DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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9 Months Ended |
Sep. 30, 2016 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Gross notional values of derivatives used in asset and liability management activities |
The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at September 30, 2016, identified by the underlying interest rate-sensitive instruments:
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(dollar amounts in thousands) |
Fair Value Hedges |
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Cash Flow Hedges |
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Total |
Instruments associated with: |
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Loans |
$ |
— |
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|
$ |
4,025,000 |
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$ |
4,025,000 |
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Subordinated notes |
950,000 |
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— |
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|
950,000 |
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Long-term debt |
7,025,000 |
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— |
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|
7,025,000 |
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Total notional value at September 30, 2016 |
$ |
7,975,000 |
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|
$ |
4,025,000 |
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|
$ |
12,000,000 |
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| Additional information about the interest rate swaps used in asset and liability management activities |
The following table presents additional information about the interest rate swaps used in Huntington’s asset and liability management activities at September 30, 2016:
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Weighted-Average
Rate
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(dollar amounts in thousands) |
Notional Value |
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Average Maturity (years) |
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Fair Value |
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Receive |
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Pay |
Asset conversion swaps |
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Receive fixed—generic |
$ |
4,025,000 |
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|
0.7 |
|
$ |
3,860 |
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|
0.99 |
% |
|
0.71 |
% |
Liability conversion swaps |
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Receive fixed—generic |
7,975,000 |
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3.2 |
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109,511 |
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|
1.44 |
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|
0.74 |
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Total swap portfolio at September 30, 2016 |
$ |
12,000,000 |
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|
2.3 |
|
$ |
113,371 |
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|
1.29 |
% |
|
0.73 |
% |
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| Asset and liability derivatives included in accrued income and other assets |
The following table presents the fair values at September 30, 2016 and December 31, 2015 of Huntington’s derivatives that are designated and not designated as hedging instruments. Amounts in the table below are presented gross without the impact of any net collateral arrangements:
Asset derivatives included in accrued income and other assets:
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(dollar amounts in thousands) |
September 30, 2016 |
|
December 31, 2015 |
Interest rate contracts designated as hedging instruments |
$ |
121,600 |
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$ |
80,513 |
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Interest rate contracts not designated as hedging instruments |
371,184 |
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|
190,846 |
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Foreign exchange contracts not designated as hedging instruments |
25,430 |
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|
37,727 |
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Commodities contracts not designated as hedging instruments |
66,817 |
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|
117,894 |
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Total contracts |
$ |
585,031 |
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$ |
426,980 |
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Liability derivatives included in accrued expenses and other liabilities:
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(dollar amounts in thousands) |
September 30, 2016 |
|
December 31, 2015 |
Interest rate contracts designated as hedging instruments |
$ |
8,229 |
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|
$ |
15,215 |
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Interest rate contracts not designated as hedging instruments |
293,542 |
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|
121,815 |
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Foreign exchange contracts not designated as hedging instruments |
23,672 |
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|
35,283 |
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Commodities contracts not designated as hedging instruments |
62,590 |
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|
114,887 |
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Total contracts |
$ |
388,033 |
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$ |
287,200 |
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| Increase or (decrease) to interest expense for derivatives designated as fair value hedges |
The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2016, and 2015:
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2016 |
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2015 |
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2016 |
|
2015 |
Interest rate contracts |
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Change in fair value of interest rate swaps hedging deposits (1) |
$ |
— |
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|
$ |
(265 |
) |
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$ |
(82 |
) |
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$ |
(723 |
) |
Change in fair value of hedged deposits (1) |
— |
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|
259 |
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|
72 |
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|
709 |
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Change in fair value of interest rate swaps hedging subordinated notes (2) |
(9,688 |
) |
|
5,328 |
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(2,880 |
) |
|
1,196 |
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Change in fair value of hedged subordinated notes (2) |
10,400 |
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|
(5,328 |
) |
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3,591 |
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(1,196 |
) |
Change in fair value of interest rate swaps hedging other long-term debt (2) |
(45,870 |
) |
|
37,272 |
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|
37,179 |
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|
49,168 |
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Change in fair value of hedged other long-term debt (2) |
42,647 |
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(36,283 |
) |
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(38,187 |
) |
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(48,546 |
) |
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(1) |
Effective portion of the hedging relationship is recognized in Interest expense—deposits in the Unaudited Condensed Consolidated Statements of Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income in the Unaudited Condensed Consolidated Statements of Income. |
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(2) |
Effective portion of the hedging relationship is recognized in Interest expense—subordinated notes and other long-term debt in the Unaudited Condensed Consolidated Statements of Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income in the Unaudited Condensed Consolidated Statements of Income. |
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| Gains and (losses) recognized in other comprehensive income (loss) (OCI) for derivatives designated as effective cash flow hedges |
The following table presents the gains and (losses) recognized in OCI and the location in the Unaudited Condensed Consolidated Statements of Income of gains and (losses) reclassified from OCI into earnings for derivatives designated as effective cash flow hedges:
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Derivatives in cash flow hedging relationships |
Amount of gain or
(loss) recognized in
OCI on derivatives
(effective portion)
(after-tax)
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Location of gain or (loss) reclassified from
