Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUES OF ASSETS AND LIABILITIES (Tables)

v3.21.2
FAIR VALUES OF ASSETS AND LIABILITIES (Tables)
 9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and Liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020 are summarized in the following tables:
Fair Value Measurements at Reporting Date Using Netting Adjustments (1) September 30, 2021
(dollar amounts in millions) Level 1 Level 2 Level 3
Assets
Trading account securities:
Municipal securities $ —  $ 77  $ —  $ —  $ 77 
—  77  —  —  77 
Available-for-sale securities:
U.S. Treasury securities 5  —  —  —  5 
Residential CMOs —  3,734  —  —  3,734 
Residential MBS —  14,337  —  —  14,337 
Commercial MBS —  1,498  —  —  1,498 
Other agencies —  264  —  —  264 
Municipal securities —  52  3,582  —  3,634 
Private-label CMO —  102  18  —  120 
Asset-backed securities —  250  35  —  285 
Corporate debt —  1,773  —  —  1,773 
Other securities/sovereign debt —  4  —  —  4 
5  22,014  3,635  —  25,654 
Other securities 62  24  —  —  86 
Loans held for sale —  1,297  —  —  1,297 
Loans held for investment —  119  20  —  139 
MSRs —  —  338  —  338 
Other assets:
Derivative assets —  1,567  19  (686) 900 
Assets held in trust for deferred compensation plans 151  —  —  —  151 
Liabilities
Other liabilities:
Derivative liabilities —  1,056  7  (813) 250 
Fair Value Measurements at Reporting Date Using
Netting Adjustments (1)
 December 31, 2020
(dollar amounts in millions)
Level 1
Level 2
Level 3
Assets
Trading account securities:
Municipal securities $ —  $ 62  $ —  $ —  $ 62 
Available-for-sale securities:
U.S. Treasury securities 5  —  —  —  5 
Residential CMOs —  3,666  —  —  3,666 
Residential MBS —  7,935  —  —  7,935 
Commercial MBS —  1,163  —  —  1,163 
Other agencies —  62  —  —  62 
Municipal securities —  53  2,951  —  3,004 
Private-label CMO —  —  9  —  9 
Asset-backed securities —  182  10  —  192 
Corporate debt —  445  —  —  445 
Other securities/sovereign debt —  4  —  —  4 
5  13,510  2,970  —  16,485 
Other securities 59  —  —  —  59 
Loans held for sale —  1,198  —  —  1,198 
Loans held for investment —  71  23  —  94 
MSRs —  —  210  —  210 
Other assets:
Derivative assets —  1,903  43  (889) 1,057 
Assets held in trust for deferred compensation plans 73  —  —  —  73 
Liabilities
Other liabilities:
Derivative liabilities —  1,031  2  (917) 116 
(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
Rollforward of financial instruments measured on a recurring basis and classified as Level 3 The following tables present a rollforward of the balance sheet amounts for the three-month and nine-month periods ended September 30, 2021 and 2020, for financial instruments measured on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 measurements may also include observable components of value that can be validated externally. Accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.
