| LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES |
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
Loans and leases which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Unaudited Condensed Consolidated Balance Sheets as loans and leases. The total balance of unamortized premiums, discounts, fees, and costs, recognized as part of loans and leases, was a net premium of $466 million and $428 million at June 30, 2019 and December 31, 2018, respectively.
Loan and Lease Portfolio Composition
The following table provides a detailed listing of Huntington’s loan and lease portfolio at June 30, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
June 30, 2019 |
|
December 31, 2018 |
Loans and leases: |
|
|
|
Commercial and industrial |
$ |
30,608 |
|
|
$ |
30,605 |
|
Commercial real estate |
6,888 |
|
|
6,842 |
|
Automobile |
12,173 |
|
|
12,429 |
|
Home equity |
9,419 |
|
|
9,722 |
|
Residential mortgage |
11,182 |
|
|
10,728 |
|
RV and marine |
3,492 |
|
|
3,254 |
|
Other consumer |
1,271 |
|
|
1,320 |
|
Loans and leases |
$ |
75,033 |
|
|
$ |
74,900 |
|
Allowance for loan and lease losses |
(774 |
) |
|
(772 |
) |
Net loans and leases |
$ |
74,259 |
|
|
$ |
74,128 |
|
Equipment Leases
Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in C&I loans. These leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases. Renewal options for leases are at the option of the lessee, and are not included in the measurement of lease receivables as they are not considered reasonably certain of exercise. Purchase options are typically at fair value, and as such those options are not considered in the measurement of lease receivables or in lease classification.
For leased equipment, the residual component of a direct financing lease represents the estimated fair value of the leased equipment at the end of the lease term. Huntington uses industry data, historical experience, and independent appraisals to establish these residual value estimates. Additional information regarding product life cycle, product upgrades, as well as insight into competing products are obtained through relationships with industry contacts and are factored into residual value estimates where applicable. Upon expiration of a lease, residual assets are remarketed, resulting in an extension of the lease by the lessee, a lease to a new customer, or purchase of the residual asset by the lessee or another party. Huntington also purchases insurance guaranteeing the value of certain residual assets.
Impairment of the residual values of direct financing leases is evaluated quarterly, with impairment arising if the expected fair value is less than the carrying amount. Effective January 1, 2019, as a result of the implementation of ASU 2016-02, Huntington assesses net investments in leases (including residual values) for impairment and recognize any impairment losses in accordance with the impairment guidance for financial instruments. As such, net investments in leases may be reduced by an allowance for credit losses, with changes recognized as provision expense.
The following table presents net investments in lease financing receivables by category at June 30, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
June 30,
2019 |
|
December 31,
2018 |
Commercial and industrial: |
|
|
|
Lease payments receivable |
$ |
1,716 |
|
|
$ |
1,747 |
|
Estimated residual value of leased assets |
700 |
|
|
726 |
|
Gross investment in commercial lease financing receivables |
2,416 |
|
|
2,473 |
|
Deferred origination costs |
19 |
|
|
20 |
|
Deferred fees |
(244 |
) |
|
(250 |
) |
Total net investment in C&I lease financing receivables |
$ |
2,191 |
|
|
$ |
2,243 |
|
The carrying value of residual values guaranteed were $88 million as of June 30, 2019. The future lease rental payments due from customers on sales-type and direct financing leases at June 30, 2019, totaled $1.7 billion and were due as follows: $0.6 billion in 2020, $0.5 billion in 2021, $0.3 billion in 2022, $0.2 billion in 2023, $0.1 billion in 2024, and less than $0.1 billion thereafter. Interest income recognized for these types of leases was $27 million and $53 million for the three-month and six-month periods ended June 30, 2019, respectively.
Nonaccrual and Past Due Loans
Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date. See Note 1 “Significant Accounting Policies” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2018 for a description of the accounting policies related to the NALs.
