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HUNTINGTON BANCSHARES INC /MD/ - Quarter Report: 2022 June (Form 10-Q)

Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
OR
 ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

hban-20220630_g1.jpg
Huntington Bancshares Incorporated
(Exact name of registrant as specified in its charter)
Maryland
1-34073
31-0724920
(State or other jurisdiction of
incorporation or organization)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
Registrant’s address: 41 South High Street, Columbus, Ohio 43287
Registrant’s telephone number, including area code: (614) 480-2265
Securities registered pursuant to Section 12(b) of the Act
Title of class
Trading
Symbol(s)
Name of exchange on which registered
Depositary Shares (each representing a 1/40th interest in a share of 4.500% Series H Non-Cumulative, perpetual preferred stock)HBANPNASDAQ
Depositary Shares (each representing a 1/1000th interest in a share of 5.70% Series I Non-Cumulative, perpetual preferred stock)HBANMNASDAQ
Common Stock—Par Value $0.01 per ShareHBANNASDAQ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ☐  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    x  Yes    ☐  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐  Yes    x  No
There were 1,442,194,344 shares of the registrant’s common stock ($0.01 par value) outstanding on June 30, 2022.

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HUNTINGTON BANCSHARES INCORPORATED
INDEX
 
2 Huntington Bancshares Incorporated
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Glossary of Acronyms and Terms

The following listing provides a comprehensive reference of common acronyms and terms used throughout the document: 
ACL  Allowance for Credit Losses
AFS  Available-for-Sale
ALLL  Allowance for Loan and Lease Losses
AOCIAccumulated Other Comprehensive Income
ASC  Accounting Standards Codification
AULC  Allowance for Unfunded Lending Commitments
Basel III  Refers to the final rule issued by the FRB and OCC and published in the Federal Register on October 11, 2013
CARES ActCoronavirus Aid, Relief, and Economic Security Act, as amended
C&I  Commercial and Industrial
CCAR  Comprehensive Capital Analysis and Review
CDs  Certificates of Deposit
CDICore Deposit Intangible
CECLCurrent Expected Credit Loss
CET1  Common Equity Tier 1 on a Basel III basis
CFPB  Bureau of Consumer Financial Protection
CMO  Collateralized Mortgage Obligations
COVID-19Coronavirus Disease 2019
CRE  Commercial Real Estate
EADExposure at Default
EVE  Economic Value of Equity
FASBFinancial Accounting Standards Board
FDIC  Federal Deposit Insurance Corporation
FHLB  Federal Home Loan Bank
FICO  Fair Isaac Corporation
FRB  Federal Reserve Bank or the Federal Reserve Board
FTE  Fully-Taxable Equivalent
FTP  Funds Transfer Pricing
FVOFair Value Option
GAAP  Generally Accepted Accounting Principles in the United States of America
HTM  Held-to-Maturity
IRS  Internal Revenue Service
LGDLoss Given Default
LIBOR  London Interbank Offered Rate
LIHTC  Low Income Housing Tax Credit
MBS  Mortgage-Backed Securities
MD&A  Management’s Discussion and Analysis of Financial Condition and Results of Operations
MSR  Mortgage Servicing Right
NAICS  North American Industry Classification System
NALs  Nonaccrual Loans
NCO  Net Charge-off
NII  Net Interest Income
NIM  Net Interest Margin
NMNot Meaningful
NPAs  Nonperforming Assets
OCC  Office of the Comptroller of the Currency
2022 2Q Form 10-Q 3

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OCI  Other Comprehensive Income
OLEM  Other Loans Especially Mentioned
PDProbability of Default
PPPPaycheck Protection Program
RBHPCG  Regional Banking and The Huntington Private Client Group
ROCRisk Oversight Committee
SBASmall Business Administration
SCBStress Capital Buffer
SEC  Securities and Exchange Commission
SOFRSecured Overnight Financing Rate
TCFTCF Financial Corporation
TDR  Troubled Debt Restructuring
U.S. Treasury  U.S. Department of the Treasury
UPBUnpaid Principal Balance
VIE  Variable Interest Entity
XBRL  eXtensible Business Reporting Language

4 Huntington Bancshares Incorporated
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PART I. FINANCIAL INFORMATION
When we refer to “we”, “our”, “us”, “Huntington”, and “the Company” in this report, we mean Huntington Bancshares Incorporated and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, Huntington Bancshares Incorporated. When we refer to the “Bank” in this report, we mean our only bank subsidiary, The Huntington National Bank, and its subsidiaries.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
INTRODUCTION
We are a multi-state diversified regional bank holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through the Bank, we have over 150 years of servicing the financial needs of our customers. Through our subsidiaries, we provide full-service commercial and consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, investment banking, capital markets, and advisory services, equipment financing, inventory finance, investment management, trust services, brokerage services, insurance products and services, and other financial products and services. At June 30, 2022, our 1,032 full-service branches and private client group offices are primarily located in Ohio, Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Pennsylvania, West Virginia and Wisconsin. Select financial services and other activities are also conducted in various other states. International banking services are available through the headquarters office in Columbus, Ohio. Our foreign banking activities, in total or with any individual country, are not significant.
This MD&A provides information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows. The MD&A included in our 2021 Annual Report on Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2021 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, and other information contained in this report.
EXECUTIVE OVERVIEW
In June 2021, Huntington closed the acquisition of TCF Financial Corporation. Historical periods prior to June 9, 2021 reflect results of legacy Huntington operations. Subsequent to closing, results reflect all post-acquisition activity. See Note 3 “Acquisition of TCF Financial Corporation” of the Notes to Unaudited Condensed Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for further information.
In May 2022, Huntington completed the acquisition of Torana, now known as Huntington Choice Pay, a digital payments business focused on business to consumer payments. This acquisition along with the formation of our enterprise-wide payments group reflects one of our strategic priorities to accelerate our payments capabilities and expand the services provided to our customers.
In June 2022, Huntington completed the acquisition of Capstone Partners, a top tier middle market investment bank and advisory firm. The transaction brings a national scale to serve middle market business owners throughout the corporate lifecycle, building on Huntington’s regional banking foundation. Capstone Partners related revenue, including mergers and acquisitions, capital raising and other advisory-related fees, is recognized within capital markets fees in the Consolidated Statements of Income.
Summary of 2022 Second Quarter Results Compared to 2021 Second Quarter
For the quarter, we reported net income of $539 million, or $0.35 per diluted common share, compared with a net loss of $15 million, or $0.05 per diluted common share, in the year-ago quarter. The 2022 second quarter reported net income benefited from the full-quarter impact of the TCF acquisition and organic growth, while the year-ago quarter was negatively impacted by the TCF acquisition initial provision for credit losses of $294 million, or $239 million after tax ($0.21 per diluted common share) in addition to acquisition-related expenses totaling $269 million, or $218 million after-tax ($0.19 per diluted common share).

2022 2Q Form 10-Q 5

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Net interest income was $1.3 billion, up $423 million, or 50% from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, increased $423 million, or 50%, from the year-ago quarter. The increase in FTE net interest income reflected the benefit from a $33.8 billion, or 27%, increase in average earning assets and a 49 basis point increase in the FTE NIM to 3.15%. Average earning assets growth included a $26.6 billion, or 30%, increase in average loans and leases and a $11.8 billion, or 38%, increase in average securities. The year-over-year increase in NIM was primarily due to improvements in yields on earning assets largely driven by the Federal Reserve's rate increases in addition to the 2021 second quarter unfavorable impact from the $55 million mark-to-market of interest rate caps.
The provision for credit losses decreased $144 million from the year-ago quarter to $67 million in the 2022 second quarter. The decrease in provision for credit losses was primarily due to the TCF acquisition initial provision for credit losses of $294 million recognized in the year-ago quarter, partially offset by loan and lease growth. The ACL decreased $154 million from the year-ago quarter to $2.2 billion in the 2022 second quarter to 1.87% of total loans and leases, compared to $2.3 billion, or 2.09% of total loans and leases. The decrease in ACL as a percentage of total loans and leases was driven by overall improved credit quality over the last year while recognizing the near-term recessionary risks. NCOs decreased $54 million from the year-ago-quarter to $8 million. Total NCOs represented an annualized 0.03% of average loans and leases in the current quarter, down from 0.28% in the year-ago quarter.
Noninterest income was $485 million, an increase of $41 million, or 9%, and noninterest expense decreased $54 million, or 5%, from the year-ago quarter. The increase to noninterest income was primarily due to the full-quarter benefit from the TCF acquisition, completed in June 2021. The decrease to noninterest expense was primarily due to a reduction in acquisition-related expenses of $245 million and execution of cost reduction initiatives, partially offset by the full-quarter impact from the TCF acquisition.
The tangible common equity to tangible assets ratio was 5.80% at June 30, 2022, down 108 basis points from December 31, 2021, primarily due to a decrease in tangible common equity related to higher interest rates causing a decrease in accumulated other comprehensive income and the impact from the acquisitions of Capstone Partners and Torana, partially offset by earnings. CET1 risk-based capital ratio was 9.05%, down from 9.33% from December 31, 2021. The regulatory Tier 1 risk-based capital ratio was 10.63% compared to 10.99% at December 31, 2021. The decrease in regulatory capital ratios was primarily driven by risk-weighted assets growth and goodwill recognized, partially offset by earnings.
During the first six months of 2022, Huntington repurchased no shares of common stock under the current repurchase authorization which began the third quarter of 2021 and expired June 30, 2022. As of June 30, 2022, the end of the current repurchase authorization, Huntington completed $650 million of the share repurchase authorization.
Business Overview
General
Our general business objectives are:
•Build on our vision to become the country’s leading people-first, digitally powered bank
•Drive sustainable long-term revenue growth and efficiency
•Deliver a Category of One customer experience through proactive and personalized guidance, differentiated products, and expertise
•Extend our digital capabilities with focus on ease of use, access to information, and self-service across products and services
•Add scale and scope by acquiring and deepening relationships and launching of select partnerships
•Maintain positive operating leverage and execute disciplined capital management
•Execute effective risk management with an aggregate moderate-to-low, through-the-cycle risk appetite
COVID-19
The COVID-19 pandemic has caused unprecedented disruption that has affected daily living and has negatively impacted the economy. As further discussed in “Discussion of Results of Operations,” the volatility in the markets and economic uncertainty caused by the pandemic continue to have impact.
6 Huntington Bancshares Incorporated
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Huntington reacted quickly to the changes required by the pandemic as a result of the commitment and flexibility of our colleagues coupled with well-prepared business continuity plans. We continue to make progress welcoming more of our colleagues back to the office as part of our Coming Back Together plan. We offer Workplace Flex to help employees achieve work/life harmony in support of the business. We achieve this with flexible work arrangements, parental leave, and other health, wellness and financial benefits and services that assist employees and their families. We continue to monitor the impact of the virus and current government guidelines.
Economy
Growth in economic activity and demand for goods and services, alongside labor shortages, supply chain complications and geopolitical matters, have contributed to rising inflation. In response, the FRB has raised interest rates and began reducing the size of its balance sheet. Furthermore, the FRB signaled that it would continue to implement these policy actions in order to bring inflation down. The timing and impact of inflation and rising interest rates on our business and related financial results will depend on future developments, which are highly uncertain and difficult to predict. Our businesses and financial results may be impacted by a variety of other factors as well, such as an economic slowdown or recession.
We delivered positive results this quarter, driven by continued execution of strategic initiatives in addition to loan and lease and revenue growth. Further, we added capabilities through the acquisitions of Capstone Partners and Torana during the quarter. Additionally, we saw net interest income expansion, average deposit growth and demonstrated disciplined expense management. Credit continues to perform well in keeping with our aggregate moderate-to-low risk profile through-the-cycle. Through our disciplined and proactive approach, we believe Huntington is well positioned to manage through the uncertainty in the macroeconomic environment. We remain focused on delivering profitable growth.
DISCUSSION OF RESULTS OF OPERATIONS
This section provides a review of financial performance on a consolidated basis. Key Unaudited Condensed Consolidated Balance Sheet and Unaudited Condensed Statement of Income trends are discussed. All earnings per share data are reported on a diluted basis. For additional insight on financial performance, please read this section in conjunction with the “Business Segment Discussion”.


2022 2Q Form 10-Q 7

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Table 1 - Selected Quarterly Income Statement Data
 Three Months Ended
June 30,June 30,Change
(amounts in millions, except per share data)20222021AmountPercent
Interest income$1,331 $935 $396 42 %
Interest expense70 97 (27)(28)
Net interest income1,261 838 423 50 
Provision for credit losses67 211 (144)(68)
Net interest income after provision for credit losses1,194 627 567 90 
Service charges on deposit accounts 105 88 17 19 
Card and payment processing income96 80 16 20 
Mortgage banking income44 67 (23)(34)
Trust and investment management services63 56 7 13 
Capital markets fees54 35 19 54 
Insurance income27 25 2 8 
Leasing revenue27 12 15 NM
Bank owned life insurance income11 16 (5)(31)
Gain on sale of loans12 3 9 NM
Net gains on sales of securities— 10 (10)(100)
Other noninterest income46 52 (6)(12)
Total noninterest income485 444 41 9 
Personnel costs577 592 (15)(3)
Outside data processing and other services153 162 (9)(6)
Net occupancy58 72 (14)(19)
Equipment61 55 6 11 
Professional services19 48 (29)(60)
Marketing24 15 9 60 
Deposit and other insurance expense20 8 12 150 
Amortization of intangibles13 11 2 18 
Lease financing equipment depreciation11 5 6 120 
Other noninterest expense82 104 (22)(21)
Total noninterest expense1,018 1,072 (54)(5)
Income (loss) before income taxes661 (1)662 NM
Provision for income taxes120 14 106 NM
Income (loss) after income taxes541 (15)556 NM
Income attributable to non-controlling interest2 — 2 NM
Net income (loss) attributable to Huntington Bancshares Inc539 (15)554 NM
Dividends on preferred shares28 43 (15)(35)
Net income (loss) applicable to common shares$511 $(58)$569 NM
Average common shares—basic1,441 1,125 316 28 
Average common shares—diluted1,463 1,125 338 30 
Net income per common share—basic$0.35 $(0.05)$0.40 NM
Net income per common share—diluted0.35 (0.05)0.40 NM
Return on average total assets1.22 %(0.05)%
Return on average common shareholders’ equity12.8 (1.9)
Return on average tangible common shareholders’ equity (1)19.9 (2.1)
Net interest margin (2)3.15 2.66 
Efficiency ratio (3)57.3 83.1 
Effective tax rate18.1 (2,353.3)
Revenue and Net Interest Income—FTE (non-GAAP)
Net interest income$1,261 $838 $423 50 
FTE adjustment6 6 — — 
Net interest income, FTE (non-GAAP) (2)1,267 844 423 50 
Noninterest income485 444 41 9 
Total revenue, FTE (non-GAAP) (2)$1,752 $1,288 $464 36 
(1)Net income (loss) excluding expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common shareholders’ equity equals average total common shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 21% tax rate.
(2)On an FTE basis assuming a 21% tax rate.
(3)Noninterest expense less amortization of intangibles and goodwill impairment divided by the sum of FTE net interest income and noninterest income excluding securities gains (losses).


8 Huntington Bancshares Incorporated
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Table 2 - Selected Year to Date Income Statement Data
 Six Months Ended June 30,Change
(amounts in millions, except per share data)20222021AmountPercent
Interest income$2,526 $1,804 $722 40 %
Interest expense119 (6)125 NM
Net interest income2,407 1,810 597 33 
Provision for credit losses92 151 (59)(39)
Net interest income after provision for credit losses2,315 1,659 656 40 
Service charges on deposit accounts 202 157 45 29 
Card and payment processing income182 145 37 26 
Mortgage banking income93 167 (74)(44)
Trust and investment management services128 108 20 19 
Capital markets fees96 64 32 50 
Insurance income58 52 6 12 
Leasing revenue62 16 46 NM
Bank owned life insurance income28 32 (4)(13)
Gain on sale of loans40 6 34 NM
Net gains on sales of securities— 10 (10)(100)
Other noninterest income95 82 13 16 
Total noninterest income984 839 145 17 
Personnel costs1,157 1,060 97 9 
Outside data processing and other services318 277 41 15 
Net occupancy122 114 8 7 
Equipment142 101 41 41 
Professional services38 65 (27)(42)
Marketing45 29 16 55 
Deposit and other insurance expense38 16 22 138 
Amortization of intangibles27 21 6 29 
Lease financing equipment depreciation25 5 20 NM
Other noninterest expense159 177 (18)(10)
Total noninterest expense2,071 1,865 206 11 
Income before income taxes1,228 633 595 94 
Provision for income taxes225 116 109 94 
Income after income taxes1,003 517 486 94 
Income attributable to non-controlling interest4 — 4 100 
Net income attributable to Huntington Bancshares Inc999 517 482 93 
Dividends on preferred shares56 74 (18)(24)
Net income applicable to common shares$943 $443 $500 113 %
Average common shares—basic1,440 1,071 369 34 %
Average common shares—diluted1,464 1,094 370 34 
Net income per common share—basic$0.65 $0.41 $0.24 59 
Net income per common share—diluted0.64 0.40 0.24 60 
Revenue and Net Interest Income—FTE (Non-GAAP)
Net interest income$2,407 $1,810 $597 33 %
FTE adjustment14 12 2 17 
Net interest income, FTE (non-GAAP) (1)2,421 1,822 599 33 
Noninterest income984 839 145 17 
Total revenue, FTE (non-GAAP) (1)$3,405 $2,661 $744 28 %
(1)On an FTE basis assuming a 21% tax rate.


2022 2Q Form 10-Q 9

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Average Balance Sheet / Net Interest Income
The following tables detail the change in our average balance sheet and the net interest margin.

Table 3 - Consolidated Quarterly Average Balance Sheet and Net Interest Margin
 Three Months Ended
June 30, 2022June 30, 2021Change in
AverageInterestYield/AverageInterestYield/Average Balances
(dollar amounts in millions)BalancesIncome (FTE) (1)Rate (2)BalancesIncome (FTE) (1)Rate (2)AmountPercent
Assets:
Interest-bearing deposits at Federal Reserve Bank$3,532 $7 0.80 %$7,636 $2 0.11 %$(4,104)(54)%
Interest-bearing deposits in banks161 1 1.32 319 — 0.01 (158)(50)
Securities:
Trading account securities30 1 3.99 48 1 2.96 (18)(38)
Available-for-sale securities:
Taxable21,672 123 2.25 20,096 67 1.34 1,576 8 
Tax-exempt2,859 19 2.71 2,832 17 2.42 27 1 
Total available-for-sale securities24,531 142 2.30 22,928 84 1.47 1,603 7 
Held-to-maturity securities—taxable17,234 90 2.10 7,280 35 1.94 9,954 137 
Other securities755 6 3.62 479 2 1.72 276 58 
Total securities42,550 239 2.24 30,735 122 1.59 11,815 38 
Loans held for sale1,033 10 4.08 1,294 9 2.79 (261)(20)
Loans and leases: (3)
Commercial:
Commercial and industrial42,689 415 3.84 34,126 319 3.70 8,563 25 
Commercial real estate15,276 131 3.41 9,083 72 3.13 6,193 68 
Lease financing4,919 61 4.98 2,798 36 5.00 2,121 76 
Total commercial62,884 607 3.83 46,007 427 3.67 16,877 37 
Consumer:
Residential mortgage20,527 158 3.09 13,768 104 3.04 6,759 49 
Automobile13,557 115 3.40 12,793 115 3.62 764 6 
Home equity10,373 115 4.44 9,375 89 3.79 998 11 
RV and marine5,317 55 4.12 4,447 46 4.13 870 20 
Other consumer1,291 30 9.08 1,004 27 10.61 287 29 
Total consumer51,065 473 3.70 41,387 381 3.69 9,678 23 
Total loans and leases113,949 1,080 3.77 87,394 808 3.68 26,555 30 
Allowance for loan and lease losses(2,053)(1,828)(225)(12)
Net loans and leases111,896 85,566 26,330 31 
Total earning assets161,225 1,337 3.33 127,378 941 2.96 33,847 27 
Cash and due from banks1,669 1,106 563 51 
Goodwill and other intangible assets5,613 3,055 2,558 84 
All other assets10,107 8,119 1,988 24 
Total assets$176,561 $137,830 $38,731 28 %
Liabilities and Shareholders’ Equity:
Interest-bearing deposits:
Demand deposits—interest-bearing$41,712 $11 0.10 %$29,729 $4 0.04 %$11,983 40 %
Money market deposits33,791 8 0.09 28,124 4 0.06 5,667 20 
Savings and other domestic deposits21,683 1 0.02 15,190 2 0.04 6,493 43 
Core certificates of deposit (4)2,228 — 0.07 1,832 1 0.19 396 22 
Other domestic deposits of $250,000 or more225 — 0.23 259 — 0.26 (34)(13)
Negotiable CDs, brokered and other deposits
2,981 5 0.72 2,986 1 0.16 (5)— 
Total interest-bearing deposits102,620 25 0.10 78,120 12 0.06 24,500 31 
Short-term borrowings2,103 7 1.40 241 — 0.47 1,862 NM
Long-term debt (5)7,024 38 2.16 6,887 85 4.97 137 2 
Total interest-bearing liabilities111,747 70 0.25 85,248 97 0.45 26,499 31 
Demand deposits—noninterest-bearing42,388 34,558 7,830 23 
All other liabilities4,168 2,608 1,560 60 
Total Huntington Bancshares Inc shareholders’ equity18,228 15,410 2,818 18 
Non-controlling interest30 6 24 NM
Total equity18,258 15,416 2,842 18 
Total liabilities and shareholders’ equity$176,561 $137,830 $38,731 28 %
Net interest rate spread3.08 2.51 
Impact of noninterest-bearing funds on margin0.07 0.15 
Net interest margin/NII (FTE)$1,267 3.15 %$844 2.66 %
(1)FTE yields are calculated assuming a 21% tax rate.
(2)Average yield rates include the impact of applicable derivatives. Loan and lease and deposit average yield rates also include impact of applicable non-deferrable and amortized fees.
(3)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
(4)Includes consumer certificates of deposit of $250,000 or more.
(5)    Reflects the net mark-to-market impact of interest rate caps, a detriment of $55 million, or 318 bps, for the three-month period ended June 30, 2021. There was no impact for the three-month period ended June 30, 2022.
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2022 Second Quarter versus 2021 Second Quarter
Net interest income for the 2022 second quarter increased $423 million, or 50%, from the 2021 second quarter. FTE net interest income, a non-GAAP financial measure, for the 2022 second quarter increased $423 million, or 50%, from the 2021 second quarter. The increase in FTE net interest income reflects the benefit of a $33.8 billion, or 27%, increase in average total earning assets and a 49 basis point increase in the FTE NIM to 3.15%. The increase in average total earning assets included a $26.6 billion, or 30%, increase in average loans and leases and a $11.8 billion, or 38%, increase in average securities. Average balances across earning asset categories for the 2022 second quarter reflect the full-quarter impact of the TCF acquisition in addition to organic growth. The increase in average securities was additionally driven by the redeployment of excess liquidity into securities in the second half of 2021.
The NIM expansion was primarily due to improvements in yields on earning assets driven by the Federal Reserve’s rate increases in addition to the 2021 second quarter unfavorable impact from the $55 million mark-to-market of interest rate caps.
Net interest income for the 2022 second quarter included $16 million of net interest income from purchase accounting accretion and $5 million in accelerated PPP loan fees recognized upon forgiveness payments from the SBA, compared to $9 million and $30 million, respectively, in the 2021 second quarter.
2022 2Q Form 10-Q 11

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Table 4 - Consolidated YTD Average Balance Sheets and Net Interest Margin
 Six months ended
June 30, 2022June 30, 2021Change in
AverageInterestYield/AverageInterestYield/Average Balances
(dollar amounts in millions)BalancesIncome (FTE) (1)Rate (2)BalancesIncome (FTE) (1)Rate (2)AmountPercent
Assets:
Interest-bearing deposits at Federal Reserve Bank$5,354 $10 0.38 %$6,855 $4 0.11 %$(1,501)(22)%
Interest-bearing deposits in banks168 1 0.71 248 — 0.03 (80)(32)
Securities:
Trading account securities38 1 3.63 50 1 3.32 (12)(24)
Available-for-sale securities:
Taxable22,931 213 1.85 17,476 116 1.33 5,455 31 
Tax-exempt2,873 41 2.86 2,742 34 2.46 131 5 
Total available-for-sale securities25,804 254 1.96 20,218 150 1.48 5,586 28 
Held-to-maturity securities—taxable15,902 156 1.97 7,772 77 1.98 8,130 105 
Other securities860 11 2.64 447 4 1.69 413 92 
Total securities42,604 422 1.98 28,487 232 1.63 14,117 50 
Loans held for sale1,137 20 3.58 1,343 18 2.71 (206)(15)
Loans and leases: (3)
Commercial:
Commercial and industrial42,047 807 3.82 33,145 634 3.80 8,902 27 
Commercial real estate15,170 245 3.22 8,134 121 2.96 7,036 87 
Lease financing4,915 122 4.95 2,500 64 5.08 2,415 97 
Total commercial62,132 1,174 3.76 43,779 819 3.72 18,353 42 
Consumer:
Residential mortgage20,019 304 3.04 12,936 199 3.08 7,083 55 
Automobile13,510 227 3.39 12,729 231 3.67 781 6 
Home equity10,394 217 4.21 9,093 169 3.75 1,301 14 
RV and marine5,210 107 4.14 4,320 90 4.21 890 21 
Other consumer1,288 58 9.02 988 54 10.89 300 30 
Total consumer50,421 913 3.64 40,066 743 3.73 10,355 26 
Total loans and leases112,553 2,087 3.71 83,845 1,562 3.73 28,708 34 
Allowance for loan and lease losses(2,050)(1,818)(232)(13)
Net loans and leases110,503 82,027 28,476 35 
Total earning assets161,816 2,540 3.17 120,778 1,816 3.03 41,038 34 
Cash and due from banks1,659 1,093 566 52 
Goodwill and other intangible assets5,598 2,618 2,980 114 
All other assets10,061 7,783 2,278 29 
Total assets$177,084 $130,454 $46,630 36 %
Liabilities and Shareholders’ Equity:
Interest-bearing deposits:
Demand deposits—interest-bearing$41,176 $14 0.07 %$28,279 $6 0.04 %$12,897 46 %
Money market deposits33,235 12 0.07 27,190 8 0.06 6,045 22 
Savings and other domestic deposits21,501 2 0.02 13,743 3 0.04 7,758 56 
Core certificates of deposit (4)2,393 1 0.10 1,487 3 0.36 906 61 
Other domestic deposits of $250,000 or more270 — 0.19 309 — 0.15 (39)(13)
Negotiable CDs, brokered and other deposits
3,216 7 0.42 3,169 3 0.17 47 1 
Total interest-bearing deposits101,791 36 0.07 74,177 23 0.06 27,614 37 
Short-term borrowings3,408 14 0.83 224 — 0.34 3,184 NM
Long-term debt (5)6,969 69 1.99 7,324 (29)(0.78)(355)(5)
Total interest-bearing liabilities112,168 119 0.21 81,725 (6)(0.02)30,443 37 
Demand deposits—noninterest-bearing42,177 31,841 10,336 32 
All other liabilities4,068 2,512 1,556 62 
Total Huntington Bancshares Inc shareholders’ equity18,644 14,373 4,271 30 
Non-controlling interest27 3 24 NM
Total equity18,671 14,376 4,295 30 
Total liabilities and shareholders’ equity$177,084 $130,454 $46,630 36 %
Net interest rate spread2.96 3.05 
Impact of noninterest-bearing funds on margin0.06 (0.01)
Net interest margin/NII$2,421 3.02 %$1,822 3.04 %
(1)FTE yields are calculated assuming a 21% tax rate.
(2)Average yield rates include the impact of applicable derivatives. Loan and lease and deposit average yield rates also include impact of applicable non-deferrable and amortized fees.
(3)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
(4)Includes consumer certificates of deposit of $250,000 or more.
(5)    Reflects the net mark-to-market impact of interest rate caps, a benefit of $89 million, or 244 bps, for the first six-month period of 2021. There was no impact for the first six-month period of 2022.

