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HUNTINGTON BANCSHARES INC /MD/ - Quarter Report: 2023 September (Form 10-Q)


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 September 30, 2023
OR
 ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

huntingtonlogo.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
Depositary Shares (each representing a 1/40th interest in a share of 6.875% Series J Non-Cumulative, perpetual preferred stock)HBANLNASDAQ
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 1,448,075,093 shares of the registrant’s common stock ($0.01 par value) outstanding on September 30, 2023.


HUNTINGTON BANCSHARES INCORPORATED
INDEX
 
2 Huntington Bancshares Incorporated
Table of Contents
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 (Loss)
ASC  Accounting Standards Codification
ASUAccounting Standards Update
ATM
Automated Teller Machine
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
Capstone PartnersCapstone Enterprises LLC
C&I  Commercial and Industrial
CDs  Certificates of Deposit
CECLCurrent Expected Credit Losses
CET1  Common Equity Tier 1 on a Basel III basis
CFPB  Bureau of Consumer Financial Protection
CFOChief Financial Officer
CMO  Collateralized Mortgage Obligations
COVID-19Coronavirus Disease 2019
CRE  Commercial Real Estate
CROChief Risk Officer
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act
EOPEnd of Period
EVE  Economic Value of Equity
FDIC  Federal Deposit Insurance Corporation
Federal ReserveBoard of Governors of the Federal Reserve System
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
GDPGross Domestic Product
HTM  Held-to-Maturity
IRS  Internal Revenue Service
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
2023 3Q Form 10-Q 3

Table of Contents
NMNot Meaningful
NPAs  Nonperforming Assets
OCC  Office of the Comptroller of the Currency
OCI  Other Comprehensive Income (Loss)
OLEM  Other Loans Especially Mentioned
PPPPaycheck Protection Program
RBHPCG  Regional Banking and The Huntington Private Client Group
REITReal estate investment trust
ROCRisk Oversight Committee
RPSRetirement Plan Services
RVRecreational vehicle
SBA  Small Business Administration
SCBStress Capital Buffer
SEC  Securities and Exchange Commission
SOFRSecured Overnight Financing Rate
TBA
To Be Announced
TDR  Troubled Debt Restructuring
ToranaDigital Payments Torana, Inc.
U.S. Treasury  U.S. Department of the Treasury
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 are committed to making people’s lives better, helping businesses thrive, and strengthening the communities we serve and have over 150 years of servicing the financial needs of our customers. Through our subsidiaries, we provide full-service commercial and consumer deposit, lending, and other banking services. This includes, but is not limited to, payments, mortgage banking, automobile, recreational vehicle and marine financing, investment banking, capital markets, advisory, equipment financing, distribution finance, investment management, trust, brokerage, insurance, and other financial products and services. At September 30, 2023, our 1,001 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.
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 2022 Annual Report on Form 10-K should be read in conjunction with this MD&A as this discussion provides only material updates to the 2022 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited Consolidated Financial Statements, and other information contained in this report.
EXECUTIVE OVERVIEW
Acquisitions and Divestitures
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.
In March 2023, we closed the sale of our RPS business and entered into an ongoing partnership with the purchaser. The sale of our RPS business resulted in a $57 million gain including associated goodwill allocation, recorded within other noninterest income.
Summary of 2023 Third Quarter Results Compared to 2022 Third Quarter
For the quarter, we reported net income of $547 million, or $0.35 per diluted common share, compared with $594 million, or $0.39 per diluted common share, in the year-ago quarter.
Net interest income was $1.4 billion, a decrease of $36 million, or 3%, from the year-ago quarter. FTE net interest income, a non-GAAP financial measure, decreased $33 million, or 2%, from the year-ago quarter. The decrease in FTE net interest income primarily reflects a 22 basis point decrease in the FTE NIM to 3.20% and a $15.2 billion, or 13%, increase in average interest-bearing liabilities, partially offset by a $6.9 billion, or 4%, increase in average earning assets.
2023 3Q Form 10-Q 5

