Quarterly report pursuant to Section 13 or 15(d)

LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES

v3.7.0.1
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
 3 Months Ended
Mar. 31, 2017
Receivables [Abstract]  
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES
Loans and leases for which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Unaudited Condensed Consolidated Balance Sheets as loans and leases. Except for loans which are accounted for at fair value, loans are carried at the principal amount outstanding, net of unamortized premiums and discounts and deferred loan fees and costs and purchase accounting adjustments, which resulted in a net premium of $179 million and $120 million at March 31, 2017 and December 31, 2016, respectively.
Loan and Lease Portfolio Composition
The following table provides a detailed listing of Huntington’s loan and lease portfolio at March 31, 2017 and December 31, 2016:
(dollar amounts in thousands)
March 31,
2017
 
December 31,
2016
Loans and leases:
 
 
 
Commercial and industrial
$
28,175,924

 
$
28,058,712

Commercial real estate
7,093,118

 
7,300,901

Automobile
11,155,094

 
10,968,782

Home equity
9,974,294

 
10,105,774

Residential mortgage
7,829,137

 
7,724,961

RV and marine finance
1,934,983

 
1,846,447

Other consumer
935,719

 
956,419

Loans and leases
67,098,269

 
66,961,996

Allowance for loan and lease losses
(672,580
)
 
(638,413
)
Net loans and leases
$
66,425,689

 
$
66,323,583


Purchased Credit-Impaired Loans
The following table presents a rollforward of the accretable yield for purchased credit impaired loans for the three-month period ended March 31, 2017: and 2016:
 
 
 
 
 
 
 
Three months ended
March 31,
(dollar amounts in thousands)
 
 
2017
FirstMerit
 
 
 
Balance, beginning of period
 
 
$
36,669

Accretion
 
 
(4,702
)
Reclassification (to) from nonaccretable difference
 
 
5,405

Balance, end of period
 
 
$
37,372


The following table reflects the ending and unpaid balances of the purchase credit impaired loans at March 31, 2017 and December 31, 2016:
 
 
 
 
 
 
 
 
 
March 31, 2017
 
December 31, 2016
(dollar amounts in thousands)
Ending
Balance
 
Unpaid
Balance
 
Ending
Balance
 
Unpaid
Balance
FirstMerit
 
 
 
 
 
 
 
Commercial and industrial
$
67,514

 
$
97,946

 
$
68,338

 
$
100,031

Commercial real estate
22,597

 
38,045

 
34,042

 
56,320

Total
$
90,111

 
$
135,991

 
$
102,380

 
$
156,351


 
 
 
 
 
 
NALs and Past Due Loans
Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date.
The following table presents NALs by loan class at March 31, 2017 and December 31, 2016:
(dollar amounts in thousands)
March 31,
2017
 
December 31,
2016
Commercial and industrial
$
232,171

 
$
234,184

Commercial real estate
13,889

 
20,508

Automobile
4,881

 
5,766

Home equity
69,575

 
71,798

Residential mortgage
80,686

 
90,502

RV and marine finance
106

 
245

Other consumer
2

 
—

Total nonaccrual loans
$
401,310

 
$
423,003


The following table presents an aging analysis of loans and leases, including past due loans, by loan class at March 31, 2017 and December 31, 2016: (1)
 
March 31, 2017
 
Past Due
 
 
 
 
 
 Loans Accounted for Under the Fair Value Option
 
Total Loans
and Leases
 
90 or
more days
past due
and accruing
 
(dollar amounts in thousands)
30-59
Days
 
60-89
 Days
 
90 or 
more days
Total
 
Current
 
Purchased Credit
Impaired
 
 
 
