Quarterly report pursuant to Section 13 or 15(d)

Available-for-Sale and Other Securities (Tables)

v2.4.0.8
Available-for-Sale and Other Securities (Tables)
 3 Months Ended
Jun. 30, 2014
Securities [Abstract]  
Contractual maturities of investment securities

Listed below are the contractual maturities (under 1 year, 1-5 years, 6-10 years, and over 10 years) of available-for-sale and other securities at June 30, 2014 and December 31, 2013:

        June 30, 2014   December 31, 2013
        Amortized           Amortized      
(dollar amounts in thousands)   Cost     Fair Value     Cost     Fair Value
  U.S. Treasury:                      
    Under 1 year $ 50,112   $ 50,191   $ 50,793   $ 51,086
    1-5 years   506     518     507     516
    6-10 years   ---     ---     ---     ---
    Over 10 years   ---     ---     1     2
  Total U.S. Treasury   50,618     50,709     51,301     51,604
  Federal agencies: mortgage-backed securities:                      
    Under 1 year   14,669     14,735     16,548     16,607
    1-5 years   253,110     256,259     164,794     166,946
    6-10 years   331,483     338,205     440,116     443,456
    Over 10 years   4,106,656     4,138,667     2,940,986     2,939,212
  Total Federal agencies: mortgage-backed securities   4,705,918     4,747,866     3,562,444     3,566,221
  Other agencies:                      
    Under 1 year   33,624     34,040     2,833     2,880
    1-5 years   9,727     10,253     291,726     297,510
    6-10 years   33,613     33,801     19,318     19,498
    Over 10 years   61,136     61,532     ---     ---
  Total other agencies   138,100     139,626     313,877     319,888
Total U.S. Government backed agencies   4,894,636     4,938,201     3,927,622     3,937,713
Municipal securities:                      
  Under 1 year   246,054     244,167     191,788     190,762
  1-5 years   247,963     249,887     206,719     211,916
  6-10 years   807,081     813,171     556,873     554,772
  Over 10 years   386,146     386,196     184,883     188,542
Total municipal securities   1,687,244     1,693,421     1,140,263     1,145,992
Private-label CMO:                      
  Under 1 year   ---     ---     ---     ---
  1-5 years   ---     ---     ---     ---
  6-10 years   1,664     1,744     1,997     2,089
  Over 10 years   45,785     44,055     49,241     47,015
Total private-label CMO   47,449     45,799     51,238     49,104
Asset-backed securities:                      
  Under 1 year   5,289     5,290     ---     ---
  1-5 years   324,832     327,084     434,825     438,156
  6-10 years   84,740     84,643     260,354     260,880
  Over 10 years   628,313     562,981     477,105     392,004
Total asset-backed securities   1,043,174     979,998     1,172,284     1,091,040
Covered bonds:                      
  Under 1 year   ---     ---     ---     ---
  1-5 years   ---     ---     280,595     285,874
  6-10 years   ---     ---     ---     ---
  Over 10 years   ---     ---     ---     ---
Total covered bonds   ---     ---     280,595     285,874
Corporate debt:                      
  Under 1 year   501     506     903     916
  1-5 years   295,820     307,892     283,079     292,989
  6-10 years   173,895     172,067     161,398     152,608
  Over 10 years   ---     ---     10,113     10,727
Total corporate debt   470,216     480,465     455,493     457,240
Other:                      
  Under 1 year   750     750     500     500
  1-5 years   3,150     3,066     3,399     3,327
  6-10 years   ---     ---     ---     ---
  Over 10 years   ---     ---     ---     ---
  Non-marketable equity securities   331,060     331,060     320,991     320,992
  Marketable equity securities   17,452     18,277     16,522     16,971
Total other   352,412     353,153     341,412     341,790
Total available-for-sale and other securities $ 8,495,131   $ 8,491,037   $ 7,368,907   $ 7,308,753
                           
Amortized cost, fair value, and gross unrealized gains and losses recognized in accumulated other comprehensive income
            Unrealized      
      Amortized     Gross     Gross     Fair
(dollar amounts in thousands)   Cost     Gains     Losses     Value
June 30, 2014                      
U.S. Treasury $ 50,618   $ 91   $ ---   $ 50,709
Federal agencies:                      
  Mortgage-backed securities   4,705,918     62,906     (20,958)     4,747,866
  Other agencies   138,100     1,653     (127)     139,626
Total U.S. Government                      
  backed securities   4,894,636     64,650     (21,085)     4,938,201
Municipal securities (1)   1,687,244     27,978     (21,801)     1,693,421
Private-label CMO   47,449     1,238     (2,888)     45,799
Asset-backed securities   1,043,174     4,421     (67,597)     979,998
Covered bonds   ---     ---     ---     ---
Corporate debt   470,216     12,953     (2,704)     480,465
Other securities   352,412     876     (135)     353,153
Total available-for-sale and other securities $ 8,495,131   $ 112,116   $ (116,210)   $ 8,491,037
                         
