Quarterly report pursuant to Section 13 or 15(d)

LOANS / LEASES

v3.21.1
LOANS / LEASES
 3 Months Ended
Mar. 31, 2021
Receivables [Abstract]  
LOANS / LEASES LOANS / LEASES
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 $473 million and $491 million at March 31, 2021 and December 31, 2020, respectively.
Loan and Lease Portfolio Composition
The following table provides a detailed listing of Huntington’s loan and lease portfolio at March 31, 2021 and December 31, 2020.
(dollar amounts in millions) March 31, 2021 December 31, 2020
Loans and leases:
Commercial and industrial
 $ 34,464  $ 35,373 
Commercial real estate
 7,179  7,199 
Automobile
 12,591  12,778 
Home equity
 8,727  8,894 
Residential mortgage
 12,092  12,141 
RV and marine
 4,218  4,190 
Other consumer
 959  1,033 
Loans and leases $ 80,230  $ 81,608 
Allowance for loan and lease losses (1,703) (1,814)
Net loans and leases $ 78,527  $ 79,794 
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.
Huntington assesses net investments in leases (including residual values) for impairment and recognizes 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 March 31, 2021 and December 31, 2020.
(dollar amounts in millions) March 31,
2021		 December 31,
2020
Commercial and industrial:
Lease payments receivable $ 1,714  $ 1,737 
Estimated residual value of leased assets 622  664 
Gross investment in commercial and industrial lease financing receivables 2,336  2,401 
Deferred origination costs 21  21 
Deferred fees (190) (200)
Total net investment in commercial and industrial lease financing receivables $ 2,167  $ 2,222 
The carrying value of residual values guaranteed was $77 million and $93 million as of March 31, 2021 and December 31, 2020, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at March 31, 2021, totaled $1.7 billion and were due as follows: $0.6 billion in 2021, $0.4 billion in 2022, $0.3 billion in 2023, $0.2 billion in 2024, $0.1 billion in 2025, and $0.1 billion thereafter. Interest income recognized for these types of leases was $24 million and $27 million for the three-month periods ended March 31, 2021 and 2020, respectively.
Nonaccrual and Past Due Loans
The following table presents NALs by loan class at March 31, 2021 and December 31, 2020 (1):
March 31, 2021 December 31, 2020
(dollar amounts in millions) Nonaccrual loans with no ACL Total nonaccrual loans Nonaccrual loans with no ACL Total nonaccrual loans
Commercial and industrial $ 103  $ 343  $ 69  $ 353 
Commercial real estate —  8  8  15 
Automobile —  3  —  4 
Home equity —  71  —  70 
Residential mortgage —  90  —  88 
RV and marine —  1  —  2 
Total nonaccrual loans $ 103  $ 516  $ 77  $ 532 
(1)    Generally excludes loans that were under payment deferral or granted other assistance, including amendments or waivers of financial covenants in response to the COVID-19 pandemic.
The following table presents an aging analysis of loans and leases, including past due loans and leases, by loan class at March 31, 2021 and December 31, 2020:
March 31, 2021
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 $ 37  $ 20  $ 96  $ 153  $ 34,311  $ —  $ 34,464  $ 8 
(3)
Commercial real estate 1  1  2  4  7,175  —  7,179  — 
Automobile 50  12  6  68  12,523  —  12,591  5 
Home equity 23  11  58  92  8,634  1  8,727  10 
Residential mortgage 78  26  194  298  11,677  117  12,092  128  (4)
RV and marine 11  3  2  16  4,202  —  4,218  1 
Other consumer 6  2  2  10  949  —  959  2 
Total loans and leases $ 206  $ 75  $ 360  $ 641  $ 79,471  $ 118  $ 80,230  $ 154 
December 31, 2020
Past Due (1)(2)  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 $ 60  $ 38  $ 95  $ 193  $ 35,180  $ —  $ 35,373  $ 10 
(3)
Commercial real estate —  1  11  12  7,187  —  7,199  — 
Automobile 84  22  12  118  12,660  —  12,778  9 
Home equity 35  15  61  111  8,782  1  8,894  14 
Residential mortgage 114  38  194  346  11,702  93  12,141  132  (4)
RV and marine 17  3  3  23  4,167  —  4,190  3 
Other consumer 9  4  3  16  1,017  —  1,033  3 
Total loans and leases $ 319  $ 121  $ 379  $ 819  $ 80,695  $ 94  $ 81,608  $ 171 
(1)NALs are included in this aging analysis based on the loan’s past due status.
