Quarterly report pursuant to Section 13 or 15(d)

LOANS / LEASES

v3.21.2
LOANS / LEASES
 9 Months Ended
Sep. 30, 2021
Receivables [Abstract]  
LOANS / LEASES LOANS AND LEASES
The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2021 and December 31, 2020.
(dollar amounts in millions) September 30, 2021 December 31, 2020
Commercial loan and lease portfolio:
Commercial and industrial $ 40,452  $ 33,151 
Commercial real estate 14,694  7,199 
Lease financing 4,991  2,222 
Total commercial loan and lease portfolio 60,137  42,572 
Consumer loan portfolio:
Automobile 13,305  12,778 
Residential mortgage 18,922  12,141 
Home equity 10,919  8,894 
RV and marine 5,052  4,190 
Other consumer 2,232  1,033 
Total consumer loan portfolio 50,430  39,036 
Total loans and leases (1) (2) 110,567  81,608 
Allowance for loan and lease losses (2,107) (1,814)
Net loans and leases $ 108,460  $ 79,794 
(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 $(85) million and $171 million at September 30, 2021 and December 31, 2020, respectively.
(2)The total amount of accrued interest recorded for these loans and leases at September 30, 2021, was $146 million and $143 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2020, was $146 million and $123 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in other assets within the Condensed Consolidated Balance Sheets.
Lease Financing
Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in commercial loans and leases. 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 ACL, with changes recognized as provision expense.
The following table presents net investments in lease financing receivables by category at September 30, 2021 and December 31, 2020.
(dollar amounts in millions) September 30,
2021		 December 31,
2020
Lease payments receivable $ 4,622  $ 1,737 
Estimated residual value of leased assets 781  664 
Gross investment in lease financing receivables 5,403  2,401 
Deferred origination costs 24  21 
Deferred fees, unearned income and other (436) (200)
Total lease financing receivables $ 4,991  $ 2,222 
The carrying value of residual values guaranteed was $463 million and $93 million as of September 30, 2021 and December 31, 2020, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at September 30, 2021, totaled $4.6 billion and were due as follows: $0.8 billion in 2021, $0.8 billion in 2022, $0.8 billion in 2023, $0.8 billion in 2024, $0.7 billion in 2025, and $0.7 billion thereafter. Interest income recognized for these types of leases was $73 million and $26 million for the three-month periods ended September 30, 2021 and 2020, respectively. For the nine-month periods ended September 30, 2021 and 2020, interest income recognized was $154 million and $81 million, respectively.
Nonaccrual and Past Due Loans and Leases
The following table presents NALs by class at September 30, 2021 and December 31, 2020:
September 30, 2021 December 31, 2020
(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 $ 141  $ 494  $ 69  $ 349 
Commercial real estate 27  103  8  15 
Lease financing 2  60  —  4 
Automobile —  3  —  4 
Residential mortgage —  108  —  88 
Home equity —  87  —  70 
RV and marine —  6  —  2 
Other consumer —  —  —  — 
Total nonaccrual loans and leases $ 170  $ 861  $ 77  $ 532 
The following table presents an aging analysis of loans and leases, by class at September 30, 2021 and December 31, 2020:
September 30, 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 $ 86  $ 28  $ 80  $ 194  $ 40,258  $ —  $ 40,452  $ 6 
Commercial real estate 9  5  18  32  14,662  —  14,694  — 
Lease financing 87  20  19  126  4,865  —  4,991  12  (2)
Automobile 61  13  7  81  13,224  —  13,305  5 
Residential mortgage 106  44  212  362  18,422  138  18,922  138  (3)
Home equity 42  14  65  121  10,797  1  10,919  10 
RV and marine 12  2  3  17  5,035  —  5,052  2 
Other consumer 11  3  2  16  2,216  —  2,232  2 
Total loans and leases $ 414  $ 129  $ 406  $ 949  $ 109,479  $ 139  $ 110,567  $ 175 
December 31, 2020
Past Due (1)(4)  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 $ 38  $ 33  $ 82  $ 153  $ 32,998  $ —  $ 33,151  $ — 
Commercial real estate —  1  11  12  7,187  —  7,199  — 
Lease financing 22  5  13  40  2,182  —  2,222  10  (2)
Automobile 84  22  12  118  12,660  —  12,778  9 
Residential mortgage 114  38  194  346  11,702  93  12,141  132  (3)
Home equity 35  15  61  111  8,782  1  8,894  14 
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)Amounts include Huntington Technology Finance administrative lease delinquencies.
