DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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9 Months Ended |
Sep. 30, 2022 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Asset and liability derivatives included in accrued income and other assets |
The following table presents the fair values and notional values of all derivative instruments included in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021. Amounts in the table below are presented gross without the impact of any net collateral arrangements.
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September 30, 2022 |
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December 31, 2021 |
| (dollar amounts in millions) |
Notional Value |
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Asset |
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Liability |
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Notional Value |
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Asset |
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Liability |
| Derivatives designated as Hedging Instruments |
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| Interest rate contracts |
$ |
38,351 |
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$ |
1,036 |
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$ |
1,205 |
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$ |
21,306 |
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$ |
258 |
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$ |
32 |
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| Foreign exchange contracts |
206 |
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— |
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13 |
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210 |
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1 |
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— |
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| Derivatives not designated as Hedging Instruments |
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| Interest rate contracts |
39,835 |
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1,188 |
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1,181 |
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45,286 |
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587 |
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498 |
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| Foreign exchange contracts |
4,483 |
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98 |
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64 |
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3,524 |
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29 |
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31 |
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| Commodities contracts |
1,045 |
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201 |
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198 |
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1,077 |
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178 |
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177 |
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| Equity contracts |
559 |
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— |
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2 |
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685 |
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12 |
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5 |
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| Total Contracts |
$ |
84,479 |
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$ |
2,523 |
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$ |
2,663 |
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$ |
72,088 |
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$ |
1,065 |
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$ |
743 |
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| Gains and (losses) recognized in other comprehensive income (loss) (OCI) for derivatives designated as effective cash flow hedges |
The following table presents the amount of gain or loss recognized in income for derivatives not designated as hedging instruments under ASC Subtopic 815-10 in the Unaudited Condensed Consolidated Income Statement for the three-month and nine-month periods ended September 30, 2022 and 2021, respectively.
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Location of Gain or (Loss) Recognized in Income
on Derivative
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Amount of Gain or (Loss) Recognized in Income on Derivative |
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
| (dollar amounts in millions) |
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2022 |
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2021 |
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2022 |
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2021 |
| Interest rate contracts: |
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| Customer |
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Capital markets fees |
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$ |
12 |
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$ |
13 |
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$ |
37 |
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$ |
37 |
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| Mortgage banking |
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Mortgage banking income |
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— |
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5 |
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(80) |
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(24) |
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| Interest rate floors |
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Interest and fee income on loans and leases |
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— |
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(4) |
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— |
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(8) |
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| Interest rate caps |
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Interest expense on long-term debt |
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— |
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— |
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— |
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89 |
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| Foreign exchange contracts |
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Capital markets fees |
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12 |
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9 |
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32 |
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22 |
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| Commodities contracts |
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Capital markets fees |
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1 |
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(1) |
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4 |
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(1) |
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| Equity contracts |
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Other noninterest expense |
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(1) |
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(2) |
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(4) |
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(6) |
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| Total |
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$ |
24 |
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$ |
20 |
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$ |
(11) |
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$ |
109 |
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| Gross notional values of derivatives used in asset and liability management activities |
The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at September 30, 2022 and December 31, 2021, identified by the underlying interest rate-sensitive instruments.
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September 30, 2022 |
| (dollar amounts in millions) |
Fair Value Hedges |
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Cash Flow Hedges |
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Economic Hedges |
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Total |
| Instruments associated with: |
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| Investment securities |
$ |
10,297 |
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$ |
— |
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$ |
— |
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$ |
10,297 |
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| Loans |
— |
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22,325 |
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271 |
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22,596 |
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| Long-term debt |
5,729 |
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— |
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— |
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5,729 |
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| Total notional value at September 30, 2022 |
$ |
16,026 |
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$ |
22,325 |
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$ |
271 |
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$ |
38,622 |
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December 31, 2021 |
| (dollar amounts in millions) |
Fair Value Hedges |
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Cash Flow Hedges |
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Economic Hedges |
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Total |
| Instruments associated with: |
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| Investment securities |
$ |
8,228 |
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$ |
— |
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$ |
— |
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$ |
8,228 |
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| Loans |
— |
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11,150 |
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271 |
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11,421 |
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| Long-term debt |
1,928 |
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— |
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— |
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1,928 |
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| Total notional value at December 31, 2021 |
$ |
10,156 |
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$ |
11,150 |
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$ |
271 |
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$ |
21,577 |
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| Increase or (decrease) to interest expense for derivatives designated as fair value hedges |
The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2022 and 2021.
