FAIR VALUES OF ASSETS AND LIABILITIES

v3.4.0.3

FAIR VALUES OF ASSETS AND LIABILITIES	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
FAIR VALUES OF ASSETS AND LIABILITIES	FAIR VALUES OF ASSETS AND LIABILITIES See Note 17 “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, 2015 for a description of valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis. 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 period ended March 31, 2016 and 2015. 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, 2016 and December 31, 2015 are summarized below:   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   March 31, 2016 (dollar amounts in thousands) Level 1   Level 2   Level 3     Assets                   Loans held for sale $ —   $ 364,967   $ —   $ —   $ 364,967 Loans held for investment —   38,113   —   —   38,113 Trading account securities:                   Municipal securities —   9,752   —   —   9,752 Other securities 35,539   633   —   —   36,172   35,539   10,385   —   —   45,924 Available-for-sale and other securities:                   U.S. Treasury securities 6,307   —   —   —   6,307 Federal agencies: Mortgage-backed —   4,841,992   —   —   4,841,992 Federal agencies: Other agencies —   114,496   —   —   114,496 Municipal securities —   352,013   2,281,743   —   2,633,756 Asset-backed securities —   743,045   94,329   —   837,374 Corporate debt —   536,661   —   —   536,661 Other securities 11,404   3,931   —   —   15,335   17,711   6,592,138   2,376,072   —   8,985,921 Automobile loans —   —   1,216   —   1,216 MSRs —   —   14,819   —   14,819 Derivative assets —   566,637   11,082   (219,347 )   358,372 Liabilities                   Derivative liabilities —   338,164   735   (201,418 )   137,481 Short-term borrowings —   624   —   —   624   Fair Value Measurements at Reporting Date Using   Netting Adjustments (1)   December 31, 2015 (dollar amounts in thousands) Level 1   Level 2   Level 3     Assets                   Loans held for sale $ —   $ 337,577   $ —   $ —   $ 337,577 Loans held for investment —   32,889   —   —   32,889 Trading account securities:                   Municipal securities —   4,159   —   —   4,159 Other securities 32,475   363   —   —   32,838   32,475   4,522   —   —   36,997 Available-for-sale and other securities:                   U.S. Treasury securities 5,472   —   —   —   5,472 Federal agencies: Mortgage-backed —   4,521,688   —   —   4,521,688 Federal agencies: Other agencies —   115,913   —   —   115,913 Municipal securities —   360,845   2,095,551   —   2,456,396 Asset-backed securities —   761,076   100,337   —   861,413 Corporate debt —   466,477   —   —   466,477 Other securities 11,397   3,899   —   —   15,296   16,869   6,229,898   2,195,888   —   8,442,655 Automobile loans —   —   1,748   —   1,748 MSRs —   —   17,585   —   17,585 Derivative assets —   429,448   6,721   (161,297 )   274,872 Liabilities                   Derivative liabilities —   287,994   665   (144,309 )   144,350 Short-term borrowings —   1,770   —   —   1,770 (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, 2016 and 2015, 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, 2016           Available-for-sale securities     (dollar amounts in thousands) MSRs   Derivative instruments   Municipal securities   Asset- backed securities   Automobile loans Opening balance $ 17,585   $ 6,056   $ 2,095,551   $ 100,337   $ 1,748 Transfers into Level 3 —   —   —   —   — Transfers out of Level 3 (1) —   (915 )   —   —   — Total gains/losses for the period:                   Included in earnings (2,766 )   5,206   —   —   — Included in OCI —   —   11,840   (5,168 )   — Purchases/originations —   —   237,450   —   — Sales —   —   —   —   — Repayments —   —   —   —   (532 ) Issues —   —   —   —   — Settlements —   —   (63,098 )   (840 )   — Closing balance $ 14,819   $ 10,347   $ 2,281,743   $ 94,329   $ 1,216 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 $ (2,766 )   $ 5,306   $ —   $ —   $ — (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.   Level 3 Fair Value Measurements Three months ended March 31, 2015           Available-for-sale securities     (dollar amounts in thousands) MSRs   Derivative instruments   Municipal securities   Private- label CMO   Asset- backed securities   Automobile loans Opening balance $ 22,786   $ 3,360   $ 1,417,593   $ 30,464   $ 82,738   $ 10,590 Transfers into Level 3 —   —   —   —   —   — Transfers out of Level 3 —   —   —   —   —   — Total gains/losses for the period:                       Included in earnings (2,331 )   5,001   —   16   —   (213 ) Included in OCI —   —   (3,992 )   18   7,511   — Purchases/originations —   —   242,997   —   —   — Sales —   —   —   —   —   — Repayments —   —   —   —   —   (3,882 ) Issues —   —   —   —   —   — Settlements —   (536 )   (20,790 )   (426 )   (1,094 )   — Closing balance $ 20,455   $ 7,825   $ 1,635,808   $ 30,072   $ 89,155   $ 6,495 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 $ (2,331 )   $ 4,465   $ (3,992 )   $ 18   $ 7,511   $ (213 ) 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, 2016 and 2015:   Level 3 Fair Value Measurements Three months ended March 31, 2016           Available-for-sale securities     (dollar amounts in thousands) MSRs   Derivative instruments   Municipal securities   Private- label CMO   Asset- backed securities   Automobile loans Classification of gains and losses in earnings:                       