OTHER COMPREHENSIVE INCOME
The components of Huntington's OCI for the three-month and nine-month periods ended September 30, 2018 and 2017, were as follows:
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Three Months Ended
September 30, 2018 |
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Tax (Expense) |
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|
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
— |
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|
$ |
— |
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|
$ |
— |
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Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
(82 |
) |
|
18 |
|
|
(64 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
3 |
|
|
(1 |
) |
|
2 |
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Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(79 |
) |
|
17 |
|
|
(62 |
) |
Net change in pension and other post-retirement obligations |
2 |
|
|
(1 |
) |
|
1 |
|
Total other comprehensive income (loss) |
$ |
(77 |
) |
|
$ |
16 |
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|
$ |
(61 |
) |
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Three Months Ended
September 30, 2017 |
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Tax (Expense) |
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
— |
|
|
$ |
— |
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|
$ |
— |
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Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
(42 |
) |
|
15 |
|
|
(27 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
9 |
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|
(4 |
) |
|
5 |
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Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(33 |
) |
|
11 |
|
|
(22 |
) |
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
2 |
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|
— |
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|
2 |
|
Less: Reclassification adjustment for net (gains) losses included in net income |
— |
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|
— |
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|
— |
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Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
2 |
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— |
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|
2 |
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Net change in pension and other post-retirement obligations |
2 |
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|
(1 |
) |
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1 |
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Total other comprehensive income (loss) |
$ |
(29 |
) |
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$ |
10 |
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$ |
(19 |
) |
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Nine Months Ended
September 30, 2018 |
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Tax (expense) |
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(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
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Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
(359 |
) |
|
78 |
|
|
(281 |
) |
Less: Reclassification adjustment for net losses (gains) included in net income |
21 |
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|
(4 |
) |
|
17 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
(338 |
) |
|
74 |
|
|
(264 |
) |
Net change in pension and other post-retirement obligations |
4 |
|
|
(1 |
) |
|
3 |
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Total other comprehensive income (loss) |
$ |
(334 |
) |
|
$ |
73 |
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|
$ |
(261 |
) |
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Nine Months Ended
September 30, 2017 |
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Tax (expense) |
(dollar amounts in millions) |
Pretax |
|
Benefit |
|
After-tax |
Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold |
$ |
3 |
|
|
$ |
(1 |
) |
|
$ |
2 |
|
Unrealized holding gains (losses) on available-for-sale debt securities arising during the period |
20 |
|
|
(7 |
) |
|
13 |
|
Less: Reclassification adjustment for net losses (gains) included in net income |
19 |
|
|
(7 |
) |
|
12 |
|
Net change in unrealized holding gains (losses) on available-for-sale debt securities |
42 |
|
|
(15 |
) |
|
27 |
|
Unrealized gains (losses) on derivatives used in cash flow hedging relationships arising during the period |
2 |
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|
— |
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|
2 |
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Less: Reclassification adjustment for net (gains) losses included in net income |
1 |
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|
(1 |
) |
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— |
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Net change in unrealized gains (losses) on derivatives used in cash flow hedging relationships |
3 |
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|
(1 |
) |
|
2 |
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Net change in pension and other post-retirement obligations |
3 |
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|
(1 |
) |
|
2 |
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Total other comprehensive income (loss) |
$ |
48 |
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|
$ |
(17 |
) |
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$ |
31 |
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Activity in accumulated OCI for the nine-month periods ended September 30, 2018 and 2017, were as follows:
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(dollar amounts in millions) |
Unrealized gains
and (losses) on
debt securities
(1)
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Unrealized
gains and
(losses) on
cash flow
hedging
derivatives
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Unrealized gains
(losses) for
pension and
other post-
retirement
obligations
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Total |
December 31, 2017 |
$ |
(278 |
) |
|
$ |
— |
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|
$ |
(250 |
) |
|
$ |
(528 |
) |
Cumulative-effect adjustments (ASU 2016-01) |
(1 |
) |
|
— |
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|
— |
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|
(1 |
) |
Other comprehensive income before reclassifications |
(281 |
) |
|
— |
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|
— |
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|
(281 |
) |
Amounts reclassified from accumulated OCI to earnings |
17 |
|
|
— |
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|
3 |
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|
20 |
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Period change |
(264 |
) |
|
— |
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|
3 |
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|
(261 |
) |
September 30, 2018 |
$ |
(543 |
) |
|
$ |
— |
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|
$ |
(247 |
) |
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$ |
(790 |
) |
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December 31, 2016 |
$ |
(193 |
) |
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$ |
(3 |
) |
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$ |
(205 |
) |
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$ |
(401 |
) |
Other comprehensive income before reclassifications |
15 |
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|
2 |
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|
— |
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|
17 |
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Amounts reclassified from accumulated OCI to earnings |
12 |
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— |
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|
2 |
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|
14 |
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Period change |
27 |
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|
2 |
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|
2 |
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|
31 |
|
September 30, 2017 |
$ |
(166 |
) |
|
$ |
(1 |
) |
|
$ |
(203 |
) |
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$ |
(370 |
) |
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(1) |
AOCI amounts at September 30, 2018, December 31, 2017 and September 30, 2017 include $141 million, $95 million and $97 million, respectively, of net unrealized gains on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized gains will be recognized in earnings over the remaining life of the security using the effective interest method.