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The provision for credit losses decreased $7 million from the year-ago quarter to $99 million in the 2023 third quarter. The ACL increased $138 million from the year-ago quarter to $2.4 billion in the 2023 third quarter, or 1.96% of total loans and leases, compared to $2.2 billion, or 1.89% of total loans and leases. The increase in the total ACL was driven by a combination of loan and lease growth and increasing coverage levels that recognize the near-term recessionary risks.
Noninterest income was $509 million, an increase of $11 million, or 2%, and noninterest expense increased $37 million, or 4%, from the year-ago quarter. The increase in noninterest income was primarily due to a $33 million increase from favorable mark-to-market on pay-fixed swaptions, included within other noninterest income, and additional increases in card and payments processing, bank owned life insurance, and service charges on deposit accounts, partially offset by decreases in capital markets fees and gain on sale of loans. The increase in noninterest expense was primarily due to increases in personnel costs, deposit and other insurance expense, professional services, equipment expense and outside data processing and other services.
Total assets at September 30, 2023 were $186.7 billion, an increase of $3.7 billion, or 2%, compared to December 31, 2022. The increase in total assets was primarily driven by increases in interest-bearing deposits at the Federal Reserve Bank of $4.9 billion, or 100%, and loans and leases of $1.3 billion, or 1%, partially offset by a decrease in total investment securities of $2.4 billion, or 6%. Total liabilities at September 30, 2023 were $168.1 billion, an increase of $3.0 billion, or 2%, compared to December 31, 2022. The increase in total liabilities was primarily driven by increases in long-term debt of $3.1 billion, or 32%, and total deposits of $1.0 billion, or 1%, partially offset by a decrease in short-term borrowings of $1.3 billion, or 66%.
The tangible common equity to tangible assets ratio was 5.70% at September 30, 2023, up 15 basis points from December 31, 2022, driven by current period earnings, partially offset by dividends and AOCI impacts driven by higher interest rates. CET1 risk-based capital ratio was 10.10%, up from 9.36% from December 31, 2022. The increase in regulatory capital ratios was primarily driven by current period earnings and a decline in risk-weighted assets, partially offset by dividends and the CECL transitional amount.
General
Our general business objectives are to:
•Build on our vision to be 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 our distinguished brand and culture
•Extend our digital leadership with focus on ease of use, access to information, and self-service across products and services
•Leverage expertise and capabilities to acquire and deepen relationships and launching of select partnerships
•Maintain positive operating leverage and execute disciplined capital management
•Stability and resilience through risk management, maintaining an aggregate moderate-to-low, through-the-cycle risk appetite
Economy
During the recent quarter, inflation continued to trend lower while remaining at elevated levels above the Federal Reserve’s target. The Federal Reserve raised interest rates one time in July and paused in September to further evaluate the impact of their tightening and the overall health of the economy. The economy has continued to expand with second quarter 2023 GDP growth of 2.4%. Market volatility has picked up as the yield curve has steepened. Loan growth and deposits have stabilized across the banking sector and further banking regulation has been proposed with the release of amendments to the regulatory capital rule and long-term debt requirements for banks.
The consensus economic outlook assumes a slowdown over the next three quarters with a return to modest growth in the second half of 2024. Inflation is expected to continue to fall, approaching target levels of 2% by the third quarter of 2024, as the Federal Reserve actions will likely result in lower GDP growth and higher unemployment.
6 Huntington Bancshares Incorporated
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Our quarterly results reflect continued execution of our growth strategy and leveraging the strength of our balance sheet, delivered through sustained core deposit growth and expansion of common equity tier 1 driven to above 10% by earnings and capital optimization. We have continued our disciplined management of credit consistent with our aggregate moderate-to-low, through-the-cycle risk appetite. With our disciplined and proactive approach, including balance sheet and other efficiency efforts to increase capital, we believe Huntington is well positioned to manage through the dynamic environment. We remain focused on delivering profitable growth and driving value for our shareholders.
Other Recent Developments
Following the failure of several financial institutions in the first half of 2023 and resulting losses to the FDIC’s Deposit Insurance Fund, the FDIC issued a notice of proposed rulemaking in May 2023 that would implement a special assessment to recover the cost associated with protecting uninsured depositors as part of those financial institution failures. Under the proposed rule, the assessment base for the special assessment would be equal to an insured depository institution’s estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion of uninsured deposits. The $5 billion exclusion would be applied once to the aggregate amount of uninsured deposits. The special assessment would be applied at an annual rate of approximately 12.5 basis points and assessed over eight quarters, subject to change depending on any adjustments to the loss estimate, mergers or failures, or amendments to reported estimates of uninsured deposits. As proposed and based on The Huntington National Bank reported uninsured deposits as of December 31, 2022, the estimated impact of the special assessment is approximately $199 million. Any change to the terms of the final rule impacting the determination of uninsured deposits, exclusionary criteria, annual rate, or term of annual rate application would have a direct impact on the estimate of Huntington’s special assessment. We continue to monitor the status of the proposed rule and the impact to our future operating results. We expect to record the impact when the final rule is enacted.
On July 27, 2023, the Federal Banking Agencies, the FDIC, the Federal Reserve, and the OCC, released a notice of proposed rulemaking that would make significant amendments to the Basel III Capital Rules applicable to both the Company and the Bank. In general, the proposed rule would align the regulatory capital calculation methodology for Category III and IV banking organizations with the methodology applicable to Category I and II banking organizations. In addition to calculating risk-weighted assets under the current U.S. standardized approach, the proposal introduces a new “Expanded Risk-Based Approach,” including standardized approaches for credit risk, operational risk and credit valuation adjustment risk, as well as a new approach for market risk that would be based upon internal models and standardized supervisory models. If adopted as proposed, Huntington would be required to calculate its risk-based capital ratios under both the current U.S. standardized approach and the Expanded Risk-Based Approach and would be subject to the lower of the two resulting ratios for each risk-based capital ratio. In addition, the proposal would require banking organizations to recognize most elements of AOCI in regulatory capital, including unrealized gains and losses on available-for-sale securities, and lower thresholds for deductions from CET1 capital for mortgage servicing assets and deferred tax assets, among other things. The proposal, if enacted, would have an effective date of July 1, 2025, with certain elements, such as the recognition of AOCI in regulatory capital and changes in risk-weighted assets calculated under the Expanded Risk-Based Approach, having a three-year phase-in period. We are in the process of evaluating this proposed rulemaking and assessing its potential impact on the Company and the Bank if adopted as proposed.
2023 3Q Form 10-Q 7