(3)Amounts include mortgage loans insured by U.S. government agencies.
(4)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.
Credit Quality Indicators
See Note 5 “Loans/Leases” to the Consolidated Financial Statements appearing in Huntington’s 2020 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.
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 the amortized cost basis of loans and leases by vintage and credit quality indicator at September 30, 2021 and December 31, 2020 respectively:
As of September 30, 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
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 10,821  $ 6,941  $ 4,246  $ 2,626  $ 1,222  $ 1,320  $ 10,698  $ 3  $ 37,877 
OLEM 148  204  176  122  33  81  133  —  897 
Substandard 182  171  266  244  146  193  469  —  1,671 
Doubtful 1  —  —  4  —  1  1  —  7 
Total Commercial and industrial $ 11,152  $ 7,316  $ 4,688  $ 2,996  $ 1,401  $ 1,595  $ 11,301  $ 3  $ 40,452 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 2,561  $ 2,813  $ 2,939  $ 1,769  $ 929  $ 1,286  $ 613  $ —  $ 12,910 
OLEM 57  172  77  78  82  46  1  —  513 
Substandard 280  284  329  134  149  77  18  —  1,271 
Total Commercial real estate $ 2,898  $ 3,269  $ 3,345  $ 1,981  $ 1,160  $ 1,409  $ 632  $ —  $ 14,694 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,383  $ 1,655  $ 915  $ 499  $ 282  $ 168  $ —  $ —  $ 4,902 
OLEM 8  10  9  4  4  1  —  —  36 
Substandard 3  14  18  1  8  9  —  —  53 
Total Lease financing $ 1,394  $ 1,679  $ 942  $ 504  $ 294  $ 178  $ —  $ —  $ 4,991 
Automobile
Credit Quality Indicator (2):
750+ $ 2,250  $ 2,112  $ 1,563  $ 785  $ 441  $ 174  $ —  $ —  $ 7,325 
650-749 1,879  1,442  867  458  212  96  —  —  4,954 
<650 283  252  200  149  87  55  —  —  1,026 
Total Automobile $ 4,412  $ 3,806  $ 2,630  $ 1,392  $ 740  $ 325  $ —  $ —  $ 13,305 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 4,359  $ 4,253  $ 1,214  $ 678  $ 817  $ 2,132  $ —  $ —  $ 13,453 
650-749 1,443  960  420  301  270  975  —  —  4,369 
<650 39  56  99  125  102  541  —  —  962 
Total Residential mortgage $ 5,841  $ 5,269  $ 1,733  $ 1,104  $ 1,189  $ 3,648  $ —  $ —  $ 18,784 
Home equity
Credit Quality Indicator (2):
750+ $ 570  $ 812  $ 101  $ 70  $ 61  $ 459  $ 4,796  $ 201  $ 7,070 
650-749 138  156  98  62  38  232  2,320  172  3,216 
<650 5  10  30  28  23  114  331  91  632 
Total Home equity $ 713  $ 978  $ 229  $ 160  $ 122  $ 805  $ 7,447  $ 464  $ 10,918 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,022  $ 982  $ 495  $ 518  $ 301  $ 364  $ —  $ —  $ 3,682 
650-749 312  303  190  173  117  167  —  —  1,262 
<650 5  11  17  20  22  33  —  —  108 
Total RV and marine $ 1,339  $ 1,296  $ 702  $ 711  $ 440  $ 564  $ —  $ —  $ 5,052 
Other consumer
Credit Quality Indicator (2):
750+ $ 486  $ 217  $ 239  $ 83  $ 32  $ 73  $ 586  $ 2  $ 1,718 
650-749 42  32  46  14  5  7  282  24  452 
<650 3  2  7  3  1  2  26  18  62 
Total Other consumer $ 531  $ 251  $ 292  $ 100  $ 38  $ 82  $ 894  $ 44  $ 2,232 
(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.