            Unrealized      
      Amortized     Gross     Gross     Fair
(dollar amounts in thousands)   Cost     Gains     Losses     Value
December 31, 2013                      
U.S. Treasury $ 51,301   $ 303   $ ---   $ 51,604
Federal agencies:                      
  Mortgage-backed securities   3,562,444     42,319     (38,542)     3,566,221
  Other agencies   313,877     6,105     (94)     319,888
Total U.S. Government                      
  backed securities   3,927,622     48,727     (38,636)     3,937,713
Municipal securities (2)   1,140,263     18,825     (13,096)     1,145,992
Private-label CMO   51,238     1,188     (3,322)     49,104
Asset-backed securities   1,172,284     6,771     (88,015)     1,091,040
Covered bonds   280,595     5,279     ---     285,874
Corporate debt   455,493     11,241     (9,494)     457,240
Other securities   341,412     511     (133)     341,790
Total available-for-sale and other securities $ 7,368,907   $ 92,542   $ (152,696)   $ 7,308,753
                         
  (1) On May 20, 2014 approximately $208.2 million of municipal equipment finance instruments were acquired.
  (2) Effective December 31, 2013 approximately $600.4 million of direct purchase municipal instruments were reclassified from C&I loans to available-for-sale securities.
Available for sale securities in an unrealized loss position table text block
      Less than 12 Months     Over 12 Months     Total
      Fair     Unrealized     Fair     Unrealized     Fair     Unrealized
(dollar amounts in thousands )   Value     Losses     Value     Losses     Value     Losses
June 30, 2014                                  
Federal agencies:                                  
  Mortgage-backed securities   724,180     (3,704)     470,997     (17,254)     1,195,177     (20,958)
  Other agencies   33,657     (105)     1,287     (22)     34,944     (127)
Total U.S. Government                                  
  backed securities   757,837     (3,809)     472,284     (17,276)     1,230,121     (21,085)
Municipal securities   579,519     (19,774)     171,530     (2,027)     751,049     (21,801)
Private-label CMO   ---     ---     22,969     (2,888)     22,969     (2,888)
Asset-backed securities   95,813     (296)     347,932     (67,301)     443,745     (67,597)
Corporate debt   10,618     (58)     114,664     (2,646)     125,282     (2,704)
Other securities   1,543     (51)     1,416     (84)     2,959     (135)
                                     
Total temporarily impaired securities $ 1,445,330   $ (23,988)   $ 1,130,795   $ (92,222)   $ 2,576,125   $ (116,210)
                                     
      Less than 12 Months     Over 12 Months     Total
      Fair     Unrealized     Fair     Unrealized     Fair     Unrealized
(dollar amounts in thousands )   Value     Losses     Value     Losses     Value     Losses
December 31, 2013                                  
U.S. Treasury $ ---   $ ---   $ ---   $ ---   $ ---   $ ---
Federal agencies:                                  
  Mortgage-backed securities   1,628,454     (37,174)     12,682     (1,368)     1,641,136     (38,542)
  Other agencies   2,069     (94)     ---     ---     2,069     (94)
Total U.S. Government                                  
  backed securities   1,630,523     (37,268)     12,682     (1,368)     1,643,205     (38,636)
Municipal securities   551,114     (12,395)     7,531     (701)     558,645     (13,096)
Private-label CMO   ---     ---     22,639     (3,322)     22,639     (3,322)
Asset-backed securities   391,665     (9,720)     107,419     (78,295)     499,084     (88,015)
Covered bonds   ---     ---     ---     ---     ---     ---
Corporate debt   146,308     (7,729)     26,155     (1,765)     172,463     (9,494)
Other securities   3,078     (72)     2,530     (61)     5,608     (133)
                                     
Total temporarily impaired securities $ 2,722,688   $ (67,184)   $ 178,956   $ (85,512)   $ 2,901,644   $ (152,696)
                                     
Realized securities gains and losses

The following table is a summary of realized securities gains and losses for the three-month and six-month periods ended June 30, 2014 and 2013:

      Three Months Ended     Six Months Ended
      June 30,     June 30,
(dollar amounts in thousands)   2014     2013     2014     2013
  Gross gains on sales of securities $ 490   $ 988   $ 17,480   $ 1,187
  Gross (losses) on sales of securities   ---     (378)     (20)     (390)
Net gain on sales of securities $ 490   $ 610   $ 17,460   $ 797
                         
Trust Preferred Securities Data

The fair values of the private label CMO and CDO assets have been impacted by various market conditions. The unrealized losses were primarily the result of wider liquidity spreads on asset-backed securities and increased market volatility on non-agency mortgage and asset-backed securities that are collateralized by certain mortgage loans. In addition, the expected average lives of the asset-backed securities backed by trust-preferred securities have been extended, due to changes in the expectations of when the underlying securities would be repaid. The contractual terms and / or cash flows of the investments do not permit the issuer to settle the securities at a price less than the amortized cost. Huntington does not intend to sell, nor does it believe it will be required to sell these securities until the fair value is recovered, which may be maturity and; therefore, does not consider them to be other-than-temporarily impaired at June 30, 2014.