(2)The principal balance of loans in payment deferral programs offered in response to the COVID-19 pandemic which are performing according to their modified terms are generally not considered delinquent.
(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 / 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, 2020 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 resulting from 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.
For all classes within the consumer loan portfolios, loans are assigned pool level PD factors based on the FICO range within which the borrower’s credit bureau score falls. 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 each loan and lease class by vintage and credit quality indicator at March 31, 2021 and December 31, 2020 respectively:
As of March 31, 2021
Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans
(dollar amounts in millions) 2021 2020 2019 2018 2017 Prior Total (3)
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 4,040  $ 10,291  $ 4,087  $ 2,369  $ 1,215  $ 1,605  $ 8,656  $ 2  $ 32,265 
OLEM 122  282  98  91  41  92  128  —  854 
Substandard 54  216  110  176  184  212  386  —  1,338 
Doubtful 1  4  —  1  —  —  1  —  7 
Total Commercial and industrial $ 4,217  $ 10,793  $ 4,295  $ 2,637  $ 1,440  $ 1,909  $ 9,171  $ 2  $ 34,464 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 406  $ 1,605  $ 1,475  $ 1,077  $ 454  $ 999  $ 624  $ —  $ 6,640 
OLEM 2  88  31  62  68  35  1  —  287 
Substandard 4  23  114  7  27  38  39  —  252 
Total Commercial real estate $ 412  $ 1,716  $ 1,620  $ 1,146  $ 549  $ 1,072  $ 664  $ —  $ 7,179 
Automobile
Credit Quality Indicator (2):
750+ $ 771  $ 2,381  $ 1,817  $ 991  $ 608  $ 279  $ —  $ —  $ 6,847 
650-749 479  1,895  1,161  642  315  163  —  —  4,655 
<650 44  336  271  216  132  90  —  —  1,089 
Total Automobile $ 1,294  $ 4,612  $ 3,249  $ 1,849  $ 1,055  $ 532  $ —  $ —  $ 12,591 
Home equity
Credit Quality Indicator (2):
750+ $ 187  $ 780  $ 21  $ 22  $ 28  $ 479  $ 4,201  $ 189  $ 5,907 
650-749 37  137  8  6  8  171  1,810  176  2,353 
<650 1  1  1  1  2  74  286  100  466 
Total Home equity $ 225  $ 918  $ 30  $ 29  $ 38  $ 724  $ 6,297  $ 465  $ 8,726 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 963  $ 3,204  $ 1,143  $ 727  $ 883  $ 1,723  $ 1  $ —  $ 8,644 
650-749 254  836  355  255  249  621  —  —  2,570 
<650 7  37  90  113  106  408  —  —  761 
Total Residential mortgage $ 1,224  $ 4,077  $ 1,588  $ 1,095  $ 1,238  $ 2,752  $ 1  $ —  $ 11,975 
RV and marine
Credit Quality Indicator (2):
750+ $ 267  $ 1,050  $ 491  $ 547  $ 311  $ 375  $ —  $ —  $ 3,041 
650-749 46  351  193  182  126  176  —  —  1,074 
<650 —  8  15  21  22  37  —  —  103 
Total RV and marine $ 313  $ 1,409  $ 699  $ 750  $ 459  $ 588  $ —  $ —  $ 4,218 
Other consumer
Credit Quality Indicator (2):
750+ $ 22  $ 59  $ 52  $ 21  $ 6  $ 16  $ 319  $ 2  $ 497 
650-749 9  30  46  15  4  4  264  28  400 
<650 —  2  7  3  1  1  25  23  62 
Total Other consumer $ 31  $ 91  $ 105  $ 39  $ 11  $ 21  $ 608  $ 53  $ 959 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.
(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.
(3)The total amount of accrued interest recorded for these loans at March 31, 2021, presented in other assets within the Condensed Consolidated Balance Sheets, was $140 million and $119 million of commercial and consumer, respectively.