The following table presents NALs by loan class at June 30, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
June 30,
2019 |
|
December 31,
2018 |
Commercial and industrial |
$ |
281 |
|
|
$ |
188 |
|
Commercial real estate |
17 |
|
|
15 |
|
Automobile |
4 |
|
|
5 |
|
Home equity |
60 |
|
|
62 |
|
Residential mortgage |
62 |
|
|
69 |
|
RV and marine |
1 |
|
|
1 |
|
Other consumer |
— |
|
|
— |
|
Total nonaccrual loans |
$ |
425 |
|
|
$ |
340 |
|
The following table presents an aging analysis of loans and leases, including past due loans and leases, by loan class at June 30, 2019 and December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
|
|
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 |
|
|
|
|
Commercial and industrial |
$ |
52 |
|
|
$ |
19 |
|
|
$ |
81 |
|
|
$ |
152 |
|
|
$ |
30,456 |
|
|
$ |
— |
|
|
$ |
30,608 |
|
|
$ |
5 |
|
(2) |
Commercial real estate |
10 |
|
|
— |
|
|
12 |
|
|
22 |
|
|
6,866 |
|
|
— |
|
|
6,888 |
|
|
— |
|
|
Automobile |
77 |
|
|
15 |
|
|
8 |
|
|
100 |
|
|
12,073 |
|
|
— |
|
|
12,173 |
|
|
7 |
|
|
Home equity |
50 |
|
|
19 |
|
|
53 |
|
|
122 |
|
|
9,296 |
|
|
1 |
|
|
9,419 |
|
|
15 |
|
|
Residential mortgage |
126 |
|
|
40 |
|
|
149 |
|
|
315 |
|
|
10,790 |
|
|
77 |
|
|
11,182 |
|
|
119 |
|
(3) |
RV and marine |
9 |
|
|
2 |
|
|
2 |
|
|
13 |
|
|
3,479 |
|
|
— |
|
|
3,492 |
|
|
1 |
|
|
Other consumer |
13 |
|
|
7 |
|
|
6 |
|
|
26 |
|
|
1,245 |
|
|
— |
|
|
1,271 |
|
|
5 |
|
|
Total loans and leases |
$ |
337 |
|
|
$ |
102 |
|
|
$ |
311 |
|
|
$ |
750 |
|
|
$ |
74,205 |
|
|
$ |
78 |
|
|
$ |
75,033 |
|
|
$ |
152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
|
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 |
|
|
|
|
Commercial and industrial |
72 |
|
|
17 |
|
|
51 |
|
|
140 |
|
|
30,465 |
|
|
— |
|
|
30,605 |
|
|
7 |
|
(2) |
Commercial real estate |
10 |
|
|
— |
|
|
5 |
|
|
15 |
|
|
6,827 |
|
|
— |
|
|
6,842 |
|
|
— |
|
|
Automobile |
95 |
|
|
19 |
|
|
10 |
|
|
124 |
|
|
12,305 |
|
|
— |
|
|
12,429 |
|
|
8 |
|
|
Home equity |
51 |
|
|
21 |
|
|
56 |
|
|
128 |
|
|
9,593 |
|
|
1 |
|
|
9,722 |
|
|
17 |
|
|
Residential mortgage |
108 |
|
|
47 |
|
|
168 |
|
|
323 |
|
|
10,327 |
|
|
78 |
|
|
10,728 |
|
|
131 |
|
(3) |
RV and marine |
12 |
|
|
3 |
|
|
2 |
|
|
17 |
|
|
3,237 |
|
|
— |
|
|
3,254 |
|
|
1 |
|
|
Other consumer |
14 |
|
|
7 |
|
|
6 |
|
|
27 |
|
|
1,293 |
|
|
— |
|
|
1,320 |
|
|
6 |
|
|
Total loans and leases |
$ |
362 |
|
|
$ |
114 |
|
|
$ |
298 |
|
|
$ |
774 |
|
|
$ |
74,047 |
|
|
$ |
79 |
|
|
$ |
74,900 |
|
|
$ |
170 |
|
|
|
|
(1) |
NALs are included in this aging analysis based on the loan's past due status. |
|
|
(2) |
Amounts include Huntington Technology Finance administrative lease delinquencies. |
|
|
(3) |
Amounts include mortgage loans insured by U.S. government agencies. |
Allowance for Credit Losses
Huntington maintains two reserves, both of which reflect Management’s judgment regarding the appropriate level necessary to absorb probable and estimable credit losses inherent in our loan and lease portfolio as of the balance sheet date: the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases, consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous loans and leases, all of which may be susceptible to change. See Note 1 “Significant Accounting Policies” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2018 for a description of the accounting policies related to the ACL.
The ALLL is increased through a provision for credit losses that is charged to earnings, based on Management’s quarterly evaluation and is reduced by charge-offs, net of recoveries.
