Annual report pursuant to Section 13 and 15(d)

LOANS AND LEASES

v3.22.0.1
LOANS AND LEASES
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
LOANS AND LEASES LOANS AND LEASES
The following table provides a detailed listing of Huntington’s loan and lease portfolio at December 31, 2021 and December 31, 2020.
At December 31,
(dollar amounts in millions) 2021 2020
Commercial Loan and lease portfolio:
Commercial and industrial $ 41,688  $ 33,151 
Commercial real estate 14,961  7,199 
Lease financing 5,000  2,222 
Total commercial loan and lease portfolio 61,649  42,572 
Consumer loan portfolio:
Residential mortgage 19,256  12,141 
Automobile 13,434  12,778 
Home equity 10,550  8,894 
RV and marine 5,058  4,190 
Other consumer 1,973  1,033 
Total consumer loan portfolio 50,271  39,036 
Total loans and leases (1)(2) 111,920  81,608 
Allowance for loan and lease losses (2,030) (1,814)
Net loans and leases $ 109,890  $ 79,794 
(1)Loans and leases are reported at principal amount outstanding including unamortized purchase premiums and discounts, unearned income, and net direct fees and costs associated with originating and acquiring loans and leases. The aggregate amount of these loan and lease adjustments was a net (discount) premium of $(111) million and $171 million at December 31, 2021 and 2020, respectively.
(2)The total amount of accrued interest recorded for these loans and leases at December 31, 2021, was $148 million and $150 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2020, was $146 million and $123 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in other assets within the Condensed Consolidated Balance Sheets.
Lease Financing
Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in commercial loans and leases. These leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases.
Huntington assesses net investments in leases (including residual values) for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. As such, net investments in leases may be reduced by an ACL, with changes recognized as provision expense.
The following table presents net investments in lease financing receivables by category at December 31, 2021 and December 31, 2020:
 
At December 31,
(dollar amounts in millions) 2021 2020
Lease payments receivable $ 4,620  $ 1,737 
Estimated residual value of leased assets 774  664 
Gross investment in lease financing receivables 5,394  2,401 
Deferred origination costs 36  21 
Deferred fees, unearned income and other (430) (200)
Total lease financing receivables $ 5,000  $ 2,222 
The carrying value of residual values guaranteed was $473 million and $93 million as of December 31, 2021 and December 31, 2020, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at December 31, 2021, totaled $4.6 billion and were due as follows: $0.8 billion in 2022, $0.7 billion in 2023, $0.7 billion in 2024, $0.8 billion in 2025, $0.7 billion in 2026, and $0.9 billion thereafter. Interest income recognized for these types of leases was $193 million, $106 million, and $108 million for the years 2021, 2020, and 2019 respectively.
Nonaccrual and Past Due Loans and Leases
The following table presents NALs by class at December 31, 2021 and 2020: 
December 31, 2021 December 31, 2020
(dollar amounts in millions) Nonaccrual loans with no ACL Total nonaccrual loans Nonaccrual loans with no ACL Total nonaccrual loans
Commercial and industrial $ 81  $ 370  $ 69  $ 349 
Commercial real estate 80  104  8  15 
Lease financing 3  48  —  4 
Residential mortgage —  111  —  88 
Automobile —  3  —  4 
Home Equity —  79  —  70 
RV and marine —  1  —  2 
Total nonaccrual loans and leases $ 164  $ 716  $ 77  $ 532 
The amount of interest that would have been recorded under the original terms for total NAL loans was $40 million, $33 million, and $26 million for 2021, 2020, and 2019, respectively. The total amount of interest recorded to interest income for NAL loans was $10 million, $6 million, and $9 million in 2021, 2020, and 2019, respectively.
