Quarterly report pursuant to Section 13 or 15(d)

LOANS / LEASES

v3.22.2.2
LOANS / LEASES
 9 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
LOANS / LEASES LOANS AND LEASES
The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2022 and December 31, 2021.
(dollar amounts in millions) September 30, 2022 December 31, 2021
Commercial loan and lease portfolio:
Commercial and industrial $ 44,144  $ 41,688 
Commercial real estate 16,456  14,961 
Lease financing 5,093  5,000 
Total commercial loan and lease portfolio 65,693  61,649 
Consumer loan portfolio:
Residential mortgage 21,816  19,256 
Automobile 13,430  13,434 
Home equity 10,440  10,550 
RV and marine 5,436  5,058 
Other consumer 1,332  1,320 
Total consumer loan portfolio 52,454  49,618 
Total loans and leases (1)(2) 118,147  111,267 
Allowance for loan and lease losses (2,110) (2,030)
Net loans and leases $ 116,037  $ 109,237 
(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 of $42 million and $111 million at September 30, 2022 and December 31, 2021, respectively.
(2)The total amount of accrued interest recorded for these loans and leases at September 30, 2022, was $190 million and $167 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2021, was $148 million and $150 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in accrued income and other receivables 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, 2022 and December 31, 2021.
(dollar amounts in millions) September 30,
2022		 December 31,
2021
Lease payments receivable $ 4,740  $ 4,620 
Estimated residual value of leased assets 769  774 
Gross investment in lease financing receivables 5,509  5,394 
Deferred origination costs 42  36 
Deferred fees, unearned income and other (458) (430)
Total lease financing receivables $ 5,093  $ 5,000 
The carrying value of residual values guaranteed was $454 million and $473 million as of September 30, 2022 and December 31, 2021, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at September 30, 2022, totaled $4.7 billion and were due as follows: $838 million in 2022, $820 million in 2023, $815 million in 2024, $733 million in 2025, $688 million in 2026, and $846 million thereafter. Interest income recognized for these types of leases was $41 million and $73 million for the three-month periods ended September 30, 2022 and 2021, respectively. For the nine-month periods ended September 30, 2022 and 2021, interest income recognized for these types of leases was $117 million and $154 million.
Nonaccrual and Past Due Loans and Leases
The following table presents NALs by class at September 30, 2022 and December 31, 2021:
September 30, 2022 December 31, 2021
(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 $ 73  $ 288  $ 81  $ 370 
Commercial real estate 85  110  80  104 
Lease financing 7  30  3  48 
Residential mortgage —  94  —  111 
Automobile —  4  —  3 
Home equity —  75  —  79 
RV and marine —  1  —  1 
Total nonaccrual loans and leases $ 165  $ 602  $ 164  $ 716 
The following table presents an aging analysis of loans and leases, by class at September 30, 2022 and December 31, 2021:
September 30, 2022
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 $ 92  $ 49  $ 117  $ 258  $ 43,886  $ —  $ 44,144  $ 29  (2)
Commercial real estate 24  4  32  60  16,396  —  16,456  — 
Lease financing 57  45  21  123  4,970  —  5,093  18  (3)
Residential mortgage 196  65  203  464  21,171  181  21,816  153  (4)
Automobile 72  18  9  99  13,331  —  13,430  6 
Home equity 47  21  61  129  10,310  1  10,440  12 
RV and marine 12  4  2  18  5,418  —  5,436  2 
Other consumer 13  3  3  19  1,313  —  1,332  3 
Total loans and leases $ 513  $ 209  $ 448  $ 1,170  $ 116,795  $ 182  $ 118,147  $ 223 
December 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 $ 72  $ 69  $ 107  $ 248  $ 41,440  $ —  $ 41,688  $ 13  (2)
Commercial real estate 9  1  9  19  14,942  —  14,961  — 
Lease financing 39  13  17  69  4,931  —  5,000  11  (3)
Residential mortgage 151  49  233  433  18,653  170  19,256  157  (4)
Automobile 79  18  8  105  13,329  —  13,434  6 
Home equity 48  35  76  159  10,390  1  10,550  17 
RV and marine 14  4  3  21  5,037  —  5,058  3 
Other consumer 13  2  3  18  1,302  —  1,320  3 
Total loans and leases $ 425  $ 191  $ 456  $ 1,072  $ 110,024  $ 171  $ 111,267  $ 210 
(1)NALs are included in this aging analysis based on the loan’s past due status.
(2)Amounts include PPP (SBA guaranteed) and other SBA loans and leases.
