cash flows, and appropriate discount rates.