Annual report pursuant to Section 13 and 15(d)

FAIR VALUES OF ASSETS AND LIABILITIES (Tables)

v3.20.4
FAIR VALUES OF ASSETS AND LIABILITIES (Tables)
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and 2019 are summarized below:
Fair Value Measurements at Reporting Date Using Netting Adjustments (1) December 31, 2020
(dollar amounts in millions) Level 1 Level 2 Level 3
Assets
Trading account securities:
Municipal securities $ —  $ 62  $ —  $ —  $ 62 
Available-for-sale securities:
U.S. Treasury securities 5  —  —  —  5 
Residential CMOs —  3,666  —  —  3,666 
Residential MBS —  7,935  —  —  7,935 
Commercial MBS —  1,163  —  —  1,163 
Other agencies —  62  —  —  62 
Municipal securities —  53  2,951  —  3,004 
Private-label CMO —  —  9  —  9 
Asset-backed securities —  182  10  —  192 
Corporate debt —  445  —  —  445 
Other securities/sovereign debt —  4  —  —  4 
5  13,510  2,970  —  16,485 
Other securities 59  —  —  —  59 
Loans held for sale —  1,198  —  —  1,198 
Loans held for investment —  71  23  —  94 
MSRs —  —  210  —  210 
Derivative assets —  1,903  43  (889) 1,057 
Liabilities
Derivative liabilities —  1,031  2  (917) 116 
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.
Roll forward of derivatives measured on a recurring basis and classified as Level 3
The tables below present a rollforward of the balance sheet amounts for the years ended December 31, 2020, 2019, and 2018 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
Year Ended December 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 serving assets previously measured using the amortized method 205  —  —  —  — 
Transfers out of Level 3 (1) —  (198) —  —  —  — 
Total gains/losses for the period:
Included in earnings (104) 233  (2) —  —  — 
Included in OCI —  —  65  —  —  — 
Purchases/originations 102  —  623  7  28  — 
Repayments —  —  —  —  —  (3)
Settlements —  —  (734) —  (66) — 
Closing balance $ 210  $ 41  $ 2,951  $ 9  $ 10  $ 23 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ (104) $ 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
Year Ended December 31, 2019
Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
 Private-
label
CMO
Asset-
backed
securities
Opening balance $ 10  $ 2  $ 3,165  $ —  $ —  $ 30 
Transfers out of Level 3 (1) —  (62) —  —  —  — 
Total gains/losses for the period:
Included in earnings (3) 66  (1) —  —  1 
Included in OCI —  —  77  —  —  — 
Purchases/originations —  —  254  2  55  — 
Repayments —  —  —  —  —  (5)
Settlements —  —  (496) —  (7) — 
Closing balance $ 7  $ 6  $ 2,999  $ 2  $ 48  $ 26 
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date $ (3) $ 3  $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —  $ —  $ 74  $ —  $ —  $ — 
Level 3 Fair Value Measurements
Year Ended December 31, 2018
      Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Asset-
backed
securities
Opening balance $ 11  $ (1) $ 3,167  $ 24  $ 38 
Transfers out of Level 3 (1) —  (35) —  —  — 
Total gains/losses for the period:
Included in earnings (1) 35  (3) (2) — 
Included in OCI —  —  (52) 11  — 
Purchases/originations —  —  658  —  — 
Sales —  —  —  (33) — 
Repayments —  —  —  —  (8)
Settlements —  3  (605) —  — 
Closing balance $ 10  $ 2  $ 3,165  $ —  $ 30 
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date $ (1) $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —  $ —  $ (52) $ —  $ — 
(1)     Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.
Roll forward of assets measured on a recurring basis and classified as Level 3
Level 3 Fair Value Measurements
Year Ended December 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 serving assets previously measured using the amortized method 205  —  —  —  — 
Transfers out of Level 3 (1) —  (198) —  —  —  — 
Total gains/losses for the period:
Included in earnings (104) 233  (2) —  —  — 
Included in OCI —  —  65  —  —  — 
Purchases/originations 102  —  623  7  28  — 
Repayments —  —  —  —  —  (3)
Settlements —  —  (734) —  (66) — 
Closing balance $ 210  $ 41  $ 2,951  $ 9  $ 10  $ 23 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ (104) $ 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
Year Ended December 31, 2019
Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
 Private-
label
CMO
Asset-
backed
securities
Opening balance $ 10  $ 2  $ 3,165  $ —  $ —  $ 30 
Transfers out of Level 3 (1) —  (62) —  —  —  — 
Total gains/losses for the period:
Included in earnings (3) 66  (1) —  —  1 
Included in OCI —  —  77  —  —  — 
Purchases/originations —  —  254  2  55  — 
Repayments —  —  —  —  —  (5)
Settlements —  —  (496) —  (7) — 
Closing balance $ 7  $ 6  $ 2,999  $ 2  $ 48  $ 26 
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date $ (3) $ 3  $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —  $ —  $ 74  $ —  $ —  $ — 
Level 3 Fair Value Measurements
Year Ended December 31, 2018
      Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Asset-
backed
securities
Opening balance $ 11  $ (1) $ 3,167  $ 24  $ 38 
Transfers out of Level 3 (1) —  (35) —  —  — 
Total gains/losses for the period:
Included in earnings (1) 35  (3) (2) — 
Included in OCI —  —  (52) 11  — 
Purchases/originations —  —  658  —  — 
Sales —  —  —  (33) — 
Repayments —  —  —  —  (8)
Settlements —  3  (605) —  — 
Closing balance $ 10  $ 2  $ 3,165  $ —  $ 30 
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at end of the reporting date $ (1) $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period $ —  $ —  $ (52) $ —  $ — 
(1)     Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.
Classification of gains and losses due to changes in fair value, recorded in earnings for Level 3 assets and liabilities
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 years ended December 31, 2020, 2019, and 2018:
Level 3 Fair Value Measurements
Year Ended December 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 $ (104) $ 233  $ — 
Interest and fee income —  —  (2)
Total $ (104) $ 233  $ (2)
Level 3 Fair Value Measurements
Year Ended December 31, 2019
Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Classification of gains and losses in earnings:
Mortgage banking income $ (3) $ 66  $ —  $ — 
Interest and fee income —  —  (1) 1 
Total $ (3) $ 66  $ (1) $ 1 
Level 3 Fair Value Measurements
Year Ended December 31, 2018
      Available-for-sale securities
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Asset-
backed
securities
Classification of gains and losses in earnings:
Mortgage banking income (loss) $ (1) $ 35  $ —  $ — 
Securities gains (losses) —  —  —  (2)
Interest and fee income —  —  (3) — 
Total $ (1) $ 35  $ (3) $ (2)
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:
December 31, 2020
Total Loans Loans that are 90 or more days past due
(dollar amounts in millions) Fair value
carrying
amount		 Aggregate
unpaid
principal		 Difference Fair value
carrying
amount		 Aggregate
unpaid
principal		 Difference
Assets
Loans held for sale $ 1,198  $ 1,134  $ 64  $ 2  $ 2  $ — 
Loans held for investment 94  99  (5) 7  8  (1)
December 31, 2019
Total Loans Loans that are 90 or more days past due
(dollar amounts in millions) Fair value
carrying
amount		 Aggregate
unpaid
principal		 Difference Fair value
carrying
amount		 Aggregate
unpaid
principal		 Difference
Assets
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 from fair value changes for the years ended December 31, 2020, 2019, and 2018: 
 