The following table presents an aging analysis of loans and leases, by class at December 31, 2021 and 2020:
December 31, 2021
Past Due (1)  Loans Accounted for Under FVO Total Loans
and Leases		 90 or
more days
past due
and accruing
(dollar amounts in millions) 30-59
 Days		 60-89
 Days		 90 or 
more days		 Total Current
Commercial and industrial $ 72  $ 69  $ 107  $ 248  $ 41,440  $ —  $ 41,688  $ 13  (2)
Commercial real estate 9  1  9  19  14,942  —  14,961  — 
Lease financing 39  13  17  69  4,931  —  5,000  11  (3)
Residential mortgage 151  49  233  433  18,653  170  19,256  157  (4)
Automobile 79  18  8  105  13,329  —  13,434  6 
Home equity 48  35  76  159  10,390  1  10,550  17 
RV and marine 14  4  3  21  5,037  —  5,058  3 
Other consumer 13  2  3  18  1,955  —  1,973  3 
Total loans and leases $ 425  $ 191  $ 456  $ 1,072  $ 110,677  $ 171  $ 111,920  $ 210 
December 31, 2020
Past Due (1)(4) Loans Accounted for Under FVO Total Loans
and Leases		 90 or
more days
past due
and accruing
(dollar amounts in millions) 30-59
 Days
 60-89
 Days
 90 or more days Total Current
Commercial and industrial $ 38  $ 33  $ 82  $ 153  $ 32,998  $ —  $ 33,151  $ — 
Commercial real estate —  1  11  12  7,187  —  7,199  — 
Lease financing 22  5  13  40  2,182  —  2,222  10  (3)
Residential mortgage 114  38  194  346  11,702  93  12,141  132  (4)
Automobile 84  22  12  118  12,660  —  12,778  9 
Home equity 35  15  61  111  8,782  1  8,894  14 
RV and marine 17  3  3  23  4,167  —  4,190  3 
Other consumer 9  4  3  16  1,017  —  1,033  3 
Total loans and leases $ 319  $ 121  $ 379  $ 819  $ 80,695  $ 94  $ 81,608  $ 171 
(1)NALs are included in this aging analysis based on the loan’s past due status.
(2)Amounts include PPP and other SBA loans and leases.
(3)Amounts include Huntington Technology Finance administrative lease delinquencies.
(4)Amounts include mortgage loans insured by U.S. government agencies.
(5)The principal balance of loans in payment deferral programs offered in response to the COVID-19 pandemic which are performing according to their modified terms are generally not considered delinquent.
Credit Quality Indicators
To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following internally defined 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 represents 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 resulting from 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.
Loans are generally assigned a category of “Pass” rating upon initial approval and subsequently updated as appropriate based on the borrower’s financial performance.
Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are both considered Classified loans.
For all classes within the consumer loan portfolios, loans are assigned pool level PD factors based on the FICO range within which the borrower’s credit bureau score falls. A credit bureau score is a credit score developed by FICO 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 the amortized cost basis of loans and leases by vintage and credit quality indicator at December 31, 2021 and 2020 respectively:
As of December 31, 2021
Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans
(dollar amounts in millions) 2021 2020 2019 2018 2017 Prior Total
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 15,435  $ 5,677  $ 3,682  $ 1,983  $ 1,080  $ 1,134  $ 9,945  $ 3  $ 38,939 
OLEM 183  178  87  83  38  73  166  —  808 
Substandard 336  203  344  206  125  167  552  —  1,933 
Doubtful 5  1  1  1  —  —  —  —  8 
Total Commercial and industrial $ 15,959  $ 6,059  $ 4,114  $ 2,273  $ 1,243  $ 1,374  $ 10,663  $ 3  $ 41,688 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 4,144  $ 2,367  $ 2,593  $ 1,456  $ 761  $ 1,124  $ 798  $ —  $ 13,243 
OLEM 76  48  42  83  73  19  —  —  341 
Substandard 224  362  448  115  151  46  30  —  1,376 
Doubtful —  —  —  1  —  —  —  —  1 
Total Commercial real estate $ 4,444  $ 2,777  $ 3,083  $ 1,655  $ 985  $ 1,189  $ 828  $ —  $ 14,961 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,851  $ 1,441  $ 809  $ 417  $ 226  $ 131  $ —  $ —  $ 4,875 
OLEM 8  32  12  4  2  —  —  —  58 
Substandard 6  23  19  2  9  8  —  —  67 
Total Lease financing $ 1,865  $ 1,496  $ 840  $ 423  $ 237  $ 139  $ —  $ —  $ 5,000 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 5,532  $ 3,857  $ 978  $ 554  $ 687  $ 1,704  $ —  $ —  $ 13,312 
650-749 1,862  993  409  269  254  1,028  —  —  4,815 
<650 48  56  104  120  99  532  —  —  959 
Total Residential mortgage $ 7,442  $ 4,906  $ 1,491  $ 943  $ 1,040  $ 3,264  $ —  $ —  $ 19,086 
