LOANS AND LEASES

v3.23.2

LOANS AND LEASES	6 Months Ended
	Jun. 30, 2023
Receivables [Abstract]
LOANS AND LEASES	LOANS AND LEASES The following table provides a detailed listing of Huntington’s loan and lease portfolio at June 30, 2023 and December 31, 2022. (dollar amounts in millions) At June 30, 2023 At December 31, 2022 Commercial loan and lease portfolio: Commercial and industrial $ 49,834  $ 48,121  Commercial real estate 13,166  13,640  Lease financing 5,143  5,252  Total commercial loan and lease portfolio 68,143  67,013  Consumer loan portfolio: Residential mortgage 23,138  22,226  Automobile 12,819  13,154  Home equity 10,135  10,375  RV and marine 5,640  5,376  Other consumer 1,350  1,379  Total consumer loan portfolio 53,082  52,510  Total loans and leases (1)(2) 121,225  119,523  Allowance for loan and lease losses (2,177) (2,121) Net loans and leases $ 119,048  $ 117,402  (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 $(86) million and $3 million at June 30, 2023 and December 31, 2022, respectively. (2)The total amount of accrued interest recorded for these loans and leases at June 30, 2023, was $306 million and $195 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2022, was $274 million and $186 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in accrued income and other receivables within the Consolidated Balance Sheets. Lease Financing The following table presents net investments in lease financing receivables by category at June 30, 2023 and December 31, 2022. (dollar amounts in millions) At June 30, 2023 At December 31, 2022 Lease payments receivable $ 4,830  $ 4,916  Estimated residual value of leased assets 797  788  Gross investment in lease financing receivables 5,627  5,704  Deferred origination costs 52  46  Deferred fees, unearned income and other (536) (498) Total lease financing receivables $ 5,143  $ 5,252  The carrying value of residual values guaranteed was $483 million and $466 million as of June 30, 2023 and December 31, 2022, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at June 30, 2023, totaled $4.8 billion and were due as follows: $856 million in 2023, $853 million in 2024, $764 million in 2025, $784 million in 2026, $747 million in 2027, and $826 million thereafter. Interest income recognized for these types of leases was $70 million and $39 million for the three-month periods ended June 30, 2023 and 2022, respectively. For the six-month periods ended June 30, 2023 and 2022, interest income recognized for these types of leases was $138 million and $77 million, respectively. Nonaccrual and Past Due Loans and Leases The following table presents NALs by class at June 30, 2023 and December 31, 2022: At June 30, 2023 At December 31, 2022 (dollar amounts in millions) Nonaccrual loans and leases with no ACL Total nonaccrual loans and leases Nonaccrual loans and leases with no ACL Total nonaccrual loans and leases Commercial and industrial $ 49  $ 267  $ 49  $ 288  Commercial real estate 32  75  63  92  Lease financing —  15  —  18  Residential mortgage —  73  —  90  Automobile —  4  —  4  Home equity —  75  —  76  RV and marine —  1  —  1  Total nonaccrual loans and leases $ 81  $ 510  $ 112  $ 569  The following tables present an aging analysis of loans and leases, by class at June 30, 2023 and December 31, 2022: 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 At June 30, 2023 Commercial and industrial $ 42  $ 21  $ 86  $ 149  $ 49,685  $ —  $ 49,834  $ 7  (2) Commercial real estate 1  —  35  36  13,130  —  13,166  —  Lease financing 28  17  18  63  5,080  —  5,143  12  (3) Residential mortgage 229  71  167  467  22,497  174  23,138  121  (4) Automobile 75  19  9  103  12,716  —  12,819  6  Home equity 54  23  73  150  9,984  1  10,135  18  RV and marine 13  4  2  19  5,621  —  5,640  2  Other consumer 10  3  3  16  1,334  —  1,350  3  Total loans and leases $ 452  $ 158  $ 393  $ 1,003  $ 120,047  $ 175  $ 121,225  $ 169  At December 31, 2022 Commercial and industrial $ 53  $ 19  $ 108  $ 180  $ 47,941  $ —  $ 48,121  $ 23  (2) Commercial real estate 2  1  9  12  13,628  —  13,640  —  Lease financing 36  18  10  64  5,188  —  5,252  9  (3) Residential mortgage 246  