Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT SECURITIES AND OTHER SECURITIES

v3.23.2
INVESTMENT SECURITIES AND OTHER SECURITIES
6 Months Ended
Jun. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES AND OTHER SECURITIES INVESTMENT SECURITIES AND OTHER SECURITIES
Debt securities purchased in which Huntington has the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other debt and equity securities are classified as either available-for-sale or other securities.
The following tables provide amortized cost, fair value, and gross unrealized gains and losses by investment category at June 30, 2023 and December 31, 2022:
Unrealized
(dollar amounts in millions)
Amortized
Cost (1)(2)
Gross
Gains
Gross
Losses
Fair Value
At June 30, 2023
Available-for-sale securities:
U.S. Treasury $ $ —  $ —  $
Federal agencies:
Residential CMO 3,742  —  (434) 3,308 
Residential MBS 13,789  (1,979) 11,811 
Commercial MBS 2,551  —  (653) 1,898 
Other agencies 176  —  (8) 168 
Total U.S. Treasury, federal agency, and other agency securities
20,263  (3,074) 17,190 
Municipal securities 3,778  (244) 3,536 
Private-label CMO 138  —  (15) 123 
Asset-backed securities 410  —  (41) 369 
Corporate debt 2,230  94  (313) 2,011 
Other securities/Sovereign debt —  — 
Total available-for-sale securities $ 26,823  $ 97  $ (3,687) $ 23,233 
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 5,012  $ —  $ (722) $ 4,290 
Residential MBS 9,835  —  (1,294) 8,541 
Commercial MBS 1,613  —  (245) 1,368 
Other agencies 116  —  (9) 107 
Total federal agency and other agency securities 16,576  —  (2,270) 14,306 
Municipal securities —  — 
Total held-to-maturity securities $ 16,578  $ —  $ (2,270) $ 14,308 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock $ 412  $ —  $ —  $ 412 
Federal Reserve Bank stock 516  —  —  516 
Equity securities 14  —  —  14 
Other securities, at fair value:
Mutual funds 32  —  —  32 
Equity securities —  — 
Total other securities $ 975  $ —  $ —  $ 975 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At June 30, 2023, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $62 million and $38 million, respectively.
(2)Excluded from the amortized cost are portfolio level basis adjustments for securities designated in fair value hedges under the portfolio layer method. The basis adjustments totaled $843 million and represent a reduction to the amortized cost of the securities being hedged. The securities being hedged under the portfolio layer method are primarily Residential CMO and Residential MBS securities.
Unrealized
(dollar amounts in millions) Amortized
Cost (1)(2)
Gross
Gains
Gross
Losses
Fair Value
At December 31, 2022
Available-for-sale securities:
U.S. Treasury $ 103  $ —  $ —  $ 103 
Federal agencies:
Residential CMO 3,336  —  (422) 2,914 
Residential MBS 14,349  (2,090) 12,263 
Commercial MBS 2,565  —  (612) 1,953 
Other agencies 190  (9) 182 
Total U.S. Treasury, federal agency, and other agency securities 20,543  (3,133) 17,415 
Municipal securities 3,527  (238) 3,290 
Private-label CMO 146  —  (18) 128 
Asset-backed securities 416  —  (44) 372 
Corporate debt 2,467  132  (385) 2,214 
Other securities/Sovereign debt —  — 
Total available-for-sale securities $ 27,103  $ 138  $ (3,818) $ 23,423 
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 4,970  $ $ (714) $ 4,260 
Residential MBS 10,295  —  (1,375) 8,920 
Commercial MBS 1,652  —  (204) 1,448 
Other agencies 133  —  (9) 124 
Total federal agency and other agency securities 17,050  (2,302) 14,752 
Municipal securities —  — 
Total held-to-maturity securities $ 17,052  $ $ (2,302) $ 14,754 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock $ 312  $ —  $ —  $ 312 
Federal Reserve Bank stock 500  —  —  500 
Equity securities 10  —  —  10 
Other securities, at fair value:
Mutual funds 31  —  —  31 
Equity securities —  — 
Total other securities $ 854  $ —  $ —  $ 854 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At December 31, 2022, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $64 million and $39 million, respectively.
(2)Excluded from the amortized cost are portfolio level basis adjustments for securities designated in fair value hedges under the portfolio layer method. The basis adjustments totaled $849 million and represent a reduction to the amortized cost of the securities being hedged. The securities being hedged under the portfolio layer method are primarily Residential CMO and Residential MBS securities.
The following table provides the amortized cost and fair value of securities by contractual maturity at June 30, 2023 and December 31, 2022. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.