The following table presents ALLL and AULC activity by portfolio segment for the three-month and six-month periods ended June 30, 2019 and 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
|
Commercial |
|
Consumer |
|
Total |
Three-month period ended June 30, 2019: |
|
|
|
|
|
|
ALLL balance, beginning of period |
|
$ |
545 |
|
|
$ |
219 |
|
|
$ |
764 |
|
Loan charge-offs |
|
(24 |
) |
|
(46 |
) |
|
(70 |
) |
Recoveries of loans previously charged-off |
|
6 |
|
|
16 |
|
|
22 |
|
Provision for loan and lease losses |
|
33 |
|
|
25 |
|
|
58 |
|
ALLL balance, end of period |
|
$ |
560 |
|
|
$ |
214 |
|
|
$ |
774 |
|
AULC balance, beginning of period |
|
$ |
98 |
|
|
$ |
2 |
|
|
$ |
100 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
|
1 |
|
|
— |
|
|
1 |
|
AULC balance, end of period |
|
$ |
99 |
|
|
$ |
2 |
|
|
$ |
101 |
|
ACL balance, end of period |
|
$ |
659 |
|
|
$ |
216 |
|
|
$ |
875 |
|
Six-month period ended June 30, 2019: |
|
|
|
|
|
|
ALLL balance, beginning of period |
|
$ |
542 |
|
|
$ |
230 |
|
|
$ |
772 |
|
Loan charge-offs |
|
(70 |
) |
|
(97 |
) |
|
(167 |
) |
Recoveries of loans previously charged-off |
|
19 |
|
|
29 |
|
|
48 |
|
Provision for loan and lease losses |
|
69 |
|
|
52 |
|
|
121 |
|
ALLL balance, end of period |
|
$ |
560 |
|
|
$ |
214 |
|
|
$ |
774 |
|
AULC balance, beginning of period |
|
$ |
94 |
|
|
$ |
2 |
|
|
$ |
96 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
|
5 |
|
|
— |
|
|
5 |
|
AULC balance, end of period |
|
$ |
99 |
|
|
$ |
2 |
|
|
$ |
101 |
|
ACL balance, end of period |
|
$ |
659 |
|
|
$ |
216 |
|
|
$ |
875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
|
Commercial |
|
Consumer |
|
Total |
Three-month period ended June 30, 2018: |
ALLL balance, beginning of period |
|
$ |
515 |
|
|
$ |
206 |
|
|
$ |
721 |
|
Loan charge-offs |
|
(12 |
) |
|
(41 |
) |
|
(53 |
) |
Recoveries of loans previously charged-off |
|
10 |
|
|
15 |
|
|
25 |
|
Provision for loan and lease losses |
|
18 |
|
|
30 |
|
|
48 |
|
ALLL balance, end of period |
|
$ |
531 |
|
|
$ |
210 |
|
|
$ |
741 |
|
AULC balance, beginning of period |
|
$ |
82 |
|
|
$ |
3 |
|
|
$ |
85 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
|
8 |
|
|
— |
|
|
8 |
|
AULC balance, end of period |
|
$ |
90 |
|
|
$ |
3 |
|
|
$ |
93 |
|
ACL balance, end of period |
|
$ |
621 |
|
|
$ |
213 |
|
|
$ |
834 |
|
Six-month period ended June 30, 2018: |
ALLL balance, beginning of period |
|
$ |
482 |
|
|
$ |
209 |
|
|
$ |
691 |
|
Loan charge-offs |
|
(35 |
) |
|
(91 |
) |
|
(126 |
) |
Recoveries of loans previously charged-off |
|
30 |
|
|
30 |
|
|
60 |
|
Provision for loan and lease losses |
|
54 |
|
|
62 |
|
|
116 |
|
ALLL balance, end of period |
|
$ |
531 |
|
|
$ |
210 |
|
|
$ |
741 |
|
AULC balance, beginning of period |
|
$ |
84 |
|
|
$ |
3 |
|
|
$ |
87 |
|
Provision (reduction in allowance) for unfunded loan commitments and letters of credit |
|
6 |
|
|
— |
|
|
6 |
|
AULC balance, end of period |
|
$ |
90 |
|
|
$ |
3 |
|
|
$ |
93 |
|
ACL balance, end of period |
|
$ |
621 |
|
|
$ |
213 |
|
|
$ |
834 |
|
Credit Quality Indicators
See Note 3 “Loans / Leases and Allowance for Credit Losses” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2018 for a description of the credit quality indicators Huntington utilizes for monitoring credit quality and for determining an appropriate ACL level.