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2022 First Six Months versus 2021 First Six Months
Net interest income for the first six-month period of 2022 increased $597 million, or 33%, from the year-ago period. FTE net interest income, a non-GAAP financial measure, for the first six-month period of 2022 increased $599 million, or 33%, from the year-ago period. The increase in FTE net interest income reflected the benefit of a $41.0 billion, or 34%, increase in average total earning assets, partially offset by a 2 basis point decrease in the FTE net interest margin to 3.02%. The increase in average total earning assets included a $28.7 billion, or 34%, increase in average loans and leases and a $14.1 billion, or 50%, increase in average securities. Average balances across earning assets categories reflect the late second-quarter 2021 TCF acquisition in addition to organic growth. The increase in average securities was additionally driven by the redeployment of excess liquidity into securities in the second half of 2021.
The NIM compression was driven by the benefit from the $89 million net mark-to-market impact of interest rate caps in the prior year and the impact of lower accelerated PPP loan fees recognized upon forgiveness payments from the SBA in 2022, partially offset by improvements in yields on securities and the benefit from an increase in net interest income from purchase accounting accretion in 2022.
Net interest income for the first six-month period of 2022 included $35 million of net interest income from purchase accounting accretion and $16 million in accelerated PPP loan fees recognized upon forgiveness payments from the SBA, compared to $9 million and $75 million, respectively, in the year-ago period.
Provision for Credit Losses
(This section should be read in conjunction with the “Credit Risk” section.)
The provision for credit losses is the expense necessary to maintain the credit allowance at levels appropriate to absorb our estimate of credit losses expected over the life of the loan and lease portfolio, securities portfolio and unfunded lending commitments.
The provision for credit losses for the 2022 second quarter was $67 million, a decrease of $144 million, compared to the 2021 second quarter. On a year-to-date basis, provision for credit losses for the first six-month period of 2022 was $92 million, a decrease of $59 million, or 39%, compared to the year-ago period. The decrease in provision expense over the prior year quarter and the prior year-to-date period was primarily attributed to the second quarter 2021 TCF acquisition initial provision for credit losses of $294 million ($234 million from loans and leases and $60 million from acquired unfunded lending commitments), partially offset by loan and lease growth. The components of the provision for credit losses were as follows:
Table 5 - Provision for Credit Losses
Three Months EndedSix Months Ended
June 30,June 30,June 30,June 30,
(dollar amounts in millions)2022202120222021
Provision for loan and lease losses$64 $145 $71 $98 
Provision for unfunded lending commitments3 66 17 53 
Provision for securities— — 4 — 
Total provision for credit losses$67 $211 $92 $151 
The ACL decreased $154 million from the year-ago quarter to $2.2 billion, or 1.87%, of total loans and leases, compared to $2.3 billion, or 2.09% of total loans and leases. The decrease in ACL as a percentage of total loans and leases was driven by overall improved credit quality over the last year while recognizing the near-term recessionary risks.
2022 2Q Form 10-Q 13

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Noninterest Income
The following table reflects noninterest income for each of the periods presented: 
Table 6 - Noninterest Income
Three Months Ended2Q22 vs. 2Q21
June 30,June 30,Change
(dollar amounts in millions)20222021AmountPercent
Service charges on deposit accounts $105 $88 $17 19 %
Card and payment processing income96 80 16 20 
Mortgage banking income44 67 (23)(34)
Trust and investment management services63 56 7 13 
Capital markets fees54 35 19 54 
Insurance income27 25 2 8 
Leasing revenue27 12 15 125 
Bank owned life insurance income11 16 (5)(31)
Gain on sale of loans12 3 9 NM
Net gains on sales of securities— 10 (10)(100)
Other noninterest income46 52 (6)(12)
Total noninterest income$485 $444 $41 9 %

2022 Second Quarter versus 2021 Second Quarter
Noninterest income for the 2022 second quarter was $485 million, an increase of $41 million, or 9%, from the year-ago quarter. The increase in noninterest income for the 2022 second quarter was driven by the full-quarter impact from the TCF acquisition, completed in June 2021. Capital markets fees increased $19 million, or 54%, primarily reflecting higher interest rate derivative fees, underwriting and advisory fees, foreign exchange fees and loan syndication. Gain on sale of loans increased $9 million, primarily due to resuming the sale of SBA loans in 2022. Trust and investment management services increased $7 million, or 13%, reflecting continued strong sales and the TCF acquisition. All other increases were primarily a result of the impact of the TCF acquisition. Partially offsetting these increases, mortgage banking income decreased $23 million, or 34%, primarily reflecting lower secondary marketing spreads and lower salable volume. Net gains on sales of securities decreased $10 million as the 2021 second quarter included sales reflecting securities optimization following the acquisition of TCF.
Table 7 - Noninterest Income—2022 First Six Months Ended vs. 2021 First Six Months Ended
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Service charges on deposit accounts $202 $157 $45 29 %
Card and payment processing income182 145 37 26 
Mortgage banking income93 167 (74)(44)
Trust and investment management services128 108 20 19 
Capital markets fees96 64 32 50 
Insurance income58 52 6 12 
Leasing revenue62 16 46 NM
Bank owned life insurance income28 32 (4)(13)
Gain on sale of loans40 6 34 NM
Net gains on sales of securities— 10 (10)(100)
Other noninterest income95 82 13 16 
Total noninterest income$984 $839 $145 17 %
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Noninterest income for the first six-month period of 2022 increased $145 million, or 17%, from the year-ago period. The first six-month period of 2022 noninterest income across categories was driven by the full-period impact of the TCF acquisition, completed in June 2021. Gain on sale of loans increased $34 million, reflecting higher SBA loan sales resulting from the strategic decision to retain SBA loans on the balance sheet during 2021. Capital markets fees increased $32 million, or 50%, primarily reflecting higher interest rate derivative fees, foreign exchange fees, loan syndication fees and underwriting and advisory fees. Trust and investment management services increased $20 million, or 19%, primarily reflecting continued strong sales and the TCF acquisition. All other increases were primarily result of the impact of the TCF acquisition. These increases were partially offset by a decrease in mortgage banking of $74 million, or 44%, primarily reflecting lower secondary marketing spreads and lower salable volume, and a decrease in net gains on sales of securities of $10 million, as the prior year included sales reflecting securities optimization following the acquisition of TCF.
Noninterest Expense
The following table reflects noninterest expense for each of the periods presented: 
Table 8 - Noninterest Expense
Three Months Ended2Q22 vs. 2Q21
June 30,June 30,Change
(dollar amounts in millions)20222021AmountPercent
Personnel costs$577 $592 $(15)(3)%
Outside data processing and other services153 162 (9)(6)
Net occupancy58 72 (14)(19)
Equipment61 55 6 11 
Professional services19 48 (29)(60)
Marketing24 15 9 60 
Deposit and other insurance expense20 8 12 150 
Amortization of intangibles13 11 2 18 
Lease financing equipment depreciation11 5 6 120 
Other noninterest expense82 104 (22)(21)
Total noninterest expense$1,018 $1,072 $(54)(5)%
Number of employees (average full-time equivalent)19,866 17,018 2,848 17 %
Impacts of acquisition-related expenses:
Three Months Ended
June 30,June 30,
(dollar amounts in millions)20222021
Personnel costs$2 $110 
Outside data processing and other services12 33 
Net occupancy6 35 
Equipment— 3 
Professional services1 36 
Deposit and other insurance expense1 — 
Other noninterest expense2 52 
Total noninterest expense adjustments$24 $269 
2022 Second Quarter versus 2021 Second Quarter
Noninterest expense for the 2022 second quarter was $1.0 billion, a decrease of $54 million, or 5%, from the year-ago quarter, primarily reflecting a $245 million decrease in acquisition-related expenses and execution of cost reduction initiatives, partially offset by the full-quarter impact of the TCF acquisition, completed in June 2021.

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Table 9 - Noninterest Expense—2022 First Six Months Ended vs. 2021 First Six Months Ended
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Personnel costs$1,157 $1,060 $97 9 %
Outside data processing and other services318 277 41 15 
Net occupancy122 114 8 7 
Equipment142 101 41 41 
Professional services38 65 (27)(42)
Marketing45 29 16 55 
Deposit and other insurance expense38 16 22 138 
Amortization of intangibles27 21 6 29 
Lease financing equipment depreciation25 5 20 NM
Other noninterest expense159 177 (18)(10)
Total noninterest expense$2,071 $1,865 $206 11 %
Impacts of TCF acquisition-related expenses: 
 Six Months Ended June 30,
(dollar amounts in millions)20222021
Personnel costs$7 $110 
Outside data processing and other services37 41 
Net occupancy16 38 
Equipment2 4 
Professional services3 44 
Deposit and other insurance expense1 
Other noninterest expense4 53 
Total noninterest expense adjustments$70 $290 
Noninterest expense increased $206 million, or 11%, from the year-ago period, primarily reflecting the full-period impact of the TCF acquisition, partially offset by a $220 million decrease in acquisition-related expenses and execution of cost reduction initiatives. Equipment expense increased $41 million, or 41%, primarily reflecting the impact of the TCF acquisition and timing of technology equipment purchases and amortization. Marketing expense increased $16 million, or 55%, primarily reflecting investment in new product launches and expanding brand marketing. All other increases were primarily a result of the impact of the TCF acquisition. Professional services expense decreased $27 million, or 42%, and other noninterest expense decreased $18 million, or 10%, both primarily reflecting decreases in acquisition-related expense, partially offset by the impact of the TCF acquisition.
Provision for Income Taxes
The provision for income taxes in the 2022 second quarter was $120 million, compared to $14 million in the 2021 second quarter. The provision for income taxes for the six-month periods ended June 30, 2022 and June 30, 2021 was $225 million and $116 million, respectively. All periods included the benefits from general business credits, capital losses, tax-exempt income, tax-exempt bank owned life insurance income, and investments in qualified affordable housing projects. The effective tax rates for the 2022 second quarter and 2021 second quarter were 18.1% and (2,353.3)%, respectively. Excluding TCF acquisition-related expense of $269 million, the related tax benefit of $51 million and discrete tax expenses of $16 million, the 2021 second quarter effective tax rate would have been 18.8%. The effective tax rates for the six-month periods ended June 30, 2022 and June 30, 2021 were 18.3% and 18.5%, respectively.
The net federal deferred tax asset was $401 million and the net state deferred tax asset was $49 million at June 30, 2022.
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We file income tax returns with the IRS and various state, city, and foreign jurisdictions. Federal income tax audits have been completed for tax years through 2009. The 2010 and 2011 tax years remain under exam by the IRS. While the statute of limitations remains open for tax years 2012 through 2020, the IRS has advised that tax years 2012 through 2014 will not be audited and is currently examining the 2015 and 2016 federal income tax returns. Also, with few exceptions, we are no longer subject to state and local income tax examinations for tax years before 2017.
RISK MANAGEMENT AND CAPITAL
We use a multi-faceted approach to risk governance. It begins with our Board of Directors defining our risk appetite as aggregate moderate-to-low, through-the-cycle. Risk awareness, identification and assessment, reporting, and active management are key elements in overall risk management. Controls include, among others, effective segregation of duties, access management, and authorization and reconciliation procedures, as well as staff education and a disciplined assessment process.
We believe that our primary risk exposures are credit, market, liquidity, operational and compliance. More information on risk can be found in Item 1A Risk Factors below, the Risk Factors section included in Item 1A of our 2021 Annual Report on Form 10-K and subsequent filings with the SEC. The MD&A included in our 2021 Annual Report on Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2021 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Condensed Consolidated Financial Statements, Notes to Unaudited Condensed Consolidated Financial Statements, and other information contained in this report. Our definition, philosophy, and approach to risk management have not materially changed from the discussion presented in the 2021 Annual Report on Form 10-K.
Credit Risk
Credit risk is the risk of financial loss if a counterparty is not able to meet the agreed upon terms of the financial obligation. The majority of our credit risk is associated with lending activities, as the acceptance and management of credit risk is central to profitable lending. We also have credit risk associated with our investment securities portfolios (see Note 4 “Investment Securities and Other Securities” of the Notes to the Unaudited Condensed Consolidated Financial Statements). We engage with other financial counterparties for a variety of purposes including investing, asset and liability management, mortgage banking, and trading activities. A variety of derivative financial instruments, principally interest rate swaps, caps, and floors, are used in asset and liability management activities to protect against the risk of adverse price or interest rate movements. We also use derivatives, principally loan sale commitments, in hedging our mortgage loan interest rate lock commitments and mortgage loans held for sale. While there is credit risk associated with derivative activity, we believe this exposure is minimal.
We focus on the early identification, monitoring, and management of all aspects of our credit risk. In addition to the traditional credit risk mitigation strategies of credit policies and processes, market risk management activities, and portfolio diversification, we use quantitative measurement capabilities utilizing external data sources, enhanced modeling technology, and internal stress testing processes. Our ongoing expansion of portfolio management resources is central to our commitment to maintaining an aggregate moderate-to-low, through-the-cycle risk appetite. In our efforts to identify risk mitigation techniques, we have focused on product design features, origination policies, and solutions for delinquent or stressed borrowers.
2022 2Q Form 10-Q 17

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Loan and Lease Credit Exposure Mix
Refer to the “Loan and Lease Credit Exposure Mix” section of our 2021 Annual Report on Form 10-K for a brief description of each portfolio segment.
The table below provides the composition of our total loan and lease portfolio: 
Table 10 - Loan and Lease Portfolio Composition
(dollar amounts in millions)June 30,
2022		December 31,
2021
Commercial:
Commercial and industrial
$43,440 38 %$41,688 37 %
Commercial real estate
15,695 13 14,961 14 
Lease financing5,043 4 5,000 4 
Total commercial
64,178 55 61,649 55 
Consumer:
Residential mortgage21,220 18 19,256 17 
Automobile
13,622 12 13,434 12 
Home equity
10,426 9 10,550 9 
RV and marine
5,453 5 5,058 5 
Other consumer
1,322 1 1,320 2 
Total consumer
52,043 45 49,618 45 
Total loans and leases
$116,221 100 %$111,267 100 %
Our loan portfolio is a managed mix of consumer and commercial credits. We manage the overall credit exposure and portfolio composition via a credit concentration policy. The policy designates specific loan types, collateral types, and loan structures to be formally tracked and assigned maximum exposure limits as a percentage of capital. Commercial lending by NAICS categories, specific limits for CRE project types, loans secured by residential real estate, large dollar exposures, and designated high risk loan categories represent examples of specifically tracked components of our concentration management process. There are no identified concentrations that exceed the assigned exposure limit. Our concentration management policy is approved by the ROC and is used to ensure a high quality, well diversified portfolio that is consistent with our overall objective of maintaining an aggregate moderate-to-low, through-the-cycle risk appetite. Changes to existing concentration limits, incorporating specific information relating to the potential impact on the overall portfolio composition and performance metrics, require the approval of the ROC prior to implementation.
Commercial Credit
Refer to the “Commercial Credit” section of our 2021 Annual Report on Form 10-K for our commercial credit underwriting and on-going credit management processes.
Consumer Credit
Refer to the “Consumer Credit” section of our 2021 Annual Report on Form 10-K for our consumer credit underwriting and on-going credit management processes.
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The table below provides our total loan and lease portfolio by industry type.
Table 11 - Loan and Lease Portfolio by Industry Type
(dollar amounts in millions)June 30,
2022		December 31,
2021
Commercial loans and leases:
Real estate and rental and leasing$14,856 13 %$14,287 13 %
Retail trade (1)7,879 7 6,709 6 
Manufacturing7,766 6 7,401 7 
Finance and insurance5,493 5 4,595 4 
Health care and social assistance4,470 4 4,733 4 
Wholesale Trade4,453 4 4,067 4 
Accommodation and food services3,423 3 3,778 3 
Transportation and warehousing3,133 3 3,096 3 
Other services1,986 2 2,119 2 
Professional, scientific, and technical services1,874 2 1,975 2 
Construction1,715 1 1,980 2 
Arts, entertainment, and recreation1,474 1 1,495 1 
Admin./Support/Waste Mgmt. and Remediation Services1,240 1 1,285 1 
Utilities988 1 932 1 
Information918 1 870 1 
Public administration688 1 713 1 
Educational services559 — 657 — 
Agriculture, forestry, fishing and hunting424 — 453 — 
Mining, quarrying, and oil and gas extraction276 — 358 — 
Management of companies and enterprises94 — 130 — 
Unclassified/other469 — 16 — 
Total commercial loans and leases by industry category64,178 55 61,649 55 
Residential mortgage21,220 18 19,256 17 
Automobile13,622 12 13,434 12 
Home equity10,426 9 10,550 9 
RV and marine5,453 5 5,058 5 
Other consumer loans1,322 1 1,320 2 
Total loans and leases$116,221 100 %$111,267 100 %
(1)    Amounts include $1.8 billion and $1.5 billion of auto dealer services loans at June 30, 2022 and December 31, 2021, respectively.
Credit Quality
(This section should be read in conjunction with Note 5 “Loans / Leases” and Note 6 “Allowance for Credit Losses” of the Notes to Unaudited Condensed Consolidated Financial Statements.)
We believe the most meaningful way to assess overall credit quality performance is through an analysis of specific performance ratios. This approach forms the basis of the discussion in the sections immediately following: NPAs, NALs, ACL, and NCOs. In addition, we utilize delinquency rates, risk distribution and migration patterns, product segmentation, and origination trends in the analysis of our credit quality performance.
Credit quality performance in the 2022 second quarter reflected NCOs of $8 million, or 0.03% of average total loans and leases, annualized, a decrease of $54 million, compared to $62 million, or 0.28%, in the year-ago quarter. The decrease was driven by a $70 million reduction in Commercial NCOs resulting in net recoveries of $11 million in 2022 second quarter, partially offset by a $16 million increase in Consumer NCOs. NPAs decreased from December 31, 2021 by $68 million, or 9%, largely driven by decreases in commercial and industrial and lease financing NALs.
2022 2Q Form 10-Q 19

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NPAs and NALs
(This section should be read in conjunction with Note 5 “Loans / Leases” and Note 6 “Allowance for Credit Losses” of the Notes to Unaudited Condensed Consolidated Financial Statements and “Credit Quality” section appearing in Huntington’s 2021 Annual Report on Form 10-K.)
NPAs and NALs
Commercial loans are placed on nonaccrual status at 90-days past due, or earlier if repayment of principal and interest is in doubt. Of the $463 million of commercial related NALs at June 30, 2022, $300 million, or 65%, represented loans that were less than 30-days past due, demonstrating our continued commitment to proactive credit risk management.
The following table reflects period-end NALs and NPAs detail.
Table 12 - Nonaccrual Loans and Leases and Nonperforming Assets
(dollar amounts in millions)June 30,
2022		December 31,
2021
Nonaccrual loans and leases (NALs):
Commercial and industrial
$324 $370 
Commercial real estate
117 104 
Lease financing22 48 
Residential mortgage111 111 
Automobile4 3 
Home equity
78 79 
RV and marine
1 1 
Total nonaccrual loans and leases
657 716 
Other real estate, net:
Residential
11 8 
Commercial
— 1 
Total other real estate, net11 9 
Other NPAs (1)14 25 
Total nonperforming assets
$682 $750 
Nonaccrual loans and leases as a % of total loans and leases
0.57 %0.64 %
NPA ratio (2)0.59 0.67 
(1)    Other nonperforming assets include certain impaired investment securities and/or nonaccrual loans held-for-sale.
(2)    Nonperforming assets divided by the sum of loans and leases, other real estate owned, and other NPAs.

ACL
(This section should be read in conjunction with Note 6 “Allowance for Credit Losses” of the Notes to Unaudited Condensed Consolidated Financial Statements.)
Our ACL is comprised of two different components, both of which in our judgment are appropriate to absorb lifetime expected credit losses in our loan and lease portfolio: the ALLL and the AULC.
We use statistically-based models that employ assumptions about current and future economic conditions throughout the contractual life of the loan. The process of estimating expected credit losses is based on three key parameters: PD, EAD, and LGD. Beyond the reasonable and supportable period (two to three years), the economic variables revert to a historical equilibrium at a pace dependent on the state of the economy reflected within the economic scenario.