 
Commercial and industrial
$
77,998

 
$
11,428

 
$
77,392

 
$
166,818

 
$
27,941,592

 
$
67,514

 
$
—

 
$
28,175,924

 
$
15,054

(2)
Commercial real estate
38,046

 
460

 
26,281

 
64,787

 
7,005,734

 
22,597

 
—

 
7,093,118

 
14,499

 
Automobile
70,564

 
15,517

 
8,331

 
94,412

 
11,058,889

 
—

 
1,793

 
11,155,094

 
8,123

 
Home equity
43,532

 
18,464

 
58,631

 
120,627

 
9,850,680

 
—

 
2,987

 
9,974,294

 
15,453

 
Residential mortgage
91,831

 
38,144

 
112,207

 
242,182

 
7,495,211

 
—

 
91,744

 
7,829,137

 
69,244

(3)
RV and marine finance
10,101

 
3,064

 
2,202

 
15,367

 
1,918,199

 
—

 
1,417

 
1,934,983

 
2,200

 
Other consumer
9,234

 
3,766

 
3,369

 
16,369

 
918,949

 
—

 
401

 
935,719

 
3,370

 
Total loans and leases
$
341,306

 
$
90,843

 
$
288,413

 
$
720,562

 
$
66,189,254

 
$
90,111

 
$
98,342

 
$
67,098,269

 
$
127,943

 

 
December 31, 2016
 
Past Due
 
 
 
 
 
Loans Accounted for Under the Fair Value Option
 
Total Loans
and Leases
 
90 or
more days
past due
and accruing
 
(dollar amounts in thousands)
30-59
Days
 
60-89
 Days
 
90 or 
more days
Total
 
Current
 
Purchased
Credit Impaired
 
 
 
