Quarterly report pursuant to Section 13 or 15(d)

Variable Interest Entities

v3.23.2
Variable Interest Entities
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities Variable Interest Entities
Unconsolidated VIEs
The following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary, of the VIE at June 30, 2023, and December 31, 2022:
At June 30, 2023
(dollar amounts in millions)
Total Assets
Total Liabilities
Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships $ 2,186  $ 1,304  $ 2,186 
Trust Preferred Securities 14  248  — 
Other Investments
 675  146  675 
Total
 $ 2,875  $ 1,698  $ 2,861 
At December 31, 2022
(dollar amounts in millions) Total Assets Total Liabilities Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships $ 2,036  $ 1,260  $ 2,036 
Trust Preferred Securities 14  248  — 
Other Investments 522  141  522 
Total $ 2,572  $ 1,649  $ 2,558 
Affordable Housing Tax Credit Partnerships
Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the LIHTC pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity.
Huntington uses the proportional amortization method to account for a majority of its investments in these entities. These investments are included in other assets. Investments that do not meet the requirements of the proportional amortization method are accounted for using the equity method. Investment losses are included in Other noninterest income in the Unaudited Consolidated Statements of Income.
The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at June 30, 2023 and December 31, 2022.
(dollar amounts in millions) At June 30, 2023 At December 31, 2022
Affordable housing tax credit investments $ 3,142  $ 2,891 
Less: amortization (956) (855)
Net affordable housing tax credit investments $ 2,186  $ 2,036 
Unfunded commitments $ 1,304  $ 1,260 
The following table presents other information relating to Huntington’s affordable housing tax credit investments for the three-month and six-month periods ended June 30, 2023 and 2022.
Three months ended June 30, Six months ended June 30,
(dollar amounts in millions) 2023 2022 2023 2022
Tax credits and other tax benefits recognized $ 65  $ 53  $ 131  $ 107 
Proportional amortization expense included in provision for income taxes 54  44  109  86 
There were no sales of affordable housing tax credit investments during the three-month and six-month periods ended June 30, 2023 and 2022. There was no impairment recognized for the three-month and six-month periods ended June 30, 2023 and 2022.
Trust-Preferred Securities
Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Unaudited Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing trust-preferred securities, from which the proceeds are then invested in Huntington junior subordinated debentures, which are reflected in Huntington’s Unaudited Consolidated Balance Sheet as long-term debt. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Unaudited Consolidated Financial Statements.
Other investments
Other investments determined to be VIE’s include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, renewable energy financings, and other miscellaneous investments.