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Future economic conditions consider multiple macroeconomic scenarios provided to us by an independent third party and are reviewed through the appropriate committee governance channels described below. These macroeconomic scenarios contain certain variables that are influential to our modeling process, the most significant being unemployment rates and GDP. The probability weights assigned to each scenario are generally expected to be consistent from period to period and determined through our ACL process. Any changes in probability weights must be supported by appropriate documentation and approval of senior management. Additionally, we consider whether to adjust the modeled estimates to address possible limitations within the models or factors not captured within the macroeconomic scenarios. Lifetime losses for most of our loans and leases are evaluated collectively based on similar risk characteristics, risk ratings, origination credit bureau scores, delinquency status, and remaining months within loan agreements, among other factors.
The baseline scenario used for the 2022 second quarter assumes that the Russian invasion will not spread beyond Ukraine and the resulting disruptions to the oil, natural gas and other commodity markets will be limited and temporary. The overnight federal funds rate is forecast to average 2.1% in fourth quarter 2022 as the Federal Reserve looks to address the rising inflation. This rate is expected to peak at 2.75% prior to the expectation that the fed would start to cut rates in late 2024.
The table below is intended to show how the forecasted path of unemployment rate and GDP has changed since the end of 2021:
Table 13 - Forecasted Key Macroeconomic Variables
Baseline scenario forecast202120222023
Q4Q2Q4Q2Q4
Unemployment rate (1)
4Q 20214.5 %3.7 %3.5 %3.5 %3.5 %
1Q 2022N/A3.7 3.4 3.4 3.4 
2Q 2022N/A3.5 3.3 3.4 3.5 
Gross Domestic Product (1)
4Q 20216.6 %3.6 %2.5 %2.9 %2.8 %
1Q 2022N/A6.1 2.5 2.9 2.9 
2Q 2022N/A3.6 2.7 2.3 2.6 
(1) Values reflect the baseline scenario forecast inputs for each period presented, not updated for subsequent actual amounts.
Management continues to assess the uncertainty in the macroeconomic environment, including those related to geopolitical instability, and current inflation levels considering multiple macroeconomic forecasts that reflected a range of possible outcomes in order to address such uncertainty. While we have incorporated estimates of economic uncertainty into our ACL, the ultimate impact the current inflation levels and attempts to lower inflation through Federal Reserve rate actions will have on the economy remains uncertain.
Management develops additional analytics to support adjustments to our modeled results. Our governance committees reviewed model results of each economic scenario for appropriate usage, concluding that the quantitative transactional reserve will continue to utilize scenario weighting. Given the uncertainty associated with key economic scenario assumptions, the June 30, 2022 ACL included a general reserve that consists of various risk profile components, including profiles related to the potential economic impact of a near-term recession as the Federal Reserve raises interest rates attempting to lower inflation, and the commercial real estate portfolio, to capture uncertainty not addressed within the quantitative transaction reserve.
Our ACL methodology committee is responsible for developing the methodology, assumptions and estimates used in the calculation, as well as determining the appropriateness of the ACL. The ALLL represents the estimate of lifetime expected losses in the loan and lease portfolio at the reported date. The loss modeling process uses an EAD concept to calculate total expected losses on both funded balances and unfunded lending commitments, where appropriate. Losses related to the unfunded lending commitments are then recorded as AULC within other liabilities in the Unaudited Condensed Consolidated Balance Sheet. A liability for expected credit losses for off-balance sheet credit exposures is recognized if Huntington has a present contractual obligation to extend the credit and the obligation is not unconditionally cancelable.
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The AULC is determined by applying the same quantitative reserve determination process to the unfunded portion of the loan exposures adjusted by an applicable funding expectation. (See Note 1 “Significant Accounting Policies” of the Notes to Unaudited Condensed Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K.)
Our ACL evaluation process includes the on-going assessment of credit quality metrics, and a comparison of certain ACL benchmarks to current performance. For more information, including the ALLL and AULC activity by portfolio segment, refer to Note 6 “Allowance for Credit Losses” of the Notes to the Unaudited Condensed Consolidated Financial Statements.
The table below reflects the allocation of our ALLL among our various loan categories and the reported ACL:

Table 14 - Allocation of Allowance for Credit Losses (1)
(dollar amounts in millions)June 30,
2022		December 31,
2021
ALLL
Commercial
Commercial and industrial$804 38 %$832 37 %
Commercial real estate498 13 586 14 
Lease financing40 4 44 4 
Total commercial1,342 55 1,462 55 
Consumer
Residential mortgage177 18 145 17 
Automobile146 12 108 12 
Home equity131 9 88 9 
RV and marine147 5 105 5 
Other consumer131 1 122 2 
Total consumer732 45 568 45 
Total ALLL2,074 100 %2,030 100 %
AULC94 77 
Total ACL$2,168 $2,107 
Total ALLL as a % of
Total loans and leases1.78%1.82%
Nonaccrual loans and leases316284
NPAs304271
Total ACL as % of
Total loans and leases1.87%1.89%
Nonaccrual loans and leases330294
NPAs318281
(1)Percentages represent the percentage of each loan and lease category to total loans and leases.
At June 30, 2022, the ACL was $2.2 billion, or 1.87% of total loans and leases, compared to $2.1 billion, or 1.89%, at December 31, 2021. The decrease in ACL as a percentage of total loans and leases reflects overall improved credit quality while recognizing the near-term recessionary risks, while the increase in the total ACL was driven by loan and lease growth.
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NCOs
The table below reflects NCO detail for the three-month periods ended June 30, 2022 and 2021:
Table 15 - Quarterly Net Charge-off Analysis
Three Months Ended
June 30,June 30,
(dollar amounts in millions)20222021
Net charge-offs (recoveries) by loan and lease type:
Commercial:
Commercial and industrial
$(4)$37 
Commercial real estate
(4)17 
Lease financing(3)5 
Total commercial
(11)59 
Consumer:
Residential mortgage(1)— 
Automobile— (4)
Home equity(2)(1)
RV and marine
1 — 
Other consumer
21 8 
Total consumer
19 3 
Total net charge-offs$8 $62 
Net charge-offs (recoveries) - annualized percentages:
Commercial:
Commercial and industrial
(0.04)%0.43 %
Commercial real estate
(0.11)0.69 
Lease financing(0.24)0.93 
Total commercial
(0.07)0.51 
Consumer:
Residential mortgage(0.02)— 
Automobile— (0.13)
Home equity(0.08)(0.08)
RV and marine
0.10 0.02 
Other consumer
6.60 3.26 
Total consumer
0.15 0.02 
Net charge-offs as a % of average loans and leases0.03 %0.28 %
2022 Second Quarter versus 2021 Second Quarter
NCOs were an annualized 0.03% of average loans and leases in the current quarter, down from 0.28% in the 2021 second quarter. NCOs for the commercial portfolios showed improvement, with annualized net recoveries of 0.07% in the current quarter compared to annualized net charge-offs of 0.51% in the year-ago quarter. Consumer charge-offs were higher in the quarter, compared to the year-ago quarter.

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The table below reflects NCO detail for the six-month periods ended June 30, 2022 and 2021:
Table 16 - Year to Date Net Charge-off Analysis
(dollar amounts in millions)
Six months ended June 30,
20222021
Net charge-offs (recoveries) by loan and lease type:
Commercial:
Commercial and industrial$(27)$65 
Commercial real estate4 14 
Lease financing2 29 
Total commercial
(21)108 
Consumer:
Residential mortgage(1)— 
Automobile— (2)
Home equity(3)(1)
RV and marine
4 3 
Other consumer48 18 
Total consumer
48 18 
Total net charge-offs$27 $126 
Net charge-offs (recoveries) - annualized percentages:
Commercial:
Commercial and industrial(0.13)%0.39 %
Commercial real estate0.05 0.32 
Lease financing0.08 2.42 
Total commercial(0.07)0.49 
Consumer:
Residential mortgage(0.01)0.01 
Automobile— (0.04)
Home equity(0.05)(0.03)
RV and marine
0.15 0.15 
Other consumer7.53 3.62 
Total consumer0.19 0.09 
Net charge-offs as a % of average loans0.05 %0.30 %

2022 First Six Months versus 2021 First Six Months
NCOs decreased $99 million in the first six-month period of 2022 to $27 million. NCOs for the commercial portfolios showed improvement, with annualized net recoveries of 0.07% in the current period compared to annualized net charge-offs of 0.49% in the year-ago period. Consumer charge-offs were higher in the period, compared to the year-ago period.
Market Risk
(This section should be read in conjunction with the “Market Risk” section appearing in Huntington’s 2021 Annual Report on Form 10-K for our on-going market risk management processes.)
Market risk refers to potential losses arising from changes in interest rates, foreign exchange rates, equity prices and commodity prices, including the correlation among these factors and their volatility. When the value of an instrument is tied to such external factors, the holder faces market risk. We are primarily exposed to interest rate risk as a result of offering a wide array of financial products to our customers and secondarily to price risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity investments, and investments in securities backed by mortgage loans.
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We measure market risk exposure via financial simulation models, which provide management with insights on the potential impact to net interest income and other key metrics as a result of changes in market interest rates. Models are used to simulate cash flows and accrual characteristics of the balance sheet based on assumptions regarding the slope or shape of the yield curve, the direction and volatility of interest rates, and the changing composition and characteristics of the balance sheet resulting from strategic objectives and customer behavior. Assumptions and models provide insight on forecasted balance sheet growth and composition, and the pricing and maturity characteristics of current and future business.
In measuring the financial risks associated with interest rate sensitivity in our balance sheet, we compare a set of alternative interest rate scenarios to the results of a base case scenario derived using market forward rates. The market forward reflects the market consensus regarding the future level and slope of the yield curve across a range of tenor points. The standard set of interest rate scenarios includes two types: “shock” scenarios which are immediate parallel rate shifts, and “ramp” scenarios where the parallel shift is applied gradually over the first 12 months of the forecast on a pro rata basis. In both shock and ramp scenarios with falling rates, we presume that market rates will not go below 0%. The scenarios are inclusive of all executed interest rate risk hedging activities. Forward starting hedges are included to the extent that they have been transacted and that they start within the measurement horizon.
We use two approaches to model interest rate risk: Net interest income at risk (NII at risk) and economic value of equity at risk modeling sensitivity analysis (EVE at Risk).
Table 17 - Net Interest Income at Risk
 Net Interest Income at Risk (%)
Basis point change scenario-25+100+200
June 30, 2022-2.1 3.0 6.0 
December 31, 2021-2.4 4.6 8.9 
The NII at Risk results included in the table above reflect the analysis used monthly by management. It models gradual “ramp” +100 and +200 basis point parallel shift scenarios, implied by the forward yield curve over the next twelve months, as well as an immediate parallel “shock” scenario of -25 basis points.
The NII at Risk shows that the balance sheet is asset sensitive at both June 30, 2022, and December 31, 2021. The change in sensitivity is primarily driven by changes in market interest rate expectations, and the size and mix of the balance sheet.
Table 18 - Economic Value of Equity at Risk
 Economic Value of Equity at Risk (%)
Basis point change scenario-25+100+200
June 30, 20220.9 -5.1 -11.6 
December 31, 2021-0.1 -1.5 -5.6 
The EVE results included in the table above reflect the analysis used monthly by management. It models immediate -25, +100 and +200 basis point parallel “shock” scenarios.
As of June 30, 2022, EVE at risk sensitivities have increased since December 31, 2021. The change in sensitivity from December 31, 2021 was driven primarily by changes in the spot market rate curve extending the duration of the securities portfolio and shortening the duration of liabilities.
We have LIBOR-based exposure in the form of variable rate loans, derivatives, Series B preferred stock, long term debt and other securities and financial arrangements. To address the discontinuance of LIBOR in its current form, we established a LIBOR transition team and project plan under the oversight of the CRO and CFO, providing periodic updates to the ROC. As of December 31, 2021, Huntington ceased issuance of new LIBOR loans. Contract remediation efforts coordinated by the LIBOR transition team are scheduled for completion by June 2023. Source systems have been updated to support alternative reference rates. At this time alternative reference rates are predominantly SOFR based. As such, we have developed a SOFR-enabled interest rate risk monitoring framework and a strategy for managing interest rate risk during the transition from LIBOR to SOFR. We continue to monitor market developments and legislative and regulatory updates.
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Use of Derivatives to Manage Interest Rate Risk
An integral component of our interest rate risk management strategy is the use of derivative instruments to minimize significant fluctuations in earnings caused by changes in market interest rates. Examples of derivative instruments that we may use as part of our interest rate risk management strategy include interest rate swaps, caps and floors, collars, forward contracts, and forward starting interest rate swaps.
Table 19 shows all swap, collar and floor positions that are utilized for purposes of managing our exposures to the variability of interest rates. The interest rates variability may impact either the fair value of the assets and liabilities or impact the cash flows attributable to net interest margin. These positions are used to protect the fair value of asset and liabilities by converting the contractual interest rate on a specified amount of assets and liabilities (i.e., notional amounts) to another interest rate index. The positions are also used to hedge the variability in cash flows attributable to the contractually specified interest rate by converting the variable rate index into a fixed rate. The volume, maturity and mix of derivative positions change frequently as we adjust our broader interest rate risk management objectives and the balance sheet positions to be hedged. For further information, including the notional amount and fair values of these derivatives, refer to Note 14 “Derivative Financial Instruments” of the Notes to Unaudited Condensed Consolidated Financial Statements.
The following tables present additional information about the interest rate swaps and floors used in Huntington’s asset and liability management activities at June 30, 2022 and December 31, 2021.
Table 19 - Weighted-Average Maturity, Receive Rate and SOFR/LIBOR Reset Rate on Asset Liability Management Instruments
June 30, 2022
 Average Maturity (years)
Weighted-Average
Fixed Rate
Weighted-Average Reset Rate
(dollar amounts in millions)Notional ValueFair Value
Asset conversion swaps
Receive Fixed - Pay 1 month LIBOR$7,875 1.91 $(282)1.21 %1.22 %
Receive Fixed - Pay SOFR (1)4,500 3.49 (80)2.31 0.91 
Pay Fixed - Receive 1 month LIBOR (2)3,615 5.37 339 0.88 1.58 
Pay Fixed - Receive SOFR326 7.42 29 1.44 0.79 
Receive Fixed - Pay SOFR - forward starting150 4.89 (2)2.49 — 
Pay Fixed - Receive 1 month LIBOR - forward starting (3)4,500 3.68 288 0.98 — 
Pay Fixed - Receive SOFR - forward starting (3)1,403 5.23 41 1.87 — 
Liability conversion swaps
Receive Fixed - Pay 1 month LIBOR1,430 2.35 (26)2.01 1.24 
Receive Fixed - Pay SOFR (1)3,550 4.14 (49)2.27 0.56 
Purchased swaption collars
Purchased Interest Rate Swaption Collars (4)2,000 0.43 7 2.46 / 3.76— 
Basis Swaps
Pay SOFR- Receive Fed Fund (economic hedges) (5)230 3.16 — 1.58 1.52 
Pay Fed Fund - Receive SOFR (economic hedges) (5)41 0.48 — 1.51 1.58 
Total swap portfolio (6)$29,620 $265 
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December 31, 2021
 Average Maturity (years)Weighted-Average
Fixed Rate		Weighted-Average
Reset Rate
(dollar amounts in millions)Notional ValueFair Value
Asset conversion swaps
Receive Fixed - Pay 1 month LIBOR$10,775 1.88 $58 1.38 %0.11 %
Pay Fixed - Receive 1 month LIBOR (2)1,625 8.83 34 1.08 0.10 
Pay Fixed - Receive SOFR67 7.98 — 1.32 — 
Receive Fixed - Pay 1 month LIBOR - forward starting (3)6,500 3.97 78 0.90 — 
Pay Fixed - Receive SOFR - forward starting (7)36 7.32 — 1.29 — 
Liability conversion swaps
Receive Fixed - Pay 1 month LIBOR1,928 2.16 54 2.13 0.10 
Basis Swaps
Pay SOFR- Receive Fed Fund (economic hedges) (5)230 3.66 — 0.08 0.06 
Pay Fed Fund - Receive SOFR (economic hedges) (5)41 0.98 — 0.05 0.08 
Total swap portfolio$21,202 $224 
December 31, 2021
 Average Maturity (years)Weighted-Average
Floor Strike		Weighted-Average
Reset Rate
(dollar amounts in millions)Notional ValueFair Value
Interest rate floors
Purchased Interest Rate Floors - 1 month LIBOR$375 0.06 $2 1.93 %0.10 %
Total floors portfolio$375 $2 
(1)SOFR based swaps compound on a daily-basis.
(2)Amounts include interest rate swaps as fair value hedges of fixed-rate investment securities using the portfolio layer method.
(3)Forward starting swaps effective starting from April 2022 to February 2023.
(4)The weighted average fixed rates for the swaption collars are the weighted average strike rates for the upper and lower bounds of the collars.
(5)Swaps have variable pay and variable receive resets. Weighted Average Fixed Rate column represents pay rate reset.
(6)LIBOR swap instruments that remain outstanding in July 2023 will transition to a SOFR-based rate.
(7)Forward starting swaps effective starting from January 2022 to February 2023.

MSRs
(This section should be read in conjunction with Note 7 “Mortgage Loan Sales and Servicing Rights” of Notes to the Unaudited Condensed Consolidated Financial Statements.)
At June 30, 2022, we had a total of $463 million of capitalized MSRs representing the right to service $31.7 billion in mortgage loans.
MSR fair values are sensitive to movements in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which can be reduced by prepayments and declines in credit quality. Prepayments usually increase when mortgage interest rates decline and decrease when mortgage interest rates rise. We also employ hedging strategies to reduce the risk of MSR fair value changes or impairment. However, volatile changes in interest rates can diminish the effectiveness of these economic hedges. We report changes in the MSR value net of hedge-related trading activity in the mortgage banking income category of noninterest income.
MSR assets are included in servicing rights and other intangible assets in the Unaudited Condensed Consolidated Financial Statements.
Price Risk
Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that are carried at fair value and are subject to fair value accounting. We have price risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, derivative instruments, and equity investments. We have established loss limits on the trading portfolio, on the amount of foreign exchange exposure that can be maintained, and on the amount of marketable equity securities that can be held.
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Liquidity Risk
(This section should be read in conjunction with the “Liquidity Risk” section appearing in Huntington’s 2021 Annual Report on Form 10-K for our on-going liquidity risk management processes.)
Our primary source of liquidity is our core deposit base. Core deposits comprised approximately 97% of total deposits at June 30, 2022. We also have available unused wholesale sources of liquidity, including advances from the FHLB, issuance through dealers in the capital markets, and access to certificates of deposit issued through brokers. Liquidity is further provided by unencumbered, or unpledged, investment securities that totaled $12.9 billion as of June 30, 2022.
Bank Liquidity and Sources of Funding
Our primary sources of funding for the Bank are consumer and commercial core deposits. At June 30, 2022, these core deposits funded 79% of total assets (122% of total loans). Other sources of liquidity include non-core deposits, FHLB advances, wholesale debt instruments, and securitizations. Demand deposit overdrafts that have been reclassified as loan balances were $27 million and $29 million at June 30, 2022 and December 31, 2021, respectively.
The following table reflects deposit composition detail.
Table 20 - Deposit Composition
June 30,December 31,
(dollar amounts in millions)20222021
By Type:
Demand deposits—noninterest-bearing$42,131 29 %$43,236 30 %
Demand deposits—interest-bearing41,433 28 39,837 28 
Money market deposits34,257 24 32,522 23 
Savings and other domestic deposits21,583 15 21,088 15 
Core certificates of deposit (1)2,103 1 2,740 2 
Total core deposits:141,507 97 139,423 98 
Other domestic deposits of $250,000 or more221 — 359 — 
Negotiable CDs, brokered and other deposits
3,707 3 3,481 2 
Total deposits$145,435 100 %$143,263 100 %
Total core deposits:
Commercial$63,629 45 %$61,521 44 %
Consumer77,878 55 77,902 56 
Total core deposits$141,507 100 %$139,423 100 %
(1)Includes consumer certificates of deposit of $250,000 or more.
The Bank maintains borrowing capacity at the FHLB and the Federal Reserve Bank Discount Window. The Bank does not consider borrowing capacity from the Federal Reserve Bank Discount Window as a primary source of liquidity. Total loans and securities pledged to the Federal Reserve Bank Discount Window and the FHLB are $91.3 billion at June 30, 2022.
At June 30, 2022, the carrying value of investment securities pledged to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements, and to support borrowing capacity totaled $28.7 billion. There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at June 30, 2022.
To the extent we are unable to obtain sufficient liquidity through core deposits, we may meet our liquidity needs through sources of wholesale funding, asset securitization or sale. Sources of wholesale funding include other domestic deposits of $250,000 or more, negotiable CDs, brokered and other deposits, short-term borrowings, and long-term debt. Our wholesale funding for both the Bank and parent company totaled $14.8 billion at June 30, 2022, compared to $11.3 billion at December 31, 2021. The increase from year-end is primarily due to issuances of short-term FHLB advances and senior debt, partially offset by repayment of maturing debt instruments.
At June 30, 2022, we believe the Bank has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and for the foreseeable future.
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Parent Company Liquidity
The parent company’s funding requirements consist primarily of dividends to shareholders, debt service, income taxes, operating expenses, funding of nonbank subsidiaries, repurchases of our stock, and acquisitions. The parent company obtains funding to meet obligations from dividends and interest received from the Bank, interest and dividends received from direct subsidiaries, net taxes collected from subsidiaries included in the federal consolidated tax return, fees for services provided to subsidiaries, and the issuance of debt securities.
The parent company had $3.0 billion and $2.8 billion at June 30, 2022 and December 31, 2021 in cash and cash equivalents, respectively.
On July 20, 2022, our Board of Directors declared a quarterly common stock cash dividend of $0.155 per common share. The dividend is payable on October 3, 2022, to shareholders of record on September 19, 2022. Based on the current quarterly dividend of $0.155 per common share, cash demands required for common stock dividends are estimated to be approximately $224 million per quarter. Additionally, on July 20, 2022, our Board of Directors declared a quarterly Series B, Series E, Series F, Series G and Series H Preferred Stock dividend payable on October 17, 2022 to shareholders of record on October 1, 2022. On June 17, 2022, our Board of Directors declared a quarterly dividend for the Series I Preferred Stock payable on September 1, 2022 to shareholders of record on August 15, 2022. Total cash demands required for Series B, Series E, Series F, Series G, Series H and Series I are expected to be approximately $28 million per quarter.
During the first six months of 2022, the Bank paid preferred and common dividends to the parent company of $22 million and $458 million, respectively. To meet any additional liquidity needs, the parent company may issue debt or equity securities.
At June 30, 2022, we believe the Company has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and for the foreseeable future.
Off-Balance Sheet Arrangements
In the normal course of business, we enter into various off-balance sheet arrangements. These arrangements include commitments to extend credit, interest rate swaps, caps and floors, collars, financial guarantees contained in standby letters-of-credit issued by the Bank, and commitments by the Bank to sell mortgage loans.
Operational Risk
Operational risk is the risk of loss due to human error, third-party performance failures, inadequate or failed internal systems and controls, including the use of financial or other quantitative methodologies that may not adequately predict future results; violations of, or noncompliance with, laws, rules, regulations, prescribed practices, or ethical standards; and external influences such as market conditions, fraudulent activities, disasters, failed business contingency plans and security risks. We continuously strive to strengthen our system of internal controls to ensure compliance with significant contracts, agreements, laws, rules, and regulations, and to improve the oversight of our operational risk.
We actively monitor cyberattacks such as attempts related to online deception and loss of sensitive customer data. We evaluate internal systems, processes and controls to mitigate loss from cyber-attacks and, to date, have not experienced any material losses. Cybersecurity threats have increased, primarily through phishing campaigns. We are actively monitoring our email gateways for malicious phishing email campaigns. We have also increased our cybersecurity and fraud monitoring activities through the implementation of specific monitoring of remote connections by geography and volume of connections to detect anomalous remote logins, since a significant portion of our workforce has the option to work remotely. 
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Our objective for managing cyber security risk is to avoid or minimize the impacts of external threat events or other efforts to penetrate our systems. We work to achieve this objective by hardening networks and systems against attack, and by diligently managing visibility and monitoring controls within our data and communications environment to recognize events and respond before the attacker has the opportunity to plan and execute on its own goals. To this end we employ a set of defense in-depth strategies, which include efforts to make us less attractive as a target and less vulnerable to threats, while investing in threat analytic capabilities for rapid detection and response. Potential concerns related to cyber security may be escalated to our board-level Technology Committee, as appropriate. As a complement to the overall cyber security risk management, we use a number of internal training methods, both formally through mandatory courses and informally through written communications and other updates. Internal policies and procedures have been implemented to encourage the reporting of potential phishing attacks or other security risks. We also use third-party services to test the effectiveness of our cyber security risk management framework, and any such third parties are required to comply with our policies regarding information security and confidentiality.
To govern operational risks, we have an Operational Risk Committee, a Legal, Regulatory, and Compliance Committee, a Funds Movement Committee, and a Third Party Risk Management Committee. The responsibilities of these committees, among other duties, include establishing and maintaining management information systems to monitor material risks and to identify potential concerns, risks, or trends that may have a significant impact and ensuring that recommendations are developed to address the identified issues. In addition, we have a Model Risk Oversight Committee that is responsible for policies and procedures describing how model risk is evaluated and managed and the application of the governance process to implement these practices throughout the enterprise. These committees report any significant findings and remediation recommendations to the Risk Management Committee. Potential concerns may be escalated to our ROC and our Audit Committee, as appropriate. Significant findings or issues are escalated by the Third Party Risk Management Committee to the Technology Committee of the Board, as appropriate.
The goal of this framework is to implement effective operational risk-monitoring; minimize operational, fraud, and legal losses; minimize the impact of inadequately designed models and enhance our overall performance.
Compliance Risk
Financial institutions are subject to many laws, rules, and regulations at both the federal and state levels. These broad-based laws, rules, and regulations include, but are not limited to, expectations relating to anti-money laundering, lending limits, client privacy, fair lending, prohibitions against unfair, deceptive or abusive acts or practices, protections for military members as they enter active duty, and community reinvestment. The volume and complexity of recent regulatory changes have increased our overall compliance risk. As such, we utilize various resources to help ensure expectations are met, including a team of compliance experts dedicated to ensuring our conformance with all applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations including, but not limited to, anti-money laundering and customer privacy. Additionally, colleagues engaged in lending activities receive training for laws and regulations related to flood disaster protection, equal credit opportunity, fair lending, and/or other courses related to the extension of credit. We hold ourselves to a high standard for adherence to compliance management and seek to continuously enhance our performance.
Capital
We consider disciplined capital management as a key objective. Both regulatory capital and shareholders’ equity are managed at the Bank and on a consolidated basis. We have an active program for managing capital and maintain a comprehensive process for assessing our overall capital adequacy. We believe our current levels of both regulatory capital and shareholders’ equity are adequate.
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The following table presents certain regulatory capital data at both the consolidated and Bank levels for each of the periods presented:
Table 21 - Regulatory Capital Data (1)
(dollar amounts in millions) June 30, 2022December 31,
2021
Total risk-weighted assetsConsolidated$137,841 $131,266 
Bank137,441 130,597 
CET 1 risk-based capitalConsolidated12,478 12,249 
Bank13,813 13,261 
Tier 1 risk-based capitalConsolidated14,654 14,426 
Bank15,005 14,445 
Tier 2 risk-based capitalConsolidated3,003 2,821 
Bank2,210 1,982 
Total risk-based capitalConsolidated17,657 17,246 
Bank17,215 16,427 
CET 1 risk-based capital ratioConsolidated9.05 %9.33 %
Bank10.05 10.15 
Tier 1 risk-based capital ratioConsolidated10.63 10.99 
Bank10.92 11.06 
Total risk-based capital ratioConsolidated12.81 13.14 
Bank12.53 12.58 
Tier 1 leverage ratioConsolidated8.46 8.56 
Bank8.68 8.60 
(1)    Huntington elected to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period which began January 1, 2022 pursuant to a rule that allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. As of June 30, 2022, we have phased in 25% of the cumulative CECL deferral with the remaining impact to be recognized over the remainder of the three-year transition period.
At June 30, 2022, we maintained Basel III capital ratios in excess of the well-capitalized standards established by the FRB. The decrease in regulatory capital ratios was primarily driven by risk-weighted asset growth and goodwill recognized during the quarter, partially offset by earnings.
Shareholders’ Equity
We generate shareholders’ equity primarily through the retention of earnings, net of dividends and share repurchases. Other potential sources of shareholders’ equity include issuances of common and preferred stock. Our objective is to maintain capital at an amount commensurate with our risk appetite and risk tolerance objectives, to meet both regulatory and market expectations, and to provide the flexibility needed for future growth and business opportunities.
Shareholders’ equity totaled $18.0 billion at June 30, 2022, a decrease of $1.3 billion or 7% when compared with December 31, 2021. The decrease was primarily driven by higher interest rates causing a decrease in accumulated other comprehensive income, partially offset by earnings, net of dividends.
Huntington is authorized to make capital distributions that are consistent with the requirements in the FRB’s capital rule, inclusive of the SCB requirement. As of June 30, 2022, Huntington’s SCB requirement was 2.5%, which is the minimum under the SCB framework. On April 5, 2022, Huntington submitted its 2022 Capital Plan to the Federal Reserve for supervisory review. By notice dated June 23, 2022, the Federal Reserve informed Huntington that its indicative SCB requirement associated with its 2022 Capital Plan is 3.3%. Huntington has submitted a request to the Federal Reserve for reconsideration of the indicative SCB requirement. Huntington anticipates that the Federal Reserve will disclose Huntington’s final SCB requirement by August 31, 2022, which will become effective October 1, 2022.
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Share Repurchases
From time to time our Board of Directors authorizes the Company to repurchase shares of our common stock. Although we announce when the Board of Directors authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Future stock repurchases may be private or open-market repurchases, including block transactions, accelerated or delayed block transactions, forward transactions, and similar transactions. Various factors determine the amount and timing of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and acquisitions, market conditions (including the trading price of our stock), and regulatory and legal considerations.
During the first six months of 2022, Huntington repurchased no shares of common stock under the current repurchase authorization which began the third quarter of 2021 and ended June 30, 2022. As of June 30, 2022, the end of the current repurchase authorization, Huntington completed $650 million of the original $800 million share repurchase authorization.
BUSINESS SEGMENT DISCUSSION
Overview
Our business segments are based on our internally-aligned segment leadership structure, which is how we monitor results and assess performance. We have four major business segments: Commercial Banking, Consumer and Business Banking, Vehicle Finance, and Regional Banking and The Huntington Private Client Group (RBHPCG). The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense.
Business segment results are determined based upon our management practices, which assigns balance sheet and income statement items to each of the business segments. The process is designed around our organizational and management structure and, accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions.
Revenue Sharing
Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is recorded to allocate portions of such revenue to other business segments involved in selling to or providing service to customers. Results of operations for the business segments reflect these fee sharing allocations.
Expense Allocation
The management process that develops the business segment reporting utilizes various estimates and allocation methodologies to measure the performance of the business segments. Expenses are allocated to business segments using a two-phase approach. The first phase consists of measuring and assigning unit costs (activity-based costs) to activities related to product origination and servicing. These activity-based costs are then extended, based on volumes, with the resulting amount allocated to business segments that own the related products. The second phase consists of the allocation of overhead costs to all four business segments from Treasury / Other. We utilize a full-allocation methodology, where all Treasury / Other expenses, except reported acquisition-related expenses, if any, and a small amount of other residual unallocated expenses, are allocated to the four business segments.
Funds Transfer Pricing (FTP)
We use an active and centralized FTP methodology to attribute appropriate net interest income to the business segments. The intent of the FTP methodology is to transfer interest rate risk from the business segments by providing modeled duration funding of assets and liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury / Other function where it can be centrally monitored and managed. The Treasury / Other function charges (credits) an internal cost of funds for assets held in (or pays for funding provided by) each business segment. The FTP rate is based on prevailing market interest rates for comparable duration assets (or liabilities).
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Net Income by Business Segment
Net income (loss) by business segment for the six-month periods ending June 30, 2022 and June 30, 2021 is presented in the following table:
Table 22 - Net Income by Business Segment
 Six Months Ended June 30,
(dollar amounts in millions)20222021
Commercial Banking$560 $167 
Consumer and Business Banking205 105 
Vehicle Finance62 161 
RBHPCG41 37 
Treasury / Other131 47 
Net income$999 $517 
Commercial Banking
Table 23 - Key Performance Indicators for Commercial Banking
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Net interest income$844 $457 $387 85 %
Provision for credit losses(75)143 (218)NM
Noninterest income292 203 89 44 
Noninterest expense496 306 190 62 
Provision for income taxes151 44 107 NM
Income attributable to non-controlling interest4 — 4 100 
Net income$560 $167 $393 235 %
Number of employees (average full-time equivalent)2,056 1,424 632 44 %
Total average assets$58,018 $34,370 $23,648 69 
Total average loans/leases50,402 29,309 21,093 72 
Total average deposits34,260 26,242 8,018 31 
Net interest margin3.20 %2.90 %0.30 %10 
NCOs $(28)$84 $(112)(133)
NCOs as a % of average loans and leases(0.11)%0.57 %(0.68)%(119)