69  199  514  21,528  184  22,226  146  (4) Automobile 88  20  11  119  13,035  —  13,154  9  Home equity 56  30  66  152  10,222  1  10,375  15  RV and marine 15  5  3  23  5,353  —  5,376  3  Other consumer 13  3  3  19  1,360  —  1,379  2  Total loans and leases $ 509  $ 165  $ 409  $ 1,083  $ 118,255  $ 185  $ 119,523  $ 207  (1)NALs are included in this aging analysis based on the loan’s past due status. (2)Amounts include SBA loans and leases. (3)Amounts include Huntington Technology Finance administrative lease delinquencies. (4)Amounts include mortgage loans insured by U.S. government agencies. Credit Quality Indicators See Note 5 “Loans and Leases” to the Consolidated Financial Statements appearing in Huntington’s 2022 Annual Report on Form 10-K for a description of the credit quality indicators Huntington utilizes for monitoring credit quality and for determining an appropriate ACL level. For all classes within the consumer loan portfolios, borrower credit bureau scores are monitored as an indicator of credit quality. 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 tables present the amortized cost basis of loans and leases by vintage and credit quality indicator at June 30, 2023 and December 31, 2022 respectively: At June 30, 2023 Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans (dollar amounts in millions) 2023 2022 2021 2020 2019 Prior Total Commercial and industrial Credit Quality Indicator (1): Pass $ 9,983  $ 12,540  $ 4,863  $ 2,602  $ 1,552  $ 1,701  $ 14,156  $ 4  $ 47,401  OLEM 107  214  79  16  7  25  159  —  607  Substandard 219  318  144  179  130  288  547  —  1,825  Doubtful —  —  —  —  —  1  —  —  1  Total Commercial and industrial $ 10,309  $ 13,072  $ 5,086  $ 2,797  $ 1,689  $ 2,015  $ 14,862  $ 4  $ 49,834  Commercial real estate Credit Quality Indicator (1): Pass $ 972  $ 3,794  $ 2,451  $ 1,247  $ 1,330  $ 1,556  $ 638  $ —  $ 11,988  OLEM 35  243  71  17  47  24  —  —  437  Substandard 164  128  90  23  151  183  2  —  741  Total Commercial real estate $ 1,171  $ 4,165  $ 2,612  $ 1,287  $ 1,528  $ 1,763  $ 640  $ —  $ 13,166  Lease financing Credit Quality Indicator (1): Pass $ 948  $ 1,631  $ 1,057  $ 757  $ 341  $ 197  $ —  $ —  $ 4,931  OLEM 13  20  11  20  10  7  —  —  81  Substandard 8  46  32  14  20  10  —  —  130  Doubtful —  —  1  —  —  —  —  —  1  Total Lease financing $ 969  $ 1,697  $ 1,101  $ 791  $ 371  $ 214  $ —  $ —  $ 5,143  Residential mortgage Credit Quality Indicator (2): 750+ $ 1,127  $ 3,953  $ 6,215  $ 3,442  $ 791  $ 2,375  $ —  $ —  $ 17,903  650-749 459  1,137  1,054  547  208  837  —  —  4,242  <650 7  61  65  65  87  534  —  —  819  Total Residential mortgage $ 1,593  $ 5,151  $ 7,334  $ 4,054  $ 1,086  $ 3,746  $ —  $ —  $ 22,964  Automobile Credit Quality Indicator (2): 750+ $ 1,417  $ 2,330  $ 1,885  $ 988  $ 558  $ 198  $ —  $ —  $ 7,376  650-749 819  1,616  1,153  498  250  112  —  —  4,448  <650 89  311  304  143  86  62  —  —  995  Total Automobile $ 2,325  $ 4,257  $ 3,342  $ 1,629  $ 894  $ 372  $ —  $ —  $ 12,819  Home equity Credit Quality Indicator (2): 750+ $ 223  $ 458  $ 547  $ 574  $ 19  $ 282  $ 4,541  $ 233  $ 6,877  650-749 74  108  71  60  8  111  2,051  238  2,721  <650 —  3  3  4  2  49  347  128  536  Total Home equity $ 297  $ 569  $ 621  $ 638  $ 29  $ 442  $ 6,939  $ 599  $ 10,134  RV and marine Credit Quality Indicator (2): 750+ $ 683  $ 1,052  $ 945  $ 651  $ 326  $ 693  $ —  $ —  $ 4,350  650-749 126  270  271  173  101  237  —  —  1,178  <650 1  9  21  18  15  48  —  —  112  Total RV and marine $ 810  $ 1,331  $ 1,237  $ 842  $ 442  $ 978  $ —  $ —  $ 5,640  Other consumer Credit Quality Indicator (2): 750+ $ 118  $ 99  $ 51  $ 25  $ 24  $ 56  $ 388  $ 3  $ 764  650-749 50  55  21  8  8  16  354  14  526  <650 2  5  4  1  2  1  33  12  60  Total Other consumer $ 170  $ 159  $ 76  $ 34  $ 34  $ 73  $ 775  $ 29  $ 1,350  (1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades. (2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly. At December 31, 2022 Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans (dollar amounts in millions) 2022 2021 2020 2019 2018 Prior Total Commercial and industrial Credit Quality