(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” to the Consolidated Financial Statements appearing in Huntington’s 2021 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, 2022 and December 31, 2021 respectively:
As of September 30, 2022
Term Loans Amortized Cost Basis by Origination Year Revolver Total at Amortized Cost Basis Revolver Total Converted to Term Loans
(dollar amounts in millions) 2022 2021 2020 2019 2018 Prior Total
Commercial and industrial
Credit Quality Indicator (1):
Pass $ 13,212  $ 7,720  $ 3,808  $ 2,328  $ 1,228  $ 1,314  $ 11,998  $ 4  $ 41,612 
OLEM 128  204  130  43  61  39  139  —  744 
Substandard 227  199  194  244  155  277  491  —  1,787 
Doubtful —  —  —  —  —  1  —  —  1 
Total Commercial and industrial $ 13,567  $ 8,123  $ 4,132  $ 2,615  $ 1,444  $ 1,631  $ 12,628  $ 4  $ 44,144 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 4,638  $ 3,544  $ 1,821  $ 1,892  $ 1,075  $ 1,186  $ 1,325  $ —  $ 15,481 
OLEM 44  26  4  11  12  39  —  —  136 
Substandard 195  126  121  128  129  137  3  —  839 
Total Commercial real estate $ 4,877  $ 3,696  $ 1,946  $ 2,031  $ 1,216  $ 1,362  $ 1,328  $ —  $ 16,456 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,391  $ 1,424  $ 1,069  $ 546  $ 229  $ 177  $ —  $ —  $ 4,836 
OLEM 25  14  32  6  7  4  —  —  88 
Substandard 37  25  56  28  9  14  —  —  169 
Total Lease financing $ 1,453  $ 1,463  $ 1,157  $ 580  $ 245  $ 195  $ —  $ —  $ 5,093 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 2,993  $ 6,251  $ 3,611  $ 864  $ 485  $ 2,165  $ —  $ —  $ 16,369 
650-749 1,260  1,308  670  235  146  814  —  —  4,433 
<650 29  60  60  90  94  500  —  —  833 
Total Residential mortgage
 $ 4,282  $ 7,619  $ 4,341  $ 1,189  $ 725  $ 3,479  $ —  $ —  $ 21,635 
Automobile
Credit Quality Indicator (2):
750+ $ 2,358  $ 2,366  $ 1,381  $ 898  $ 362  $ 154  $ —  $ —  $ 7,519 
650-749 1,641  1,733  785  436  205  77  —  —  4,877 
<650 231  364  186  128  79  46  —  —  1,034 
Total Automobile
 $ 4,230  $ 4,463  $ 2,352  $ 1,462  $ 646  $ 277  $ —  $ —  $ 13,430 
Home equity
Credit Quality Indicator (2):
750+ $ 359  $ 588  $ 633  $ 25  $ 23  $ 323  $ 4,891  $ 265  $ 7,107 
650-749 104  95  69  10  8  130  2,124  269  2,809 
<650 2  3  3  2  2  55  324  132  523 
Total Home equity $ 465  $ 686  $ 705  $ 37  $ 33  $ 508  $ 7,339  $ 666  $ 10,439 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,059  $ 1,070  $ 764  $ 379  $ 373  $ 465  $ —  $ —  $ 4,110 
650-749 247  335  213  126  122  180  —  —  1,223 
<650 3  16  14  16  16  38  —  —  103 
Total RV and marine $ 1,309  $ 1,421  $ 991  $ 521  $ 511  $ 683  $ —  $ —  $ 5,436 
Other consumer
Credit Quality Indicator (2):
750+ $ 202  $ 71  $ 39  $ 40  $ 15  $ 55  $ 360  $ 3  $ 785 
650-749 57  34  14  18  4  16  330  18  491 
<650 2  3  2  3  1  2  30  13  56 
Total Other consumer $ 261  $ 108  $ 55  $ 61  $ 20  $ 73  $ 720  $ 34  $ 1,332 
(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, 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 $ 15,435  $ 5,677  $ 3,682  $ 1,983  $ 1,080  $ 1,134  $ 9,945  $ 3  $ 38,939 
OLEM 183  178  87  83  38  73  166  —  808 
Substandard 336  203  344  206  125  167  552  —  1,933 
Doubtful 5  1  1  1  —  —  —  —  8 
Total Commercial and industrial $ 15,959  $ 6,059  $ 4,114  $ 2,273  $ 1,243  $ 1,374  $ 10,663  $ 3  $ 41,688 
Commercial real estate
Credit Quality Indicator (1):
Pass $ 4,144  $ 2,367  $ 2,593  $ 1,456  $ 761  $ 1,124  $ 798  $ —  $ 13,243 
OLEM 76  48  42  83  73  19  —  —  341 
Substandard 224  362  448  115  151  46  30  —  1,376 