2022 First Six Months versus 2021 First Six Months
Commercial Banking reported net income of $560 million in the six-month period of 2022, compared to $167 million in the year-ago period. Segment net interest income increased $387 million, or 85%, primarily due to an increase in average earning assets reflecting the impact of the June 2021 acquisition of TCF and higher utilization rates, and a 30 basis point increase in net interest margin driven by an increase in spreads largely due to impact from the Federal Reserve's recent rate increases. The provision for credit losses decreased $218 million, primarily due to the initial provision for credit losses recognized in the second quarter 2021 related to the TCF acquisition. Noninterest income increased $89 million, or 44%, reflecting the impact of the TCF acquisition in addition to an increase in capital markets fees, primarily reflecting higher interest rate derivative fees, foreign exchange fees, loan syndication fees and underwriting and advisory fees. Noninterest expense increased $190 million, or 62%, primarily reflecting the impact of the TCF acquisition, driven by higher personnel expense due to increased number of colleagues, allocated overhead and operating lease expense.
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Consumer and Business Banking
Table 24 - Key Performance Indicators for Consumer and Business Banking
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Net interest income$993 $703 $290 41 %
Provision for credit losses74 63 11 17 
Noninterest income542 477 65 14 
Noninterest expense1,202 984 218 22 
Provision for income taxes54 28 26 93 
Net income$205 $105 $100 95 %
Number of employees (average full-time equivalent)9,530 8,160 1,370 17 %
Total average assets$38,499 $31,834 $6,665 21 
Total average loans/leases32,029 28,014 4,015 14 
Total average deposits94,866 67,702 27,164 40 
Net interest margin2.09 %2.06 %0.03 %1 
NCOs$54 $41 $13 32 
NCOs as a % of average loans and leases0.34 %0.30 %0.04 %13 
2022 First Six Months versus 2021 First Six Months
Consumer and Business Banking, including Home Lending, reported net income of $205 million in the six-month period of 2022, an increase of $100 million, or 95%, compared to the year-ago period. Segment net interest income increased $290 million, or 41%, primarily due to an increase in average earnings assets reflecting the impact of the June 2021 acquisition of TCF and a 3 basis point increase in net interest margin driven primarily from impact of the Federal Reserve's recent rate increases, partially offset by a decrease in accelerated PPP loan fees recognized upon forgiveness payments from the SBA. The provision for credit losses increased $11 million to $74 million, primarily due to an increase in loan growth. Noninterest income increased $65 million, or 14%, reflecting the impact of the TCF acquisition, primarily due to higher interchange income and service charges on deposit accounts along with gains from SBA sales in 2022, partially offset by decreased mortgage banking income primarily reflecting lower secondary marketing spreads and lower salable volume. Noninterest expense increased $218 million, or 22%, primarily reflecting the impact of the TCF acquisition largely driven by higher personnel expense reflecting an increase in the number of FTE employees and allocated overhead.
Home Lending, an operating unit of Consumer and Business Banking, reflects the result of the origination, sale, and servicing of mortgage loans less referral fees and net interest income for mortgage banking products distributed by the retail branch network and other business segments. Home Lending reported net income of $80 million in the six-month period of 2022, compared with net income of $23 million in the year-ago period. Net interest income increased $94 million, primarily due to the impact of the TCF acquisition, reduction in prepayment activity and increased retention. The provision for credit losses decreased $32 million, primarily due to continued general improvement in economic conditions. Noninterest income decreased $52 million, driven primarily by lower secondary marketing spreads and lower salable volume.
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Vehicle Finance
Table 25 - Key Performance Indicators for Vehicle Finance
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Net interest income$237 $217 $20 9 %
Provision (benefit) for credit losses79 (53)132 NM
Noninterest income6 6 — — 
Noninterest expense86 72 14 19 
Provision for income taxes16 43 (27)(63)
Net income$62 $161 $(99)(61)%
Number of employees (average full-time equivalent)270 258 12 5 %
Total average assets$21,148 $19,383 $1,765 9 
Total average loans/leases21,379 19,641 1,738 9 
Total average deposits1,273 903 370 41 
Net interest margin2.24 %2.22 %0.02 %1 
NCOs $2 $1 $1 100 
NCOs as a % of average loans and leases0.02 %0.01 %0.01 %100 
2022 First Six Months versus 2021 First Six Months

Vehicle Finance reported net income of $62 million in the six-month period of 2022, a decrease of $99 million, compared to the year-ago period. Segment net interest income increased $20 million, or 9%, primarily due to an increase in average earning assets and a 2 basis point increase in the net interest margin. The provision for credit losses increased $132 million, primarily due to reserve releases in 2021 as the economic environment was improving, in addition to the increasing risk during the second quarter 2022 of a near-term recession as the Federal Reserve raises rates attempting to lower inflation. Noninterest income was relatively unchanged from the year-ago period. Noninterest expense increased $14 million, or 19%, largely attributable to higher production related costs and geographic expansion.

Regional Banking and The Huntington Private Client Group
Table 26 - Key Performance Indicators for Regional Banking and The Huntington Private Client Group
 Six Months Ended June 30,Change
(dollar amounts in millions)20222021AmountPercent
Net interest income$104 $70 $34 49 %
Provision (benefit) for credit losses14 (2)16 NM
Noninterest income124 107 17 16 
Noninterest expense162 132 30 23 
Provision for income taxes11 10 1 10 
Net income$41 $37 $4 11 %
Number of employees (average full-time equivalent)1,106 1,018 88 9 %
Total average assets$8,778 $6,958 $1,820 26 
Total average loans/leases8,484 6,705 1,779 27 
Total average deposits9,506 7,313 2,193 30 
Net interest margin2.13 %1.89 %0.24 %13 
Total assets under management (in billions)—eop $21.0 $24.0 $(3.0)(13)
Total trust assets (in billions)—eop 129.3 146.7 (17.4)(12)
eop - End of Period
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2022 First Six Months versus 2021 First Six Months

RBHPCG reported net income of $41 million for the first six-month period of 2022, an increase of $4 million, or 11%, compared to the year-ago period. Segment net interest income increased $34 million, or 49%, primarily due to an increase in average earnings assets and a 24 basis point increase in net interest margin, largely driven by higher benefit in deposit spreads. Average loans and leases increased $1.8 billion, or 27%, due to growth in both commercial and residential real estate mortgages, and the impact of the June 2021 acquisition of TCF. Average deposits increased $2.2 billion, or 30%, primarily related to higher customer liquidity levels, and impact of the acquired TCF deposit portfolio. The provision for credit losses increased $16 million, largely due to loan growth. Noninterest income increased $17 million, or 16%, reflecting higher sales production and the impact of the TCF acquisition. Total assets under management decreased 13% due to equity and bond markets, offset by positive net asset flows. Noninterest expense increased $30 million primarily due to an increase in personnel expense impacted by the TCF acquisition.

Treasury / Other
The Treasury / Other function includes revenue and expense related to assets, liabilities, derivatives (including the mark-to-market of interest rate caps in the first six-month period of 2021), and equity not directly assigned or allocated to one of the four business segments. Assets include investment securities and bank owned life insurance.
Net interest income includes the impact of administering our investment securities portfolios, the net impact of derivatives used to hedge interest rate sensitivity as well as the financial impact associated with our FTP methodology, as described above. Noninterest income includes miscellaneous fee income not allocated to other business segments, such as bank owned life insurance income and securities and trading asset gains or losses. Noninterest expense includes certain corporate administrative, acquisition-related expenses, if any, and other miscellaneous expenses not allocated to other business segments. The provision for income taxes for the business segments is calculated at a statutory 21% tax rate, although our overall effective tax rate is lower.

ADDITIONAL DISCLOSURES
Forward-Looking Statements
This report, including MD&A, contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as expect, anticipate, believe, intend, estimate, plan, target, goal, or similar expressions, or future or conditional verbs such as will, may, might, should, would, could, or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
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While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; the magnitude and duration of the COVID-19 pandemic and related variants and mutations and their impact on the global economy and financial market conditions and our business, results of operations, and financial condition; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve Board; volatility and disruptions in global capital and credit markets; movements in interest rates; reform of LIBOR; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services including those implementing our “Fair Play” banking philosophy; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the OCC, Federal Reserve, FDIC, and CFPB; the possibility that the anticipated benefits of the transaction with TCF are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Huntington does business; and other factors that may affect the future results of Huntington.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Huntington does not assume any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Non-GAAP Financial Measures
This document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.
Fully-Taxable Equivalent Basis
Interest income, yields, and ratios on a FTE basis are considered non-GAAP financial measures. Management believes net interest income on a FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent. We encourage readers to consider the Unaudited Condensed Consolidated Financial Statements and other financial information contained in this Form 10-Q in their entirety, and not to rely on any single financial measure.
Non-Regulatory Capital Ratios
In addition to capital ratios defined by banking regulators, the Company considers various other measures when evaluating capital utilization and adequacy, including:
•Tangible common equity to tangible assets,
•Tangible equity to tangible assets, and
•Tangible common equity to risk-weighted assets using Basel III definitions.
These non-regulatory capital ratios are viewed by management as useful additional methods of reflecting the level of capital available to withstand unexpected market conditions. Additionally, presentation of these ratios allows readers to compare our capitalization to other financial services companies. These ratios differ from capital ratios defined by banking regulators principally in that the numerator excludes goodwill and other intangible assets, the nature and extent of which varies among different financial services companies. These ratios are not defined in GAAP or federal banking regulations. As a result, these non-regulatory capital ratios disclosed by the Company are considered non-GAAP financial measures.
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Because there are no standardized definitions for these non-regulatory capital ratios, the Company’s calculation methods may differ from those used by other financial services companies. Also, there may be limits in the usefulness of these measures to investors. As a result, we encourage readers to consider the Unaudited Condensed Consolidated Financial Statements and other financial information contained in this Form 10-Q in their entirety, and not to rely on any single financial measure.
Critical Accounting Policies and Use of Significant Estimates
Our Consolidated Financial Statements are prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to establish accounting policies and make estimates that affect amounts reported in our Consolidated Financial Statements. Note 1 of the Notes to Consolidated Financial Statements included in our 2021 Annual Report on Form 10-K, as supplemented by this report including this MD&A, describes the significant accounting policies we used in our Consolidated Financial Statements.
An accounting estimate requires assumptions and judgments about uncertain matters that could have a material effect on the Consolidated Financial Statements. Estimates are made under facts and circumstances at a point in time, and changes in those facts and circumstances could produce results substantially different from those estimates. Our most significant accounting policies and estimates and their related application are discussed in our 2021 Annual Report on Form 10-K, as supplemented by this report including this MD&A .
Allowance for Credit Losses
Our ACL at June 30, 2022 represents our current estimate of the lifetime credit losses expected from our loan and lease portfolio and our unfunded lending commitments. Management estimates the ACL by projecting probability of default, loss given default and exposure at default conditional on economic parameters, for the remaining contractual term. Internal factors that impact the quarterly allowance estimate include the level of outstanding balances, the portfolio performance and assigned risk ratings.
One of the most significant judgments influencing the ACL estimate is the macroeconomic forecasts. Key external economic parameters that directly impact our loss modeling framework include forecasted footprint unemployment rates and Gross Domestic Product. Changes in the economic forecasts could significantly affect the estimated credit losses, which could potentially lead to materially different allowance levels from one reporting period to the next.
Given the dynamic relationship between macroeconomic variables within our modeling framework, it is difficult to estimate the impact of a change in any one individual variable on the allowance. As a result, management uses a probability-weighted approach that incorporates a baseline, an adverse and a more favorable economic scenario when formulating the quantitative estimate.
However, to illustrate a hypothetical sensitivity analysis, management calculated a quantitative allowance using a 100% weighting applied to an adverse scenario. This scenario includes assumptions around the Russian invasion of Ukraine worsening and lasting longer than the baseline scenario. Import bans on Russian oil lead to additional price increases, contributing to higher inflation rates that are also exacerbated by the continuing supply chain disruption. Additionally, the Federal Reserve continues to raise rates through the first half of 2023 to fight inflation even as the economy heads into a recession in the third quarter 2022. Under this scenario, as an example, the unemployment rate increases from baseline levels and remains elevated for a prolonged period, the rate is estimated at 6.4% and 7.7% at the end of 2022 and 2023 respectively. These numbers result in unemployment rates that are approximately 3.1% and 4.2% higher than baseline scenario projections of 3.3% and 3.5%, respectively for the same time periods.
To demonstrate the sensitivity to key economic parameters used in the calculation of our ACL at June 30, 2022, management calculated the difference between our quantitative ACL and this 100% adverse scenario. Excluding consideration of qualitative adjustments, this sensitivity analysis would result in a hypothetical increase in our ACL of approximately $900 million at June 30, 2022. This hypothetical increase is reflective of the sensitivity of the rate of change in the unemployment variable on our models.
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The resulting difference is not intended to represent an expected increase in allowance levels for a number of reasons including the following:
•Management uses a weighted approach applied to multiple economic scenarios for its allowance estimation process;
•The highly uncertain economic environment;
•The difficulty in predicting the inter-relationships between the economic parameters used in the various economic scenarios; and
•The sensitivity estimate does not account for any general reserve components and associated risk profile adjustments incorporated by management as part of its overall allowance framework.
We regularly review our ACL for appropriateness by performing on-going evaluations of the loan and lease portfolio. In doing so, we consider factors such 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. We also evaluate the impact of changes in key economic parameters 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. There is no certainty that our ACL will be appropriate over time to cover losses in our portfolio as economic and market conditions may ultimately differ from our reasonable and supportable forecast. Additionally, events adversely affecting specific customers, industries, or our markets such as geopolitical instability, risks of rising inflation including a near-term recession, or the emergence of a more contagious and severe COVID-19 variant, could severely impact our current expectations. If the credit quality of our customer base materially deteriorates or the risk profile of a market, industry, or group of customers changes materially, our net income and capital could be materially adversely affected which, in turn could have a material adverse effect on our financial condition and results of operations. The extent to which the geopolitical instability, risks of rising inflation, and the COVID-19 pandemic will continue to negatively impact our businesses, financial condition, liquidity and results will depend on future developments, which are highly uncertain and cannot be forecasted with precision at this time. For more information, see Note 5 “Loans and Leases” and Note 6 “Allowance for Credit Losses” of the Notes to Unaudited Condensed Consolidated Financial Statements.
Fair Value Measurement
Certain assets and liabilities are measured at fair value on a recurring basis, including securities, and derivative instruments. Assets and liabilities carried at fair value inherently include subjectivity and may require the use of significant assumptions, adjustments and judgment including, among others, discount rates, rates of return on assets, cash flows, default rates, loss rates, terminal values and liquidation values. A significant change in assumptions may result in a significant change in fair value, which in turn, may result in a higher degree of financial statement volatility and could result in significant impact on our results of operations, financial condition or disclosures of fair value information.
The fair value hierarchy requires use of observable inputs first and subsequently unobservable inputs when observable inputs are not available. Our fair value measurements involve various valuation techniques and models, which involve inputs that are observable (Level 1 or Level 2 in fair value hierarchy), when available. The level of judgment required to determine fair value is dependent on the methods or techniques used in the process. Assets and liabilities that are measured at fair value using quoted prices in active markets (Level 1) do not require significant judgment while the valuation of assets and liabilities when quoted market prices are not available (Levels 2 and 3) may require significant judgment to assess whether observable or unobservable inputs for those assets and liabilities provide reasonable determination of fair value. The fair values measured at each level of the fair value hierarchy, additional discussion regarding fair value measurements, and a brief description of how fair value is determined for categories that have unobservable inputs, can be found in Note 13 “Fair Values of Assets and Liabilities” of the Notes to Unaudited Condensed Consolidated Financial Statements.
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Goodwill and Other Intangible Assets
The acquisition method of accounting requires that assets and liabilities acquired in a business combination are recorded at fair value as of the acquisition date. The valuation of assets and liabilities often involves estimates based on third party valuations or internal valuations based on discounted cash flow analyses or other valuation techniques, all of which are inherently subjective. This typically results in goodwill, the amount by which the cost of net assets acquired in a business combination exceeds their fair value, which is subject to impairment testing at least annually. The amortization of identified intangible assets recognized in a business combination is based upon the estimated economic benefits to be received over their economic life, which is also subjective. Customer attrition rates that are based on historical experience are used to determine the estimated economic life of certain intangibles assets, including but not limited to, customer deposit intangibles.
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Item 1: Financial Statements
Huntington Bancshares Incorporated
Condensed Consolidated Balance Sheets
(Unaudited)
June 30,December 31,
(dollar amounts in millions)20222021
Assets
Cash and due from banks
$1,793 $1,811 
Interest-bearing deposits at Federal Reserve Bank
2,115 3,711 
Interest-bearing deposits in banks
196 392 
Trading account securities
34 46 
Available-for-sale securities
24,377 28,460 
Held-to-maturity securities
17,355 12,447 
Other securities
763 648 
Loans held for sale (includes $777 and $1,270 respectively, measured at fair value)(1)
969 1,676 
Loans and leases (includes $179 and $171 respectively, measured at fair value)(1)
116,221 111,267 
Allowance for loan and lease losses(2,074)(2,030)
Net loans and leases
114,147 109,237 
Bank owned life insurance
2,766 2,765 
Accrued income and other receivables2,169 1,319 
Premises and equipment
1,175 1,164 
Goodwill
5,571 5,349 
Servicing rights and other intangible assets
703 611 
Other assets
4,649 4,428 
Total assets$178,782 $174,064 
Liabilities and shareholders’ equity
Liabilities
Deposits:
Demand deposits—noninterest-bearing$42,131 $43,236 
Interest-bearing103,304 100,027 
Total deposits145,435 143,263 
Short-term borrowings
3,048 334 
Long-term debt
7,866 7,108 
Other liabilities
4,454 4,041 
Total liabilities160,803 154,746 
Commitments and Contingent Liabilities (Note 16)
Shareholders’ equity
Preferred stock
2,167 2,167 
Common stock
14 14 
Capital surplus
15,261 15,222 
Less treasury shares, at cost
(85)(79)
Accumulated other comprehensive income (loss)(2,098)(229)
Retained earnings
2,691 2,202 
Total Huntington Bancshares Inc shareholders’ equity17,950 19,297 
Non-controlling interest29 21 
Total equity17,979 19,318 
Total liabilities and shareholders’ equity$178,782 $174,064 
Common shares authorized (par value of $0.01)
2,250,000,000 2,250,000,000 
Common shares outstanding1,442,194,344 1,437,742,172 
Treasury shares outstanding6,691,381 6,298,288 
Preferred stock, authorized shares6,617,808 6,617,808 
Preferred shares outstanding557,500 557,500 
(1)Amounts represent loans for which Huntington has elected the fair value option. See Note 13 “Fair Values of Assets and Liabilities”.
See Notes to Unaudited Condensed Consolidated Financial Statements
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Huntington Bancshares Incorporated
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended June 30,Six months ended June 30,
(dollar amounts in millions, except per share data, share count in thousands)2022202120222021
Interest and fee income:
Loans and leases$1,078 $806 $2,082 $1,558 
Available-for-sale securities
Taxable123 67 213 116 
Tax-exempt15 13 32 26 
Held-to-maturity securities—taxable90 35 156 77 
Other securities—taxable6 2 11 4 
Other19 12 32 23 
Total interest income1,331 935 2,526 1,804 
Interest expense:
Deposits25 12 36 23 
Short-term borrowings7 — 14 — 
Long-term debt38 85 69 (29)
Total interest expense70 97 119 (6)
Net interest income1,261 838 2,407 1,810 
Provision for credit losses67 211 92 151 
Net interest income after provision for credit losses1,194 627 2,315 1,659 
Service charges on deposit accounts 105 88 202 157 
Card and payment processing income96 80 182 145 
Mortgage banking income44 67 93 167 
Trust and investment management services63 56 128 108 
Capital markets fees54 35 96 64 
Insurance income27 25 58 52 
Leasing revenue27 12 62 16 
Bank owned life insurance income11 16 28 32 
Gain on sale of loans12 3 40 6 
Net gains on sales of securities— 10 — 10 
Other noninterest income46 52 95 82 
Total noninterest income485 444 984 839 
Personnel costs577 592 1,157 1,060 
Outside data processing and other services153 162 318 277 
Net occupancy58 72 122 114 
Equipment61 55 142 101 
Professional services19 48 38 65 
Marketing24 15 45 29 
Deposit and other insurance expense20 8 38 16 
Amortization of intangibles13 11 27 21 
Lease financing equipment depreciation11 5 25 5 
Other noninterest expense82 104 159 177 
Total noninterest expense1,018 1,072 2,071 1,865 
Income (loss) before income taxes661 (1)1,228 633 
Provision for income taxes120 14 225 116 
Income after income taxes541 (15)1,003 517 
Income attributable to non-controlling interest2 — 4 — 
Net income (loss) attributable to Huntington Bancshares Inc539 (15)999 517 
Dividends on preferred shares28 43 56 74 
Net income (loss) applicable to common shares$511 $(58)$943 $443 
Average common shares—basic1,441,200 1,125,039 1,439,814 1,071,276 
Average common shares—diluted1,463,293 1,125,039 1,463,810 1,094,474 
Per common share:
Net income—basic$0.35 $(0.05)$0.65 $0.41 
Net income—diluted0.35 (0.05)0.64 0.40 
See Notes to Unaudited Condensed Consolidated Financial Statements
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Huntington Bancshares Incorporated
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)2022202120222021
Net income (loss) attributable to Huntington Bancshares Inc$539 $(15)$999 $517 
Other comprehensive (loss) income, net of tax:
Net unrealized (losses) gains on available-for-sale securities(820)78 (1,999)(138)
Net impact of fair value hedges on available-for-sale securities123 (5)455 29 
Change in fair value related to cash flow hedges(86)(34)(326)(102)
Translation adjustments, net of hedges(2)(6)(2)(6)
Change in accumulated unrealized gains for pension and other post-retirement obligations1 4 3 6 
Other comprehensive (loss) income, net of tax(784)37 (1,869)(211)
Comprehensive (loss) income attributable to Huntington Bancshares(245)22 (870)306 
Comprehensive income attributed to non-controlling interest2 — 4 — 
Comprehensive (loss) income$(243)$22 $(866)$306 
See Notes to Unaudited Condensed Consolidated Financial Statements
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Huntington Bancshares Incorporated
Condensed Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
(dollar amounts in millions, share amounts in thousands)Preferred StockCommon StockCapital SurplusTreasury StockAccumulated Other Comprehensive Income (Loss) Retained EarningsNon-controllingTotal
AmountSharesAmountSharesAmountTotalinterestEquity
Three Months Ended June 30, 2022
Balance, beginning of period$2,167 1,445,386 $14 $15,255 (6,211)$(78)$(1,314)$2,408 $18,452 $29 $18,481 
Net income539 539 2 541 
Other comprehensive (loss) income, net of tax(784)(784)(784)
Cash dividends declared:
Common ($0.155 per share)
(228)(228)(228)
Preferred(28)(28)(28)
Recognition of the fair value of share-based compensation23 23 23 
Other share-based compensation activity3,499 — (17)— (17)(17)
Other— (480)(7)— (7)(2)(9)
Balance, end of period$2,167 1,448,885 $14 $15,261 (6,691)$(85)$(2,098)$2,691 $17,950 $29 $17,979 
Three Months Ended June 30, 2021
Balance, beginning of period$2,676 1,023,094 $10 $8,806 (5,041)$(59)$(56)$2,223 $13,600 $— $13,600 
Net loss(15)(15)— (15)
Other comprehensive income, net of tax37 37 37 
TCF Financial Corp acquisition:
Issuance of common stock458,171 56,993 (37)6,961 6,961 
Issuance of Series I preferred stock175 10 185 185 
Non-controlling interest acquired— 22 22 
Cash dividends declared:
Common ($0.15 per share)
(224)(224)(224)
Preferred(43)(43)(43)
Recognition of the fair value of share-based compensation38 38 38 
Other share-based compensation activity3,349 — (17)— (17)(17)
Other— (3,015)(9)(2)(11)(2)(13)
Balance, end of period$2,851 1,484,614 $15 $15,830 (8,056)$(105)$(19)$1,939 $20,511 $20 $20,531 