Indicator (1): Pass $ 18,092  $ 6,742  $ 3,332  $ 2,107  $ 1,156  $ 1,186  $ 13,060  $ 3  $ 45,678  OLEM 108  139  72  21  49  26  113  —  528  Substandard 368  183  203  212  142  256  550  —  1,914  Doubtful —  —  —  —  —  1  —  —  1  Total Commercial and industrial $ 18,568  $ 7,064  $ 3,607  $ 2,340  $ 1,347  $ 1,469  $ 13,723  $ 3  $ 48,121  Commercial real estate Credit Quality Indicator (1): Pass $ 4,022  $ 3,115  $ 1,562  $ 1,662  $ 829  $ 1,020  $ 519  $ —  $ 12,729  OLEM 61  53  1  43  6  9  —  —  173  Substandard 231  116  92  74  84  140  1  —  738  Total Commercial real estate $ 4,314  $ 3,284  $ 1,655  $ 1,779  $ 919  $ 1,169  $ 520  $ —  $ 13,640  Lease financing Credit Quality Indicator (1): Pass $ 1,930  $ 1,291  $ 952  $ 447  $ 186  $ 143  $ —  $ —  $ 4,949  OLEM 32  9  15  18  6  3  —  —  83  Substandard 65  37  74  24  9  11  —  —  220  Total Lease financing $ 2,027  $ 1,337  $ 1,041  $ 489  $ 201  $ 157  $ —  $ —  $ 5,252  Residential mortgage Credit Quality Indicator (2): 750+ $ 3,666  $ 6,274  $ 3,566  $ 846  $ 469  $ 2,070  $ —  $ —  $ 16,891  650-749 1,394  1,172  617  211  137  777  —  —  4,308  <650 49  68  61  95  90  480  —  —  843  Total Residential mortgage $ 5,109  $ 7,514  $ 4,244  $ 1,152  $ 696  $ 3,327  $ —  $ —  $ 22,042  Automobile Credit Quality Indicator (2): 750+ $ 2,770  $ 2,212  $ 1,243  $ 777  $ 289  $ 98  $ —  $ —  $ 7,389  650-749 1,944  1,508  683  367  162  52  —  —  4,716  <650 307  352  173  115  67  35  —  —  1,049  Total Automobile $ 5,021  $ 4,072  $ 2,099  $ 1,259  $ 518  $ 185  $ —  $ —  $ 13,154  Home equity Credit Quality Indicator (2): 750+ $ 463  $ 573  $ 611  $ 23  $ 20  $ 301  $ 4,787  $ 252  $ 7,030  650-749 131  88  68  9  8  122  2,129  261  2,816  <650 3  3  3  2  2  51  335  129  528  Total Home equity $ 597  $ 664  $ 682  $ 34  $ 30  $ 474  $ 7,251  $ 642  $ 10,374  RV and marine Credit Quality Indicator (2): 750+ $ 1,148  $ 1,031  $ 731  $ 361  $ 354  $ 438  $ —  $ —  $ 4,063  650-749 290  315  200  118  113  169  —  —  1,205  <650 5  18  15  17  17  36  —  —  108  Total RV and marine $ 1,443  $ 1,364  $ 946  $ 496  $ 484  $ 643  $ —  $ —  $ 5,376  Other consumer Credit Quality Indicator (2): 750+ $ 207  $ 64  $ 35  $ 34  $ 13  $ 52  $ 393  $ 3  $ 801  650-749 71  30  12  15  4  14  355  16  517  <650 3  3  2  3  1  2  33  14  61  Total Other consumer $ 281  $ 97  $ 49  $ 52  $ 18  $ 68  $ 781  $ 33  $ 1,379  (1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades. (2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly. The following tables present the gross charge-offs of loans and leases by vintage. Term Loans Gross Charge-offs by Origination Year Revolver Gross Charge-offs Revolver Converted to Term Loans Gross Charge-offs (dollar amounts in millions) 2023 2022 2021 2020 2019 Prior Total Three months ended June 30, 2023 Commercial and industrial $ 1  $ 4  $ 14  $ —  $ 8  $ 10  $ —  $ 1  $ 38  Commercial real estate —  3  —  —  5  5  —  —  13  Lease Financing —  1  1  —  —  —  —  —  2  Residential mortgage —  —  —  —  —  1  —  —  1  Automobile —  3  4  2  2  —  —  —  11  Home equity —  —  —  —  —  1  —  1  2  RV and marine —  1  —  —  —  3  —  —  4  Other consumer 2  5  3  2  2  1  —  6  21  Total $ 3  $ 17  $ 22  $ 4  $ 17  $ 21  $ —  $ 8  $ 92  Six months ended June 30, 2023 Commercial and industrial $ 2  $ 18  $ 17  $ 6  $ 12  $ 10  $ 4  $ 1  $ 70  Commercial real estate —  3  19  —  5  5  —  —  32  Lease Financing —  1  1  —  —  1  —  —  3  Residential mortgage —  —  1  —  —  2  —  —  3  Automobile —  6  8  4  3  2  —  —  23  Home equity —  —  —  —  —  1  1  2  4  RV and marine —  1  1  1  1  4  —  —  8  Other consumer 3  13  8  3  3  5  —  13  48  Total $ 5  $ 42  $ 55  $ 14  $ 24  $ 30  $ 5  $ 16  $ 191  Modifications to Debtors Experiencing Financial Difficulty Effective January 1, 2023, Huntington adopted ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information on the adoption, refer to both Note 1 “Basis of Presentation” and Note 2 “Accounting Standards Update.” Huntington will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. A debtor is considered to be experiencing financial difficulty when there is significant doubt about the debtor’s