Table of Contents
On August 29, 2023, the Federal Banking Agencies released a notice of proposed rulemaking that would require certain large banking organizations such as Huntington to issue and maintain minimum amounts of eligible long-term debt and comply with clean holding company requirements similar to requirements currently applicable to U.S. global systemically important banking organizations. Under the proposal, the Company and the Bank would each be required to maintain a minimum amount of eligible long-term debt equal to the greater of 6% of total risk-weighted assets, 3.5% of average total consolidated assets, and 2.5% of total leverage exposure (if subject to the supplementary leverage ratio). To comply with the requirement, the Bank would be required to issue incremental eligible long-term debt to the Company, and the Company would be required to issue incremental eligible long-term debt externally. The proposed rule would also allow banking organizations to include, as part of the required minimum amounts, certain existing long-term debt. Once the rule is finalized, covered institutions would have three years to comply with the new requirements following a phased-in approach, with 25% of the long-term debt requirement by one year after finalization of the rule, 50% after two years, and 100% after three years. In addition, the clean holding company requirements would limit or prohibit the Company from entering into certain transactions that could impede its orderly resolution, including, for example, prohibiting the Company from issuing short-term debt to, or entering into qualified financial contracts with, non-affiliates and entering into contracts that could spread losses to subsidiaries, as well as limiting the amount of the Company’s liabilities that are not eligible long-term debt. We are in the process of evaluating this proposed rulemaking and assessing its potential impact on the Company and the Bank if adopted as proposed.
On October 25, 2023, the Federal Reserve released a notice of proposed rulemaking that would lower the maximum interchange fee that a large debit card issuer can receive on a debit card transaction. Under the proposal, the base component would initially decrease from 21.0 cents to 14.4 cents, the ad valorem component would decrease from 5.0 basis points to 4.0 basis points multiplied by the value of the transaction, and the fraud-prevention adjustment would increase from 1.0 cents to 1.3 cents for debit card transactions performed from the effective date of the final rule to June 30, 2025. In addition, the proposal would adopt an approach for future adjustments to the interchange fee cap, which would occur every other year based on issuer cost data gathered from large debit card issuers. We will continue to monitor the status of the proposed rule and are beginning the process of evaluating this proposed rulemaking and assessing the scale of its adverse impact on the Company and the Bank.
DISCUSSION OF RESULTS OF OPERATIONS
This section provides a review of financial performance on a consolidated basis. Key unaudited consolidated balance sheet and unaudited income statement 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.”