 
Commercial and industrial
42,052

 
20,136

 
74,174

 
136,362

 
27,854,012

 
68,338

 
—

 
28,058,712

 
18,148

(2)
Commercial real estate
21,187

 
3,202

 
29,659

 
54,048

 
7,212,811

 
34,042

 
—

 
7,300,901

 
17,215

 
Automobile loans
76,283

 
17,188

 
10,442

 
103,913

 
10,862,715

 
—

 
2,154

 
10,968,782

 
10,182

 
Home equity
38,899

 
23,903

 
53,002

 
115,804

 
9,986,697

 
—

 
3,273

 
10,105,774

 
11,508

 
Residential mortgage
122,469

 
37,460

 
116,682

 
276,611

 
7,373,414

 
—

 
74,936

 
7,724,961

 
66,952

(3)
RV and marine finance
10,009

 
2,230

 
1,566

 
13,805

 
1,831,123

 
—

 
1,519

 
1,846,447

 
1,462

 
Other consumer
9,442

 
4,324

 
3,894

 
17,660

 
938,322

 
—

 
437

 
956,419

 
3,895

 
Total loans and leases
$
320,341

 
$
108,443

 
$
289,419

 
$
718,203

 
$
66,059,094

 
$
102,380

 
$
82,319

 
$
66,961,996

 
$
129,362

 
(1)
NALs are included in this aging analysis based on the loan’s past due status.
(2)
Amounts include Huntington Technology Finance administrative lease delinquencies.
(3)
Amounts include loans guaranteed by government organizations.
Allowance for Credit Losses
Huntington maintains two reserves, both of which reflect management’s judgment regarding the appropriate level necessary to absorb credit losses inherent in our loan and lease portfolio: the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases, consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous loans and leases, all of which may be susceptible to change.
The appropriateness of the ACL is based on management’s current judgments about the credit quality of the loan portfolio. These judgments consider on-going evaluations of the loan and lease portfolio, including such factors as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. Further, management evaluates the impact of changes in interest rates and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date. In addition to general economic conditions and the other factors described above, additional factors also considered include: the impact of increasing or decreasing commercial real estate values and the development of new or expanded Commercial business segments. Also, the ACL assessment includes the on-going assessment of credit quality metrics, and a comparison of certain ACL benchmarks to current performance.
The ALLL consists of two components: (1) the transaction reserve, which includes a loan level allocation, specific reserves related to loans considered to be impaired, and loans involved in troubled debt restructurings, and (2) the general reserve. The transaction reserve component includes both (1) an estimate of loss based on pools of commercial and consumer loans and leases with similar characteristics, and (2) an estimate of loss based on an impairment review of each impaired C&I and CRE loan where obligor balance is greater than $1 million. For the C&I and CRE portfolios, the estimate of loss based on pools of loans and leases with similar characteristics is made by applying a PD factor and a LGD factor to each individual loan based on a regularly updated loan grade, using a standardized loan grading system. The PD factor and an LGD factor are determined for each loan grade using statistical models based on historical performance data. The PD factor considers on-going reviews of the financial performance of the specific borrower, including cash flow, debt-service coverage ratio, earnings power, debt level, and equity position, in conjunction with an assessment of the borrower’s industry and future prospects. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. These reserve factors are developed based on credit migration models that track historical movements of loans between loan ratings over time and a combination of long-term average loss experience of our own portfolio and external industry data.
In the case of more homogeneous portfolios, such as automobile loans, home equity loans, residential mortgage loans and RV and marine finance, the determination of the transaction reserve also incorporates PD and LGD factors. The estimate of loss is based on pools of loans and leases with similar characteristics. The PD factor considers current credit scores unless the account is delinquent, in which case a higher PD factor is used. The credit score provides a basis for understanding the borrower’s past and current payment performance, and this information is used to estimate expected losses over the emergence period. The performance of first-lien loans ahead of our junior-lien loans is available to use as part of our updated score process. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. Credit scores, models, analyses, and other factors used to determine both the PD and LGD factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as required.
The general reserve consists of various risk-profile reserve components. The risk-profile component considers items unique to our structure, policies, processes, and portfolio composition, as well as qualitative measurements and assessments of the loan portfolios including, but not limited to, management quality, concentrations, portfolio composition, industry comparisons, and internal review functions.
The estimate for the AULC is determined using the same procedures and methodologies as used for the ALLL. The loss factors used in the AULC are the same as the loss factors used in the ALLL while also considering a historical utilization of unused commitments. The AULC is reflected in accrued expenses and other liabilities in the Unaudited Condensed Consolidated Balance Sheets.
The acquired loans were recorded at their fair value as of the acquisition date and the prior ALLL was eliminated. An ALLL for acquired loans is estimated using a methodology similar to that used for originated loans. The allowance determined for each acquired loan is compared to the remaining fair value adjustment for that loan. If the computed allowance is greater, the excess is added to the allowance through a provision for loan losses. If the computed allowance is less, no additional allowance is recognized.
The ACL is increased through a provision for credit losses that is charged to earnings, based on Management’s quarterly evaluation of the factors previously mentioned, and is reduced by charge-offs, net of recoveries, and the ACL associated with loans sold or transferred to held for sale.
The following table presents ALLL and AULC activity by portfolio segment for the three-month periods ended March 31, 2017 and 2016:
(dollar amounts in thousands)
 
Commercial
 
Consumer
 
Total
Three-month period ended March 31, 2017:
ALLL balance, beginning of period
 
$
451,091

 
$
187,322

 
$
638,413

Loan charge-offs
 
(23,669
)
 
(47,046
)
 
(70,715
)
Recoveries of loans previously charged-off
 
17,815

 
13,462

 
31,277

Provision (reduction in allowance) for loan and lease losses
 
35,145

 
38,534

 
73,679

Allowance for loans sold or transferred to loans held for sale
 
(74
)
 
—

 
(74
)
ALLL balance, end of period
 
$
480,308

 
$
192,272

 
$
672,580

AULC balance, beginning of period
 
$
86,543

 
$
11,336

 
$
97,879

Provision for (reduction in allowance) unfunded loan commitments and letters of credit
 
2,356

 
(8,397
)
 
(6,041
)
AULC balance, end of period
 
$
88,899

 
$
2,939

 
$
91,838

ACL balance, end of period
 
$
569,207

 
$
195,211

 
$
764,418

(dollar amounts in thousands)
 
Commercial
 
Consumer
 
Total
Three-month period ended March 31, 2016:
ALLL balance, beginning of period
 
$
398,753

 
$
199,090

 
$
597,843

Loan charge-offs
 
(28,949
)
 
(30,743
)
 
(59,692
)
Recoveries of loans previously charged-off
 
39,911

 
11,229

 
51,140

Provision for (reduction in allowance) loan and lease losses
 
12,726

 
11,612

 
24,338

Allowance for loans sold or transferred to loans held for sale
 
—

 
90

 
90

ALLL balance, end of period
 
$
422,441

 
$
191,278

 
$
613,719

AULC balance, beginning of period
 
$
63,448

 
$
8,633

 
$
72,081

Provision for (reduction in allowance) unfunded loan commitments and letters of credit
 