To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following internally defined categories of credit grades:
|
|
• |
Pass - Higher quality loans that do not fit any of the other categories described below.
|
|
|
• |
OLEM - The credit risk may be relatively minor yet represents a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or the collateral may be inadequate to protect Huntington’s position in the future. For these reasons, Huntington considers the loans to be potential problem loans.
|
|
|
• |
Substandard - Inadequately protected loans by the borrower’s ability to repay, equity, and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified weaknesses are not mitigated.
|
|
|
• |
Doubtful - Loans that have all of the weaknesses inherent in those loans classified as Substandard, with the added elements of the full collection of the loan is improbable and that the possibility of loss is high.
|
Loans are generally assigned a category of "Pass" rating upon initial approval and subsequently updated as appropriate based on the borrower's financial performance.
Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are both considered Classified loans.
The following table presents each loan and lease class by credit quality indicator at June 30, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
(dollar amounts in millions) |
Credit Risk Profile by UCS Classification |
Commercial |
Pass |
|
OLEM |
|
Substandard |
|
Doubtful |
|
Total |
Commercial and industrial |
$ |
28,584 |
|
|
$ |
634 |
|
|
$ |
1,384 |
|
|
$ |
6 |
|
|
$ |
30,608 |
|
Commercial real estate |
6,657 |
|
|
156 |
|
|
73 |
|
|
2 |
|
|
6,888 |
|
|
|
|
|
|
|
|
|
|
|
|
Credit Risk Profile by FICO Score (1), (2) |
Consumer |
750+ |
|
650-749 |
|
<650 |
|
Other (3) |
|
Total |
Automobile |
$ |
6,140 |
|
|
$ |
4,447 |
|
|
$ |
1,315 |
|
|
$ |
271 |
|
|
$ |
12,173 |
|
Home equity |
5,960 |
|
|
2,823 |
|
|
586 |
|
|
49 |
|
|
9,418 |
|
Residential mortgage |
7,630 |
|
|
2,725 |
|
|
589 |
|
|
161 |
|
|
11,105 |
|
RV and marine |
2,293 |
|
|
992 |
|
|
108 |
|
|
99 |
|
|
3,492 |
|
Other consumer |
496 |
|
|
594 |
|
|
120 |
|
|
61 |
|
|
1,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
(dollar amounts in millions) |
Credit Risk Profile by UCS Classification |
Commercial |
Pass |
|
OLEM |
|
Substandard |
|
Doubtful |
|
Total |
Commercial and industrial |
$ |
28,807 |
|
|
$ |
518 |
|
|
$ |
1,269 |
|
|
$ |
11 |
|
|
$ |
30,605 |
|
Commercial real estate |
6,586 |
|
|
181 |
|
|
74 |
|
|
1 |
|
|
6,842 |
|
|
|
|
|
|
|
|
|
|
|
|
Credit Risk Profile by FICO Score (1), (2) |
Consumer |
750+ |
|
650-749 |
|
<650 |
|
Other (3) |
|
Total |
Automobile |
$ |
6,254 |
|
|
$ |
4,520 |
|
|
$ |
1,373 |
|
|
$ |
282 |
|
|
$ |
12,429 |
|
Home equity |
6,098 |
|
|
2,975 |
|
|
591 |
|
|
56 |
|
|
9,720 |
|
Residential mortgage |
7,159 |
|
|
2,801 |
|
|
612 |
|
|
78 |
|
|
10,650 |
|
RV and marine |
2,074 |
|
|
990 |
|
|
105 |
|
|
85 |
|
|
3,254 |
|
Other consumer |
501 |
|
|
633 |
|
|
129 |
|
|
57 |
|
|
1,320 |
|
|
|
(1) |
Excludes loans accounted for under the fair value option. |
|
|
(2) |
Reflects updated customer credit scores. |
|
|
(3) |
Reflects deferred fees and costs, loans in process, etc. |
Impaired Loans
See Note 1 “Significant Accounting Policies” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2018 for a description of accounting policies related to impaired loans.