Net gains (losses) from fair value
changes Year Ended December 31,
(dollar amounts in millions) 2020 2019 2018
Assets
Loans held for sale (1)
$ 38  $ 7  $ 5 
Loans held for investment 1  1  — 
Assets measured at fair value on a nonrecurring basis
The amounts measured at fair value on a nonrecurring basis at December 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)
Year Ended
December 31, 2020
Collateral-dependent loans $ 144  $ —  $ —  $ 144  $ (43)
Loans held for sale 124  —  —  124  (63)
Quantitative information about significant unobservable level 3 fair value measurement inputs
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 December 31, 2020 and 2019:
Quantitative Information about Level 3 Fair Value Measurements at December 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 $ 210  Discounted cash flow Constant prepayment rate 8  % - 24  % 17  %
Spread over forward interest rate swap rates 4  % - 11  % 5  %
Derivative assets 43  Consensus Pricing Net market price (4) % - 11  % 3  %
Estimated Pull through % 1  % - 100  % 88  %
Municipal securities 2,951  Discounted cash flow Discount rate —  % - 1  % 1  %
Asset-backed securities 10  Cumulative default —  % - 39  % 4  %
Loss given default 5  % - 80  % 25  %
Measured at fair value on a nonrecurring basis:
Collateral-dependent loans 144  Appraisal value NA NA
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.
Fair value by balance sheet grouping
The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments at December 31, 2020 and December 31, 2019:
December 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 $ 6,712  $ —  $ —  $ 6,712  $ 6,712 
Trading account securities —  —  62  62  62 
Available-for-sale securities —  —  16,485  16,485  16,485 
Held-to-maturity securities 8,861  —  —  8,861  9,255 
Other securities 359  —  59  418  418 
Loans held for sale —  77  1,198  1,275  1,275 
Net loans and leases (1) 79,700  —  94  79,794  80,477 
Derivative assets —  —  1,057  1,057  1,057 
Financial Liabilities
Deposits 98,948  —  —  98,948  99,021 
Short-term borrowings 183  —  —  183  183 
Long-term debt 8,352  —  —  8,352  8,568 
Derivative liabilities —  —  116  116  116 
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 December 31, 2020 and December 31, 2019:
Estimated Fair Value Measurements at Reporting Date Using Netting December 31, 2020
(dollar amounts in millions) Level 1 Level 2 Level 3 Adjustments (1)
Financial Assets
Trading account securities $ —  $ 62  $ —  $ 62 
Available-for-sale securities 5  13,510  2,970  16,485 
Held-to-maturity securities —  9,255  —  9,255 
Other securities (2) 59  —  —  59 
Loans held for sale —  1,198  77  1,275 
Net loans and direct financing leases —  71  80,406  80,477 
Derivative assets —  1,903  43  (889) 1,057 
Financial Liabilities
Deposits —  96,656  2,365  99,021 
Short-term borrowings —  183  —  183 
Long-term debt —  7,999  569  8,568 
Derivative liabilities —  1,031  2  (917) 116 
Estimated Fair Value Measurements at Reporting Date Using Netting December 31, 2019
(dollar amounts in millions) Level 1 Level 2 Level 3 Adjustments (1)
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.