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
| (dollar amounts in millions) |
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2022 |
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2021 |
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2022 |
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2021 |
| Interest rate contracts |
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| Change in fair value of interest rate swaps hedging investment securities (1) |
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$ |
340 |
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$ |
2 |
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$ |
926 |
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$ |
39 |
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| Change in fair value of hedged investment securities (1) |
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(324) |
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— |
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(914) |
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(40) |
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| Change in fair value of interest rate swaps hedging long-term debt (2) |
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(178) |
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(22) |
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(314) |
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(95) |
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| Change in fair value of hedged long term debt (2) |
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178 |
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22 |
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315 |
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96 |
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| Amounts recorded on the balance sheet related to cumulative basis adjustments |
As of September 30, 2022, and December 31, 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.
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Amortized Cost |
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Cumulative Amount of Fair Value Hedging Adjustment To Hedged Items |
| (dollar amounts in millions) |
September 30, 2022 |
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December 31, 2021 |
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September 30, 2022 |
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December 31, 2021 |
| Assets |
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| Investment securities (1) |
$ |
18,026 |
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$ |
17,150 |
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$ |
(1,032) |
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$ |
(117) |
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| Liabilities |
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| Long-term debt (2) |
4,095 |
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1,981 |
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(271) |
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45 |
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(1)Amounts include the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of September 30, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $17.2 billion, the cumulative basis adjustments associated with these hedging relationships was $892 million, and the amounts of the designated hedging instruments were $9.4 billion.
(2)Excluded from the above table are the cumulative amount of fair value hedge adjustments remaining for long-term debt for which hedge accounting has been discontinued in the amounts of $(69) million at September 30, 2022 and $17 million at December 31, 2021.
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| Offsetting of financial assets and derivatives assets |
The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021.
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Offsetting of Financial Assets and Derivative Assets |
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Gross amounts
offset in the unaudited
condensed
consolidated
balance sheets |
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Net amounts of
assets
presented in
the unaudited condensed
consolidated
balance sheets |
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Gross amounts not offset in the
unaudited condensed consolidated
balance sheets |
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| (dollar amounts in millions) |
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Gross amounts
of recognized
assets
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Financial
instruments
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Cash collateral
received
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Net amount |
| September 30, 2022 |
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$ |
2,523 |
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$ |
(2,104) |
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$ |
419 |
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$ |
(6) |
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$ |
(121) |
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$ |
292 |
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| December 31, 2021 |
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1,065 |
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(465) |
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600 |
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(65) |
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(31) |
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504 |
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| MSR Derivative Hedging |
The notional value of the derivative financial instruments, the corresponding trading assets and liabilities positions, and net trading gains (losses) related to MSR hedging activity is summarized in the following table:
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| (dollar amounts in millions) |
September 30,
2022 |
December 31,
2021 |
| Notional value |
$ |
1,095 |
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$ |
1,330 |
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| Trading assets |
4 |
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19 |
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| Trading liabilities |
(80) |
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— |
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Three Months Ended
September 30, 2022 |
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Nine Months Ended
September 30, 2022 |
| (dollar amounts in millions) |
2022 |
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2021 |
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2022 |
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2021 |
| Trading gains (losses) |
$ |
(25) |
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$ |
(4) |
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$ |
(105) |
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$ |
(28) |
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| Offsetting of financial liabilities and derivative liabilities |
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Offsetting of Financial Liabilities and Derivative Liabilities |
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Gross amounts
offset in the unaudited
condensed
consolidated
balance sheets
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Net amounts of
liabilities
presented in
the unaudited condensed
consolidated
balance sheets
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Gross amounts not offset in the
unaudited condensed consolidated
balance sheets
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| (dollar amounts in millions) |
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Gross amounts
of recognized
liabilities
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Financial
instruments
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Cash collateral
delivered
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Net amount |
| September 30, 2022 |
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$ |
2,663 |
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$ |
(1,460) |
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$ |
1,203 |
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$ |
(79) |
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$ |
(148) |
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$ |
976 |
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| December 31, 2021 |
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743 |
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(624) |
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119 |
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(3) |
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(116) |
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— |
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