accumulated OCI into earnings (effective portion)
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Amount of (gain) or loss
reclassified from
accumulated OCI
into earnings
(effective portion)
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Three months ended September 30, |
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Three months ended September 30, |
(dollar amounts in thousands) |
2016 |
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2015 |
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2016 |
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2015 |
Interest rate contracts |
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Loans |
$ |
(5,311 |
) |
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$ |
8,301 |
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Interest and fee income - loans and leases |
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$ |
123 |
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$ |
(73 |
) |
Investment Securities |
— |
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— |
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Noninterest income - other income |
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— |
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— |
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Total |
$ |
(5,311 |
) |
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$ |
8,301 |
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$ |
123 |
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$ |
(73 |
) |
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Derivatives in cash flow hedging relationships |
Amount of gain or
(loss) recognized in
OCI on derivatives
(effective portion)
(after-tax)
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Location of gain or (loss) reclassified from
accumulated OCI into earnings (effective portion)
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Amount of (gain) or loss
reclassified from
accumulated OCI
into earnings
(effective portion)
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Nine months ended September 30, |
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Nine months ended September 30, |
(dollar amounts in thousands) |
2016 |
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2015 |
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2016 |
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2015 |
Interest rate contracts |
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Loans |
$ |
5,231 |
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$ |
26,057 |
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Interest and fee income - loans and leases |
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$ |
(770 |
) |
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$ |
(323 |
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Investment Securities |
— |
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— |
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Noninterest income - other income |
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1 |
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(11 |
) |
Total |
$ |
5,231 |
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$ |
26,057 |
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$ |
(769 |
) |
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$ |
(334 |
) |
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| Gains and (losses) recognized in noninterest income on the ineffective portion on interest rate contracts for derivatives designated as fair value and cash flow hedges |
The following table presents the gains and (losses) recognized in noninterest income on the ineffective portion on interest rate contracts for derivatives designated as cash flow hedges for the three and nine-month periods ended September 30, 2016 and 2015:
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
(dollar amounts in thousands) |
2016 |
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2015 |
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2016 |
|
2015 |
Derivatives in cash flow hedging relationships |
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Interest rate contracts |
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Loans |
$ |
(371 |
) |
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$ |
888 |
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$ |
6 |
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$ |
858 |
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| Derivative assets and liabilities used in mortgage banking activities [Table Text Block] |
The following table summarizes the derivative assets and liabilities used in mortgage banking activities:
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(dollar amounts in thousands) |
September 30, 2016 |
|
December 31, 2015 |
Derivative assets: |
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Interest rate lock agreements |
$ |
15,483 |
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$ |
6,721 |
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Forward trades and options |
285 |
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|
2,468 |
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Total derivative assets |
15,768 |
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|
9,189 |
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Derivative liabilities: |
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Interest rate lock agreements |
(158 |
) |
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(220 |
) |
Forward trades and options |
(4,506 |
) |
|
(1,239 |
) |
Total derivative liabilities |
(4,664 |
) |
|
(1,459 |
) |
Net derivative asset (liability) |
$ |
11,104 |
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$ |
7,730 |
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| Offsetting of financial liabilities and derivative liabilities |
Offsetting of Financial Liabilities and Derivative Liabilities
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Gross amounts not offset in
the condensed consolidated
balance sheets
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(dollar amounts in thousands) |
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Gross amounts
of recognized
liabilities
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Gross amounts
offset in the
condensed
consolidated
balance sheets
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Net amounts of
liabilities
presented in
the condensed
consolidated
balance sheets
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Financial
instruments
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Cash collateral
delivered
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Net amount |
Offsetting of Financial Liabilities and Derivative Liabilities |
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September 30, 2016 |
Derivatives |
$ |
392,696 |
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|
$ |
(278,458 |
) |
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$ |
114,239 |
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$ |
(73,830 |
) |
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$ |
(12,465 |
) |
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$ |
27,945 |
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December 31, 2015 |
Derivatives |
288,659 |
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|
(144,309 |
) |
|
144,350 |
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(62,460 |
) |
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(20 |
) |
|
81,870 |
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| Offsetting of financial assets and derivatives assets |
The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2016 and December 31, 2015:
Offsetting of Financial Assets and Derivative Assets
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Gross amounts not offset in
the condensed consolidated
balance sheets
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(dollar amounts in thousands) |
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Gross amounts
of recognized
assets
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Gross amounts
offset in the
condensed
consolidated
balance sheets
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Net amounts of
assets
presented in
the condensed
consolidated
balance sheets
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Financial
instruments
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|
Cash collateral
received
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Net amount |
Offsetting of Financial Assets and Derivative Assets |
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September 30, 2016 |
Derivatives |
$ |
600,799 |
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|
$ |
(172,666 |
) |
|
$ |
428,132 |
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|
$ |
(50,680 |
) |
|
$ |
(4,749 |
) |
|
$ |
372,703 |
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December 31, 2015 |
Derivatives |
436,169 |
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|
(161,297 |
) |
|
274,872 |
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|
(39,305 |
) |
|
(3,462 |
) |
|
232,105 |
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