See Notes to Unaudited Condensed Consolidated Financial Statements
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(dollar amounts in millions, share amounts in thousands)Preferred StockCommon StockCapital SurplusTreasury StockAccumulated Other Comprehensive Gain (Loss) Retained EarningsNon-controlling 
AmountSharesAmountSharesAmountTotalinterestTotal
Six Months Ended June 30, 2022
Balance, beginning of period$2,167 1,444,040 $14 $15,222 (6,298)$(79)$(229)$2,202 $19,297 $21 $19,318 
Net income999 999 4 1,003 
Other comprehensive income (loss), net of tax(1,869)(1,869)(1,869)
Cash dividends declared:
Common ($0.31 per share)
(454)(454)(454)
Preferred(56)(56)(56)
Recognition of the fair value of share-based compensation63 63 63 
Other share-based compensation activity4,845 — (24)— (24)(24)
Other— (393)(6)— — (6)4 (2)
Balance, end of period$2,167 1,448,885 $14 $15,261 (6,691)$(85)$(2,098)$2,691 $17,950 $29 $17,979 
Six Months Ended June 30, 2021
Balance, beginning of period$2,191 1,022,258 $10 $8,781 (5,062)$(59)$192 $1,878 $12,993 $— $12,993 
Net income517 517 — 517 
Other comprehensive income, net of tax(211)(211)(211)
TCF Financial Corp acquisition:
Issuance of common stock458,171 5 6,993 (37)6,961 6,961 
Issuance of Series I preferred stock175 10 185 185 
Non-controlling interest acquired— 22 22 
Net proceeds from issuance of preferred stock485 485 485 
Cash dividends declared:
Common ($0.30 per share)
(380)(380)(380)
Preferred(74)(74)(74)
Recognition of the fair value of share-based compensation66 66 66 
Other share-based compensation activity4,185 — (20)— (20)(20)
Other— (2,994)(9)(2)(11)(2)(13)
Balance, end of period$2,851 1,484,614 $15 $15,830 (8,056)$(105)$(19)$1,939 $20,511 $20 $20,531 
See Notes to Unaudited Condensed Consolidated Financial Statements
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Huntington Bancshares Incorporated
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended June 30,
(dollar amounts in millions)20222021
Operating activities
Net income$1,003 $517 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses92 151 
Depreciation and amortization207 274 
Share-based compensation expense63 66 
Deferred income tax expense108 34 
Net change in:
Trading account securities12 (31)
Loans held for sale485 50 
Other assets(206)(416)
Other liabilities67 261 
Other, net(7)82 
Net cash provided by operating activities1,824 988 
Investing activities
Change in interest bearing deposits in banks321 415 
Net cash (paid) received from business combinations(223)466 
Proceeds from:
Maturities and calls of available-for-sale securities2,401 3,683 
Maturities and calls of held-to-maturity securities1,699 1,995 
Maturities and calls of other securities812 — 
Sales of available-for-sale securities— 5,838 
Purchases of available-for-sale securities(5,246)(10,285)
Purchases of held-to-maturity securities(2,409)(1,547)
Purchases of other securities(936)— 
Net proceeds from sales of portfolio loans and leases704 334 
Principal payments received under direct finance and sales-type leases902 408 
Net loan and lease activity, excluding sales and purchases(5,858)3,990 
Purchases of premises and equipment(123)(99)
Purchases of loans and leases(493)(493)
Net accrued income and other receivables activity(818)(837)
Other, net62 118 
Net cash provided by (used in) investing activities(9,205)3,986 
Financing activities
Increase in deposits2,172 5,194 
Increase (decrease) in short-term borrowings3,209 (1,152)
Net proceeds from issuance of long-term debt2,075 59 
Maturity/redemption of long-term debt(1,158)(2,526)
Dividends paid on preferred stock(56)(66)
Dividends paid on common stock(449)(308)
Repurchases of common stock— — 
Net proceeds from issuance of preferred stock— 485 
Other, net(26)— 
Net cash provided by financing activities5,767 1,686 
Increase (decrease) in cash and cash equivalents(1,614)6,660 
Cash and cash equivalents at beginning of period5,522 6,595 
Cash and cash equivalents at end of period$3,908 $13,255 
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 Six Months Ended June 30,
(dollar amounts in millions)20222021
Supplemental disclosures:
Interest paid$113 $87 
Income taxes (received) paid(110)200 
Non-cash activities
Loans transferred to held-for-sale from portfolio569 190
Loans transferred to portfolio from held-for-sale31 60
Transfer of securities from available-for-sale to held-to-maturity 4,225 3,007 
Business Combination (1)
(1)     In the six months ended June 30, 2021, the TCF acquisition included fair value of tangible assets acquired of $46.3 billion, goodwill and other intangible assets of $3.5 billion, liabilities assumed $42.6 billion, preferred stock of $185 million, and common stock of $7.0 billion.

See Notes to Unaudited Condensed Consolidated Financial Statements


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Huntington Bancshares Incorporated
Notes to Unaudited Condensed Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying Unaudited Condensed Consolidated Financial Statements of Huntington reflect all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the consolidated financial position, the results of operations, and cash flows for the periods presented. These Unaudited Condensed Consolidated Financial Statements have been prepared according to the rules and regulations of the SEC and, therefore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. The Notes to Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K, which include descriptions of significant accounting policies, as updated by the information contained in this report, should be read in conjunction with these interim financial statements.
For statement of cash flow purposes, cash and cash equivalents are defined as the sum of cash and due from banks and interest-bearing deposits at Federal Reserve Bank.
Certain prior period amounts have been reclassified to conform to current year’s presentation.
Effective in the 2022 first quarter, a new classification within the Unaudited Condensed Consolidated Balance Sheet of accrued income and other receivables was established comprised of activity that was previously classified as loans and leases (other consumer loans and leases) and other assets. All prior period amounts and all related metrics have been revised to conform to the current presentation.
In conjunction with applicable accounting standards, all material subsequent events have been either recognized in the Unaudited Condensed Consolidated Financial Statements or disclosed in the Notes to Unaudited Condensed Consolidated Financial Statements. There were no material subsequent events to disclose for the current period.
2. ACCOUNTING STANDARDS UPDATE
Accounting standards adopted in the current period
StandardSummary of guidanceEffects on financial Statements
ASU 2021-08-Business Combinations (Topic 805) Issued October 2021
•The amendments in this update require that an acquirer apply topic 606 to the recognition and measurement of revenue contract assets and liabilities acquired in a business combination.
•Management adopted the guidance during the second quarter 2022.
•The ASU has been applied to all business combinations occurring during the first six months of 2022 and will be applied prospectively to all business combinations occurring after adoption.
•The adoption did not result in a material impact on Huntington’s Consolidated financial statements.
ASU 2022-01-Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method Issued March 2022
•The amendments in this update expand the current last-of-layer method to allow for multiple hedge layers in a single closed portfolio. To reflect the expansion, the last-of-layer method has been renamed the portfolio layer method. The standard also expands the scope of the portfolio layer method to nonprepayable financial assets.
•Management early adopted the guidance during the second quarter of 2022 using the modified retrospective basis. There was no impact to Huntington’s Consolidated financial statements as a result of the adoption. Amendments related to disclosures were applied prospectively from the initial adoption date.
•The ASU also gives entities the option to reclassify debt securities classified in the held-to-maturity category at the date of adoption to the available-for-sale category if the entity applies the portfolio layer method hedging to one or more closed portfolios that include those debt securities, Huntington did not apply this option to any held-to-maturity securities.
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Accounting standards yet to be adopted
StandardSummary of guidanceEffects on financial statements
ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Issued March 2022
•The amendments in this update eliminate TDR accounting for entities that have adopted Update 2016-13, while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. The ASU also requires current period gross write-offs by year of origination for financing receivables and net investment in leases.
•Effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
•Adoption of the ASU will be applied prospectively, except for the portion of the standard related to the recognition and measurement of TDRs an entity may elect to use a modified retrospective transition method with a cumulative effect adjustment to retained earnings at the beginning of the period of adoption. An entity that elects to early adopt in an interim period should apply the guidance as of the beginning of the fiscal year that includes the interim period. An entity may also chose to early adopt the amendments about TDRs and related disclosure enhancements separately from amendments about vintage disclosures.
•Huntington is currently evaluating the impact of the ASU on its Consolidated financial statements, as well as which adoption method to apply.
3. BUSINESS COMBINATIONS

On June 15, 2022, Huntington acquired Capstone Partners, a leading middle market investment bank and advisory firm dedicated to servicing middle market companies throughout their full business lifecycle. The acquisition resulted in $192 million of goodwill, allocated to the Commercial segment, which approximates total consideration. Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of the acquisition. The goodwill recognized is deductible for tax purposes.




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4. 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 June 30, 2022 and December 31, 2021:
Unrealized
(dollar amounts in millions)
Amortized
Cost (1)(2)
Gross
Gains		Gross
Losses		Fair Value
June 30, 2022
Available-for-sale securities:
U.S. Treasury$5 $— $— $5 
Federal agencies:
Residential CMO3,217 — (216)3,001 
Residential MBS14,478 1 (1,532)12,947 
Commercial MBS2,365 1 (384)1,982 
Other agencies215 — (6)209 
Total U.S. Treasury, federal agency and other agency securities20,280 2 (2,138)18,144 
Municipal securities3,604 1 (183)3,422 
Private-label CMO158 — (6)152 
Asset-backed securities392 — (31)361 
Corporate debt2,539 99 (344)2,294 
Other securities/Sovereign debt4 — — 4 
Total available-for-sale securities$26,977 $102 $(2,702)$24,377 
Held-to-maturity securities:
Federal agencies:
Residential CMO$4,896 $— $(383)$4,513 
Residential MBS10,509 2 (930)9,581 
Commercial MBS1,792 1 (124)1,669 
Other agencies156 — (5)151 
Total federal agency and other agency securities17,353 3 (1,442)15,914 
Municipal securities2 — — 2 
Total held-to-maturity securities$17,355 $3 $(1,442)$15,916 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock$187 $— $— $187 
Federal Reserve Bank stock514 — — 514 
Equity securities9 — — 9 
Other securities, at fair value:
Mutual funds50 — — 50 
Equity securities3 — — 3 
Total other securities$763 $— $— $763 
(1)Amortized cost amounts excludes accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At June 30, 2022, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $62 million and $38 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 $608 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.
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Unrealized
(dollar amounts in millions)Amortized
Cost (1)		Gross
Gains		Gross
Losses		Fair Value
December 31, 2021
Available-for-sale securities:
U.S. Treasury$5 $— $— $5 
Federal agencies:
Residential CMO4,649 40 (40)4,649 
Residential MBS15,533 135 (160)15,508 
Commercial MBS1,896 7 (38)1,865 
Other agencies248 1 (1)248 
Total U.S. Treasury, federal agency and other agency securities22,331 183 (239)22,275 
Municipal securities3,497 62 (33)3,526 
Private-label CMO106 1 (1)106 
Asset-backed securities385 1 (4)382 
Corporate debt2,183 22 (38)2,167 
Other securities/Sovereign debt4 — — 4 
Total available-for-sale securities$28,506 $269 $(315)$28,460 
Held-to-maturity securities:
Federal agencies:
Residential CMO$2,602 $35 $(20)$2,617 
Residential MBS7,475 41 (59)7,457 
Commercial MBS2,175 45 (5)2,215 
Other agencies193 5 — 198 
Total federal agency and other agency securities12,445 126 (84)12,487 
Municipal securities2 — — 2 
Total held-to-maturity securities$12,447 $126 $(84)$12,489 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock$52 $— $— $52 
Federal Reserve Bank stock512 — — 512 
Equity securities12 — — 12 
Other securities, at fair value:
Mutual funds65 — — 65 
Equity securities6 1 — 7 
Total other securities$647 $1 $— $648 
(1)Amortized cost amounts excludes accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At December 31, 2021, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $62 million and $26 million, respectively.
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The following table provides the amortized cost and fair value of securities by contractual maturity at June 30, 2022 and December 31, 2021. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.
June 30, 2022December 31, 2021
(dollar amounts in millions)
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Available-for-sale securities:
Under 1 year$476 $471 $377 $374 
After 1 year through 5 years2,347 2,203 1,888 1,880 
After 5 years through 10 years3,215 2,950 3,166 3,180 
After 10 years20,939 18,753 23,075 23,026 
Total available-for-sale securities$26,977 $24,377 $28,506 $28,460 
Held-to-maturity securities:
Under 1 year$1 $1 $2 $2 
After 1 year through 5 years85 83 162 164 
After 5 years through 10 years42 41 44 45 
After 10 years17,227 15,791 12,239 12,278 
Total held-to-maturity securities$17,355 $15,916 $12,447 $12,489 
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 June 30, 2022 and December 31, 2021:
Less than 12 MonthsOver 12 MonthsTotal
(dollar amounts in millions)Fair
Value		Gross Unrealized
Losses		Fair
Value		Gross Unrealized
Losses		Fair
Value		Gross Unrealized
Losses
June 30, 2022
Available-for-sale securities:
Federal agencies:
Residential CMO$2,671 $(182)$170 $(34)$2,841 $(216)
Residential MBS9,122 (977)3,730 (555)12,852 (1,532)
Commercial MBS1,584 (270)377 (114)1,961 (384)
Other agencies80 (6)— — 80 (6)
Total federal agency and other agency securities13,457 (1,435)4,277 (703)17,734 (2,138)
Municipal securities2,866 (161)311 (22)3,177 (183)
Private-label CMO122(6)——122(6)
Asset-backed securities319 (26)42 (5)361 (31)
Corporate debt1,951 (274)339 (70)2,290 (344)
Total temporarily impaired available-for-sale securities$18,715 $(1,902)$4,969 $(800)$23,684 $(2,702)
Held-to-maturity securities:
Federal agencies:
Residential CMO$4,501 $(382)$8 $(1)$4,509 $(383)
Residential MBS8,552 (826)735 (104)9,287 (930)
Commercial MBS1,661 (124)— — 1,661 (124)
Other agencies151 (5)— — 151 (5)
Total federal agency and other agency securities14,865 (1,337)743 (105)15,608 (1,442)
Total temporarily impaired held-to-maturity securities$14,865 $(1,337)$743 $(105)$15,608 $(1,442)
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Less than 12 MonthsOver 12 MonthsTotal
(dollar amounts in millions)Fair
Value		Gross Unrealized
Losses		Fair
Value		Gross Unrealized
Losses		Fair
Value		Gross Unrealized
Losses
December 31, 2021
Available-for-sale securities:
Federal agencies:
Residential CMO$2,925 $(40)$— $— $2,925 $(40)
Residential MBS13,491 (160)— — 13,491 (160)
Commercial MBS1,251 (38)— — 1,251 (38)
Other agencies140 (1)— — 140 (1)
Total federal agency and other agency securities17,807 (239)— — 17,807 (239)
Municipal securities859 (22)319 (11)1,178 (33)
Private-label CMO78 (1)— — 78 (1)
Asset-backed securities237 (4)— — 237 (4)
Corporate debt1,766 (38)— — 1,766 (38)
Total temporarily impaired available-for-sale securities$20,747 $(304)$319 $(11)$21,066 $(315)
Held-to-maturity securities:
Federal agencies:
Residential CMO$1,453 $(20)$— $— $1,453 $(20)
Residential MBS5,837 (59)— — 5,837 (59)
Commercial MBS318 (5)— — 318 (5)
Total federal agency and other agency securities7,608 (84)— — 7,608 (84)
Total temporarily impaired held-to-maturity securities$7,608 $(84)$— $— $7,608 $(84)
During the 2022 first quarter, Huntington transferred $4.2 billion of securities from the AFS portfolio to the HTM portfolio. At the time of the transfer, AOCI included $58 million of net unrealized losses (after-tax) attributed to these securities. This loss will be amortized into interest income over the remaining life of the securities.
At June 30, 2022 and December 31, 2021, the carrying value of investment securities pledged to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, security repurchase agreements and to support borrowing capacity totaled $28.7 billion and $21.7 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 June 30, 2022 or December 31, 2021. At June 30, 2022, all HTM debt securities are considered AAA rated. In addition, there were no HTM debt securities considered past due at June 30, 2022.
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 June 30, 2022, 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 June 30, 2022 or December 31, 2021.
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5. LOANS AND LEASES
The following table provides a detailed listing of Huntington’s loan and lease portfolio at June 30, 2022 and December 31, 2021.
(dollar amounts in millions)June 30, 2022December 31, 2021
Commercial loan and lease portfolio:
Commercial and industrial$43,440 $41,688 
Commercial real estate15,695 14,961 
Lease financing5,043 5,000 
Total commercial loan and lease portfolio64,178 61,649 
Consumer loan portfolio:
Residential mortgage21,220 19,256 
Automobile13,622 13,434 
Home equity10,426 10,550 
RV and marine5,453 5,058 
Other consumer1,322 1,320 
Total consumer loan portfolio52,043 49,618 
Total loans and leases (1) (2)116,221 111,267 
Allowance for loan and lease losses(2,074)(2,030)
Net loans and leases$114,147 $109,237 
(1)Loans and leases are reported at principal amount outstanding including unamortized purchase premiums and discounts, unearned income, and net direct fees and costs associated with originating and acquiring loans and leases. The aggregate amount of these loan and lease adjustments was a net discount of $48 million and $111 million at June 30, 2022 and December 31, 2021, respectively.
(2)The total amount of accrued interest recorded for these loans and leases at June 30, 2022, was $157 million and $153 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2021, was $148 million and $150 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in accrued income and other receivables within the Condensed Consolidated Balance Sheets.
Lease Financing
Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in commercial loans and leases. These leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases.
Huntington assesses net investments in leases (including residual values) for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. As such, net investments in leases may be reduced by an ACL, with changes recognized as provision expense.
The following table presents net investments in lease financing receivables by category at June 30, 2022 and December 31, 2021.
(dollar amounts in millions)June 30,
2022		December 31,
2021
Lease payments receivable$4,674 $4,620 
Estimated residual value of leased assets766 774 
Gross investment in lease financing receivables5,440 5,394 
Deferred origination costs39 36 
Deferred fees, unearned income and other(436)(430)
Total lease financing receivables$5,043 $5,000 
The carrying value of residual values guaranteed was $435 million and $473 million as of June 30, 2022 and December 31, 2021, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at June 30, 2022, totaled $4.7 billion and were due as follows: $878 million in 2022, $869 million in 2023, $865 million in 2024, $759 million in 2025, $672 million in 2026, and $631 million thereafter. Interest income recognized for these types of leases was $39 million and $56 million for the three-month periods ended June 30, 2022 and 2021, respectively. For the six-month periods ended June 30, 2022 and 2021, interest income recognized for these types of leases was $77 million and $81 million.
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Nonaccrual and Past Due Loans and Leases
The following table presents NALs by class at June 30, 2022 and December 31, 2021:
June 30, 2022December 31, 2021
(dollar amounts in millions)Nonaccrual loans and leases with no ACLTotal nonaccrual loans and leasesNonaccrual loans and leases with no ACLTotal nonaccrual loans and leases
Commercial and industrial$57 $324 $81 $370 
Commercial real estate95 117 80 104 
Lease financing10 22 3 48 
Residential mortgage— 111 — 111 
Automobile— 4 — 3 
Home equity— 78 — 79 
RV and marine— 1 — 1 
Total nonaccrual loans and leases$162 $657 $164 $716 
The following table presents an aging analysis of loans and leases, by class at June 30, 2022 and December 31, 2021:
June 30, 2022
Past Due (1) Loans Accounted for Under FVOTotal Loans
and Leases		90 or
more days
past due
and accruing
(dollar amounts in millions)30-59
 Days		60-89
 Days		90 or 
more days		TotalCurrent
Commercial and industrial$63 $97 $106 $266 $43,174 $— $43,440 $11 (2)
Commercial real estate45 10 12 67 15,628 — 15,695 — 
Lease financing45 18 14 77 4,966 — 5,043 10 (3)
Residential mortgage237 58 230 525 20,517 178 21,220 168 (4)
Automobile82 18 9 109 13,513 — 13,622 6 
Home equity46 18 64 128 10,297 1 10,426 13 
RV and marine14 4 2 20 5,433 — 5,453 2 
Other consumer13 2 2 17 1,305 — 1,322 2 
Total loans and leases$545 $225 $439 $1,209 $114,833 $179 $116,221 $212 
December 31, 2021
Past Due (1) Loans Accounted for Under FVOTotal Loans
and Leases		90 or
more days
past due
and accruing
(dollar amounts in millions)30-59
 Days		60-89
 Days		90 or more daysTotalCurrent
Commercial and industrial$72 $69 $107 $248 $41,440 $— $41,688 $13 (2)
Commercial real estate9 1 9 19 14,942 — 14,961 — 
Lease financing39 13 17 69 4,931 — 5,000 11 (3)
Residential mortgage151 49 233 433 18,653 170 19,256 157 (4)
Automobile79 18 8 105 13,329 — 13,434 6 
Home equity48 35 76 159 10,390 1 10,550 17 
RV and marine14 4 3 21 5,037 — 5,058 3 
Other consumer13 2 3 18 1,302 — 1,320 3 
Total loans and leases$425 $191 $456 $1,072 $110,024 $171 $111,267 $210 
(1)NALs are included in this aging analysis based on the loan’s past due status.
(2)Amounts include PPP (SBA guaranteed) and other SBA loans and leases.
(3)Amounts include Huntington Technology Finance administrative lease delinquencies.
(4)Amounts include mortgage loans insured by U.S. government agencies.