2,424

 
820

 
3,244

AULC balance, end of period
 
$
65,872

 
$
9,453

 
$
75,325

ACL balance, end of period
 
$
488,313

 
$
200,731

 
$
689,044


Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment. Additionally, discharged, collateral dependent non-reaffirmed debt in Chapter 7 bankruptcy filings will result in a charge-off to estimated collateral value, less anticipated selling costs.
C&I and CRE loans are either fully or partially charged-off at 90-days past due. Automobile, RV and marine finance loans and other consumer loans are charged-off at 120-days past due. First-lien and junior-lien home equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the collateral at 150-days past due.
Credit Quality Indicators
To facilitate the monitoring of credit quality for C&I and CRE 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 represent 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.
Substandard - Inadequately protected loans by 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.
The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of the loan or lease and subsequently updated as appropriate.
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, each loan is assigned a specific PD factor that is partially based on the borrower’s most recent credit bureau score, which we update quarterly. A credit bureau score is a credit score developed by Fair Isaac Corporation 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 table presents each loan and lease class by credit quality indicator at March 31, 2017 and December 31, 2016:
 
March 31, 2017
 
Credit Risk Profile by UCS Classification
(dollar amounts in thousands)
Pass
 
OLEM
 
Substandard
 
Doubtful
 
Total
Commercial
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
26,216,400

 
$
808,467

 
$
1,131,835

 
$
19,222

 
$
28,175,924

Commercial real estate
6,867,440

 
120,212

 
103,983

 
1,483

 
7,093,118

 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by FICO Score (1), (2)
 
750+
 
650-749
 
<650
 
Other (3)
 
Total
Consumer
 
 
 
 
 
 
 
 
 
Automobile
$
5,445,124

 
$
4,254,397

 
$
1,172,859

 
$
280,921

 
$
11,153,301

Home equity
6,131,710

 
2,924,593

 
631,268

 
283,736

 
9,971,307

Residential mortgage
4,643,664

 
2,406,782

 
611,675

 
75,272

 
7,737,393

RV and marine finance
1,179,561

 
699,701

 
16,202

 
38,102

 
1,933,566

Other consumer
333,683

 
440,599

 
142,515

 
18,521

 
935,318


 
December 31, 2016
 
Credit Risk Profile by UCS Classification
(dollar amounts in thousands)
Pass
 
OLEM
 
Substandard
 
Doubtful
 
Total
Commercial
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
26,211,885

 
$
810,287

 
$
1,028,819

 
$
7,721

 
$
28,058,712

Commercial real estate
7,042,304

 
96,975

 
159,098

 
2,524

 
7,300,901

 
 
 
 
 
 
 
 
 
 
 
Credit Risk Profile by FICO Score (1), (2)
 
750+
 
650-749
 
<650
 
Other (3)
 
Total
Consumer
 
 
 
 
 
 
 
 
 