Mortgage banking income $ (2,766 )   $ 5,206   $ —   $ —   $ —   $ — Securities gains (losses) —   —   —   —   —   — Interest and fee income —   —   —   —   —   — Noninterest income —   —   —   —   —   — Total $ (2,766 )   $ 5,206   $ —   $ —   $ —   $ —   Level 3 Fair Value Measurements Three months ended March 31, 2015           Available-for-sale securities     (dollar amounts in thousands) MSRs   Derivative instruments   Municipal securities   Private- label CMO   Asset- backed securities   Automobile loans Classification of gains and losses in earnings:                       Mortgage banking income $ (2,331 )   $ 5,001   $ —   $ —   $ —   $ — Securities gains (losses) —   —   —   —   —   — Interest and fee income —   —   —   16   —   (213 ) Noninterest income —   —   —   —   —   — Total $ (2,331 )   $ 5,001   $ —   $ 16   $ —   $ (213 ) Assets and liabilities under the fair value option The following table presents the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:   March 31, 2016   December 31, 2015 (dollar amounts in thousands) Fair value carrying amount   Aggregate unpaid principal   Difference   Fair value carrying amount   Aggregate unpaid principal   Difference Assets                       Loans held for sale $ 364,967   $ 348,302   $ 16,665   $ 337,577   $ 326,802   $ 10,775 Loans held for investment 38,113   38,811   (698 )   32,889   33,637   (748 ) Automobile loans 1,216   1,216   —   1,748   1,748   — The following tables present the net gains (losses) from fair value changes, including net gains (losses) associated with instrument specific credit risk for the three-month periods ended March 31, 2016 and 2015:   Net gains (losses) from fair value changes   Three months ended March 31, (dollar amounts in thousands) 2016   2015 Assets       Loans held for sale $ 4,649   $ 1,001 Automobile loans —   (213 )   Gains (losses) included in fair value changes associated with instrument specific credit risk   Three months ended March 31, (dollar amounts in thousands) 2016   2015 Assets       Automobile loans $ 90   $ 66 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. Assets measured at fair value on a nonrecurring basis were as follows:       Fair Value Measurements Using     (dollar amounts in thousands) 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, 2016 MSRs $ 125,957   $ —   $ —   $ 125,957   $ (16,340 ) Impaired loans 68,726   —   —   68,726   1,417 Other real estate owned 26,132   —   —   26,132   (505 ) MSRs accounted for under the amortization method are subject to nonrecurring fair value measurement when the fair value is lower than the carrying amount. Periodically, Huntington records nonrecurring adjustments of collateral-dependent loans measured for impairment when establishing the ACL. 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. In cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized. Other real estate owned properties are included in accrued income and other assets and valued based on appraisals and third party price opinions, less estimated selling costs. The appraisals supporting the fair value of the collateral to recognize loan impairment or unrealized loss on other real estate owned properties may not have been obtained as of March 31, 2016. 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, 2016 and December 31, 2015:   Quantitative Information about Level 3 Fair Value Measurements at March 31, 2016 (dollar amounts in thousands) Fair Value   Valuation Technique   Significant Unobservable Input   Range (Weighted Average) MSRs $ 14,819   Discounted cash flow   Constant prepayment rate   7.0% - 26.5% (12.3%)           Spread over forward interest rate swap rates   3.0% - 9.2% (5.5%) Derivative assets 11,082   Consensus Pricing   Net market price   -2.5% - 22.1% (2.3%) Derivative liabilities 735       Estimated Pull through %   7.9% - 99.8% (79.4%) Municipal securities 2,281,743   Discounted cash flow   Discount rate   0.6% - 7.8% (3.5%)           Cumulative default   0.1% - 56.0% (2.9%)           Loss given default   5.0% - 80.0% (21.8%) Asset-backed securities 94,329   Discounted cash flow   Discount rate   4.9% - 11.4% (6.5%)           Cumulative prepayment rate   0.0% - 100% (9.6%)           Cumulative default   1.5% - 100% (11.1%)           Loss given default   85% - 100% (96.7%)           Cure given deferral   0.0% - 75.0% (36.5%) Automobile loans 1,216   Discounted cash flow   Constant prepayment rate   154.2 %           Discount rate   0.2% - 5.0% (2.3%)           Life of pool cumulative losses   2.1 % Impaired loans 68,726   Appraisal value   NA   NA Other real estate owned 26,132   Appraisal value   NA   NA   Quantitative Information about Level 3 Fair Value Measurements at December 31, 2015 (dollar amounts in thousands) Fair Value   Valuation Technique   Significant Unobservable Input   Range (Weighted Average) MSRs $ 17,585   Discounted cash flow   Constant prepayment rate   7.9% - 25.7% (14.7%)           Spread over forward interest rate swap rates   3.3% - 9.2% (5.4%) Derivative assets 6,721   Consensus Pricing   Net market price   -3.2% - 20.9% (1.9%) Derivative liabilities 665       Estimated Pull through %   11.9% - 99.8% (76.7%) Municipal securities 2,095,551   Discounted cash flow   Discount rate   0.3% - 7.2% (3.1%)           Cumulative default   0.1% - 50.0% (2.1%)           Loss given default   5.0% - 80.0% (20.5%) Asset-backed securities 100,337   Discounted cash flow   Discount rate   4.6% - 10.9% (6.2%)           Cumulative prepayment rate   0.0% - 100.