 

The following table summarizes the relevant characteristics of our CDO securities portfolio, which are included in asset-backed securities, at June 30, 2014. Each security is part of a pool of issuers and supports a more senior tranche of securities except for the I-Pre TSL II, and MM Comm III securities which are the most senior class.

Collateralized Debt Obligation Data                    
June 30, 2014                          
(dollar amounts in thousands)         Actual          
                        Deferrals   Expected      
                        and   Defaults      
                      # of Issuers Defaults   as a % of      
                    Lowest Currently as a % of   Remaining      
        Amortized Fair Unrealized Credit Performing/ Original   Performing   Excess  
Deal Name Par Value Cost Value Loss (2) Rating (3) Remaining (4) Collateral   Collateral Subordination (5)
Alesco II (1) $ 41,646 $ 29,235 $ 14,722 $ (14,513) C 29/33 10 % 9 % --- %
ICONS   20,000   20,000   15,878   (4,122) BB 20/21 3   14   50  
I-Pre TSL II   7,084   7,067   6,825   (242) A 19/21 5   10   90  
MM Comm III   5,626   5,375   4,402   (973) BB 5/9 5   9   33  
Pre TSL IX (1)   5,000   3,955   2,301   (1,654) C 29/41 19   10   6  
Pre TSL XI (1)   25,000   20,867   11,135   (9,732) C 43/58 17   10   5  
Pre TSL XIII (1)   27,530   20,506   12,746   (7,760) C 44/59 18   17   10  
Reg Diversified (1)   25,500   6,908   954   (5,954) D 23/41 38   10   ---  
Soloso (1)   12,500   2,440   260   (2,180) C 38/61 28   20   ---  
Tropic III   31,000   31,000   14,623   (16,377) CCC+ 26/40 24   11   37  
Total at June 30, 2014 $ 200,886 $ 147,353 $ 83,846 $ (63,507)                
Total at December 31, 2013 $ 214,419 $ 161,730 $ 84,136 $ (77,594)                
                                   
(1) Security was determined to have OTTI. As such, the book value is net of recorded credit impairment.
(2) The majority of securities have been in a continuous loss position for 12 months or longer.
(3) For purposes of comparability, the lowest credit rating expressed is equivalent to Fitch ratings even where the lowest rating is based on another nationally recognized credit rating agency.
(4) Includes both banks and/or insurance companies.
(5) Excess subordination percentage represents the additional defaults in excess of both current and projected defaults that the CDO can absorb before the bond experiences credit impairment. Excess subordinated percentage is calculated by (a) determining what percentage of defaults a deal can experience before the bond has credit impairment, and (b) subtracting from this default breakage percentage both total current and expected future default percentages.
Total OTTI losses, OTTI losses included in OCI, and OTTI recognized in the income statement for securities evaluated for impairment by debt security debt
      Three Months Ended     Six Months Ended
      June 30,     June 30,
(dollar amounts in thousands)   2014     2013     2014     2013
Available-for-sale and other securities:                      
  Alt-A Mortgage-backed $ ---   $ ---   $ ---   $ ---
  Pooled-trust-preferred   ---     (1,020)     ---     (1,380)
  Private label CMO   ---     ---     ---     (336)
  Total debt securities   ---     (1,020)     ---     (1,716)
  Equity securities   ---     ---     ---     ---
Total available-for-sale and other securities $ ---   $ (1,020)   $ ---   $ (1,716)
OTTI recognized in earnings on debt securities held by Huntington

The following table rolls forward the OTTI recognized in earnings on debt securities held by Huntington for the three-month and six-month periods ended June 30, 2014 and 2013 as follows:

    Three Months Ended   Six Months Ended
    June 30,   June 30,
(dollar amounts in thousands)   2014     2013     2014     2013
Balance, beginning of period $ 30,869   $ 50,129   $ 30,869   $ 49,433
  Reductions from sales/maturities   ---     (1,298)     ---     (1,298)
  Credit losses not previously recognized   ---     ---     ---     ---
  Additional credit losses   ---     1,020     ---     1,716
Balance, end of period $ 30,869   $ 49,851   $ 30,869   $ 49,851