Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT SECURITIES AND OTHER SECURITIES

v3.23.1
INVESTMENT SECURITIES AND OTHER SECURITIES
3 Months Ended
Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES AND OTHER SECURITIES INVESTMENT SECURITIES AND OTHER SECURITIES
Debt securities purchased in which Huntington has the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other debt and equity securities are classified as either available-for-sale or other securities.
The following tables provide amortized cost, fair value, and gross unrealized gains and losses by investment category at March 31, 2023 and December 31, 2022:
Unrealized
(dollar amounts in millions)
Amortized
Cost (1)(2)
Gross
Gains
Gross
Losses
Fair Value
At March 31, 2023
Available-for-sale securities:
U.S. Treasury $ $ —  $ —  $
Federal agencies:
Residential CMO 3,818  (369) 3,450 
Residential MBS 14,193  10  (1,870) 12,333 
Commercial MBS 2,555  —  (588) 1,967 
Other agencies 184  —  (8) 176 
Total U.S. Treasury, federal agency, and other agency securities
20,755  11  (2,835) 17,931 
Municipal securities 3,614  (234) 3,381 
Private-label CMO 143  —  (13) 130 
Asset-backed securities 413  —  (38) 375 
Corporate debt 2,481  109  (325) 2,265 
Other securities/Sovereign debt —  — 
Total available-for-sale securities $ 27,410  $ 121  $ (3,445) $ 24,086 
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 5,133  $ $ (634) $ 4,506 
Residential MBS 10,090  (1,199) 8,892 
Commercial MBS 1,630  —  (207) 1,423 
Other agencies 122  —  (6) 116 
Total federal agency and other agency securities 16,975  (2,046) 14,937 
Municipal securities —  — 
Total held-to-maturity securities $ 16,977  $ $ (2,046) $ 14,939 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock $ 748  $ —  $ —  $ 748 
Federal Reserve Bank stock 509  —  —  509 
Equity securities —  — 
Other securities, at fair value:
Mutual funds 32  —  —  32 
Equity securities —  — 
Total other securities $ 1,299  $ —  $ —  $ 1,299 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At March 31, 2023, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $73 million and $39 million, respectively.
(2)Excluded from the amortized cost are portfolio level basis adjustments for securities designated in fair value hedges under the portfolio layer method. The basis adjustments totaled $689 million and represent a reduction to the amortized cost of the securities being hedged. The securities being hedged under the portfolio layer method are primarily Residential CMO and Residential MBS securities.
Unrealized
(dollar amounts in millions) Amortized
Cost (1)(2)
Gross
Gains
Gross
Losses
Fair Value
At December 31, 2022
Available-for-sale securities:
U.S. Treasury $ 103  $ —  $ —  $ 103 
Federal agencies:
Residential CMO 3,336  —  (422) 2,914 
Residential MBS 14,349  (2,090) 12,263 
Commercial MBS 2,565  —  (612) 1,953 
Other agencies 190  (9) 182 
Total U.S. Treasury, federal agency, and other agency securities 20,543  (3,133) 17,415 
Municipal securities 3,527  (238) 3,290 
Private-label CMO 146  —  (18) 128 
Asset-backed securities 416  —  (44) 372 
Corporate debt 2,467  132  (385) 2,214 
Other securities/Sovereign debt —  — 
Total available-for-sale securities $ 27,103  $ 138  $ (3,818) $ 23,423 
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 4,970  $ $ (714) $ 4,260 
Residential MBS 10,295  —  (1,375) 8,920 
Commercial MBS 1,652  —  (204) 1,448 
Other agencies 133  —  (9) 124 
Total federal agency and other agency securities 17,050  (2,302) 14,752 
Municipal securities —  — 
Total held-to-maturity securities $ 17,052  $ $ (2,302) $ 14,754 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock $ 312  $ —  $ —  $ 312 
Federal Reserve Bank stock 500  —  —  500 
Equity securities 10  —  —  10 
Other securities, at fair value:
Mutual funds 31  —  —  31 
Equity securities —  — 
Total other securities $ 854  $ —  $ —  $ 854 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At December 31, 2022, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $64 million and $39 million, respectively.
(2)Excluded from the amortized cost are portfolio level basis adjustments for securities designated in fair value hedges under the portfolio layer method. The basis adjustments totaled $849 million and represent a reduction to the amortized cost of the securities being hedged. The securities being hedged under the portfolio layer method are primarily Residential CMO and Residential MBS securities.
The following table provides the amortized cost and fair value of securities by contractual maturity at March 31, 2023 and December 31, 2022. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.