% (9.6%)           Cumulative default   1.6% - 100% (11.1%)           Loss given default   85% - 100% (96.6%)           Cure given deferral   0.0% - 75.0% (36.8%) Automobile loans 1,748   Discounted cash flow   Constant prepayment rate   154.2 %           Discount rate   0.2% - 5.0% (2.3%)           Life of pool cumulative losses   2.1 % Impaired loans 62,029   Appraisal value   NA   NA Other real estate owned 27,342   Appraisal value   NA   NA 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. Such relationships have not been included in the discussion below. A significant change in the unobservable inputs may result in a significant change in the ending fair value measurement of Level 3 instruments. In general, prepayment rates increase when market interest rates decline and decrease when market interest rates rise and higher prepayment rates generally result in lower fair values for MSR assets, Private-label CMO securities, Asset-backed securities, and Automobile loans. 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 that are carried either at fair value or cost at March 31, 2016 and December 31, 2015:   March 31, 2016   December 31, 2015 (dollar amounts in thousands) Carrying Amount   Fair Value   Carrying Amount   Fair Value Financial Assets               Cash and short-term assets $ 882,916   $ 882,916   $ 898,994   $ 898,994 Trading account securities 45,924   45,924   36,997   36,997 Loans held for sale 567,165   570,609   474,621   484,511 Available-for-sale and other securities 9,319,381   9,319,381   8,775,441   8,775,441 Held-to-maturity securities 5,946,144   6,042,243   6,159,590   6,135,458 Net loans and direct financing leases 50,925,640   49,897,026   49,743,256   48,024,998 Derivatives 358,372   358,372   274,872   274,872 Financial Liabilities               Deposits 55,628,842   55,641,189   55,294,979   55,299,435 Short-term borrowings 471,375   471,375   615,279   615,279 Long-term debt 7,935,412   7,928,482   7,067,614   7,043,014 Derivatives 137,481   137,481   144,350   144,350 The following table presents the level in the fair value hierarchy for the estimated fair values of only Huntington’s financial instruments that are not already on the Unaudited Condensed Consolidated Balance Sheets at fair value at March 31, 2016 and December 31, 2015:   Estimated Fair Value Measurements at Reporting Date Using   March 31, 2016 (dollar amounts in thousands) Level 1   Level 2   Level 3   Financial Assets               Held-to-maturity securities $ —   $ 6,042,243   $ —   $ 6,042,243 Net loans and direct financing leases —   —   49,897,026   49,897,026 Financial Liabilities               Deposits —   52,544,042   3,097,147   55,641,189 Short-term borrowings —   624   470,751   471,375 Long-term debt —   —   7,928,482   7,928,482   Estimated Fair Value Measurements at Reporting Date Using   December 31, 2015 (dollar amounts in thousands) Level 1   Level 2   Level 3   Financial Assets               Held-to-maturity securities $ —   $ 6,135,458   $ —   $ 6,135,458 Net loans and direct financing leases —   —   48,024,998   48,024,998 Financial Liabilities         Deposits —   51,869,105   3,430,330   55,299,435 Short-term borrowings —   1,770   613,509   615,279 Long-term debt —   —   7,043,014   7,043,014 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, and 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. Not all the financial instruments listed in the table above are subject to the disclosure provisions of ASC Topic 820. 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 and nonmortgage 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. The following methods and assumptions were used by Huntington to estimate the fair value of the remaining classes of financial instruments: Held-to-maturity securities Fair values are determined by using models that are based on security-specific details, as well as relevant industry and economic factors. The most significant of these inputs are quoted market prices, and interest rate spreads on relevant benchmark securities. Loans and Direct Financing Leases Variable-rate loans that reprice frequently are based on carrying amounts, as adjusted for estimated credit losses. The fair values for other loans and leases are estimated using discounted cash flow analyses and employ interest rates currently being offered for loans and leases with similar terms. The rates take into account the position of the yield curve, as well as an adjustment for prepayment risk, operating costs, and profit. This value is also reduced by an estimate of expected losses and the credit risk associated in the loan and lease portfolio. The valuation of the loan portfolio reflected discounts that Huntington believed are consistent with transactions occurring in the marketplace. Deposits Demand deposits, savings accounts, and money market deposits are, by definition, equal to the amount payable on demand. The fair values of fixed-rate time deposits are estimated by discounting cash flows using interest rates currently being offered on certificates with similar maturities. Debt Long-term debt is based upon quoted market prices, which are inclusive of Huntington’s credit risk. In the absence of quoted market prices, discounted cash flows using market rates for similar debt with the same maturities are used in the determination of fair value.