Huntington Bancshares Incorporated Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Variable Interest Entities

Variable Interest Entities

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Unconsolidated VIEs

The following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary, of the VIE at March 31, 2023, and December 31, 2022:


	At March 31, 2023
(dollar amounts in millions)	Total Assets		Total Liabilities		Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships	$	2,141	$	1,326	$	2,141
Trust Preferred Securities	14		248		—
Other Investments	557		144		557
Total	$	2,712	$	1,718	$	2,698


	At December 31, 2022
(dollar amounts in millions)	Total Assets		Total Liabilities		Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships	$	2,036	$	1,260	$	2,036
Trust Preferred Securities	14		248		—
Other Investments	522		141		522
Total	$	2,572	$	1,649	$	2,558

Affordable Housing Tax Credit Partnerships

Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the LIHTC pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity.

Huntington uses the proportional amortization method to account for a majority of its investments in these entities. These investments are included in other assets. Investments that do not meet the requirements of the proportional amortization method are accounted for using the equity method. Investment losses are included in Other noninterest income in the Unaudited Consolidated Statements of Income.

The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at March 31, 2023 and December 31, 2022.


(dollar amounts in millions)	At March 31, 2023		At December 31, 2022
Affordable housing tax credit investments	$	3,050	$	2,891
Less: amortization	(909)		(855)
Net affordable housing tax credit investments	$	2,141	$	2,036
Unfunded commitments	$	1,326	$	1,260

The following table presents other information relating to Huntington’s affordable housing tax credit investments for the three-month periods ended March 31, 2023 and 2022.


	Three Months Ended March 31,
(dollar amounts in millions)	2023		2022
Tax credits and other tax benefits recognized	$	66	$	53

Proportional amortization expense included in provision for income taxes	54		41

There were no sales of affordable housing tax credit investments during the three-month periods ended March 31, 2023 and 2022. There was no impairment recognized for the three-month periods ended March 31, 2023 and 2022.

Trust-Preferred Securities

Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Unaudited Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing trust-preferred securities, from which the proceeds are then invested in Huntington junior subordinated debentures, which are reflected in Huntington’s Unaudited Consolidated Balance Sheet as long-term debt. See Note 11 “Borrowings” to the Consolidated Financial Statements appearing in Huntington’s 2022 Annual Report on Form 10-K for the outstanding amount of debentures issued to each trust and corresponding trust securities as of December 31, 2022. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Unaudited Consolidated Financial Statements.

Other investments

Other investments determined to be VIE’s include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, renewable energy financings, and other miscellaneous investments.