Doubtful —  —  —  1  —  —  —  —  1 
Total Commercial real estate $ 4,444  $ 2,777  $ 3,083  $ 1,655  $ 985  $ 1,189  $ 828  $ —  $ 14,961 
Lease financing
Credit Quality Indicator (1):
Pass $ 1,851  $ 1,441  $ 809  $ 417  $ 226  $ 131  $ —  $ —  $ 4,875 
OLEM 8  32  12  4  2  —  —  —  58 
Substandard 6  23  19  2  9  8  —  —  67 
Total Lease financing $ 1,865  $ 1,496  $ 840  $ 423  $ 237  $ 139  $ —  $ —  $ 5,000 
Residential mortgage
Credit Quality Indicator (2):
750+ $ 5,532  $ 3,857  $ 978  $ 554  $ 687  $ 1,704  $ —  $ —  $ 13,312 
650-749 1,862  993  409  269  254  1,028  —  —  4,815 
<650 48  56  104  120  99  532  —  —  959 
Total Residential mortgage $ 7,442  $ 4,906  $ 1,491  $ 943  $ 1,040  $ 3,264  $ —  $ —  $ 19,086 
Automobile
Credit Quality Indicator (2):
750+ $ 2,993  $ 1,927  $ 1,381  $ 666  $ 345  $ 129  $ —  $ —  $ 7,441 
650-749 2,393  1,237  736  380  168  55  —  —  4,969 
<650 380  234  178  128  70  34  —  —  1,024 
Total Automobile $ 5,766  $ 3,398  $ 2,295  $ 1,174  $ 583  $ 218  $ —  $ —  $ 13,434 
Home equity
Credit Quality Indicator (2):
750+ $ 645  $ 701  $ 32  $ 31  $ 34  $ 387  $ 4,772  $ 272  $ 6,874 
650-749 129  94  15  13  13  161  2,324  324  3,073 
<650 3  2  2  1  1  67  361  165  602 
Total Home equity $ 777  $ 797  $ 49  $ 45  $ 48  $ 615  $ 7,457  $ 761  $ 10,549 
RV and marine
Credit Quality Indicator (2):
750+ $ 1,257  $ 933  $ 470  $ 468  $ 268  $ 319  $ —  $ —  $ 3,715 
650-749 393  273  171  157  106  150  —  —  1,250 
<650 6  11  13  18  18  27  —  —  93 
Total RV and marine $ 1,656  $ 1,217  $ 654  $ 643  $ 392  $ 496  $ —  $ —  $ 5,058 
Other consumer
Credit Quality Indicator (2):
750+ $ 211  $ 34  $ 50  $ 13  $ 10  $ 27  $ 326  $ 3  $ 674 
650-749 88  52  50  23  17  41  295  24  590 
<650 2  2  5  2  —  1  27  17  56 
Total Other consumer $ 301  $ 88  $ 105  $ 38  $ 27  $ 69  $ 648  $ 44  $ 1,320 
(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 2021 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, 2022 and 2021.
New Troubled Debt Restructurings (1)
Three Months Ended September 30, 2022
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 81  $ 39  $ 22  $ —  $ 13  $ 74 
Commercial real estate 7  5  10  —  —  15 
Residential mortgage 184  —  25  1  —  26 
Automobile 697  —  6  1  —  7 
Home equity 54  —  1  —  —  1 
RV and marine 31  —  1  1  —  2 
Other consumer 38  —  —  —  —  — 
Total new TDRs 1,092  $ 44  $ 65  $ 3  $ 13  $ 125 
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  —  —  —  —  — 
Residential mortgage 74  —  7  2  —  9 
Automobile 498  —  3  1  —  4 
Home equity 42  —  1  1  —  2 
RV and marine 19  —  —  —  —  — 
Other consumer 49  —  —  —  —  — 
Total new TDRs 702  $ —  $ 14  $ 4  $ —  $ 18 
New Troubled Debt Restructurings (1)
Nine Months Ended September 30, 2022
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 222  $ 69  $ 37  $ —  $ 14  $ 120 
Commercial real estate 12  42  10  —  —  52 
Residential mortgage 629  —  85  5  —  90 
Automobile 1,791  —  13  2  —  15 
Home equity 166  —  5  3  —  8 
RV and marine finance 105  —  2  1  —  3 
Other consumer 91  —  —  —  —  — 
Total new TDRs 3,016  $ 111  $ 152  $ 11  $ 14  $ 288 
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  —  —  —  —  — 
Residential mortgage 232  —  31  4  —  35 
Automobile 1,914  —  13  3  —  16 
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 
(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, 2022 and December 31, 2021, these borrowings and advances are secured by $70.1 billion and $61.1 billion, respectively, of loans.