Automobile
Credit Quality Indicator (2):
750+ $ 2,993  $ 1,927  $ 1,381  $ 666  $ 345  $ 129  $ —  $ —  $ 7,441 
650-749 2,393  1,237  736  380  168  55  —  —  4,969 
<650 380  234  178  128  70  34  —  —  1,024 
Total Automobile $ 5,766  $ 3,398  $ 2,295  $ 1,174  $ 583  $ 218  $ —  $ —  $ 13,434 
Home Equity
Credit Quality Indicator (2):
750+ $ 645  $ 701  $ 32  $ 31  $ 34  $ 387  $ 4,772  $ 272  $ 6,874 
650-749 129  94  15  13  13  161  2,324  324  3,073 
<650 3  2  2  1  1  67  361  165  602 
Total Home equity $ 777  $ 797  $ 49  $ 45  $ 48  $ 615  $ 7,457  $ 761  $ 10,549 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,257  $ 933  $ 470  $ 468  $ 268  $ 319  $ —  $ —  $ 3,715 
650-749 393  273  171  157  106  150  —  —  1,250 
<650 6  11  13  18  18  27  —  —  93 
Total RV and marine $ 1,656  $ 1,217  $ 654  $ 643  $ 392  $ 496  $ —  $ —  $ 5,058 
Other consumer
Credit Quality Indicator (2):
750+ $ 458  $ 125  $ 138  $ 50  $ 38  $ 97  $ 546  $ 3  $ 1,455 
650-749 49  22  34  11  9  19  294  24  462 
<650 2  2  5  2  —  1  27  17  56 
Total Other consumer $ 509  $ 149  $ 177  $ 63  $ 47  $ 117  $ 867  $ 44  $ 1,973 
As of December 31, 2020
Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans
(dollar amounts in millions) 2020 2019 2018 2017 2016 Prior Total
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 12,599  $ 4,161  $ 2,537  $ 1,192  $ 837  $ 815  $ 8,894  $ 2  $ 31,037 
OLEM 415  112  65  24  32  22  124  —  794 
Substandard 195  125  181  203  41  147  423  —  1,315 
Doubtful 2  —  1  —  —  1  1  —  5 
Total Commercial and industrial $ 13,211  $ 4,398  $ 2,784  $ 1,419  $ 910  $ 985  $ 9,442  $ 2  $ 33,151 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 1,742  $ 1,610  $ 1,122  $ 507  $ 507  $ 539  $ 633  $ —  $ 6,660 
OLEM 94  78  63  37  28  14  4  —  318 
Substandard 27  46  10  29  58  14  36  —  220 
Doubtful —  —  —  —  —  1  —  —  1 
Total Commercial real estate $ 1,863  $ 1,734  $ 1,195  $ 573  $ 593  $ 568  $ 673  $ —  $ 7,199 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,158  $ 364  $ 221  $ 155  $ 137  $ 101  $ —  $ —  $ 2,136 
OLEM 6  4  4  6  1  —  —  —  21 
Substandard 1  19  7  21  5  12  —  —  65 
Total Lease financing $ 1,165  $ 387  $ 232  $ 182  $ 143  $ 113  $ —  $ —  $ 2,222 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 3,269  $ 1,370  $ 891  $ 1,064  $ 762  $ 1,243  $ 1  $ —  $ 8,600 
650-749 991  435  307  278  171  495  —  —  2,677 
<650 34  89  111  108  81  348  —  —  771 
Total Residential mortgage $ 4,294  $ 1,894  $ 1,309  $ 1,450  $ 1,014  $ 2,086  $ 1  $ —  $ 12,048 
Automobile
Credit Quality Indicator (2):
750+ $ 2,670  $ 2,013  $ 1,144  $ 742  $ 317  $ 81  $ —  $ —  $ 6,967 
650-749 1,965  1,343  755  386  175  52  —  —  4,676 
<650 312  301  244  157  84  37  —  —  1,135 
Total Automobile $ 4,947  $ 3,657  $ 2,143  $ 1,285  $ 576  $ 170  $ —  $ —  $ 12,778 
Home equity
Credit Quality Indicator (2):
750+ $ 793  $ 26  $ 26  $ 32  $ 89  $ 451  $ 4,373  $ 192  $ 5,982 
650-749 147  9  8  11  27  157  1,906  181  2,446 
<650 1  1  1  1  6  70  286  99  465 
Total Home equity $ 941  $ 36  $ 35  $ 44  $ 122  $ 678  $ 6,565  $ 472  $ 8,893 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,136  $ 525  $ 589  $ 337  $ 153  $ 254  $ —  $ —  $ 2,994 
650-749 348  215  201  136  64  129  —  —  1,093 
<650 4  15  21  22  12  29  —  —  103 
Total RV and marine $ 1,488  $ 755  $ 811  $ 495  $ 229  $ 412  $ —  $ —  $ 4,190 
Other consumer
Credit Quality Indicator (2):
750+ $ 69  $ 58  $ 26  $ 8  $ 4  $ 14  $ 340  $ 2  $ 521 
650-749 36  56  17  5  2  3  294  30  443 
<650 2  8  3  1  —  1  26  28  69 
Total Other consumer $ 107  $ 122  $ 46  $ 14  $ 6  $ 18  $ 660  $ 60  $ 1,033 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.
(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.
TDR Loans
In response to the COVID-19 pandemic, on March 22, 2020 and April 7, 2020, the federal bank regulatory agencies including the FRB and OCC released statements encouraging financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19. The statements go on to explain that, in consultation with the FASB staff, the federal bank regulatory agencies concluded that short-term modifications (e.g. six months) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not TDRs. Section 4013 of the CARES Act, as amended by Section 541 of the CARES Act further addresses COVID-19 related modifications occurring between March 1, 2020 through January 1, 2022 and specifies that such COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs.