Level 3 Fair Value Measurements
Three Months Ended September 30, 2021
Available-for-sale securities Loans held for investment
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
 Private-
label CMO
Asset-backed
securities
Opening balance $ 327  $ 23  $ 3,609  $ 18  $ 46  $ 21 
Transfers out of Level 3 (1) —  (39) —  —  —  — 
Total gains/losses for the period:
Included in earnings 1  28  (1) —  —  — 
Included in OCI —  —  (8) —  —  — 
Purchases/originations 31  —  260  —  —  — 
Sales —  —  (17) —  —  — 
Repayments —  —  —  —  —  (1)
Settlements (21) —  (261) —  (11) — 
Closing balance $ 338  $ 12  $ 3,582  $ 18  $ 35  $ 20 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ 1  $ (12) $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period —  —  (10) —  —  — 
Level 3 Fair Value Measurements
Three Months Ended September 30, 2020
MSRs
Derivative
instruments
 Available-for-sale securities Loans held for investment
(dollar amounts in millions)
Municipal
securities
Private-
label
CMO
Asset-backed
securities
Opening balance $ 172  $ 40  $ 3,102  $ 5  $ 56  $ 25 
Transfers out of Level 3 (1) —  (64) —  —  —  — 
Total gains/losses for the period:
Included in earnings 19  72  (1) —  —  — 
Included in OCI —  —  60  —  —  — 
Purchases/originations —  —  154  —  —  — 
Repayments —  —  —  —  —  (1)
Settlements —  —  (226) —  (7) — 
Closing balance $ 191  $ 48  $ 3,089  $ 5  $ 49  $ 24 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ 18  $ 8  $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period —  —  62  —  —  — 
Level 3 Fair Value Measurements
Nine Months Ended September 30, 2021
Available-for-sale securities
Loans held for investment
(dollar amounts in millions)
MSRs
Derivative
instruments
Municipal
securities
 Private- label CMO
Asset-backed
securities
Opening balance $ 210  $ 41  $ 2,951  $ 9  $ 10  $ 23 
Transfers out of Level 3 (1) —  (109) —  —  —  — 
Total gains/losses for the period:
Included in earnings 27  73  (1) —  —  — 
Included in OCI —  —  (13) —  —  — 
Purchases/originations/acquisitions 162  7  1,613  8  75  — 
Sales —  —  (369) —  —  — 
Repayments —  —  —  —  —  (3)
Settlements (61) —  (599) 1  (50) — 
Closing balance $ 338  $ 12  $ 3,582  $ 18  $ 35  $ 20 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ 27  $ (33) $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period —  —  (14) —  —  — 
Level 3 Fair Value Measurements
Nine Months Ended September 30, 2020
Available-for-sale securities
Loans held for investment
(dollar amounts in millions)
MSRs
Derivative
instruments
Municipal
securities
Private-
label
CMO
Asset-
backed
securities
Opening balance $ 7  $ 6  $ 2,999  $ 2  $ 48  $ 26 
Fair value election for servicing assets previously measured using the amortized method 205  —  —  —  —  — 
Transfers out of Level 3 (1) —  (139) —  —  —  — 
Total gains/losses for the period:
Included in earnings (21) 181  (2) —  —  — 
Included in OCI —  —  61  —  —  — 
Purchases/originations —  —  491  3  28  — 
Repayments —  —  —  —  —  (2)
Settlements —  —  (460) —  (27) — 
Closing balance $ 191  $ 48  $ 3,089  $ 5  $ 49  $ 24 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date $ (22) $ 42  $ —  $ —  $ —  $ — 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period —  —  64  —  —  —  — 
(1)Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.