ability to make required payments on the debt or to get equivalent financing from another creditor at a market rate for similar debt. A loan placed on nonaccrual because the borrower is experiencing financial difficulty may be returned to accrual status when all contractually due interest and principal has been paid and the borrower demonstrates the financial capacity to continue to pay as agreed, with the risk of loss diminished. Reported Modification Types Modifications in the form of principal forgiveness, an interest rate reduction, an other than insignificant payment delay or a term extension that have occurred in the current reporting period to a borrower experiencing financial difficulty are disclosed along with the financial impact of the modifications. Huntington will generally try other forms of relief before principal forgiveness but would define any contractual reduction in the amount of principal due without receiving payment or assets as forgiveness. For the purpose of the disclosure Huntington considers any contractual change in interest rate that results in the borrower receiving a below market rate to be an interest rate reduction. Many factors can go into what is considered an other than insignificant payment delay such as the significance of the restructured payment amount relative to the normal loan payment or the relative significance of the delay to the original loan terms. Generally, Huntington would consider any delay in payment of greater than 90 days in the last 12 months to be significant. For the purpose of the disclosure modification of contingent payment features or covenants that would have accelerated payment are not considered term extensions. Following is a description of what is considered a borrower experiencing financial difficulty by the different loan types: Commercial loan modifications – Our strategy involving commercial borrowers generally includes working with these borrowers to allow them time to improve their financial position and remain a Huntington customer through restructuring their notes or to restructure elsewhere if necessary. Borrowers that are rated substandard or worse in accordance with the regulatory definition, or that cannot otherwise restructure at market terms and conditions, are considered to be experiencing financial difficulty. A subsequent restructuring or modification of a loan may occur when either the loan matures according to the terms of the modified agreement, or the borrower requests a change to the loan agreements. It is subjected to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The restructured note is evaluated to determine if it is considered a new loan or a continuation of the prior loan.  Consumer loan modifications – Consumer loans in which a borrower requires a modification as a result of negative changes to their financial condition or to avoid default, generally indicate the borrower is experiencing financial difficulty. The primary modifications made to consumer loans are amortization, maturity date and interest rate changes. Consumer borrowers identified as experiencing financial difficulty are unable to refinance their loans through the Company’s normal origination channels or through other independent sources. Most, but not all, of the loans may be delinquent. The Company’s primary loan categories that receive modifications are residential mortgage, automobile, home equity, RV and marine, and other consumer loans. Impact on Credit Quality of Borrowers Experiencing Financial Difficulty Huntington’s ALLL is influenced by loan level characteristics that inform the assessed propensity to default. As such, the provision for credit losses is impacted primarily by changes in such loan level characteristics, such as payment performance. Commercial borrowers experiencing financial difficulty are risk rated to reflect the increase in default characteristics so that that the ALLL reflects the future risk of loss. Borrowers experiencing financial difficulty can be classified as either accrual or nonaccrual loans. The following table summarizes the amortized cost basis of loans modified during the reporting