For COVID-19 related loan modifications which met the criteria under the CARES Act, Huntington elected to suspend TDR accounting. For loan modifications not eligible for the CARES Act, Huntington applied the interagency regulatory guidance that was clarified on April 7, 2020. Accordingly, insignificant concessions (related to the current COVID-19 crisis) granted through payment deferrals, fee waivers, or other short-term modifications (generally 6 months or less) and provided to borrowers less than 30 days past due at March 17, 2020 were not deemed to be TDRs. Therefore, modified loans that met the required guidelines for relief are excluded from the TDR disclosures below.
The amount of interest that would have been recorded under the original terms for total accruing TDR loans was $42 million, $46 million, and $52 million for 2021, 2020, and 2019, respectively. The total amount of actual interest recorded to interest income for these loans was $39 million, $43 million, and $49 million for 2021, 2020, and 2019, respectively.
TDR Concession Types
The Company’s standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analyses, and collateral valuations. Each potential loan modification is reviewed individually and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time. All commercial TDRs are reviewed and approved by our FRG.
Following is a description of TDRs by the different loan types:
Commercial loan TDRs – Our strategy involving commercial TDR borrowers includes working with these borrowers to allow them to refinance elsewhere, as well as allow them time to improve their financial position and remain a Huntington customer through refinancing their notes according to market terms and conditions in the future. A subsequent refinancing or modification of a loan may occur when either the loan matures according to the terms of the TDR-modified agreement or the borrower requests a change to the loan agreements. At that time, the loan is evaluated to determine if the borrower is creditworthy. It is subjected to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The refinanced note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. 
Consumer loan TDRs – Residential mortgage TDRs represent loan modifications associated with traditional first-lien mortgage loans in which a concession has been provided to the borrower. The primary concessions given to residential mortgage borrowers are amortization or maturity date changes and interest rate reductions. Residential mortgages identified as TDRs involve borrowers unable to refinance their mortgages through the Company’s normal mortgage origination channels or through other independent sources. Some, but not all, of the loans may be delinquent. The Company may make similar interest rate, term, and principal concessions for Automobile, Home Equity, RV and Marine and Other Consumer loan TDRs.
TDR Impact on Credit Quality
Huntington’s ALLL is largely determined by risk ratings assigned to commercial loans, updated borrower credit scores on consumer loans, and borrower delinquency history in both the commercial and consumer portfolios. These risk ratings and credit scores consider the default history of the borrower, including payment redefaults. As such, the provision for credit losses is impacted primarily by changes in borrower payment performance rather than the TDR classification. TDRs can be classified as either accrual or nonaccrual loans. Nonaccrual TDRs are included in NALs whereas accruing TDRs are excluded from NALs as it is probable that all contractual principal and interest due under the restructured terms will be collected.
The Company’s TDRs may include multiple concessions and the disclosure classifications are presented based on the primary concession provided to the borrower.
The following table presents, by class and modification type, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the years ended December 31, 2021 and 2020.
New Troubled Debt Restructurings (1)
Year Ended December 31, 2021
Number of
Contracts		 Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions) Interest rate reduction Amortization or maturity date change Chapter 7 bankruptcy Other Total
Commercial and industrial 76  $ 29  $ 25  $ —  $ —  $ 54 
Commercial real estate 5  —  —  —  —  — 
Residential mortgage 320  —  39  6  —  45 
Automobile 2,442  —  16  4  —  20 
Home equity 214  —  4  7  —  11 
RV and marine 138  1  2  1  —  4 
Other consumer 270  —  —  —  1  1 
Total new TDRs 3,465  $ 30  $ 86  $ 18  $ 1  $ 135 
Year Ended December 31, 2020
Number of
Contracts		 Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions) Interest rate reduction Amortization or maturity date change Chapter 7 bankruptcy Other Total
Commercial and industrial 317  $ —  $ 123  $ —  $ 58  $ 181 
Commercial real estate 13  —  3  —  —  3 
Residential mortgage 585  —  79  7  —  86 
Automobile 3,018  —  29  6  —  35 
Home equity 273  —  6  8  2  16 
RV and marine 168  —  4  1  —  5 
Other consumer 622  3  —  —  1  4 
Total new TDRs 4,996  $ 3  $ 244  $ 22  $ 61  $ 330 
(1)TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.
(2)Post-modification balances approximate pre-modification balances.
Pledged Loans
The Bank has access to the Federal Reserve’s discount window and advances from the FHLB. As of December 31, 2021 and 2020, these borrowings and advances are secured by $61.1 billion and $43.0 billion, respectively, of loans.