Classification of gains and losses due to changes in fair value, recorded in earnings for Level 3 assets and liabilities The following tables summarize the classification of gains and losses due to changes in fair value, recorded in earnings for Level 3 assets and liabilities for the three-month and nine-month periods ended September 30, 2021 and 2020:
Level 3 Fair Value Measurements
Three Months Ended September 30, 2021
Available-for-sale securities
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Classification of gains and losses in earnings:
Mortgage banking income $ 1  $ 28  $ — 
Interest and fee income —  —  (1)
Total $ 1  $ 28  $ (1)
Level 3 Fair Value Measurements
Three Months Ended September 30, 2020
Available-for-sale securities
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Classification of gains and losses in earnings:
Mortgage banking income $ 19  $ 72  $ — 
Interest and fee income —  —  (1)
Total $ 19  $ 72  $ (1)
Level 3 Fair Value Measurements
Nine Months Ended September 30, 2021
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Classification of gains and losses in earnings:
Mortgage banking income $ 27  $ 73  $ — 
Interest and fee income —  —  (1)
Total $ 27  $ 73  $ (1)
Level 3 Fair Value Measurements
Nine Months Ended September 30, 2020
Available-for-sale securities
(dollar amounts in millions) MSRs
Derivative
instruments
Municipal
securities
Classification of gains and losses in earnings:
Mortgage banking income $ (21) $ 181  $ — 
Interest and fee income —  —  (2)
Total $ (21) $ 181  $ (2)
Assets and liabilities under the fair value option
The following tables present the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:
September 30, 2021
(dollar amounts in millions) Total Loans Loans that are 90 or more days past due
Assets
Fair value
carrying
amount
Aggregate
unpaid
principal
 Difference
Fair value
carrying
amount
Aggregate
unpaid
principal
 Difference
Loans held for sale $ 1,297  $ 1,260  $ 37  $ —  $ —  $ — 
Loans held for investment 139  143  (4) 3  4  (1)
December 31, 2020
(dollar amounts in millions) Total Loans Loans that are 90 or more days past due
Assets
Fair value
carrying
amount
Aggregate
unpaid
principal
 Difference
Fair value
carrying
amount
Aggregate
unpaid
principal
 Difference
Loans held for sale $ 1,198  $ 1,134  $ 64  $ 2  $ 2  $ — 
Loans held for investment 94  99  (5) 7  8  (1)
The following table present the net gains (losses) from fair value changes for the three-month and nine-month periods ended September 30, 2021 and 2020.
Net gains (losses) from fair value changes
(dollar amounts in millions) Three Months Ended September 30, Nine Months Ended September 30,
Assets 2021 2020 2021 2020
Loans held for sale (1) $ (4) $ 13  $ (30) $ 35 
(1)The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited Condensed Consolidated Statements of Income.
Assets measured at fair value on a nonrecurring basis
The amounts measured at fair value on a nonrecurring basis at September 30, 2021 were as follows:
Fair Value Measurements Using Total
Gains/(Losses)
 Nine Months Ended
September 30, 2021
(dollar amounts in millions) Fair Value Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Other
Unobservable
Inputs
(Level 3)
Collateral-dependent loans $ 18  $ —  $ —  $ 18  $ (2)
Loans held for sale —  —  —  —  1 
Quantitative information about significant unobservable level 3 fair value measurement inputs
Quantitative Information about Level 3 Fair Value Measurements at September 30, 2021 (1)
(dollar amounts in millions) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average
Measured at fair value on a recurring basis:
MSRs $ 338  Discounted cash flow Constant prepayment rate 8  % - 21% 12  %
Spread over forward interest rate swap rates 3  % - 11% 5  %
Derivative assets 19  Consensus Pricing Net market price (4) % - 10% 1  %
Estimated pull through % 6  % - 100% 90  %
Municipal securities 3,582  Discounted cash flow Discount rate —  % - 2% 1  %
Asset-backed securities 35  Cumulative default —  % - 64% 5  %
Loss given default 5  % - 90% 24  %
Measured at fair value on a nonrecurring basis:
Collateral-dependent loans 18  Appraisal value N/A N/A
Quantitative Information about Level 3 Fair Value Measurements at December 31, 2020 (1)
(dollar amounts in millions) Fair Value Valuation Technique Significant Unobservable Input Range Weighted Average
Measured at fair value on a recurring basis:
MSRs $ 210  Discounted cash flow Constant prepayment rate 8  % - 24% 17  %
Spread over forward interest rate swap rates 4  % - 11% 5  %
Derivative assets 43  Consensus Pricing Net market price (4) % - 11% 3  %
Estimated pull through % 1  % - 100% 88  %
Municipal securities 2,951  Discounted cash flow Discount rate —  % 1% 1  %
Asset-backed securities 10  Cumulative default —  % 39% 4  %
Loss given default 5  % 80% 25  %
Measured at fair value on a nonrecurring basis:
Collateral-dependent loans 144  Appraisal value N/A NA
(1)     Certain disclosures related to quantitative level 3 fair value measurements do not include those deemed to be immaterial.