period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification. Amortized Cost (dollar amounts in millions) Interest rate reduction Term extension Payment deferral Combo - interest rate reduction and term extension Total % of total loan class (1) Three months ended June 30, 2023 Commercial and industrial $ —  $ 138  $ —  $ —  $ 138  0.28  % Commercial real estate —  134  —  —  134  1.02  Residential mortgage —  12  2  1  15  0.06  Automobile —  4  —  1  5  0.04  Home equity —  1  —  3  4  0.04  Other consumer 1  —  —  —  1  0.07  Total loans to borrowers experiencing financial difficulty in which modifications were made $ 1  $ 289  $ 2  $ 5  $ 297  0.24  % Six months ended June 30, 2023 Commercial and industrial $ 35  $ 198  $ —  $ 3  $ 236  0.47  % Commercial real estate —  148  —  —  148  1.12  Residential mortgage —  35  2  2  39  0.17  Automobile —  7  —  1  8  0.06  Home equity —  1  —  5  6  0.06  RV and marine —  1  —  —  1  0.02  Other consumer 1  —  —  —  1  0.07  Total loans to borrowers experiencing financial difficulty in which modifications were made $ 36  $ 390  $ 2  $ 11  $ 439  0.36  % (1)Represents the amortized cost of loans modified during the reporting period as a percentage of the period-end loan balance by class. The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty. Interest Rate Reduction Term Extension Weighted-average contractual interest rate Weighted-average years added to the life From To Three months ended June 30, 2023 Commercial and industrial     0.7 Commercial real estate     0.5 Residential mortgage 5.55  % 4.42  % 8.8 Automobile 6.58  6.22  2.0 Home equity 8.55  6.05  14.6 Six months ended June 30, 2023 Commercial and industrial 7.68  % 6.94  % 0.9 Commercial real estate 0.5 Residential mortgage 5.54  4.29  7.2 Automobile 6.59  6.24  2.0 Home equity 8.37  5.86  15.5 The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 or more days past due. The following table depicts the performance of loans that have been modified during the reporting period. At June 30, 2023 Past Due (dollar amounts in millions) 30-59  Days 60-89  Days 90 or  more days Total Current Total Commercial and industrial $ 1  $ 1  $ —  $ 2  $ 234  $ 236  Commercial real estate —  —  —  —  148  148  Residential mortgage 7  3  4  14  25  39  Automobile 1  —  —  1  7  8  Home equity 1  —  —  1  5  6  RV and marine —  —  —  —  1  1  Other consumer —  —  —  —  1  1  Total loans to borrowers experiencing financial difficulty in which modifications were made in the six months ended June 30, 2023 $ 10  $ 4  $ 4  $ 18  $ 421  $ 439  TDR Loans The following provides additional disclosures previously required by ASC Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, related to the three-month and six-month period ended June 30, 2022. TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided would not otherwise be considered. However, not all loan modifications are TDRs. See Note 1 “Significant Accounting Policies” and Note 5 “Loans and Leases” to the Consolidated Financial Statements appearing in Huntington’s 2022 Annual Report on Form 10-K for additional discussion of TDRs. 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 three-month and six-month period ended June 30, 2022. New Troubled Debt Restructurings (1) 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 Three months ended June 30, 2022 Commercial and industrial 88  $ 19  $ 12  $ —  $ 1  $ 32  Commercial real estate 4  37  —  —  —  37  Residential mortgage 238  —  32  3  —  35  Automobile 469  —  3  —  —  3  Home equity 70  —  3  2  —  5  RV and marine 35  —  —  —  —  —  Other consumer 23  —  —  —  —  —  Total new TDRs 927  $ 56  $ 50  $ 5  $ 1  $ 112  Six months ended June 30, 2022 Commercial and industrial 46  $ 30  $ 15  $ —  $ 1  $ 46  Commercial real estate 5  37  —  —  —  37  Residential mortgage 445  —  60  4  —  64  Automobile 1,094  —  7  1  —  8  Home equity 112  —  4  3  —  7  RV and marine 74  —  1  —  —  1  Other consumer 53  —  —  —  —  —  Total new TDRs 1,829  $ 67  $ 87  $ 8  $ 1  $ 163  (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 June 30, 2023 and December 31, 2022, these borrowings and advances are secured by $99.2 billion and $70.9 billion, respectively, of loans.