Automobile
$
5,369,085

 
$
4,043,611

 
$
1,298,460

 
$
255,472

 
$
10,966,628

Home equity
6,280,328

 
2,891,330

 
637,560

 
293,283

 
10,102,501

Residential mortgage
4,662,777

 
2,285,121

 
615,067

 
87,060

 
7,650,025

RV and marine finance
1,064,143

 
644,039

 
72,995

 
63,751

 
1,844,928

Other consumer
346,867

 
455,959

 
133,243

 
19,913

 
955,982

(1)
Excludes loans accounted for under the fair value option.
(2)
Reflects most recent customer credit scores.
(3)
Reflects deferred fees and costs, loans in process, loans to legal entities, etc.
Impaired Loans
For all classes within the C&I and CRE portfolios, all loans with an obligor balance of $1 million or greater are evaluated on a quarterly basis for impairment. Generally, consumer loans within any class are not individually evaluated on a regular basis for impairment. However, certain home equity and residential mortgage loans are measured for impairment based on the underlying collateral value. All TDRs, regardless of the outstanding balance amount, are also considered to be impaired. Loans acquired with evidence of deterioration of credit quality since origination for which it is probable at acquisition that all contractually required payments will not be collected are also considered to be impaired.
Once a loan has been identified for an assessment of impairment, the loan is considered impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. This determination requires significant judgment and use of estimates, and the eventual outcome may differ significantly from those estimates.
When a loan in any class has been determined to be impaired, the amount of the impairment is measured using the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, the observable market price of the loan, or the fair value of the collateral, less anticipated selling costs, if the loan is collateral dependent. When the present value of expected future cash flows is used, the effective interest rate is the original contractual interest rate of the loan adjusted for any cost, fee, premium, or discount. When the contractual interest rate is variable, the effective interest rate of the loan changes over time. A specific reserve is established as a component of the ALLL when a loan has been determined to be impaired. Subsequent to the initial measurement of impairment, if there is a significant change to the impaired loan’s expected future cash flows, or if actual cash flows are significantly different from the cash flows previously estimated, Huntington recalculates the impairment and appropriately adjusts the specific reserve. Similarly, if Huntington measures impairment based on the observable market price of an impaired loan or the fair value of the collateral of an impaired collateral dependent loan, Huntington will adjust the specific reserve.
When a loan within any class is impaired, the accrual of interest income is discontinued unless the receipt of principal and interest is no longer in doubt. Interest income on TDRs is accrued when all principal and interest is expected to be collected under the post-modification terms. Cash receipts on nonaccruing impaired loans within any class are generally applied entirely against principal until the loan has been collected in full (including already charged-off portion), after which time any additional cash receipts are recognized as interest income. Cash receipts on accruing impaired loans within any class are applied in the same manner as accruing loans that are not considered impaired.
The following tables present the balance of the ALLL attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance at March 31, 2017 and December 31, 2016:
(dollar amounts in thousands)
 
Commercial
 
Consumer
 
Total
ALLL at March 31, 2017:
 
 
 
 
 
 
Portion of ALLL balance:
 
 
 
 
 
 
Attributable to loans individually evaluated for impairment
 
$
24,519

 
$
11,888

 
$
36,407

Attributable to loans collectively evaluated for impairment
 
455,789

 
180,384

 
636,173

Total ALLL balance
 
$
480,308

 
$
192,272

 
$
672,580

Loan and Lease Ending Balances at March 31, 2017: (1)
 
 
 
 
 
 
Portion of loan and lease ending balance:
 
 
 
 
 
 
Purchased credit-impaired loans
 
$
90,111

 
$
—

 
$
90,111

Individually evaluated for impairment
 
425,793

 
457,790

 
883,583

Collectively evaluated for impairment
 
34,753,138

 
31,273,095

 
66,026,233

Total loans and leases evaluated for impairment
 
$
35,269,042

 
$
31,730,885

 
$
66,999,927

(dollar amounts in thousands)
 
Commercial
 
Consumer
 
Total
ALLL at December 31, 2016
 
 
 
 
 
 
Portion of ALLL balance:
 
 
 
 
 
 
Attributable to loans individually evaluated for impairment
 
$
10,525

 
$
11,021

 
$
21,546

Attributable to loans collectively evaluated for impairment
 
440,566

 
176,301

 
616,867

Total ALLL balance:
 
$
451,091

 
$
187,322

 
$
638,413

Loan and Lease Ending Balances at December 31, 2016 (1)
 
 
 
 
 
 
Portion of loan and lease ending balances:
 
 
 
 
 
 
Purchased credit-impaired loans
 
$
102,380

 
$
—

 
$
102,380

Individually evaluated for impairment
 
415,624

 
457,890

 
873,514

Collectively evaluated for impairment
 
34,841,609

 
31,062,174

 
65,903,783

Total loans and leases evaluated for impairment
 
$
35,359,613

 
$
31,520,064

 
$
66,879,677


(1)
Excludes loans accounted for under the fair value option.
The following tables present by class the ending, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized only for impaired loans and leases and purchased credit-impaired loans: (1), (2)
 
 
March 31, 2017
 
Three months ended
March 31,
(dollar amounts in thousands)
 
Ending
Balance
 
Unpaid
Principal
Balance (5)
 
Related
Allowance
 
Average
Balance
 
Interest
Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
250,789

 
$
290,673

 
$
—

 
$
275,409

 
$
4,500

Commercial real estate
 
86,621

 
117,745

 
—

 
85,829

 
2,000

Automobile
 
—

 
—

 
—

 
—

 
—

Home equity
 
—

 
—

 
—

 
—

 
—

Residential mortgage
 
—

 
—

 
—

 
—

 
—

RV and marine finance
 
—

 
—

 
—

 
—

 
—

Other consumer
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial (3)
 