Carrying amounts and estimated fair values of financial instruments
The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments at September 30, 2021 and December 31, 2020:
September 30, 2021
(dollar amounts in millions) Amortized Cost Lower of Cost or Market
Fair Value or
Fair Value Option
 Total Carrying Amount Estimated Fair Value
Financial Assets
Cash and short-term assets $ 10,188  $ —  $ —  $ 10,188  $ 10,188 
Trading account securities —  —  77  77  77 
Available-for-sale securities —  —  25,654  25,654  25,654 
Held-to-maturity securities 12,455  —  —  12,455  12,619 
Other securities 563  —  86  649  649 
Loans held for sale —  38  1,297  1,335  1,335 
Net loans and leases (1) 108,321  —  139  108,460  108,385 
Derivative assets —  —  900  900  900 
Assets held in trust for deferred compensation plans —  —  151  151  151 
Financial Liabilities
Deposits 141,898  —  —  141,898  142,261 
Short-term borrowings 435  —  —  435  435 
Long-term debt 7,779  —  —  7,779  7,908 
Derivative liabilities —  —  250  250  250 
December 31, 2020
(dollar amounts in millions) Amortized Cost Lower of Cost or Market
Fair Value or
Fair Value Option
 Total Carrying Amount Estimated Fair Value
Financial Assets
Cash and short-term assets $ 6,712  $ —  $ —  $ 6,712  $ 6,712 
Trading account securities —  —  62  62  62 
Available-for-sale securities —  —  16,485  16,485  16,485 
Held-to-maturity securities 8,861  —  —  8,861  9,255 
Other securities 359  —  59  418  418 
Loans held for sale —  77  1,198  1,275  1,275 
Net loans and leases (1) 79,700  —  94  79,794  80,477 
Derivative assets —  —  1,057  1,057  1,057 
Assets held in trust for deferred compensation plans —  —  73  73  73 
Financial Liabilities
Deposits 98,948  —  —  98,948  99,021 
Short-term borrowings 183  —  —  183  183 
Long-term debt 8,352  —  —  8,352  8,568 
Derivative liabilities —  —  116  116  116 
(1)Includes collateral-dependent loans.
The following table presents the level in the fair value hierarchy for the estimated fair values at September 30, 2021 and December 31, 2020:
Estimated Fair Value Measurements at Reporting Date Using Netting Adjustments (1)  September 30, 2021
(dollar amounts in millions) Level 1 Level 2 Level 3
Financial Assets
Trading account securities $ —  $ 77  $ —  $ 77 
Available-for-sale securities 5  22,014  3,635  25,654 
Held-to-maturity securities —  12,619  —  12,619 
Other securities (2) 62  24  —  86 
Loans held for sale —  1,297  38  1,335 
Net loans and direct financing leases —  119  108,266  108,385 
Derivative assets —  1,567  19  $ (686) 900 
Financial Liabilities
Deposits —  137,142  5,119  142,261 
Short-term borrowings —  435  —  435 
Long-term debt —  7,147  761  7,908 
Derivative liabilities —  1,056  7  (813) 250 
Estimated Fair Value Measurements at Reporting Date Using Netting Adjustments (1) December 31, 2020
(dollar amounts in millions) Level 1 Level 2 Level 3
Financial Assets
Trading account securities $ —  $ 62  $ —  $ 62 
Available-for-sale securities 5  13,510  2,970  16,485 
Held-to-maturity securities —  9,255  —  9,255 
Other securities (2) 59  —  —  59 
Loans held for sale —  1,198  77  1,275 
Net loans and direct financing leases —  71  80,406  80,477 
Derivative assets —  1,903  43  $ (889) 1,057 
Financial Liabilities
Deposits —  96,656  2,365  99,021 
Short-term borrowings —  183  —  183 
Long-term debt —  7,999  569  8,568 
Derivative liabilities —  1,031  2  (917) 116 
(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
(2)Excludes securities without readily determinable fair values.