The following tables present the balance of the ALLL attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance at June 30, 2019 and December 31, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
|
Commercial |
|
Consumer |
|
Total |
ALLL at June 30, 2019 |
|
|
|
|
|
|
Portion of ALLL balance: |
|
|
|
|
|
|
Attributable to loans individually evaluated for impairment |
|
$ |
49 |
|
|
$ |
9 |
|
|
$ |
58 |
|
Attributable to loans collectively evaluated for impairment |
|
511 |
|
|
205 |
|
|
716 |
|
Total ALLL balance |
|
$ |
560 |
|
|
$ |
214 |
|
|
$ |
774 |
|
Loan and Lease Ending Balances at June 30, 2019 (1) |
|
|
|
|
|
|
Portion of loan and lease ending balance: |
|
|
|
|
|
|
Individually evaluated for impairment |
|
$ |
594 |
|
|
$ |
584 |
|
|
$ |
1,178 |
|
Collectively evaluated for impairment |
|
36,902 |
|
|
36,875 |
|
|
73,777 |
|
Total loans and leases evaluated for impairment |
|
$ |
37,496 |
|
|
$ |
37,459 |
|
|
$ |
74,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollar amounts in millions) |
|
Commercial |
|
Consumer |
|
Total |
ALLL at December 31, 2018 |
|
|
|
|
|
|
Portion of ALLL balance: |
|
|
|
|
|
|
Attributable to loans individually evaluated for impairment |
|
$ |
33 |
|
|
$ |
10 |
|
|
$ |
43 |
|
Attributable to loans collectively evaluated for impairment |
|
509 |
|
|
220 |
|
|
729 |
|
Total ALLL balance: |
|
$ |
542 |
|
|
$ |
230 |
|
|
$ |
772 |
|
Loan and Lease Ending Balances at December 31, 2018 (1) |
|
|
|
|
|
|
Portion of loan and lease ending balances: |
|
|
|
|
|
|
Individually evaluated for impairment |
|
516 |
|
|
591 |
|
|
1,107 |
|
Collectively evaluated for impairment |
|
36,931 |
|
|
36,783 |
|
|
73,714 |
|
Total loans and leases evaluated for impairment |
|
$ |
37,447 |
|
|
$ |
37,374 |
|
|
$ |
74,821 |
|
|
|
(1) |
Excludes loans accounted for under the fair value option. |
The following tables present by class the ending balance, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized for impaired loans and leases: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2019 |
|
Three Months Ended
June 30, 2019 |
|
Six Months Ended
June 30, 2019 |
(dollar amounts in millions) |
Ending
Balance
|
|
Unpaid
Principal
Balance (6)
|
|
Related
Allowance (7)
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
With no related allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
203 |
|
|
$ |
230 |
|
|
$ |
— |
|
|
$ |
205 |
|
|
$ |
5 |
|
|
$ |
211 |
|
|
$ |
11 |
|
Commercial real estate |
28 |
|
|
32 |
|
|
— |
|
|
34 |
|
|
2 |
|
|
35 |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
329 |
|
|
364 |
|
|
47 |
|
|
328 |
|
|
3 |
|
|
292 |
|
|
5 |
|
Commercial real estate |
34 |
|
|
38 |
|
|
2 |
|
|
34 |
|
|
— |
|
|
35 |
|
|
1 |
|
Automobile |
40 |
|
|
43 |
|
|
2 |
|
|
40 |
|
|
1 |
|
|
39 |
|
|
1 |
|
Home equity |
301 |
|
|
339 |
|
|
11 |
|
|
306 |
|
|
3 |
|
|
309 |
|
|
7 |
|
Residential mortgage |
284 |
|
|
319 |
|
|
3 |
|
|
285 |
|
|
3 |
|
|
286 |
|
|
6 |
|
RV and marine |
3 |
|
|
3 |
|
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
|
— |
|
Other consumer |
9 |
