DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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3 Months Ended |
Mar. 31, 2017 |
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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 March 31, 2017, 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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$ |
2,550,000 |
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$ |
2,550,000 |
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Deposits |
— |
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— |
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|
— |
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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 |
7,225,000 |
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— |
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|
7,225,000 |
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Total notional value at March 31, 2017 |
$ |
8,175,000 |
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|
$ |
2,550,000 |
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$ |
10,725,000 |
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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 March 31, 2017:
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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 |
$ |
2,550,000 |
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0.5 |
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$ |
(4,371 |
) |
|
1.08 |
% |
|
1.19 |
% |
Liability conversion swaps |
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Receive fixed—generic |
8,175,000 |
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2.8 |
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(64,090 |
) |
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1.51 |
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|
1.02 |
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Total swap portfolio at March 31, 2017 |
$ |
10,725,000 |
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|
2.3 |
|
$ |
(68,461 |
) |
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1.41 |
% |
|
1.06 |
% |
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| Asset and liability derivatives included in accrued income and other assets |
The following table presents the fair values at March 31, 2017 and December 31, 2016 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) |
March 31, 2017 |
|
December 31, 2016 |
Interest rate contracts designated as hedging instruments |
$ |
42,421 |
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$ |
46,440 |
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Interest rate contracts not designated as hedging instruments |
197,221 |
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|
213,587 |
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Foreign exchange contracts not designated as hedging instruments |
18,431 |
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|
23,265 |
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Commodities contracts not designated as hedging instruments |
73,996 |
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|
108,026 |
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Equity contracts not designated as hedging instruments |
10,081 |
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|
9,775 |
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Total contracts |
$ |
342,150 |
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$ |
401,093 |
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Liability derivatives included in accrued expenses and other liabilities:
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(dollar amounts in thousands) |
March 31, 2017 |
|
December 31, 2016 |
Interest rate contracts designated as hedging instruments |
$ |
110,882 |
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$ |
99,996 |
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Interest rate contracts not designated as hedging instruments |
127,260 |
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|
143,976 |
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Foreign exchange contracts not designated as hedging instruments |
17,285 |
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|
19,576 |
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Commodities contracts not designated as hedging instruments |
70,705 |
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|
104,328 |
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Equity contracts not designated as hedging instruments |
— |
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— |
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Total contracts |
$ |
326,132 |
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$ |
367,876 |
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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:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Interest rate contracts |
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Change in fair value of interest rate swaps hedging deposits (1) |
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$ |
— |
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$ |
(82 |
) |
Change in fair value of hedged deposits (1) |
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— |
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|
72 |
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Change in fair value of interest rate swaps hedging subordinated notes (2) |
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(4,708 |
) |
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6,804 |
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Change in fair value of hedged subordinated notes (2) |
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5,403 |
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(6,804 |
) |
Change in fair value of interest rate swaps hedging other long-term debt (2) |
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(10,282 |
) |
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61,032 |
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Change in fair value of hedged other long-term debt (2) |
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8,535 |
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(59,786 |
) |
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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 March 31, |
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Three months ended March 31, |
(dollar amounts in thousands) |
2017 |
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2016 |
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2017 |
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2016 |
Interest rate contracts |
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Loans |
$ |
(1,190 |
) |
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$ |
9,249 |
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Interest and fee income - loans and leases |
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$ |
560 |
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$ |
(645 |
) |
Investment Securities |
— |
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— |
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Noninterest income - other income |
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— |
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1 |
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$ |
(1,190 |
) |
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$ |
9,249 |
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$ |
560 |
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$ |
(644 |
) |
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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 for the ineffective portion of interest rate contracts for derivatives designated as cash flow hedges for the three-month periods ended March 31, 2017 and 2016:
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Three months ended
March 31, |
(dollar amounts in thousands) |
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2017 |
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2016 |
Derivatives in cash flow hedging relationships |
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Interest rate contracts |
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Loans |
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|
$ |
(103 |
) |
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$ |
421 |
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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) |
March 31, 2017 |
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December 31, 2016 |
Derivative assets: |
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Interest rate lock agreements |
$ |
9,439 |
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$ |
5,747 |
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Forward trades and options |
434 |
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|
13,319 |
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Total derivative assets |
9,873 |
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|
19,066 |
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Derivative liabilities: |
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Interest rate lock agreements |
(565 |
) |
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(1,598 |
) |
Forward trades and options |
(3,047 |
) |
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(1,173 |
) |
Total derivative liabilities |
(3,612 |
) |
|
(2,771 |
) |
Net derivative asset (liability) |
$ |
6,261 |
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$ |
16,295 |
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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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March 31, 2017 |
Derivatives |
$ |
329,744 |
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|
$ |
(246,192 |
) |
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$ |
83,552 |
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$ |
— |
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$ |
(21,427 |
) |
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$ |
62,125 |
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December 31, 2016 |
Derivatives |
370,647 |
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|
(272,361 |
) |
|
98,286 |
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(7,550 |
) |
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(23,943 |
) |
|
66,793 |
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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 March 31, 2017 and December 31, 2016:
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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March 31, 2017 |
Derivatives |
$ |
352,023 |
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$ |
(173,603 |
) |
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$ |
178,420 |
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$ |
(20,393 |
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$ |
(11,120 |
) |
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$ |
146,907 |
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December 31, 2016 |
Derivatives |
420,159 |
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(181,940 |
) |
|
238,219 |
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(34,328 |
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(5,428 |
) |
|
198,463 |
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