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Credit Quality Indicators
See Note 5 “Loans/Leases” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for a description of the credit quality indicators Huntington utilizes for monitoring credit quality and for determining an appropriate ACL level.
To facilitate the monitoring of credit quality for commercial 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 represents 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. For these reasons, Huntington considers the loans to be potential problem loans.
•Substandard - Inadequately protected loans resulting from 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.
Loans are generally assigned a category of “Pass” rating upon initial approval and subsequently updated as appropriate based on the borrower’s financial performance.
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, loans are assigned pool level PD factors based on the FICO range within which the borrower’s credit bureau score falls. A credit bureau score is a credit score developed by FICO 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.
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The following tables present the amortized cost basis of loans and leases by vintage and credit quality indicator at June 30, 2022 and December 31, 2021 respectively:
As of June 30, 2022
Term Loans Amortized Cost Basis by Origination YearRevolver Total at Amortized Cost BasisRevolver Total Converted to Term Loans
(dollar amounts in millions)20222021202020192018PriorTotal
Commercial and industrial
Credit Quality Indicator (1):
Pass$9,829 $9,137 $4,429 $2,593 $1,373 $1,572 $11,704 $4 $40,641 
OLEM76 204 78 71 85 48 192 — 754 
Substandard157 275 219 321 185 322 564 — 2,043 
Doubtful— — — — 1 1 — — 2 
Total Commercial and industrial$10,062 $9,616 $4,726 $2,985 $1,644 $1,943 $12,460 $4 $43,440 
Commercial real estate
Credit Quality Indicator (1):
Pass$2,526 $3,700 $2,121 $2,193 $1,289 $1,416 $1,208 $— $14,453 
OLEM45 46 24 20 59 36 — — 230 
Substandard182 161 213 198 107 133 17 — 1,011 
Doubtful— — — — 1 — — — 1 
Total Commercial real estate$2,753 $3,907 $2,358 $2,411 $1,456 $1,585 $1,225 $— $15,695 
Lease financing
Credit Quality Indicator (1):
Pass$934 $1,590 $1,225 $637 $288 $230 $— $— $4,904 
OLEM10 9 32 6 6 4 — — 67 
Substandard4 5 18 25 6 14 — — 72 
Total Lease financing$948 $1,604 $1,275 $668 $300 $248 $— $— $5,043 
Residential mortgage
Credit Quality Indicator (2):
750+$2,358 $6,205 $3,696 $879 $473 $2,208 $— $— $15,819 
650-749847 1,437 706 270 180 906 — — 4,346 
<65012 56 56 94 111 548 — — 877 
Total Residential mortgage
$3,217 $7,698 $4,458 $1,243 $764 $3,662 $— $— $21,042 
Automobile
Credit Quality Indicator (2):
750+$1,673 $2,621 $1,571 $1,057 $456 $236 $— $— $7,614 
650-7491,199 1,988 909 519 254 113 — — 4,982 
<650148 379 201 143 94 61 — — 1,026 
Total Automobile
$3,020 $4,988 $2,681 $1,719 $804 $410 $— $— $13,622 
Home equity
Credit Quality Indicator (2):
750+$301 $602 $651 $27 $25 $350 $4,868 $272 $7,096 
650-74991 102 78 10 8 138 2,102 272 2,801 
<650— 2 2 2 3 62 319 138 528 
Total Home equity$392 $706 $731 $39 $36 $550 $7,289 $682 $10,425 
RV and marine
Credit Quality Indicator (2):
750+$890 $1,112 $814 $400 $402 $502 $— $— $4,120 
650-749165 368 228 141 130 199 — — 1,231 
<6501 14 13 15 16 43 — — 102 
Total RV and marine$1,056 $1,494 $1,055 $556 $548 $744 $— $— $5,453 
Other consumer
Credit Quality Indicator (2):
750+$189 $81 $46 $47 $18 $58 $345 $3 $787 
650-74940 38 17 23 7 23 311 19 478 
<6501 3 2 4 2 3 28 14 57 
Total Other consumer$230 $122 $65 $74 $27 $84 $684 $36 $1,322 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.
(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.
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As of December 31, 2021
Term Loans Amortized Cost Basis by Origination YearRevolver Total at Amortized Cost BasisRevolver Total Converted to Term Loans
(dollar amounts in millions)20212020201920182017PriorTotal
Commercial and industrial
Credit Quality Indicator (1):
Pass$15,435 $5,677 $3,682 $1,983 $1,080 $1,134 $9,945 $3 $38,939 
OLEM183 178 87 83 38 73 166 — 808 
Substandard336 203 344 206 125 167 552 — 1,933 
Doubtful5 1 1 1 — — — — 8 
Total Commercial and industrial$15,959 $6,059 $4,114 $2,273 $1,243 $1,374 $10,663 $3 $41,688 
Commercial real estate
Credit Quality Indicator (1):
Pass$4,144 $2,367 $2,593 $1,456 $761 $1,124 $798 $— $13,243 
OLEM76 48 42 83 73 19 — — 341 
Substandard224 362 448 115 151 46 30 — 1,376 
Doubtful— — — 1 — — — — 1 
Total Commercial real estate$4,444 $2,777 $3,083 $1,655 $985 $1,189 $828 $— $14,961 
Lease financing
Credit Quality Indicator (1):
Pass$1,851 $1,441 $809 $417 $226 $131 $— $— $4,875 
OLEM8 32 12 4 2 — — — 58 
Substandard6 23 19 2 9 8 — — 67 
Total Lease financing$1,865 $1,496 $840 $423 $237 $139 $— $— $5,000 
Residential mortgage
Credit Quality Indicator (2):
750+$5,532 $3,857 $978 $554 $687 $1,704 $— $— $13,312 
650-7491,862 993 409 269 254 1,028 — — 4,815 
<65048 56 104 120 99 532 — — 959 
Total Residential mortgage$7,442 $4,906 $1,491 $943 $1,040 $3,264 $— $— $19,086 
Automobile
Credit Quality Indicator (2):
750+$2,993 $1,927 $1,381 $666 $345 $129 $— $— $7,441 
650-7492,393 1,237 736 380 168 55 — — 4,969 
<650380 234 178 128 70 34 — — 1,024 
Total Automobile$5,766 $3,398 $2,295 $1,174 $583 $218 $— $— $13,434 
Home equity
Credit Quality Indicator (2):
750+$645 $701 $32 $31 $34 $387 $4,772 $272 $6,874 
650-749129 94 15 13 13 161 2,324 324 3,073 
<6503 2 2 1 1 67 361 165 602 
Total Home equity$777 $797 $49 $45 $48 $615 $7,457 $761 $10,549 
RV and marine
Credit Quality Indicator (2):
750+$1,257 $933 $470 $468 $268 $319 $— $— $3,715 
650-749393 273 171 157 106 150 — — 1,250 
<6506 11 13 18 18 27 — — 93 
Total RV and marine$1,656 $1,217 $654 $643 $392 $496 $— $— $5,058 
Other consumer
Credit Quality Indicator (2):
750+$211 $34 $50 $13 $10 $27 $326 $3 $674 
650-74988 52 50 23 17 41 295 24 590 
<6502 2 5 2 — 1 27 17 56 
Total Other consumer$301 $88 $105 $38 $27 $69 $648 $44 $1,320 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.
(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.


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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 would not otherwise be considered. However, not all loan modifications are TDRs. See Note 5 “Loans / Leases” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for an additional discussion of TDRs.
The following table presents, by class and modification type, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the three-month and six-month periods ended June 30, 2022 and 2021.
New Troubled Debt Restructurings (1)
Three Months Ended June 30, 2022
Number of
Contracts		Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)Interest rate reductionAmortization or maturity date changeChapter 7 bankruptcyOtherTotal
Commercial and industrial88 $19 $12 $— $1 $32 
Commercial real estate4 37 — — — 37 
Residential mortgage238 — 32 3 — 35 
Automobile469 — 3 — — 3 
Home equity70 — 3 2 — 5 
RV and marine35 — — — — — 
Other consumer23 — — — — — 
Total new TDRs927 $56 $50 $5 $1 $112 
Three Months Ended June 30, 2021
Number of
Contracts		Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)Interest rate reductionAmortization or maturity date changeChapter 7 bankruptcyOtherTotal
Commercial and industrial25 $15 $14 $— $— $29 
Residential mortgage72 — 11 1 — 12 
Automobile514 — 3 1 — 4 
Home equity51 — 1 1 — 2 
RV and marine35 1 — — — 1 
Other consumer68 — — — — — 
Total new TDRs765 $16 $29 $3 $— $48 
2022 2Q Form 10-Q 59

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New Troubled Debt Restructurings (1)
Six Months Ended June 30, 2022
Number of
Contracts		Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)Interest rate reductionAmortization or maturity date changeChapter 7 bankruptcyOtherTotal
Commercial and industrial46 $30 $15 $— $1 $46 
Commercial real estate5 37 — — — 37 
Residential mortgage445 — 60 4 — 64 
Automobile1,094 — 7 1 — 8 
Home equity112 — 4 3 — 7 
RV and marine finance74 — 1 — — 1 
Other consumer53 — — — — — 
Total new TDRs1,829 $67 $87 $8 $1 $163 
Six Months Ended June 30, 2021
Number of
Contracts		Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)Interest rate reductionAmortization or maturity date changeChapter 7 bankruptcyOtherTotal
Commercial and industrial37 $15 $19 $— $— $34 
Residential mortgage158 — 24 2 — 26 
Automobile1,416 — 10 2 — 12 
Home equity113 — 2 3 — 5 
RV and marine finance84 1 1 — — 2 
Other consumer165 — — — 1 1 
Total new TDRs1,973 $16 $56 $7 $1 $80 
(1)TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.
(2)Post-modification balances approximate pre-modification balances.
Pledged Loans
The Bank has access to the Federal Reserve’s discount window and advances from the FHLB. As of June 30, 2022 and December 31, 2021, these borrowings and advances are secured by $70.0 billion and $61.1 billion, respectively, of loans.
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6. ALLOWANCE FOR CREDIT LOSSES
Allowance for Credit Losses - Roll-forward
The following tables present ACL activity by portfolio segment for the three-month and six-month periods ended June 30, 2022 and 2021.

(dollar amounts in millions)CommercialConsumerTotal
Three-month period ended June 30, 2022:
ALLL balance, beginning of period$1,514 $504 $2,018 
Loan and lease charge-offs(12)(40)(52)
Recoveries of loans and leases previously charged-off24 20 44 
Provision (benefit) for loan and lease losses(184)248 64 
ALLL balance, end of period$1,342 $732 $2,074 
AULC balance, beginning of period$57 $34 $91 
Provision (benefit) for unfunded lending commitments(4)7 3 
AULC balance, end of period$53 $41 $94 
ACL balance, end of period$1,395 $773 $2,168 
Six-month period ended June 30, 2022:
ALLL balance, beginning of period$1,462 $568 $2,030 
Loan and lease charge-offs(44)(89)(133)
Recoveries of loans and leases previously charged-off65 41 106 
Provision for loan and lease losses(141)212 71 
ALLL balance, end of period$1,342 $732 $2,074 
AULC balance, beginning of period$41 $36 $77 
Provision for unfunded lending commitments12 5 17 
AULC balance, end of period$53 $41 $94 
ACL balance, end of period$1,395 $773 $2,168 
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(dollar amounts in millions)CommercialConsumerTotal
Three-month period ended June 30, 2021:
ALLL balance, beginning of period$1,197 $506 $1,703 
Loan and lease charge-offs (1)(78)(24)(102)
Recoveries of loans and leases previously charged-off19 21 40 
Provision for loan and lease losses (2)106 39 145 
Allowance on PCD loans and leases at acquisition374 58 432 
ALLL balance, end of period$1,618 $600 $2,218 
AULC balance, beginning of period$27 $11 $38 
Provision (benefit) for unfunded lending commitments (3)49 17 66 
AULC balance, end of period$76 $28 $104 
ACL balance, end of period$1,694 $628 $2,322 
Six-month period ended June 30, 2021:
ALLL balance, beginning of period$1,236 $578 $1,814 
Loan and lease charge-offs (1)(139)(58)(197)
Recoveries of loans and leases previously charged-off31 40 71 
Provision for loan and lease losses (2)116 (18)98 
Allowance on PCD loans and leases at acquisition374 58 432 
ALLL balance, end of period$1,618 $600 $2,218 
AULC balance, beginning of period$34 $18 $52 
Provision (reduction in allowance) for unfunded lending commitments (3)43 10 53 
Unfunded lending commitment losses(1)— (1)
AULC balance, end of period$76 $28 $104 
ACL balance, end of period$1,694 $628 $2,322 
(1)Loan and lease charge-offs for the three and six-month periods ended June 30, 2021 exclude $80 million of charge-offs recognized upon completion of the TCF acquisition related to required purchase accounting treatment. The initial ALLL recognized on PCD assets included these amounts and after charging these amounts off upon acquisition, the net impact was $432 million of additional ALLL for PCD loans.
(2)Includes $234 million of TCF acquisition initial provision for credit losses related to non-PCD loans and leases.
(3)Includes $60 million from acquired unfunded lending commitments.
At June 30, 2022, the ACL was $2.2 billion, an increase of $61 million from the December 31, 2021 balance of $2.1 billion.
The economic scenarios used in the June 30, 2022 ACL determination contained judgmental assumptions due to elevated levels of economic uncertainty associated with geopolitical instability, high inflation readings, and the expected path of interest rate increases by the Fed. Given the uncertainty associated with key economic scenario assumptions, the June 30, 2022 ACL included a general reserve that consists of various risk profile components, including the potential economic impact of a near-term recession as the Fed raises interest rates attempting to lower inflation, and the commercial real estate portfolio, to capture uncertainty not addressed within the quantitative transaction reserve.
7. MORTGAGE LOAN SALES AND SERVICING RIGHTS
Residential Mortgage Portfolio
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the three-month and six-month periods ended June 30, 2022 and 2021:
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)2022202120222021
Residential mortgage loans sold with servicing retained$1,313 $2,748 $3,247 $5,004 
Pretax gains resulting from above loan sales (1)40 101 99 194 
(1)Recorded in mortgage banking income.
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The following table summarizes the changes in MSRs recorded using the fair value method for the three-month and six-month periods ended June 30, 2022 and 2021:
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)20222021 20222021
Fair value, beginning of period$416 $274 $351 $210 
Servicing assets obtained in acquisition— ``59 — 59 
New servicing assets created18 38 47 72 
Change in fair value during the period due to:
Time decay (1)(5)(4)(10)(7)
Payoffs (2)(10)(16)(20)(33)
Changes in valuation inputs or assumptions (3)44 (24)95 26 
Fair value, end of period$463 $327 $463 $327 
Weighted-average life (years)8.16.98.16.9
(1)Represents decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.
(2)Represents decrease in value associated with loans that paid off during the period.
(3)Represents change in value resulting primarily from market-driven changes in interest rates.
MSRs do not trade in an active, open market with readily observable prices. Therefore, the fair value of MSRs is estimated using a discounted future cash flow model. Changes in the assumptions used may have a significant impact on the valuation of MSRs. MSR values are sensitive to movement in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which are impacted by the level of prepayments.
A summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at June 30, 2022, and December 31, 2021 follows:
June 30, 2022December 31, 2021
Decline in fair value due toDecline in fair value due to
(dollar amounts in millions)Actual10%
adverse
change		20%
adverse
change		Actual10%
adverse
change		20%
adverse
change
Constant prepayment rate (annualized)
7.29 %$(13)$(25)12.28 %$(17)$(32)
Spread over forward interest rate swap rates584 bps(11)(22)466 bps(7)(13)
Total servicing, late and other ancillary fees included in mortgage banking income was $23 million and $17 million for the three-month periods ended June 30, 2022 and 2021, respectively. Total servicing, late fees and other ancillary fees included in mortgage banking income was $45 million and $35 million for the six-month periods ended June 30, 2022 and 2021, respectively. The unpaid principal balance of residential mortgage loans serviced for third parties was $32 billion and $31 billion at June 30, 2022 and December 31, 2021, respectively.
8. BORROWINGS
Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following at June 30, 2022 and December 31, 2021, respectively: 
(dollar amounts in millions)June 30,
2022		December 31,
2021
Federal funds purchased and securities sold under agreements to repurchase$325 $320 
Federal Home Loan Bank advances2,500 — 
Other borrowings223 14 
Total short-term borrowings$3,048 $334 
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Huntington’s long-term debt consisted of the following at June 30, 2022 and December 31, 2021, respectively:
(dollar amounts in millions)June 30,
2022		December 31,
2021
The Parent Company:
Senior Notes$2,389 $2,083 
Subordinated Notes1,009 1,028 
Total notes issued by the parent3,398 3,111 
The Bank:
Senior Notes3,036 2,434 
Subordinated Notes671 811 
Total notes issued by the bank3,707 3,245 
FHLB Advances213 215 
Other548 537 
Total long-term debt$7,866 $7,108 

In May 2022, the Bank issued $500 million of senior notes at 99.8% of face value. The senior notes mature on May 16, 2025 and have a fixed coupon rate of 4.01%.
In May 2022, the Bank issued $800 million of senior notes at 99.7% of face value. The senior notes mature on May 17, 2028 and have a fixed coupon rate of 4.55%.
In May 2022, the Bank issued $300 million of senior notes at 99.8% of face value. The senior notes mature on May 16, 2025 and have a floating rate equal to SOFR plus 119 basis points resetting quarterly.
In May 2022, Huntington issued $400 million of senior notes at 100% of face value. The senior notes mature on May 17, 2033 and have a fixed coupon rate of 5.02%.
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9. OTHER COMPREHENSIVE INCOME
The components of Huntington’s OCI for the three-month and six-month periods ended June 30, 2022 and 2021, were as follows:
(dollar amounts in millions)PretaxTax (Expense) benefitAfter-tax
Three Months Ended June 30, 2022
Unrealized losses on available-for-sale securities arising during the period$(1,147)$264 $(883)
Reclassification adjustment for realized net losses included in net income82 (19)63 
Total unrealized losses on available-for-sale securities(1,065)245 (820)
Net impact of fair value hedges on available-for-sale securities161 (38)123 
Change in fair value related to cash flow hedges(111)25 (86)
Foreign currency translation adjustment (1)(8)— (8)
Net unrealized gains (losses) on net investment hedges6 — 6 
Translation adjustments, net of hedges (1)(2)— (2)
Change in accumulated unrealized gains for pension and other post retirement obligations2 (1)1 
Other comprehensive loss$(1,015)$231 $(784)
Three Months Ended June 30, 2021
Unrealized gains on available-for-sale securities arising during the period$88 $(20)$68 
Reclassification adjustment for realized net losses included in net income13 (3)10 
Total unrealized losses on available-for-sale securities101 (23)78 
Net impact of fair value hedges on available-for-sale securities(6)1 (5)
Change in fair value related to cash flow hedges(42)8 (34)
Translation adjustments, net of hedges (1)(6)— (6)
Change in accumulated unrealized gains for pension and other post retirement obligations3 1 4 
Other comprehensive income$50 $(13)$37 
Six Months Ended June 30, 2022
Unrealized losses on available-for-sale securities arising during the period$(2,687)$618 $(2,069)
Reclassification adjustment for realized net losses (gains) included in net income91 (21)70 
Total unrealized gains (losses) on available-for-sale securities(2,596)597 (1,999)
Net impact of fair value hedges on available-for-sale securities592 (137)455 
Change in fair value related to cash flow hedges(421)95 (326)
Foreign currency translation adjustment (1)(6)— (6)
Net unrealized gains (losses) on net investment hedges4 — 4 
Translation adjustments, net of hedges (1)(2)— (2)
Change in accumulated unrealized gains for pension and other post retirement obligations5 (2)3 
Other comprehensive loss$(2,422)$553 $(1,869)
Six Months Ended June 30, 2021
Unrealized losses on available-for-sale securities arising during the period$(199)$44 $(155)
Reclassification adjustment for realized net losses (gains) included in net income22 (5)17 
Total unrealized losses on available-for-sale securities(177)39 (138)
Net impact of fair value hedges on available-for-sale securities38 (9)29 
Change in fair value related to cash flow hedges(130)28 (102)
Translation adjustments, net of hedges (1)(6)— (6)
Change in accumulated unrealized gains for pension and other post retirement obligations6 — 6 
Other comprehensive loss$(269)$58 $(211)
(1)Foreign investments are deemed to be permanent in nature and, therefore, Huntington does not provide for taxes on foreign currency translation adjustments.
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Activity in accumulated OCI for the three-month and six-month periods ended June 30, 2022 and 2021, were as follows:
(dollar amounts in millions)
Unrealized
 gains (losses) on
available-for-sale securities (1)
Net impact of fair value hedges on available-for-sale securitiesChange in fair value related to cash flow hedgesTranslation adjustments, net of hedges
Unrealized
 gains
(losses) for
pension and
other post-
retirement
obligations (2)
Total
Three Months Ended June 30, 2022
Balance, beginning of period$(1,332)$421 $(177)$(3)$(223)$(1,314)
Other comprehensive income (loss) before reclassifications(883)123 (86)(2)— (848)
Amounts reclassified from accumulated OCI to earnings63 — — — 1 64 
Period change(820)123 (86)(2)1 (784)
Balance, end of period$(2,152)$544 $(263)$(5)$(222)$(2,098)
Three Months Ended June 30, 2021
Balance, beginning of period$(28)$36 $187 $— $(251)$(56)
Other comprehensive income (loss) before reclassifications68 (5)(34)(6)— 23 
Amounts reclassified from accumulated OCI to earnings10 — — — 4 14 
Period change78 (5)(34)(6)4 37 
Balance, end of period$50 $31 $153 $(6)$(247)$(19)
Six Months Ended June 30, 2022
Balance, beginning of period$(153)$89 $63 $(3)$(225)$(229)
Other comprehensive loss before reclassifications(2,069)455 (326)(2)— (1,942)
Amounts reclassified from accumulated OCI to earnings70 — — — 3 73 
Period change(1,999)455 (326)(2)3 (1,869)
Balance, end of period$(2,152)$544 $(263)$— $(5)$— $(222)$(2,098)
Six Months Ended June 30, 2021
Balance, beginning of period$188 $2 $255 $— $(253)$192 
Other comprehensive income before reclassifications(155)29 (102)(6)— (234)
Amounts reclassified from accumulated OCI to earnings17 — — — 6 23 
Period change(138)29 (102)(6)6 (211)
Balance, end of period$50 $31 $— $153 $— $(6)$— $(247)$(19)
(1)AOCI amounts at June 30, 2022 and June 30, 2021 include $73 million and $48 million, respectively, of net unrealized losses (after-tax) on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized losses will be recognized in earnings over the remaining life of the security using the effective interest method.