|
|
9 |
|
|
2 |
|
|
9 |
|
|
— |
|
|
9 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial (3) |
532 |
|
|
594 |
|
|
47 |
|
|
533 |
|
|
8 |
|
|
503 |
|
|
16 |
|
Commercial real estate (4) |
62 |
|
|
70 |
|
|
2 |
|
|
68 |
|
|
2 |
|
|
70 |
|
|
5 |
|
Automobile (2) |
40 |
|
|
43 |
|
|
2 |
|
|
40 |
|
|
1 |
|
|
39 |
|
|
1 |
|
Home equity (5) |
301 |
|
|
339 |
|
|
11 |
|
|
306 |
|
|
3 |
|
|
309 |
|
|
7 |
|
Residential mortgage (5) |
284 |
|
|
319 |
|
|
3 |
|
|
285 |
|
|
3 |
|
|
286 |
|
|
6 |
|
RV and marine (2) |
3 |
|
|
3 |
|
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
|
— |
|
Other consumer (2) |
9 |
|
|
9 |
|
|
2 |
|
|
9 |
|
|
— |
|
|
9 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
Three Months Ended
June 30, 2018 |
|
Six Months Ended
June 30, 2018 |
(dollar amounts in millions) |
Ending
Balance
|
|
Unpaid
Principal
Balance (6)
|
|
Related
Allowance (7)
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
|
Average
Balance
|
|
Interest
Income
Recognized
|
With no related allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
$ |
224 |
|
|
$ |
261 |
|
|
$ |
— |
|
|
$ |
259 |
|
|
$ |
6 |
|
|
$ |
268 |
|
|
$ |
10 |
|
Commercial real estate |
36 |
|
|
45 |
|
|
— |
|
|
55 |
|
|
2 |
|
|
55 |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With an allowance recorded: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
221 |
|
|
240 |
|
|
31 |
|
|
295 |
|
|
3 |
|
|
283 |
|
|
6 |
|
Commercial real estate |
35 |
|
|
39 |
|
|
2 |
|
|
46 |
|
|
— |
|
|
48 |
|
|
1 |
|
Automobile |
38 |
|
|
42 |
|
|
2 |
|
|
37 |
|
|
1 |
|
|
36 |
|
|
1 |
|
Home equity |
314 |
|
|
356 |
|
|
10 |
|
|
331 |
|
|
4 |
|
|
332 |
|
|
7 |
|
Residential mortgage |
287 |
|
|
323 |
|
|
4 |
|
|
300 |
|
|
3 |
|
|
303 |
|
|
5 |
|
RV and marine |
2 |
|
|
3 |
|
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
— |
|
Other consumer |
9 |
|
|
9 |
|
|
3 |
|
|
7 |
|
|
— |
|
|
7 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial (3) |
445 |
|
|
501 |
|
|
31 |
|
|
554 |
|
|
9 |
|
|
551 |
|
|
16 |
|
Commercial real estate (4) |
71 |
|
|
84 |
|
|
2 |
|
|
101 |
|
|
2 |
|
|
103 |
|
|
5 |
|
Automobile (2) |
38 |
|
|
42 |
|
|
2 |
|
|
37 |
|
|
1 |
|
|
36 |
|
|
1 |
|
Home equity (5) |
314 |
|
|
356 |
|
|
10 |
|
|
331 |
|
|
4 |
|
|
332 |
|
|
7 |
|
Residential mortgage (5) |
287 |
|
|
323 |
|
|
4 |
|
|
300 |
|
|
3 |
|
|
303 |
|
|
5 |
|
RV and marine (2) |
2 |
|
|
3 |
|
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
|
— |
|
Other consumer (2) |
9 |
|
|
9 |
|
|
3 |
|
|
7 |
|
|
— |
|
|
7 |
|
|
— |
|
|
|
(1) |
These tables do not include loans fully charged-off. |
|
|
(2) |
All automobile, RV and marine, and other consumer impaired loans included in these tables are considered impaired due to their status as a TDR. |
|
|
(3) |
At June 30, 2019 and December 31, 2018, C&I loans of $333 million and $366 million, respectively, were considered impaired due to their status as a TDR.
|
|
|
(4) |
At June 30, 2019 and December 31, 2018, CRE loans of $54 million and $60 million, respectively, were considered impaired due to their status as a TDR.