At March 31, 2023 At December 31, 2022
(dollar amounts in millions)
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Available-for-sale securities:
Under 1 year $ 502  $ 494  $ 518  $ 511 
After 1 year through 5 years 2,387  2,232  2,182  2,033 
After 5 years through 10 years 2,913  2,666  3,106  2,814 
After 10 years 21,608  18,694  21,297  18,065 
Total available-for-sale securities $ 27,410  $ 24,086  $ 27,103  $ 23,423 
Held-to-maturity securities:
Under 1 year $ $ $ —  $ — 
After 1 year through 5 years 62  60  72  68 
After 5 years through 10 years 67  63  71  66 
After 10 years 16,846  14,814  16,909  14,620 
Total held-to-maturity securities $ 16,977  $ 14,939  $ 17,052  $ 14,754 
The following tables provide detail on investment securities with unrealized losses aggregated by investment category and the length of time the individual securities have been in a continuous loss position at March 31, 2023 and December 31, 2022:
Less than 12 Months Over 12 Months Total
(dollar amounts in millions) Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
At March 31, 2023
Available-for-sale securities:
Federal agencies:
Residential CMO $ 1,241  $ (71) $ 1,808  $ (298) $ 3,049  $ (369)
Residential MBS 555  (31) 11,285  (1,839) 11,840  (1,870)
Commercial MBS 526  (77) 1,441  (511) 1,967  (588)
Other agencies 22  —  71  (8) 93  (8)
Total federal agency and other agency securities 2,344  (179) 14,605  (2,656) 16,949  (2,835)
Municipal securities 1,019  (60) 2,212  (174) 3,231  (234)
Private-label CMO 37 (3) 72  (10) 109 (13)
Asset-backed securities 36  (2) 340  (36) 376  (38)
Corporate debt 75  (4) 2,190  (321) 2,265  (325)
Total temporarily impaired available-for-sale securities $ 3,511  $ (248) $ 19,419  $ (3,197) $ 22,930  $ (3,445)
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 254  $ (5) $ 3,830  $ (629) $ 4,084  $ (634)
Residential MBS 1,456  (72) 7,341  (1,127) 8,797  (1,199)
Commercial MBS 52  (2) 1,371  (205) 1,423  (207)
Other agencies —  —  116  (6) 116  (6)
Total federal agency and other agency securities 1,762  (79) 12,658  (1,967) 14,420  (2,046)
Total temporarily impaired held-to-maturity securities $ 1,762  $ (79) $ 12,658  $ (1,967) $ 14,420  $ (2,046)
Less than 12 Months Over 12 Months Total
(dollar amounts in millions) Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
Fair
Value
Gross Unrealized
Losses
At December 31, 2022
Available-for-sale securities:
Federal agencies:
Residential CMO $ 2,096  $ (224) $ 818  $ (198) $ 2,914  $ (422)
Residential MBS 2,455  (286) 9,490  (1,804) 11,945  (2,090)
Commercial MBS 1,090  (249) 863  (363) 1,953  (612)
Other agencies 40  (1) 56  (8) 96  (9)
Total federal agency and other agency securities 5,681  (760) 11,227  (2,373) 16,908  (3,133)
Municipal securities 2,298  (174) 807  (64) 3,105  (238)
Private-label CMO 64  (13) 43  (5) 107  (18)
Asset-backed securities 174  (10) 199  (34) 373  (44)
Corporate debt 727  (105) 1,487  (280) 2,214  (385)
Total temporarily impaired available-for-sale securities $ 8,944  $ (1,062) $ 13,763  $ (2,756) $ 22,707  $ (3,818)
Held-to-maturity securities:
Federal agencies:
Residential CMO $ 1,702  $ (238) $ 2,283  $ (476) $ 3,985  $ (714)
Residential MBS 4,151  (462) 4,711  (913) 8,862  (1,375)
Commercial MBS 1,201  (154) 247  (50) 1,448  (204)
Other agencies 124  (9) —  —  124  (9)
Total federal agency and other agency securities 7,178  (863) 7,241  (1,439) 14,419  (2,302)
Total temporarily impaired held-to-maturity securities $ 7,178  $ (863) $ 7,241  $ (1,439) $ 14,419  $ (2,302)
At March 31, 2023 and December 31, 2022, the carrying value of investment securities pledged: (i) to secure certain uninsured deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements, and (ii) to support borrowing capacity, totaled $32.2 billion and $26.9 billion, respectively. There were no securities of a single issuer, which were not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at either March 31, 2023 or December 31, 2022. At March 31, 2023, all HTM debt securities are considered investment grade. In addition, there were no HTM debt securities considered past due at March 31, 2023.
Based on an evaluation of available information including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, as of March 31, 2023, Huntington has concluded that except for one municipal bond classified as an AFS debt security for which a charge-off of $4 million was recognized during the 2022 first quarter, it expects to receive all contractual cash flows from each security held in its AFS and HTM debt securities portfolio. There was no allowance related to investment securities as of March 31, 2023 or December 31, 2022.