278,368

 
306,613

 
33,678

 
334,179

 
1,906

Commercial real estate (4)
 
41,416

 
49,444

 
2,810

 
69,094

 
467

Automobile
 
32,731

 
32,942

 
2,004

 
31,846

 
534

Home equity (6)
 
326,755

 
360,622

 
16,232

 
323,079

 
3,949

Residential mortgage (6) (7)
 
349,527

 
383,685

 
14,217

 
338,640

 
3,110

RV and marine finance
 
687

 
710

 
26

 
343

 
11

Other consumer
 
4,245

 
4,245

 
248

 
4,071

 
57

 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
529,157

 
597,286

 
33,678

 
609,588

 
6,406

Commercial real estate
 
128,037

 
167,189

 
2,810

 
154,923

 
2,467

Automobile
 
32,731

 
32,942

 
2,004

 
31,846

 
534

Home equity
 
326,755

 
360,622

 
16,232

 
323,079

 
3,949

Residential mortgage
 
349,527

 
383,685

 
14,217

 
338,640

 
3,110

RV and marine finance
 
687

 
710

 
26

 
343

 
11

Other consumer
 
4,245

 
4,245

 
248

 
4,071

 
57


 
 
December 31, 2016
 
Three months ended
March 31,
(dollar amounts in thousands)
 
Ending
Balance
 
Unpaid
Principal
Balance (5)
 
Related
Allowance
 
Average
Balance
 
Interest
Income
Recognized
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
299,606


$
358,712


$
—


$
261,144


$
1,233

Commercial real estate
 
88,817


126,152


—


71,807


1,616

Automobile
 
—

 
—

 
—

 
—

 
—

Home equity
 
—


—


—


—


—

Residential mortgage
 
—


—


—


1,473


2

RV and marine finance
 
—

 
—

 
—

 
—

 
—

Other consumer
 
—


—


—


45


102

 
 
 
 
 
 
 
 
 
 
 
With an allowance recorded:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial (3)
 
406,243

 
448,121

 
22,259

 
264,084

 
3,086

Commercial real estate (4)
 
97,238

 
107,512

 
3,434

 
79,857

 
758

Automobile
 
30,961

 
31,298

 
1,850

 
32,284

 
578

Home equity (6)
 
319,404

 
352,722

 
15,032

 
250,016

 
2,968

Residential mortgage (6) (7)
 
327,753

 
363,099

 
12,849

 
362,280

 
3,036

RV and marine finance
 
—

 
—

 
—

 
—

 
—

Other consumer
 
3,897

 
3,897

 
260

 
4,799

 
66

 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
705,849

 
806,833

 
22,259

 
525,228

 
4,319

Commercial real estate
 
186,055

 
233,664

 
3,434

 
151,664

 
2,374

Automobile
 
30,961

 
31,298

 
1,850

 
32,284

 
578

Home equity
 
319,404

 
352,722

 
15,032

 
250,016

 
2,968

Residential mortgage
 
327,753

 
363,099

 
12,849

 
363,753

 
3,038

RV and marine finance
 
—

 
—

 
—

 
—

 
—

Other consumer
 
3,897

 
3,897

 
260

 
4,844

 
168

(1)
These tables do not include loans fully charged-off.
(2)
All automobile, RV and marine finance and other consumer impaired loans included in these tables are considered impaired due to their status as a TDR.
(3)
At March 31, 2017 and December 31, 2016, commercial and industrial loans with an allowance recorded of $117 million and $293 million, respectively, were considered impaired due to their status as a TDR.
(4)
At March 31, 2017 and December 31, 2016, commercial real estate loans with an allowance recorded of $24 million and $81 million, respectively, were considered impaired due to their status as a TDR.
(5)
The differences between the ending balance and unpaid principal balance amounts represent partial charge-offs.
(6)
Includes home equity and residential mortgages considered to be collateral dependent as well as home equity and mortgage loans considered impaired due to their status as a TDR.
(7)
At March 31, 2017 and December 31, 2016, residential mortgage loans with an allowance recorded of $30 million and $29 million, respectively, were guaranteed by the U.S. government.
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 are not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs. Acquired, non-purchased credit impaired loan are only considered for TDR reporting for modifications made subsequent to acquisition.
The following table presents by class and by the reason for the modification, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the three-month periods ended March 31, 2017 an 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
New Troubled Debt Restructurings During The Three-Month Period Ended (1)
 