|
|
|
(5) |
Includes home equity and residential mortgages considered impaired due to collateral dependent designation associated with their non-accrual status as well as home equity and mortgage loans considered impaired due to their status as a TDR. |
|
|
(6) |
The differences between the ending balance and unpaid principal balance amounts primarily represent partial charge-offs. |
|
|
(7) |
Impaired loans in the consumer portfolio are evaluated in pools and not at the loan level. Thus, these loans do not have an individually assigned allowance and as such are all classified as with an allowance in the tables above. |
TDR Loans
TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided are not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs. See Note 3 “Loans / Leases and Allowance for Credit Losses” to the Consolidated Financial Statements of the Annual Report on Form 10-K for the year ended December 31, 2018 for an 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 periods ended June 30, 2019 and 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Troubled Debt Restructurings (1) |
|
Three Months Ended June 30, 2019 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
101 |
|
|
$ |
— |
|
|
$ |
39 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
39 |
|
Commercial real estate |
6 |
|
|
— |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
Automobile |
650 |
|
|
— |
|
|
4 |
|
|
2 |
|
|
— |
|
|
6 |
|
Home equity |
68 |
|
|
— |
|
|
2 |
|
|
1 |
|
|
— |
|
|
3 |
|
Residential mortgage |
96 |
|
|
— |
|
|
10 |
|
|
1 |
|
|
— |
|
|
11 |
|
RV and marine |
31 |
|
|
— |
|
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
Other consumer |
343 |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
Total new TDRs |
1,295 |
|
|
$ |
2 |
|
|
$ |
57 |
|
|
$ |
6 |
|
|
$ |
— |
|
|
$ |
65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
269 |
|
|
$ |
— |
|
|
$ |
171 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
171 |
|
Commercial real estate |
38 |
|
|
— |
|
|
43 |
|
|
— |
|
|
— |
|
|
43 |
|
Automobile |
613 |
|
|
— |
|
|
3 |
|
|
2 |
|
|
— |
|
|
5 |
|
Home equity |
169 |
|
|
— |
|
|
8 |
|
|
2 |
|
|
— |
|
|
10 |
|
Residential mortgage |
119 |
|
|
— |
|
|
12 |
|
|
— |
|
|
— |
|
|
12 |
|
RV and marine |
40 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other consumer |
493 |
|
|
4 |
|
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
Total new TDRs |
1,741 |
|
|
$ |
4 |
|
|
$ |
237 |
|
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Troubled Debt Restructurings (1) |
|
Six Months Ended June 30, 2019 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
216 |
|
|
$ |
— |
|
|
$ |
74 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
74 |
|
Commercial real estate |
14 |
|
|
— |
|
|
11 |
|
|
— |
|
|
— |
|
|
11 |
|
Automobile |
1,394 |
|
|
— |
|
|
9 |
|
|
4 |
|
|
— |
|
|
13 |
|
Home equity |
172 |
|
|
— |
|
|
5 |
|
|
3 |
|
|
— |
|
|
8 |
|
Residential mortgage |
172 |
|
|
— |
|
|
18 |
|
|
1 |
|
|
— |
|
|
19 |
|
RV and marine finance |
67 |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
Other consumer |
587 |
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
|
3 |
|
Total new TDRs |
2,622 |
|
|
$ |
3 |
|
|
$ |
117 |
|
|
$ |
9 |
|
|
$ |
— |
|
|
$ |
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2018 |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial |
510 |
|
|
$ |
— |
|
|
$ |
267 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
267 |
|
Commercial real estate |
86 |
|
|
— |
|
|
74 |
|
|
— |
|
|
— |
|
|
74 |
|
Automobile |
1,240 |
|
|
— |
|
|
7 |
|
|
4 |
|
|
— |
|
|
11 |
|
Home equity |
325 |
|
|
— |
|
|
14 |
|
|
5 |
|
|
1 |
|
|
20 |
|
Residential mortgage |
202 |
|
|
— |
|
|
20 |
|
|
1 |
|
|
— |
|
|
21 |
|
RV and marine finance |
59 |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
Other consumer |
934 |
|
|
4 |
|
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
Total new TDRs |
3,356 |
|
|
$ |
4 |
|
|
$ |
382 |
|
|
$ |
11 |
|
|
$ |
1 |
|
|
$ |
398 |
|
|
|
(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. |
The financial effects of modification represent the impact on the provision (recovery) for loan and lease losses. Amounts for the three-month periods ended June 30, 2019 and 2018, were less than $1 million and $(7) million, respectively. For the six-month periods ended June 30, 2019 and 2018, the financial effects of modification were $(3) million and $(10) million, respectively.
Pledged Loans and Leases
The Bank has access to the Federal Reserve’s discount window and advances from the FHLB of Cincinnati. As of June 30, 2019 and December 31, 2018, these borrowings and advances are secured by $37.9 billion and $46.5 billion, respectively, of loans and securities.
|