Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUES OF ASSETS AND LIABILITIES (Tables)

v3.21.1
FAIR VALUES OF ASSETS AND LIABILITIES (Tables)
 3 Months Ended
Mar. 31, 2021
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
Assets and liabilities measured at fair value on a recurring basis at March 31, 2021 and December 31, 2020 are summarized below:
Fair Value Measurements at Reporting Date Using Netting Adjustments (1) March 31, 2021
(dollar amounts in millions) Level 1 Level 2 Level 3
Assets
Trading account securities:
Municipal securities $ —  $ 48  $ —  $ —  $ 48 
Corporate debt —  3  —  —  3 
—  51  —  —  51 
Available-for-sale securities:
U.S. Treasury securities 5  —  —  —  5 
Residential CMOs —  3,172  —  —  3,172 
Residential MBS —  10,645  —  —  10,645 
Commercial MBS —  1,227  —  —  1,227 
Other agencies —  46  —  —  46 
Municipal securities —  52  3,070  —  3,122 
Private-label CMO —  39  11  —  50 
Asset-backed securities —  200  47  —  247 
Corporate debt —  857  —  —  857 
Other securities/sovereign debt —  4  —  —  4 
5  16,242  3,128  —  19,375 
Other securities 42  17  —  —  59 
Loans held for sale —  1,531  —  —  1,531 
Loans held for investment —  96  22  —  118 
MSRs —  —  274  —  274 
Derivative assets —  1,808  21  (816) 1,013 
Liabilities
Derivative liabilities —  863  11  (703) 171 
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 
(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.
Rollforward of financial instruments measured on a recurring basis and classified as Level 3
The tables below present a rollforward of the balance sheet amounts for the three-month periods ended March 31, 2021 and 2020, 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, 2021
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 $ 210  $ 41  $ 2,951  $ 9  $ 10  $ 23 
Transfers out of Level 3 (1) —  (39) —  —  —  — 
Total gains/losses for the period:
Included in earnings 51  8  —  —  —  — 
Included in OCI —  —  (4) —  —  — 
Purchases/originations 33  —  209  2  37  — 
Repayments —  —  —  —  —  (1)
Settlements (20) —  (86) —  —  — 
Closing balance $ 274  $ 10  $ 3,070  $ 11  $ 47  $ 22 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ 51  $ (26) $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period —  —  (5) —  —  — 
Level 3 Fair Value Measurements
Three Months Ended March 31, 2020
MSRs
Derivative
instruments
 Available-for-sale securities Loans held for investment
(dollar amounts in millions)
Municipal
securities
Private-
label
CMO
Asset-backed
securities
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  — 
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) $ —  0 $ —  $ — 
(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.
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 three-month periods ended March 31, 2021 and 2020:
Level 3 Fair Value Measurements
Three Months Ended March 31, 2021
(dollar amounts in millions) MSRs
Derivative
instruments
Classification of gains and losses in earnings:
Mortgage banking income $ 51  $ 8 
Total $ 51  $ 8 
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)
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, 2021
(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 $ 1,531  $ 1,501  $ 30  $ —  $ —  $ — 
Loans held for investment 118  123  (5) 4  5  (1)
December 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 $ 1,198  $ 1,134  $ 64  $ 2  $ 2  $ — 
Loans held for investment 94  99  (5) 7  8  (1)
The following table present the net gains (losses) from fair value changes for the three-month periods ended March 31, 2021 and 2020.
Net gains (losses) from fair value changes
(dollar amounts in millions) Three Months Ended March 31,
Assets 2021 2020
Loans held for sale (1) $ (34) $ 19 
(1)The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited Condensed Consolidated Statements of Income.
Assets measured at fair value on a nonrecurring basis
The amounts measured at fair value on a nonrecurring basis at March 31, 2021 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, 2021
Collateral-dependent loans 12  —  —  12  (1)
Quantitative information about significant unobservable level 3 fair value measurement inputs
Quantitative Information about Level 3 Fair Value Measurements at March 31, 2021 (1) (1)
(dollar amounts in millions) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average
Measured at fair value on a recurring basis:
MSRs $ 274  Discounted cash flow Constant prepayment rate 6  % - 22% 12  %
Spread over forward interest rate swap rates 3  % - 11% 5  %
Derivative assets 21  Consensus Pricing Net market price (5) % - 12% 1  %
Estimated Pull through % 6  % - 100% 90  %
Municipal securities 3,070  Discounted cash flow Discount rate —  % - 2% 1  %
Asset-backed securities 47  Cumulative default —  % - 39% 4  %
Loss given default 5  % - 80% 25  %
Measured at fair value on a nonrecurring basis:
Collateral-dependent loans 12  Appraisal value N/A N/A
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 N/A NA
Carrying amounts and estimated fair values of financial instruments
The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments at March 31, 2021 and December 31, 2020:
March 31, 2021
(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 $ 8,641  $ —  $ —  $ 8,641  $ 8,641 
Trading account securities —  —  51  51  51 
Available-for-sale securities —  —  19,375  19,375  19,375 
Held-to-maturity securities 7,815  —  —  7,815  8,062 
Other securities 352  —  59  411  411 
Loans held for sale —  6  1,531  1,537  1,537 
Net loans and leases (1) 78,409  —  118  78,527  78,603 
Derivative assets —  —  1,013  1,013  1,013 
Financial Liabilities
Deposits 102,184  —  —  102,184  102,231 
Short-term borrowings 219  —  —  219  219 
Long-term debt 7,210  —  —  7,210  7,305 
Derivative liabilities —  —  171  171  171 
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 
(1)Includes collateral-dependent loans.
The following table presents the level in the fair value hierarchy for the estimated fair values at March 31, 2021 and December 31, 2020:
Estimated Fair Value Measurements at Reporting Date Using Netting Adjustments (1)  March 31, 2021
(dollar amounts in millions) Level 1 Level 2 Level 3
Financial Assets
Trading account securities $ —  $ 51  $ —  $ 51 
Available-for-sale securities 5  16,242  3,128  19,375 
Held-to-maturity securities —  8,062  —  8,062 
Other securities (2) 42  17  —  59 
Loans held for sale —  1,531  6  1,537 
Net loans and direct financing leases —  96  78,507  78,603 
Derivative assets —  1,808  21  $ (816) 1,013 
Financial Liabilities
Deposits —  99,998  2,233  102,231 
Short-term borrowings —  219  —  219 
Long-term debt —  6,736  569  7,305 
Derivative liabilities —  863  11  (703) 171 
Estimated Fair Value Measurements at Reporting Date Using Netting Adjustments (1) December 31, 2020
(dollar amounts in millions) Level 1 Level 2 Level 3
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