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The following table presents the reclassification adjustments out of accumulated OCI included in net income and the impacted line items as listed on the Unaudited Condensed Consolidated Statements of Income for the three-month and nine-month periods ended September 30, 2018 and 2017:
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Reclassifications out of accumulated OCI |
Accumulated OCI components |
Amounts reclassified from accumulated OCI |
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Location of net gain (loss) reclassified from
accumulated OCI into earnings
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Three Months Ended |
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(dollar amounts in millions) |
September 30, 2018 |
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September 30, 2017 |
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Gains (losses) on debt securities: |
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Amortization of unrealized gains (losses) |
$ |
(3 |
) |
|
$ |
(1 |
) |
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Interest income - held-to-maturity securities - taxable |
Realized gain (loss) on sale of securities |
— |
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|
(8 |
) |
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Noninterest income - net gains (losses) on sale of securities |
OTTI recorded |
— |
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|
— |
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Noninterest income - net gains (losses) on sale of securities |
Total before tax |
(3 |
) |
|
(9 |
) |
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Tax (expense) benefit |
1 |
|
|
4 |
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Net of tax |
$ |
(2 |
) |
|
$ |
(5 |
) |
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Amortization of defined benefit pension and post-retirement items: |
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Actuarial gains (losses) |
$ |
(2 |
) |
|
$ |
(1 |
) |
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Noninterest income / expense (1) |
Net periodic benefit costs |
— |
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|
(1 |
) |
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Noninterest income / expense (1) |
Total before tax |
(2 |
) |
|
(2 |
) |
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Tax (expense) benefit |
1 |
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|
1 |
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Net of tax |
$ |
(1 |
) |
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$ |
(1 |
) |
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Reclassifications out of accumulated OCI |
Accumulated OCI components |
Amounts reclassified from accumulated OCI |
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Location of net gain (loss) reclassified from accumulated OCI into earnings |
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Nine Months Ended |
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(dollar amounts in millions) |
September 30, 2018 |
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September 30, 2017 |
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Gains (losses) on debt securities: |
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Amortization of unrealized gains (losses) |
$ |
(9 |
) |
|
$ |
(7 |
) |
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Interest income - held-to-maturity securities - taxable |
Realized gain (loss) on sale of securities |
(12 |
) |
|
(8 |
) |
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Noninterest income - net gains (losses) on sale of securities |
OTTI recorded |
— |
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|
(4 |
) |
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Noninterest income - net gains (losses) on sale of securities |
Total before tax |
(21 |
) |
|
(19 |
) |
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Tax (expense) benefit |
4 |
|
|
7 |
|
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Net of tax |
$ |
(17 |
) |
|
$ |
(12 |
) |
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Gains (losses) on cash flow hedging relationships: |
Interest rate contracts |
$ |
— |
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|
$ |
(1 |
) |
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Interest income - loans and leases |
Interest rate contracts |
— |
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|
— |
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Noninterest income - other income |
Total before tax |
— |
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|
(1 |
) |
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|
Tax (expense) benefit |
— |
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|
1 |
|
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|
Net of tax |
$ |
— |
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|
$ |
— |
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Amortization of defined benefit pension and post-retirement items: |
Actuarial gains (losses) |
$ |
(6 |
) |
|
$ |
(4 |
) |
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Noninterest income / expense (1) |
Net periodic benefit costs |
2 |
|
|
1 |
|
|
Noninterest income / expense (1) |
Total before tax |
(4 |
) |
|
(3 |
) |
|
|
Tax (expense) benefit |
1 |
|
|
1 |
|
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|
Net of tax |
$ |
(3 |
) |
|
$ |
(2 |
) |
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(1) |
The activity for 2018 and 2017 is recorded in Noninterest Income - other noninterest income and Noninterest Expense - personnel costs, respectively, on the Condensed Consolidated Statements of Income. |
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