March 31, 2017
 
March 31, 2016
(dollar amounts in thousands)
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
 
Number of
Contracts
 
Post-modification
Outstanding
Ending Balance
 
Financial effects
of modification (2)
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
$
19

 
$
6

 
1

 
$
17

 
$
(1
)
Amortization or maturity date change
236

 
112,425

 
(1,002
)
 
184

 
122,658

 
572

Other
3

 
160

 
(27
)
 
8

 
858

 
(4
)
Total Commercial and industrial
240

 
112,604

 
(1,023
)
 
193

 
123,533

 
567

Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
—

 
—

 
—

 
—

 
—

 
—

Amortization or maturity date change
24

 
31,263

 
(388
)
 
24

 
33,795

 
(559
)
Other
—

 
—

 
—

 
2

 
263

 
16

Total commercial real estate:
24

 
31,263

 
(388
)
 
26

 
34,058

 
(543
)
Automobile:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
14

 
178

 
5

 
4

 
42

 
2

Amortization or maturity date change
477

 
4,301

 
111

 
421

 
3,901

 
220

Chapter 7 bankruptcy
240

 
1,822

 
29

 
317

 
2,562

 
115

Other
—

 
—

 
—

 
—

 
—

 
—

Total Automobile
731

 
6,301

 
145

 
742

 
6,505

 
337

Home equity:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
8

 
562

 
7

 
20

 
1,384

 
67

Amortization or maturity date change
106

 
5,496

 
(674
)
 
229

 
11,890

 
(1,282
)
Chapter 7 bankruptcy
87

 
3,619

 
1,038

 
99

 
3,597

 
733

Other
58

 
3,729

 
(326
)
 
—

 
—

 
—

Total Home equity
259

 
13,406

 
45

 
348

 
16,871

 
(482
)
Residential mortgage:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
2

 
110

 
(9
)
 
5

 
657

 
(32
)
Amortization or maturity date change
99

 
11,071

 
(258
)
 
92

 
10,759

 
(577
)
Chapter 7 bankruptcy
24

 
2,691

 
(136
)
 
17

 
1,505

 
70

Other
16

 
1,920

 
14

 
—

 
—

 
—

Total Residential mortgage
141

 
15,792

 
(389
)
 
114

 
12,921

 
(539
)
RV and marine finance:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
—

 
—

 
—

 
—

 
—

 
—

Amortization or maturity date change
14

 
476

 
12

 
—

 
—

 
—

Chapter 7 bankruptcy
15

 
210

 
4

 
—

 
—

 
—

Other
—

 
—

 
—

 
—

 
—

 
—

Total RV and marine finance
29

 
686

 
16

 
—

 
—

 
—

Other consumer:
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
1

 
78

 
2

 
—

 
—

 
—

Amortization or maturity date change
2

 
267

 
7

 
4

 
555

 
24

Chapter 7 bankruptcy
1

 
4

 
—

 
7

 
66

 
7

Other
—

 
—

 
—

 
—

 
—

 
—

Total Other consumer
4

 
349

 
9

 
11

 
621

 
31

Total new troubled debt restructurings
1,428

 
$
180,401

 
$
(1,585
)
 
1,434

 
$
194,509

 
$
(629
)
 
 
 
 
 
 
 
 
(1)
TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.
(2)
Amount represents the financial impact via provision for loan and lease losses as a result of the modification.
Pledged Loans and Leases
 
 
 
 
 
 
 
 

At March 31, 2017, the Bank has access to the Federal Reserve’s discount window and advances from the FHLB – Cincinnati. As of March 31, 2017, these borrowings and advances are secured by $29.3 billion of loans and securities.
On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which we have re-branded Huntington Technology Finance. Huntington assumed debt associated with a related securitization. As of March 31, 2017, the debt is secured by $55 million of leases held by the trust.