As of December 31, 2020
Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans
(dollar amounts in millions) 2020 2019 2018 2017 2016 Prior Total (3)
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 13,757  $ 4,525  $ 2,758  $ 1,347  $ 974  $ 916  $ 8,894  $ 2  $ 33,173 
OLEM 421  116  69  30  33  22  124  —  815 
Substandard 196  144  188  224  46  159  423  —  1,380 
Doubtful 2  —  1  —  —  1  1  —  5 
Total Commercial and industrial $ 14,376  $ 4,785  $ 3,016  $ 1,601  $ 1,053  $ 1,098  $ 9,442  $ 2  $ 35,373 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 1,742  $ 1,610  $ 1,122  $ 507  $ 507  $ 539  $ 633  $ —  $ 6,660 
OLEM 94  78  63  37  28  14  4  —  318 
Substandard 27  46  10  29  58  14  36  —  220 
Doubtful —  —  —  —  —  1  —  —  1 
Total Commercial real estate $ 1,863  $ 1,734  $ 1,195  $ 573  $ 593  $ 568  $ 673  $ —  $ 7,199 
Automobile
Credit Quality Indicator (2):
750+ $ 2,670  $ 2,013  $ 1,144  $ 742  $ 317  $ 81  $ —  $ —  $ 6,967 
650-749 1,965  1,343  755  386  175  52  —  —  4,676 
<650 312  301  244  157  84  37  —  —  1,135 
Total Automobile $ 4,947  $ 3,657  $ 2,143  $ 1,285  $ 576  $ 170  $ —  $ —  $ 12,778 
Home equity
Credit Quality Indicator (2):
750+ $ 793  $ 26  $ 26  $ 32  $ 89  $ 451  $ 4,373  $ 192  $ 5,982 
650-749 147  9  8  11  27  157  1,906  181  2,446 
<650 1  1  1  1  6  70  286  99  465 
Total Home equity $ 941  $ 36  $ 35  $ 44  $ 122  $ 678  $ 6,565  $ 472  $ 8,893 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 3,269  $ 1,370  $ 891  $ 1,064  $ 762  $ 1,243  $ 1  $ —  $ 8,600 
650-749 991  435  307  278  171  495  —  —  2,677 
<650 34  89  111  108  81  348  —  —  771 
Total Residential mortgage $ 4,294  $ 1,894  $ 1,309  $ 1,450  $ 1,014  $ 2,086  $ 1  $ —  $ 12,048 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,136  $ 525  $ 589  $ 337  $ 153  $ 254  $ —  $ —  $ 2,994 
650-749 348  215  201  136  64  129  —  —  1,093 
<650 4  15  21  22  12  29  —  —  103 
Total RV and marine $ 1,488  $ 755  $ 811  $ 495  $ 229  $ 412  $ —  $ —  $ 4,190 
Other consumer
Credit Quality Indicator (2):
750+ $ 69  $ 58  $ 26  $ 8  $ 4  $ 14  $ 340  $ 2  $ 521 
650-749 36  56  17  5  2  3  294  30  443 
<650 2  8  3  1  —  1  26  28  69 
Total Other consumer $ 107  $ 122  $ 46  $ 14  $ 6  $ 18  $ 660  $ 60  $ 1,033 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.
(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.
(3)The total amount of accrued interest recorded for these loans at December 31, 2020, presented in other assets within the Condensed Consolidated Balance Sheets, was $146 million and $123 million of commercial and consumer, respectively.
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 would not otherwise be considered. However, not all loan modifications are TDRs. See Note 5 “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, 2020 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 periods ended March 31, 2021 and 2020.
New Troubled Debt Restructurings (1)
Three Months Ended March 31, 2021
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 12  $ —  $ 5  $ —  $ —  $ 5 
Automobile 902  —  7  1  —  8 
Home equity 62  —  1  2  —  3 
Residential mortgage 86  —  13  1  —  14 
RV and marine 49  —  1  —  —  1 
Other consumer 97  —  —  —  1  1 
Total new TDRs 1,208  $ —  $ 27  $ 4  $ 1  $ 32 
Three Months Ended March 31, 2020
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 140  $ —  $ 62  $ —  $ —  $ 62 
Commercial real estate 7  —  2  —  —  2 
Automobile 798  —  6  2  —  8 
Home equity 63  —  1  2  —  3 
Residential mortgage 101  —  9  2  —  11 
RV and marine 28  —  1  —  —  1 
Other consumer 249  1  —  —  —  1 
Total new TDRs 1,386  $ 1  $ 81  $ 6  $ —  $ 88 
(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 on the provision for loan and lease losses for the three-month periods ended March 31, 2021 and 2020, were less than $1 million and $9 million, respectively.
Pledged Loans
The Bank has access to the Federal Reserve’s discount window and advances from the FHLB. As of March 31, 2021 and December 31, 2020, these borrowings and advances are secured by $44.1 billion and $43.0 billion, respectively, of loans.