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
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 12,599  $ 4,161  $ 2,537  $ 1,192  $ 837  $ 815  $ 8,894  $ 2  $ 31,037 
OLEM 415  112  65  24  32  22  124  —  794 
Substandard 195  125  181  203  41  147  423  —  1,315 
Doubtful 2  —  1  —  —  1  1  —  5 
Total Commercial and industrial $ 13,211  $ 4,398  $ 2,784  $ 1,419  $ 910  $ 985  $ 9,442  $ 2  $ 33,151 
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 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,158  $ 364  $ 221  $ 155  $ 137  $ 101  $ —  $ —  $ 2,136 
OLEM 6  4  4  6  1  —  —  —  21 
Substandard 1  19  7  21  5  12  —  —  65 
Total Lease financing $ 1,165  $ 387  $ 232  $ 182  $ 143  $ 113  $ —  $ —  $ 2,222 
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 
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 
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 
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.
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” to the Consolidated Financial Statements appearing in Huntington’s 2020 Annual Report on Form 10-K 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 nine-month periods ended September 30, 2021 and 2020.
New Troubled Debt Restructurings (1)
Three Months Ended September 30, 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 16  $ —  $ 3  $ —  $ —  $ 3 
Commercial real estate 4  —  —  —  —  — 
Automobile 498  —  3  1  —  4 
Residential mortgage 74  —  7  2  —  9 
Home equity 42  —  1  1  —  2 
RV and marine 19  —  —  —  —  — 
Other consumer 49  —  —  —  —  — 
Total new TDRs 702  $ —  $ 14  $ 4  $ —  $ 18 
Three Months Ended September 30, 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 39  $ —  $ 28  $ —  $ —  $ 28 
Commercial real estate 2  —  —  —  —  — 
Automobile 726  —  5  2  —  7 
Residential mortgage 242  —  40  2  —  42 
Home equity 90  —  2  3  1  6 
RV and marine 30  —  1  —  —  1 
Other consumer 122  1  —  —  —  1 
Total new TDRs 1,251  $ 1  $ 76  $ 7  $ 1  $ 85 
New Troubled Debt Restructurings (1)
Nine Months Ended September 30, 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 53  $ 15  $ 23  $ —  $ —  $ 38 
Commercial real estate 4  —  —  —  —  — 
Automobile 1,914  —  13  3  —  16 
Residential mortgage 232  —  31  4  —  35 
Home equity 155  —  3  5  —  8 
RV and marine finance 103  1  1  1  —  3 
Other consumer 214  —  —  —  1  1 
Total new TDRs 2,675  $ 16  $ 71  $ 13  $ 1  $ 101 
Nine Months Ended September 30, 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 277  $ —  $ 116  $ —  $ 58  $ 174 
Commercial real estate 11  —  3  —  —  3 
Automobile 2,582  —  26  5  —  31 
Residential mortgage 448  —  62  5  —  67 
Home equity 216  —  5  6  2  13 
RV and marine finance 126  —  4  —  —  4 
Other consumer 513  3  —  —  —  3 
Total new TDRs 4,173  $ 3  $ 216  $ 16  $ 60  $ 295 
(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 September 30, 2021 and December 31, 2020, these borrowings and advances are secured by $45.9 billion and $43.0 billion, respectively, of loans.