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10. SHAREHOLDERS’ EQUITY

Preferred Stock
The following is a summary of Huntington’s non-cumulative, non-voting, perpetual preferred stock outstanding.
(dollar amounts in millions)
Carrying Amount
SeriesIssuance Date
Shares Outstanding
Dividend Rate
Earliest Redemption Date (1)
June 30,
2022		December 31, 2021
Series B (2)12/28/201135,500 
3-mo. LIBOR + 270 bps
1/15/2017$23 $23 
Series E (3)2/27/20185,000 5.70 4/15/2023495 495 
Series F (3)5/27/20205,000 5.625 7/15/2030494 494 
Series G (3)8/3/20205,000 4.45 10/15/2027494 494 
Series H (2)2/2/2021500,000 4.50 4/15/2026486 486 
Series I (4)6/9/20217,000 5.70 12/01/2022175 175 
Total557,500 $2,167 $2,167 
(1) Denotes earliest option redemption date. Earlier redemption is solely at Huntington’s option, subject to prior approval of FRB.
(2) Series B and H preferred stock have a liquidation value and redemption price per share of $1,000, plus any declared and unpaid dividends.
(3) Series E, F, and G preferred stock have a liquidation value and redemption price per share of $100,000, plus any declared and unpaid dividends.
(4) Series I preferred stock has a liquidation value and redemption price per share of $25,000, plus any declared and unpaid dividends.
The following table presents the dividends declared for each series of Preferred shares for the three-month and six-month periods ended June 30, 2022 and 2021:
Three Months Ended June 30,Six months ended June 30,
(amounts in millions, except per share data)2022202120222021
Cash Dividend Declared Per ShareCash Dividend Declared Per ShareCash Dividend Declared Per ShareCash Dividend Declared Per Share
Preferred SeriesAmount ($)Amount ($)Amount ($)Amount ($)
Series B$13.03 $— $7.21 $— $22.39 $— $14.56 $— 
Series C— — 14.69 (1)— — 29.38 (3)
Series D— — 15.63 (9)— — 31.25 (18)
Series E1,425.00 (7)1,425.00 (7)2,850.00 (14)2,850.00 (14)
Series F1,406.25 (7)1,406.25 (7)2,812.50 (14)2,812.50 (14)
Series G1,112.50 (6)1,112.50 (6)2,225.00 (12)2,225.00 (12)
Series H11.25 (6)19.50 (10)22.50 (12)19.50 (10)
Series I356.25 (2)356.25 (3)712.50 (4)356.25 (3)
Total$(28)$(43)$(56)$(74)
Share Repurchases
On July 21, 2021, the Board authorized the repurchase of up to $800 million of common shares which began in the third quarter of 2021 and ended as of June 30, 2022. Purchases of common stock under the authorization may have included open market purchases, privately negotiated transactions, and accelerated share repurchase programs. During the first six months of 2022, Huntington repurchased no shares of common stock. As of June 30, 2022, Huntington completed $650 million of the share repurchase authorization.
Treasury shares
Treasury shares includes shares held for deferred compensation plans, at cost, of $85 million at June 30, 2022 and $79 million at December 31, 2021.
Non-controlling Interest in Subsidiaries
Through the acquisition of TCF, Huntington acquired a joint venture in which Huntington maintains a 55% ownership interest. As Huntington has a controlling financial interest, its financial results are consolidated in Huntington's financial statements and the other party’s 45% ownership interest is reported as a non-controlling interest within equity.
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11. EARNINGS PER SHARE
Basic earnings per share is the amount of earnings (adjusted for dividends declared on preferred stock) available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, restricted stock units and awards, and distributions from deferred compensation plans. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive.
The calculation of basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2022 and 2021 was as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions, except per share data, share count in thousands)2022202120222021
Basic earnings per common share:
Net income attributable to Huntington Bancshares Inc$539 $(15)$999 $517 
Preferred stock dividends28 43 56 74 
Net income available to common shareholders$511 $(58)$943 $443 
Average common shares issued and outstanding1,441,200 1,125,039 1,439,814 1,071,276 
Basic earnings per common share$0.35 $(0.05)$0.65 $0.41 
Diluted earnings per common share:
Dilutive potential common shares:
Stock options and restricted stock units and awards15,545 — 17,587 17,667 
Shares held in deferred compensation plans6,548 — 6,409 5,531 
Dilutive potential common shares22,093 — 23,996 23,198 
Total diluted average common shares issued and outstanding1,463,293 1,125,039 1,463,810 1,094,474 
Diluted earnings per common share$0.35 $(0.05)$0.64 $0.40 
Anti-dilutive awards (1)11,550 26,895 6,333 2,738 
(1)Reflects the total number of shares related to outstanding options and awards that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.
12. NONINTEREST INCOME
Huntington earns a variety of revenue including interest and fees from customers as well as revenues from non-customers. Certain sources of revenue are recognized within interest or fee income and are outside of the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Other sources of revenue fall within the scope of ASC 606 and are generally recognized within noninterest income. These revenues are included within various sections of the Unaudited Condensed Consolidated Financial Statements. The following table shows Huntington’s total noninterest income segregated between contracts with customers within the scope of ASC 606 and those within the scope of other GAAP Topics.
(dollar amounts in millions)Three Months Ended June 30,Six Months Ended June 30,
Noninterest income2022202120222021
Noninterest income from contracts with customers$322 $257 $630 $479 
Noninterest income within the scope of other GAAP topics163 187 354 360 
Total noninterest income$485 $444 $984 $839 
The following table illustrates the disaggregation by operating segment and major revenue stream and reconciles disaggregated revenue to segment revenue presented in Note 17 “Segment Reporting”.
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Three Months Ended June 30, 2022
(dollar amounts in millions)Commercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
Major Revenue Streams
Service charges on deposit accounts $22 $81 $1 $1 $— $105 
Card and payment processing income5 84 — — — 89 
Trust and investment management services2 17 — 44 — 63 
Insurance income2 14 — 12 (1)27 
Capital markets fees7 2 1 1 — 11 
Other noninterest income21 6 — — — 27 
Net revenue from contracts with customers$59 $204 $2 $58 $(1)$322 
Noninterest income within the scope of
other GAAP topics
92 66 1 — 4 163 
Total noninterest income$151 $270 $3 $58 $3 $485 
Three Months Ended June 30, 2021
(dollar amounts in millions)Commercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
Major Revenue Streams
Service charges on deposit accounts $22 $64 $1 $1 $— $88 
Card and payment processing income4 68 — — — 72 
Trust and investment management services— 15 — 40 — 55 
Insurance income1 14 — 9 1 25 
Capital markets fees6 2 — — — 8 
Other noninterest income1 3 — 4 1 9 
Net revenue from contracts with customers$34 $166 $1 $54 $2 $257 
Noninterest income within the scope of
other GAAP topics
80 77 1 — 29 187 
Total noninterest income$114 $243 $2 $54 $31 $444 
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Six Months Ended June 30, 2022
(dollar amounts in millions)Commercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
Major Revenue Streams
Service charges on deposit accounts $45 $152 $3 $2 $— $202 
Card and payment processing income11 158 — — — 169 
Trust and investment management services2 35 — 91 — 128 
Insurance income4 26 — 28 — 58 
Capital markets fees11 4 1 1 — 17 
Other noninterest income43 12 — 1 — 56 
Net revenue from contracts with customers$116 $387 $4 $123 $— $630 
Noninterest income within the scope of
other GAAP topics
176 155 2 1 20 354 
Total noninterest income$292 $542 $6 $124 $20 $984 
Six Months Ended June 30, 2021
(dollar amounts in millions)Commercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
Major Revenue Streams
Service charges on deposit accounts $41 $112 $3 $1 $— $157 
Card and payment processing income8 126 — — — 134 
Trust and investment management services1 28 — 78 — 107 
Insurance income3 26 — 22 1 52 
Capital markets fees7 3 1 — — 11 
Other noninterest income2 8 — 5 3 18 
Net revenue from contracts with customers$62 $303 $4 $106 $4 $479 
Noninterest income within the scope of
other GAAP topics
141 174 2 1 42 360 
Total noninterest income$203 $477 $6 $107 $46 $839 
Huntington generally provides services for customers in which it acts as principal. Payment terms and conditions vary amongst services and customers, and thus impact the timing and amount of revenue recognition. Some fees may be paid before any service is rendered and accordingly, such fees are deferred until the obligations pertaining to those fees are satisfied. Most Huntington contracts with customers are cancelable by either party without penalty or they are short-term in nature, with a contract duration of less than one year. Accordingly, most revenue deferred for the reporting period ended June 30, 2022 is expected to be earned within one year. Huntington does not have significant balances of contract assets or contract liabilities and any change in those balances during the reporting period ended June 30, 2022 was determined to be immaterial.
13. FAIR VALUES OF ASSETS AND LIABILITIES
See Note 19 “Fair Value of Assets and Liabilities” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for a description of the valuation methodologies used for instruments measured at fair value. Assets and liabilities measured at fair value rarely transfer between Level 1 and Level 2 measurements. There were no such transfers during the three-month and six-month periods ended June 30, 2022 and 2021.
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Assets and Liabilities measured at fair value on a recurring basis
Fair Value Measurements at Reporting Date UsingNetting Adjustments (1)June 30, 2022
(dollar amounts in millions)Level 1Level 2Level 3
Assets
Trading account securities:
Municipal securities$— $34 $— $— $34 
Available-for-sale securities:
U.S. Treasury securities5 — — — 5 
Residential CMOs— 3,001 — — 3,001 
Residential MBS— 12,947 — — 12,947 
Commercial MBS— 1,982 — — 1,982 
Other agencies— 209 — — 209 
Municipal securities— 45 3,377 — 3,422 
Private-label CMO— 130 22 — 152 
Asset-backed securities— 317 44 — 361 
Corporate debt— 2,294 — — 2,294 
Other securities/sovereign debt— 4 — — 4 
Total available-for-sale securities
5 20,929 3,443 — 24,377 
Other securities50 3 — — 53 
Loans held for sale— 777 — — 777 
Loans held for investment— 162 17 — 179 
MSRs— — 463 — 463 
Other assets:
Derivative assets— 1,648 6 (1,222)432 
Assets held in trust for deferred compensation plans122 — — — 122 
Liabilities
Derivative liabilities— 1,381 11 (756)636 

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Fair Value Measurements at Reporting Date Using
Netting Adjustments (1)
December 31, 2021
(dollar amounts in millions)
Level 1
Level 2
Level 3
Assets
Trading account securities:
Municipal securities$— $46 $— $— $46 
Available-for-sale securities:
U.S. Treasury securities5 — — — 5 
Residential CMOs— 4,649 — — 4,649 
Residential MBS— 15,508 — — 15,508 
Commercial MBS— 1,865 — — 1,865 
Other agencies— 248 — — 248 
Municipal securities— 49 3,477 — 3,526 
Private-label CMO— 86 20 — 106 
Asset-backed securities— 312 70 — 382 
Corporate debt— 2,167 — — 2,167 
Other securities/sovereign debt— 4 — — 4 
Total available-for-sale securities5 24,888 3,567 — 28,460 
Other securities65 7 — — 72 
Loans held for sale— 1,270 — — 1,270 
Loans held for investment— 152 19 — 171 
MSRs— — 351 — 351 
Other assets:
Derivative assets— 1,055 10 (465)600 
Assets held in trust for deferred compensation plans156 — — — 156 
Liabilities
Derivative liabilities— 737 6 (624)119 
(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
The following tables present a rollforward of the balance sheet amounts measured at fair value on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 measurements may also include observable components of value that can be validated externally. Accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.
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Level 3 Fair Value Measurements
Available-for-sale securitiesLoans held for investment
(dollar amounts in millions)MSRs
Derivative
instruments
Municipal
securities
Private-
label CMO
Asset-backed
securities
Three Months Ended June 30, 2022
Opening balance$416 $(10)$3,282 $19 $62 $18 
Transfers out of Level 3 (1)— 7 — — — — 
Total gains/losses for the period:
Included in earnings:
Mortgage banking income44 (2)— — — — 
Interest and fee income— — — (1)— — 
Included in OCI— — (88)— — — 
Purchases/originations18 — 386 4 — — 
Repayments— — — — — (1)
Settlements(15)— (203)— (18)— 
Closing balance$463 $(5)$3,377 $22 $44 $17 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$44 $7 $— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (90)— — — 
Three Months Ended June 30, 2021
Opening balance$274 $10 $3,070 $11 $47 $22 
Transfers out of Level 3 (1)— (31)— — — — 
Total gains/losses for the period:
Included in earnings:
Mortgage banking income(24)37 — — — — 
Included in OCI— — (1)— — — 
Purchases/originations97 7 1,144 6 38 — 
Sales— — (352)— — — 
Repayments— — — — — (1)
Settlements(20)— (252)1 (39)— 
Closing balance$327 $23 $3,609 $18 $46 $21 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$(24)$5 $— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (1)— — — 


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Level 3 Fair Value Measurements
Available-for-sale securities
Loans held for investment
(dollar amounts in millions)
MSRs
Derivative
instruments
Municipal
securities
Private- label CMO
Asset-backed
securities
Six Months Ended June 30, 2022
Opening balance$351 $4 $3,477 $20 $70 $19 
Transfers out of Level 3 (1)— — — — — — 
Total gains/losses for the period:
Included in earnings
Mortgage banking income95 (9)— — — — 
Interest and fee income— — (2)(2)— — 
Provision for credit losses— — (4)— — — 
Included in OCI— — (208)— (1)— 
Purchases/originations48 — 558 4 — — 
Repayments— — — — — (2)
Settlements(31)— (444)— (25)— 
Closing balance$463 $(5)$3,377 $22 $44 $17 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$95 $(9)$— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (205)— — — 
Six Months Ended June 30, 2021
Opening balance$210 $41 $2,951 $9 $10 $23 
Transfers out of Level 3 (1)— (70)— — — — 
Total gains/losses for the period:
Included in earnings
Mortgage banking income27 45 — — — — 
Included in OCI— — (5)— — — 
Purchases/originations/acquisitions130 7 1,353 8 75 — 
Sales— — (352)— — — 
Repayments— — — — — (2)
Settlements(40)— (338)1 (39)— 
Closing balance$327 $23 $3,609 $18 $46 $21 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$27 $(21)$— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (4)— — — 
(1)Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e. interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.
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Assets and liabilities under the fair value option
The following tables present the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:
(dollar amounts in millions)Total LoansLoans that are 90 or more days past due
Fair value
carrying
amount
Aggregate
unpaid
principal
Difference
Fair value
carrying
amount
Aggregate
unpaid
principal
Difference
June 30, 2022
Assets
Loans held for sale$777 $778 $(1)$— $— $— 
Loans held for investment179 184 (5)5 5 — 
December 31, 2021
Assets
Loans held for sale$1,270 $1,237 $33 $— $— $— 
Loans held for investment171 177 (6)4 4 — 
The following table presents the net gains (losses) from fair value changes.
(dollar amounts in millions)Three Months Ended June 30,Six Months Ended June 30,
Assets2022202120222021
Loans held for sale (1)$10 $11 $(34)$(23)
Loans held for investment— — 1 — 
(1)The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited Condensed Consolidated Statements of Income.
Assets and Liabilities measured at fair value on a nonrecurring basis
Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The amounts presented represent the fair value on the various measurement dates throughout the period. The gains (losses) represent the amounts recorded during the period regardless of whether the asset is still held at period end.
The amounts measured at fair value on a nonrecurring basis were as follows:
Fair Value Measurements Using Significant Other Unobservable Inputs (Level 3)Total Gains (Losses)
Three Months Ended June 30,Six Months Ended June 30,
(dollar amounts in millions)June 30, 2022December 31, 20212022202120222021
Collateral-dependent loans$32 $39 $— $(1)$(1)$(2)
Loans held for sale— — — 2 — 2 
Huntington records nonrecurring adjustments of collateral-dependent loans held for investment. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Appraisals are generally obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties and cost of construction. Periodically, in cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized in the form of a charge-off.
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Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis
The table below presents quantitative information about the significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis:
Quantitative Information about Level 3 Fair Value Measurements
At June 30, 2022 (1)At December 31, 2021 (1)
(dollar amounts in millions)Valuation TechniqueSignificant Unobservable InputRange Weighted AverageRangeWeighted Average
Measured at fair value on a recurring basis:
MSRsDiscounted cash flowConstant prepayment rate5 %-25%7 %8 %—%23 %12 %
Spread over forward interest rate swap rates5 %-13%6 %3 %—%11 %5 %
Derivative assetsConsensus PricingNet market price(15)%-13%(1)%(4)%—%8 %1 %
Estimated pull through %4 %-100%91 %6 %—%100 %92 %
Municipal securitiesDiscounted cash flowDiscount rate3 %-4%4 %— %—%2 %1 %
Asset-backed securitiesCumulative default— %-64%6 %— %—%64 %5 %
Loss given default5 %-80%24 %5 %—%80 %23 %
(1)     Certain disclosures related to quantitative level 3 fair value measurements do not include those deemed to be immaterial.
The following provides a general description of the impact of a change in an unobservable input on the fair value measurement and the interrelationship between unobservable inputs, where relevant/significant. Interrelationships may also exist between observable and unobservable inputs.
Credit loss estimates, such as probability of default, constant default, cumulative default, loss given default, cure given deferral, and loss severity, are driven by the ability of the borrowers to pay their loans and the value of the underlying collateral and are impacted by changes in macroeconomic conditions, typically increasing when economic conditions worsen and decreasing when conditions improve. An increase in the estimated prepayment rate typically results in a decrease in estimated credit losses and vice versa. Higher credit loss estimates generally result in lower fair values. Credit spreads generally increase when liquidity risks and market volatility increase and decrease when liquidity conditions and market volatility improve.
Discount rates and spread over forward interest rate swap rates typically increase when market interest rates increase and/or credit and liquidity risks increase and decrease when market interest rates decline and/or credit and liquidity conditions improve. Higher discount rates and credit spreads generally result in lower fair market values.
Net market price and pull through percentages generally increase when market interest rates increase and decline when market interest rates decline. Higher net market price and pull through percentages generally result in higher fair values.
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Fair values of financial instruments
The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments:

(dollar amounts in millions)Amortized CostLower of Cost or Market
Fair Value or
Fair Value Option
Total Carrying AmountEstimated Fair Value
June 30, 2022
Financial Assets
Cash and short-term assets$4,104 $— $— $4,104 $4,104 
Trading account securities— — 34 34 34 
Available-for-sale securities— — 24,377 24,377 24,377 
Held-to-maturity securities17,355 — — 17,355 15,916 
Other securities710 — 53 763 763 
Loans held for sale— 192 777 969 973 
Net loans and leases (1)113,968 — 179 114,147 110,397 
Derivative assets— — 432 432 432 
Assets held in trust for deferred compensation plans— — 122 122 122 
Financial Liabilities
Deposits145,435 — — 145,435 145,365 
Short-term borrowings3,048 — — 3,048 3,048 
Long-term debt7,866 — — 7,866 7,547 
Derivative liabilities— — 636 636 636 
December 31, 2021
Financial Assets
Cash and short-term assets$5,914 $— $— $5,914 $5,914 
Trading account securities— — 46 46 46 
Available-for-sale securities— — 28,460 28,460 28,460 
Held-to-maturity securities12,447 — — 12,447 12,489 
Other securities576 — 72 648 648 
Loans held for sale— 406 1,270 1,676 1,621 
Net loans and leases (1)109,066 — 171 109,237 109,695 
Derivative assets— — 600 600 600 
Assets held in trust for deferred compensation plans— — 156 156 156 
Financial Liabilities
Deposits143,263 — — 143,263 143,574 
Short-term borrowings334 — — 334 334 
Long-term debt7,108 — — 7,108 7,319 
Derivative liabilities— — 119 119 119 
(1)Includes collateral-dependent loans.
2022 2Q Form 10-Q 77