At June 30, 2023 At December 31, 2022
(dollar amounts in millions)
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Available-for-sale securities:
Under 1 year $ 524  $ 514  $ 518  $ 511 
After 1 year through 5 years 2,456  2,273  2,182  2,033 
After 5 years through 10 years 2,734  2,507  3,106  2,814 
After 10 years 21,109  17,939  21,297  18,065 
Total available-for-sale securities $ 26,823  $ 23,233  $ 27,103  $ 23,423 
Held-to-maturity securities:
Under 1 year $ $ $ —  $ — 
After 1 year through 5 years 58  55  72  68 
After 5 years through 10 years 75  70  71  66 
After 10 years 16,443  14,181  16,909  14,620 
Total held-to-maturity securities $ 16,578  $ 14,308  $ 17,052  $ 14,754 
The following tables provide detail on investment securities with unrealized losses aggregated by investment category and the length of time the individual securities have been in a continuous loss position at June 30, 2023 and December 31, 2022:
Less than 12 Months Over 12 Months Total
(dollar amounts in millions) Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
At June 30, 2023
Available-for-sale securities:
Federal agencies:
Residential CMO $ 1,249  $ (56) $ 2,059  $ (378) $ 3,308  $ (434)
Residential MBS 778  (38) 10,883  (1,941) 11,661  (1,979)
Commercial MBS 387  (64) 1,512  (589) 1,899  (653)
Other agencies 22  —  70  (8) 92  (8)
Total federal agency and other agency securities 2,436  (158) 14,524  (2,916) 16,960  (3,074)
Municipal securities 789  (49) 2,566  (195) 3,355  (244)
Private-label CMO —  97  (15) 103  (15)
Asset-backed securities —  —  369  (41) 369  (41)
Corporate debt —  —  2,011  (313) 2,011  (313)
Total temporarily impaired available-for-sale securities $ 3,231  $ (207) $ 19,567  $ (3,480) $ 22,798  $ (3,687)
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 612  $ (12) $ 3,678  $ (710) $ 4,290  $ (722)
Residential MBS 1,118  (60) 7,407  (1,234) 8,525  (1,294)
Commercial MBS 43  (3) 1,324  (242) 1,367  (245)
Other agencies —  —  108  (9) 108  (9)
Total federal agency and other agency securities 1,773  (75) 12,517  (2,195) 14,290  (2,270)
Total temporarily impaired held-to-maturity securities $ 1,773  $ (75) $ 12,517  $ (2,195) $ 14,290  $ (2,270)
Less than 12 Months Over 12 Months Total
(dollar amounts in millions) Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
At December 31, 2022
Available-for-sale securities:
Federal agencies:
Residential CMO $ 2,096  $ (224) $ 818  $ (198) $ 2,914  $ (422)
Residential MBS 2,455  (286) 9,490  (1,804) 11,945  (2,090)
Commercial MBS 1,090  (249) 863  (363) 1,953  (612)
Other agencies 40  (1) 56  (8) 96  (9)
Total federal agency and other agency securities 5,681  (760) 11,227  (2,373) 16,908  (3,133)
Municipal securities 2,298  (174) 807  (64) 3,105  (238)
Private-label CMO 64  (13) 43  (5) 107  (18)
Asset-backed securities 174  (10) 199  (34) 373  (44)
Corporate debt 727  (105) 1,487  (280) 2,214  (385)
Total temporarily impaired available-for-sale securities $ 8,944  $ (1,062) $ 13,763  $ (2,756) $ 22,707  $ (3,818)
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 1,702  $ (238) $ 2,283  $ (476) $ 3,985  $ (714)
Residential MBS 4,151  (462) 4,711  (913) 8,862  (1,375)
Commercial MBS 1,201  (154) 247  (50) 1,448  (204)
Other agencies 124  (9) —  —  124  (9)
Total federal agency and other agency securities 7,178  (863) 7,241  (1,439) 14,419  (2,302)
Total temporarily impaired held-to-maturity securities $ 7,178  $ (863) $ 7,241  $ (1,439) $ 14,419  $ (2,302)
At June 30, 2023 and December 31, 2022, the carrying value of investment securities pledged: (i) to secure certain uninsured deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements, and (ii) to support borrowing capacity, totaled $33.1 billion and $26.9 billion, respectively. There were no securities of a single issuer, which were not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at either June 30, 2023 or December 31, 2022. At June 30, 2023, all HTM debt securities are considered investment grade. In addition, there were no HTM debt securities considered past due at June 30, 2023.
Based on an evaluation of available information including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, as of June 30, 2023, Huntington has concluded that it expects to receive all contractual cash flows from each security held in its AFS and HTM debt securities portfolio. There was no allowance related to investment securities as of June 30, 2023 or December 31, 2022. A $4 million charge-off was recognized during the 2022 first quarter for one municipal bond classified as an AFS debt security.