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The following table presents the level in the fair value hierarchy for the estimated fair values at June 30, 2022 and December 31, 2021:
Estimated Fair Value Measurements at Reporting Date UsingNetting Adjustments (1) Presented Balance
(dollar amounts in millions)Level 1Level 2Level 3
June 30, 2022
Financial Assets
Trading account securities$— $34 $— $34 
Available-for-sale securities5 20,929 3,443 24,377 
Held-to-maturity securities— 15,916 — 15,916 
Other securities (2)50 3 — 53 
Loans held for sale— 777 196 973 
Net loans and leases— 162 110,235 110,397 
Derivative assets— 1,648 6 $(1,222)432 
Financial Liabilities
Deposits— 141,762 3,603 145,365 
Short-term borrowings— 3,048 — 3,048 
Long-term debt— 6,757 790 7,547 
Derivative liabilities— 1,381 11 (756)636 
December 31, 2021
Financial Assets
Trading account securities$— $46 $— $46 
Available-for-sale securities5 24,888 3,567 28,460 
Held-to-maturity securities— 12,489 — 12,489 
Other securities (2)65 7 — 72 
Loans held for sale— 1,270 351 1,621 
Net loans and leases— 152 109,543 109,695 
Derivative assets— 1,055 10 $(465)600 
Financial Liabilities
Deposits— 139,047 4,527 143,574 
Short-term borrowings— 334 — 334 
Long-term debt— 6,441 878 7,319 
Derivative liabilities— 737 6 (624)119 
(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
(2)Excludes securities without readily determinable fair values.
The short-term nature of certain assets and liabilities result in their carrying value approximating fair value. These include trading account securities, customers’ acceptance liabilities, short-term borrowings, bank acceptances outstanding, FHLB advances, and cash and short-term assets, which include cash and due from banks, interest-bearing deposits in banks, interest-bearing deposits at FRB, federal funds sold, and securities purchased under resale agreements. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses that limit Huntington’s exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value.
Certain assets, the most significant being operating lease assets, bank owned life insurance, and premises and equipment, do not meet the definition of a financial instrument and are excluded from this disclosure. Similarly, mortgage servicing rights, deposit base, and other customer relationship intangibles are not considered financial instruments and are not included above. Accordingly, this fair value information is not intended to, and does not, represent Huntington’s underlying value. Many of the assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by management. These estimations necessarily involve the use of judgment about a wide variety of factors, including but not limited to, relevancy of market prices of comparable instruments, expected future cash flows, and appropriate discount rates.
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14. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are recorded in the Unaudited Condensed Consolidated Balance Sheets as either an asset or a liability (in other assets or other liabilities, respectively) and measured at fair value.
Derivative financial instruments can be designated as accounting hedges under GAAP. Designating a derivative as an accounting hedge allows Huntington to recognize gains and losses on the hedging instruments in the income statement line item where the gains and losses on the hedged item are recognized. Gains and losses on derivatives that are not designated in an effective hedge relationship under GAAP immediately impact earnings within the period they occur.
The following table presents the fair values and notional values of all derivative instruments included in the Unaudited Condensed Consolidated Balance Sheets at June 30, 2022 and December 31, 2021. Amounts in the table below are presented gross without the impact of any net collateral arrangements.
June 30, 2022December 31, 2021
(dollar amounts in millions)Notional ValueAssetLiabilityNotional ValueAssetLiability
Derivatives designated as Hedging Instruments
Interest rate contracts$29,349 $723 $458 $21,306 $258 $32 
Foreign exchange contracts209 — 4 210 1 — 
Derivatives not designated as Hedging Instruments
Interest rate contracts41,820 635 632 45,286 587 498 
Foreign exchange contracts4,260 55 45 3,524 29 31 
Commodities contracts980 241 240 1,077 178 177 
Equity contracts625 — 13 685 12 5 
Total Contracts$77,243 $1,654 $1,392 $72,088 $1,065 $743 
The following table presents the amount of gain or loss recognized in income for derivatives not designated as hedging instruments under ASC Subtopic 815-10 in the Unaudited Condensed Consolidated Income Statement for the three-month and six-month periods ended June 30, 2022 and 2021, respectively.
Location of Gain or (Loss) Recognized in Income
on Derivative
Amount of Gain or (Loss) Recognized in Income on Derivative
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)2022202120222021
Interest rate contracts:
CustomerCapital markets fees$15 $12 $25 $24 
Mortgage bankingMortgage banking income(33)(23)(80)(29)
Interest rate floorsInterest and fee income on loans and leases— (2)— (4)
Interest rate capsInterest expense on long-term debt— (55)— 89 
Foreign exchange contractsCapital markets fees10 7 20 13 
Commodities contractsCapital markets fees2 — 3 — 
Equity contractsOther noninterest expense(4)3 (3)(4)
Total$(10)$(58)$(35)$89 
Derivatives used in asset and liability management activities
Huntington engages in balance sheet hedging activity, principally for asset and liability management purposes. Balance sheet hedging activity is generally arranged to receive hedge accounting treatment that can be classified as either fair value or cash flow hedges. Fair value hedges are executed to hedge changes in fair value of outstanding fixed-rate debt and investment securities caused by fluctuations in market interest rates. Cash flow hedges are executed to modify interest rate characteristics of designated commercial loans in order to reduce the impact of changes in future cash flows due to market interest rate changes.
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The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at June 30, 2022 and December 31, 2021, identified by the underlying interest rate-sensitive instruments.
June 30, 2022
(dollar amounts in millions)Fair Value HedgesCash Flow HedgesEconomic HedgesTotal
Instruments associated with:
Investment securities$9,844 $— $— $9,844 
Loans— 14,525 271 14,796 
Long-term debt4,980 — — 4,980 
Total notional value at June 30, 2022$14,824 $14,525 $271 $29,620 
December 31, 2021
(dollar amounts in millions)Fair Value HedgesCash Flow HedgesEconomic HedgesTotal
Instruments associated with:
Investment securities$8,228 $— $— $8,228 
Loans— 11,150 271 11,421 
Long-term debt1,928 — — 1,928 
Total notional value at December 31, 2021$10,156 $11,150 $271 $21,577 
These derivative financial instruments were entered into for the purpose of managing the interest rate risk of assets and liabilities. Net amounts receivable or payable on contracts hedging either interest earning assets or interest bearing liabilities were accrued as an adjustment to either interest income or interest expense. Adjustments to interest income were also recorded for the amounts related to the amortization of floors and forward-starting floors that were excluded from the hedge effectiveness, changes in the fair value of economic hedges, as well as the amounts related to terminated hedges reclassified from AOCI. The net amounts resulted in an increase to net interest income of $48 million and $5 million for the three-month periods ended June 30, 2022, and 2021, respectively. For the six-month periods ended June 30, 2022, and 2021, the net amounts resulted in an increase to net interest income of $87 million and $230 million, respectively.
Fair Value Hedges
The changes in fair value of the fair value hedges are recorded through earnings and offset against changes in the fair value of the hedged item.
Huntington has designated $9.0 billion of interest rate swaps as fair value hedges of fixed-rate investment securities using the portfolio layer method. This approach allows the Company to designate as the hedged item a stated amount of the assets that are not expected to be affected by prepayments, defaults and other factors affecting the timing and amount of cash flows. The fair value portfolio level basis adjustment on our hedged mortgage-backed securities is not included in available-for-sale securities on our Unaudited Condensed Consolidated Statements of Financial Condition. Huntington has also designated $869 million of interest rate swaps as fair value hedges of fixed-rate corporate bonds.
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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 six-month periods ended June 30, 2022 and 2021.
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)2022202120222021
Interest rate contracts
Change in fair value of interest rate swaps hedging investment securities (1)$168 $(6)$586 $37 
Change in fair value of hedged investment securities (1)(160)4 (590)(40)
Change in fair value of interest rate swaps hedging long-term debt (2)(38)(23)(136)(73)
Change in fair value of hedged long term debt (2)39 22 137 74 
(1)Recognized in Interest income—available-for-sale securities—taxable in the Unaudited Condensed Consolidated Statements of Income.
(2)Recognized in Interest expense—long-term debt in the Unaudited Condensed Consolidated Statements of Income.
As of June 30, 2022, and December 31, 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.
Amortized CostCumulative Amount of Fair Value Hedging Adjustment To Hedged Items
(dollar amounts in millions)June 30, 2022December 31, 2021June 30, 2022December 31, 2021
Assets
Investment securities (1)$18,089 $17,150 $(708)$(117)
Liabilities
Long-term debt (2)4,486 1,981 (92)45 
(1)Amounts include the amortized cost basis of closed portfolios used to designate hedging relationships under the portfolio layer method. The hedged item is a layer of the closed portfolio which is expected to be remaining at the end of the hedging relationship. As of June 30, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $17.3 billion, the cumulative basis adjustments associated with these hedging relationships was $608 million, and the amounts of the designated hedging instruments were $9.0 billion.
(2)Excluded from the above table are the cumulative amount of fair value hedge adjustments remaining for long-term debt for which hedge accounting has been discontinued in the amounts of $4 million at June 30, 2022 and $17 million at December 31, 2021.
Cash Flow Hedges
At June 30, 2022, Huntington has $14.5 billion of interest rate swaps and collars. These are designated as cash flow hedges for variable rate commercial loans. The change in the fair value of a derivative instrument designated as a cash flow hedge is initially recognized in OCI and is reclassified into income when the hedged item impacts earnings. The initial premium paid for the interest rate collar contracts represents the time value of the contracts and is not included in the measurement of hedge effectiveness. Any change in fair value related to time value is recognized in OCI. The initial premium paid is amortized on a straight line basis as a reduction to interest income over the contractual life of these contracts.
Gains and (losses) on interest rate floors, floor spreads, and swaps recognized in other comprehensive income (loss) after-tax were $(86) million and $(34) million for the three-month periods ended June 30, 2022 and 2021, respectively. For the six-month periods ended June 30, 2022 and 2021, gains and losses on interest rate floors and swaps recognized in other comprehensive income were $(326) million and $(102) million, respectively.
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Derivatives used in mortgage banking activities
Mortgage loan origination hedging activity
Huntington’s mortgage origination hedging activity is related to economically hedging Huntington’s mortgage pricing commitments to customers and the secondary sale to third parties. The value of a newly originated mortgage is not firm until the interest rate is committed or locked. Forward commitments to sell economically hedge the possible loss on interest rate lock commitments due to interest rate change. The net asset position of these derivatives at June 30, 2022 and December 31, 2021 were $5 million and $15 million, respectively. At June 30, 2022 and December 31, 2021, Huntington had commitments to sell residential real estate loans of $1.4 billion and $2.1 billion, respectively. These contracts mature in less than one year.
MSR hedging activity
Huntington’s MSR economic hedging activity uses securities and derivatives to manage the value of the MSR asset and to mitigate the various types of risk inherent in the MSR asset, including risks related to duration, basis, convexity, volatility, and yield curve. The hedging instruments include forward commitments, TBA securities, Treasury futures contracts, interest rate swaps, and options on interest rate swaps.
The notional value of the derivative financial instruments, the corresponding net asset (liability) position recognized in other assets and/or other liabilities, and net trading gains (losses) related to MSR hedging activity is summarized in the following table:

(dollar amounts in millions)June 30,
2022		December 31,
2021
Notional value$975 $1,330 
Trading assets2 19 
Trading liabilities(53)— 

Three Months Ended
June 30, 2022		Six Months Ended
June 30, 2022
(dollar amounts in millions)2022202120222021
Trading gains$(33)$22 $(80)$(24)
MSR hedging trading assets and liabilities are included in other assets and other liabilities, respectively, in the Unaudited Condensed Balance Sheets. Trading gains (losses) are included in mortgage banking income in the Unaudited Condensed Consolidated Statement of Income.
Derivatives used in customer related activities
Various derivative financial instruments are offered to enable customers to meet their financing and investing objectives and for their risk management purposes. Derivative financial instruments used in trading activities consist of commodity, interest rate, and foreign exchange contracts. Huntington enters into offsetting third-party contracts with approved, reputable counterparties with substantially matching terms and currencies in order to economically hedge significant exposure related to derivatives used in trading activities.
The interest rate or price risk of customer derivatives is mitigated by entering into similar derivatives having offsetting terms with other counterparties. The credit risk to these customers is evaluated and included in the calculation of fair value. Foreign currency derivatives help the customer hedge risk and reduce exposure to fluctuations in exchange rates. Transactions are primarily in liquid currencies with Canadian dollars and Euros comprising a majority of all transactions. Commodity derivatives help the customer hedge risk and reduce exposure to fluctuations in the price of various commodities. Hedging of energy-related products and base metals comprise the majority of these transactions.
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The net fair values of these derivative financial instruments, for which the gross amounts are included in other assets or other liabilities at both June 30, 2022 and December 31, 2021, were $72 million and $51 million, respectively. The total notional values of derivative financial instruments used by Huntington on behalf of customers, including offsetting derivatives, were $43.5 billion and $45.1 billion at June 30, 2022 and December 31, 2021, respectively. Huntington’s credit risk from customer derivatives was $136 million and $551 million at the same dates, respectively.
Financial assets and liabilities that are offset in the Unaudited Condensed Consolidated Balance Sheets
Huntington records derivatives at fair value as further described in Note 13 “Fair Values of Assets and Liabilities”.
Derivative balances are presented on a net basis taking into consideration the effects of legally enforceable master netting agreements. Additionally, collateral exchanged with counterparties is also netted against the applicable derivative fair values. Huntington enters into derivative transactions with two primary groups: broker-dealers and banks, and Huntington’s customers. Different methods are utilized for managing counterparty credit exposure and credit risk for each of these groups.
Huntington enters into transactions with broker-dealers and banks for various risk management purposes. These types of transactions generally are high dollar volume. Huntington enters into collateral and master netting agreements with these counterparties, and routinely exchanges cash and high quality securities collateral. Huntington enters into transactions with customers to meet their financing, investing, payment and risk management needs. These types of transactions generally are low dollar volume. Huntington enters into master netting agreements with customer counterparties; however, collateral is generally not exchanged with customer counterparties.
In addition to the customer derivative credit exposure, aggregate credit risk associated with broker-dealer and bank derivative transactions, net of collateral that has been pledged by the counterparty, was $293 million and $44 million at June 30, 2022 and December 31, 2021, respectively. The credit risk associated with derivatives is calculated after considering master netting agreements.
At June 30, 2022, Huntington pledged $285 million of investment securities and cash collateral to counterparties, while other counterparties pledged $782 million of investment securities and cash collateral to Huntington to satisfy collateral netting agreements. In the event of credit downgrades, Huntington would not be required to provide additional collateral.
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 June 30, 2022 and December 31, 2021.

Offsetting of Financial Assets and Derivative Assets
Gross amounts
offset in the unaudited
condensed
consolidated
balance sheets
Net amounts of
assets
presented in
the unaudited condensed
consolidated
balance sheets
Gross amounts not offset in the
unaudited condensed consolidated
balance sheets
(dollar amounts in millions)
Gross amounts
of recognized
assets
Financial
instruments
Cash collateral
received
Net amount
June 30, 2022$1,654 $(1,222)$432 $(7)$(157)$268 
December 31, 20211,065 (465)600 (65)(31)504 
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts
offset in the unaudited
condensed
consolidated
balance sheets
Net amounts of
liabilities
presented in
the unaudited condensed
consolidated
balance sheets
Gross amounts not offset in the
unaudited condensed consolidated
balance sheets
(dollar amounts in millions)
Gross amounts
of recognized
liabilities
Financial
instruments
Cash collateral
delivered
Net amount
June 30, 2022$1,392 $(756)$636 $(87)$(120)$429 
December 31, 2021743 (624)119 (3)(116)— 
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15. VIEs
Unconsolidated VIEs
The following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Condensed 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 June 30, 2022, and December 31, 2021:
June 30, 2022
(dollar amounts in millions)
Total Assets
Total Liabilities
Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships$1,721 $997 $1,721 
Trust Preferred Securities8 179 — 
Other Investments
528 152 528 
Total
$2,257 $1,328 $2,249 
December 31, 2021
(dollar amounts in millions)Total AssetsTotal LiabilitiesMaximum Exposure to Loss
Affordable Housing Tax Credit Partnerships$1,652 $949 $1,652 
Trust Preferred Securities14 248 — 
Other Investments484 146 484 
Total$2,150 $1,343 $2,136 
Trust-Preferred Securities
Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Unaudited Condensed 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 Condensed Consolidated Balance Sheet as long-term debt. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Unaudited Condensed Consolidated Financial Statements.
A list of trust preferred securities outstanding at June 30, 2022 follows:
(dollar amounts in millions)Rate
Principal amount of
subordinated note/
debenture issued to trust (1)
Investment in
unconsolidated
subsidiary
Huntington Capital II2.91 (2)$32 $3 
Sky Financial Capital Trust III3.69 (3)72 2 
Sky Financial Capital Trust IV3.69 (3)75 3 
Total$179 $8 
(1)Represents the principal amount of debentures issued to each trust, including unamortized original issue discount.
(2)Variable effective rate at June 30, 2022, based on three-month LIBOR +0.625%.
(3)Variable effective rate at June 30, 2022, based on three-month LIBOR +1.40%.

Each issue of the junior subordinated debentures has an interest rate equal to the corresponding trust securities distribution rate. Huntington has the right to defer payment of interest on the debentures at any time, or from time-to-time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the related debentures. During any such extension period, distributions to the trust securities will also be deferred and Huntington’s ability to pay dividends on its common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to trust securities are guaranteed by Huntington to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to all indebtedness of the Company to the same extent as the junior subordinated debt. The guarantee does not place a limitation on the amount of additional indebtedness that may be incurred by Huntington.
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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 Condensed Consolidated Statements of Income.
The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at June 30, 2022 and December 31, 2021.
(dollar amounts in millions)June 30,
2022		December 31,
2021
Affordable housing tax credit investments$2,517 $2,376 
Less: amortization(796)(724)
Net affordable housing tax credit investments$1,721 $1,652 
Unfunded commitments$997 $949 
The following table presents other information relating to Huntington’s affordable housing tax credit investments for the three-month and six-month periods ended June 30, 2022 and 2021.
Three Months Ended
June 30,		Six Months Ended
June 30,
(dollar amounts in millions)2022202120222021
Tax credits and other tax benefits recognized$53 $44 $107 $77 
Proportional amortization expense included in provision for income taxes44 30 86 58 
There were no sales of affordable housing tax credit investments during the three-month and six-month periods ended June 30, 2022 and 2021. There was no impairment recognized for the three-month and six-month periods ended June 30, 2022 and 2021.
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.
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16. COMMITMENTS AND CONTINGENT LIABILITIES
Commitments to extend credit
In the ordinary course of business, Huntington makes various commitments to extend credit that are not reflected in the Unaudited Condensed Consolidated Financial Statements. The contract amounts of these financial agreements at June 30, 2022 and December 31, 2021, were as follows:
(dollar amounts in millions)June 30,
2022		December 31,
2021
Contract amount representing credit risk
Commitments to extend credit:
Commercial
$29,398 $27,933 
Consumer
19,501 18,513 
Commercial real estate3,437 3,042 
Standby letters of credit and guarantees on industrial revenue bonds713 694 
Commercial letters of credit
15 36 
Commitments to extend credit generally have fixed expiration dates, are variable-rate, and contain clauses that permit Huntington to terminate or otherwise renegotiate the contracts in the event of a significant deterioration in the customer’s credit quality. These arrangements normally require the payment of a fee by the customer, the pricing of which is based on prevailing market conditions, credit quality, probability of funding, and other relevant factors. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements. The interest rate risk arising from these financial instruments is insignificant as a result of their predominantly short-term, variable-rate nature. Collateral to secure any funding of these commitments predominately consists of residential and commercial real estate mortgage loans.
Standby letters-of-credit and guarantees on industrial revenue bonds are conditional commitments issued to guarantee the performance of a customer to a third-party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most of these arrangements mature within two years. Since the conditions under which Huntington is required to fund these commitments may not materialize, the cash requirements are expected to be less than the total outstanding commitments. The carrying amount of deferred revenue associated with these guarantees was $16 million and $7 million at June 30, 2022 and December 31, 2021, respectively.
Commercial letters-of-credit represent short-term, self-liquidating instruments that facilitate customer trade transactions and generally have maturities of no longer than 90 days. The goods or cargo being traded normally secure these instruments.
Litigation and Regulatory Matters
In the ordinary course of business, Huntington is routinely a defendant in or party to pending and threatened legal and regulatory actions and proceedings.
In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, Huntington generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each matter may be.
Huntington establishes an accrued liability when those matters present loss contingencies that are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Huntington thereafter continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established.
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For certain matters, Huntington is able to estimate a range of possible loss. In cases in which Huntington possesses information to estimate a range of possible loss, that estimate is aggregated and disclosed below. There may be other matters for which a loss is probable or reasonably possible but such an estimate of the range of possible loss may not be possible. For those matters where an estimate of the range of possible loss is possible, management currently estimates the aggregate range of reasonably possible loss is $0 to $15 million at June 30, 2022 in excess of the accrued liability (if any) related to those matters. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. The estimated range of possible loss does not represent Huntington’s maximum loss exposure.
Based on current knowledge, management does not believe that loss contingencies arising from pending matters will have a material adverse effect on the consolidated financial position of Huntington. Further, management believes that amounts accrued are adequate to address Huntington’s contingent liabilities. However, in light of the inherent uncertainties involved in these matters, some of which are beyond Huntington’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to Huntington’s results of operations for any particular reporting period.
17. SEGMENT REPORTING
Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The Company has four major business segments: Commercial Banking, Consumer and Business Banking, Vehicle Finance, and Regional Banking and The Huntington Private Client Group (RBHPCG). The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense. For a description of our business segments, see Note 25 - Segment Reporting to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K.
Listed in the following tables is certain operating basis financial information reconciled to Huntington’s June 30, 2022, December 31, 2021, and June 30, 2021, reported results by business segment.
Three Months Ended June 30,
Income Statements
Commercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
(dollar amounts in millions)
2022
Net interest income
$426 $534 $117 $55 $129 $1,261 
Provision (benefit) for credit losses(206)183 86 4 — 67 
Noninterest income
151 270 3 58 3 485 
Noninterest expense
248 590 41 81 58 1,018 
Provision (benefit) for income taxes
113 7 (2)6 (4)120 
Income attributable to non-controlling interest2 — — — — 2 
Net income attributable to Huntington Bancshares Inc$420 $24 $(5)$22 $78 $539 
2021
Net interest income
$258 $366 $109 $37 $68 $838 
Provision (benefit) for credit losses137 100 (31)5 — 211 
Noninterest income
114 243 2 54 31 444 
Noninterest expense
173 513 37 72 277 1,072 
Provision (benefit) for income taxes
13 — 21 3 (23)14 
Net income (loss) attributable to Huntington Bancshares Inc$49 $(4)$84 $11 $(155)$(15)
2022 2Q Form 10-Q 87

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Six Months Ended June 30,
Income StatementsCommercial BankingConsumer & Business BankingVehicle FinanceRBHPCGTreasury / OtherHuntington Consolidated
(dollar amounts in millions)
2022
Net interest income$844 $993 $237 $104 $229 $2,407 
Provision (benefit) for credit losses(75)74 79 14 — 92 
Noninterest income292 542 6 124 20 984 
Noninterest expense496 1,202 86 162 125 2,071 
Provision (benefit) for income taxes151 54 16 11 (7)225 
Income attributable to non-controlling interest4 — — — — 4 
Net income attributable to Huntington Bancshares Inc$560 $205 $62 $41 $131 $999 
2021
Net interest income$457 $703 $217 $70 $363 $1,810 
Provision (benefit) for credit losses143 63 (53)(2)— 151 
Noninterest income203 477 6 107 46 839 
Noninterest expense306 984 72 132 371 1,865 
Provision (benefit) for income taxes44 28 43 10 (9)116 
Net income attributable to Huntington Bancshares Inc$167 $105 $161 $37 $47 $517 
Assets atDeposits at
(dollar amounts in millions)June 30,
2022		December 31,
2021		June 30,
2022		December 31,
2021
Commercial Banking$60,946 $57,071 $34,670 $31,845 
Consumer & Business Banking39,425 39,929 95,693 95,352 
Vehicle Finance21,549 20,752 1,291 1,401 
RBHPCG9,469 8,325 9,226 10,162 
Treasury / Other47,393 47,987 4,555 4,503 
Total
$178,782 $174,064 $145,435 $143,263 

88 Huntington Bancshares Incorporated

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Item 3: Quantitative and Qualitative Disclosures about Market Risk
Quantitative and qualitative disclosures for the current period can be found in the Market Risk section of this report, which includes changes in market risk exposures from disclosures presented in Huntington’s 2021 Annual Report on Form 10-K.
Item 4: Controls and Procedures
Disclosure Controls and Procedures
Huntington maintains disclosure controls and procedures designed to ensure that the information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Huntington’s management, with the participation of its Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of Huntington’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2022. Based upon such evaluation, Huntington’s Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2022, Huntington’s disclosure controls and procedures were effective.
There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
PART II. OTHER INFORMATION
In accordance with the instructions to Part II, the other specified items in this part have been omitted because they are not applicable or the information has been previously reported.
Item 1: Legal Proceedings
Information required by this item is set forth in Note 16 “Commitments and Contingent Liabilities” of the Notes to Unaudited Condensed Consolidated Financial Statements under the caption “Litigation and Regulatory Matters” and is incorporated into this Item by reference.
Item 1A: Risk Factors
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our 2021 Annual Report on Form 10-K, which could materially affect our business, financial condition, or results of operations. In the first quarter of 2022, we identified the following additional risk factor:
Liquidity Risks:
Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition.
Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on the Company’s results of operations and financial condition. The macroeconomic environment in the United States is susceptible to global events and volatility in financial markets. For example, trade negotiations between the U.S. and other nations remain uncertain and could adversely impact economic and market conditions for the Company and its clients and counterparties. In addition, global demand for products may exceed supply during the economic recovery from the COVID-19 pandemic, and such shortages may cause inflation, adversely impact consumer and business confidence, and adversely affect the economy as well as the Company’s financial condition and results.
2022 2Q Form 10-Q 89

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) and (b)
Not Applicable
(c)
PeriodTotal Number of Shares Purchased (1)Average
Price Paid
Per Share		Maximum Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs (2)
April 1, 2022 to April 30, 2022— $— $150,053,953 
May 1, 2022 to May 31, 2022— — 150,053,953 
June 1, 2022 to June 30, 2022— — — 
Total— $— 
(1)The reported shares were repurchased pursuant to Huntington’s publicly-announced share repurchase authorization.
(2)The number shown represents, as of the end of each period, the approximate dollar value of Common Stock that may yet be purchased under publicly-announced share repurchase authorizations. Authorization to repurchase common shares expired as of June 30, 2022.

90 Huntington Bancshares Incorporated

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Item 6. Exhibits
Exhibit Index
This report incorporates by reference the documents listed below that we have previously filed with the SEC. The SEC allows us to incorporate by reference information in this document. The information incorporated by reference is considered to be a part of this document, except for any information that is superseded by information that is included directly in this document.
The SEC maintains an Internet web site that contains reports, proxy statements, and other information about issuers, like us, who file electronically with the SEC. The address of the site is http://www.sec.gov. The reports and other information filed by us with the SEC are also available free of charge at our internet web site. The address of the site is http://www.huntington.com. Except as specifically incorporated by reference into this Quarterly Report on Form 10-Q, information on those web sites is not part of this report. You also should be able to inspect reports, proxy statements, and other information about us at the offices of the Nasdaq National Market at 33 Whitehall Street, New York, New York 10004.
Exhibit
Number		Document DescriptionReport or Registration StatementSEC File or
Registration
Number		Exhibit
Reference
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
4.1(P)Instruments defining the Rights of Security Holders—reference is made to Articles Fifth, Eighth, and Tenth of Articles of Restatement of Charter, as amended and supplemented. Instruments defining the rights of holders of long-term debt will be furnished to the Securities and Exchange Commission upon request.
31.1
31.2
32.1
32.2
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101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document
*Filed herewith
**Furnished herewith
***
2022 2Q Form 10-Q 91

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HUNTINGTON BANCSHARES INCORPORATED
(Registrant)
 
Date:July 29, 2022 /s/ Stephen D. Steinour
 Stephen D. Steinour
 Chairman, President, and Chief Executive Officer (Principal Executive Officer)
Date:July 29, 2022 /s/ Zachary Wasserman
 Zachary Wasserman
 
Chief Financial Officer
(Principal Financial Officer)

92 Huntington Bancshares Incorporated