8 Huntington Bancshares Incorporated
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Table 1 - Selected Quarterly Income Statement Data
 Three months ended September 30,Change
(amounts in millions, except per share data)20232022AmountPercent
Interest income$2,313 $1,589 $724 46 %
Interest expense945 185 760 NM
Net interest income1,368 1,404 (36)(3)
Provision for credit losses99 106 (7)(7)
Net interest income after provision for credit losses1,269 1,298 (29)(2)
Service charges on deposit accounts 97 93 4 4 
Card and payment processing income103 96 7 7 
Capital markets fees49 73 (24)(33)
Trust and investment management services62 60 2 3 
Mortgage banking income27 26 1 4 
Leasing revenue32 29 3 10 
Insurance income31 28 3 11 
Gain on sale of loans2 15 (13)(87)
Bank owned life insurance income18 13 5 38 
Other noninterest income88 65 23 35 
Total noninterest income509 498 11 2 
Personnel costs622 614 8 1 
Outside data processing and other services149 145 4 3 
Equipment65 60 5 8 
Net occupancy67 63 4 6 
Marketing29 24 5 21 
Professional services27 18 9 50 
Deposit and other insurance expense25 15 10 67 
Amortization of intangibles12 13 (1)(8)
Lease financing equipment depreciation6 11 (5)(45)
Other noninterest expense88 90 (2)(2)
Total noninterest expense1,090 1,053 37 4 
Income before income taxes688 743 (55)(7)
Provision for income taxes136 146 (10)(7)
Income after income taxes552 597 (45)(8)
Income attributable to non-controlling interest5 3 2 67 
Net income attributable to Huntington547 594 (47)(8)
Dividends on preferred shares37 29 8 28 
Net income applicable to common shares$510 $565 $(55)(10)%
Average common shares—basic1,448 1,443 5 — %
Average common shares—diluted1,468 1,465 3 — 
Net income per common share—basic$0.35 $0.39 $(0.04)(10)
Net income per common share—diluted0.35 0.39 (0.04)(10)
Return on average total assets1.16 %1.31 %
Return on average common shareholders’ equity12.4 13.9 
Return on average tangible common shareholders’ equity (1)19.5 21.9 
Net interest margin (2)3.20 3.42 
Efficiency ratio (3)57.0 54.4 
Revenue and Net Interest Income—FTE (non-GAAP)
Net interest income$1,368 $1,404 $(36)(3)%
FTE adjustment (2)11 8 3 38 
Net interest income, FTE (non-GAAP) (2)1,379 1,412 (33)(2)
Noninterest income509 498 11 2 
Total revenue, FTE (non-GAAP) (2)$1,888 $1,910 $(22)(1)%
(1)Net income applicable to common shares 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 divided by the sum of FTE net interest income and noninterest income excluding securities gains.
2023 3Q Form 10-Q 9

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Table 2 - Selected Year to Date Income Statement Data
 Nine months ended September 30,Change
(amounts in millions, except per share data)20232022AmountPercent
Interest income$6,566 $4,115 $2,451 60 %
Interest expense2,443 304 2,139 NM
Net interest income4,123 3,811 312 8 
Provision for credit losses276 198 78 39 
Net interest income after provision for credit losses3,847 3,613 234 6 
Service charges on deposit accounts 267 295 (28)(9)
Card and payment processing income298 278 20 7 
Capital markets fees165 169 (4)(2)
Trust and investment management services192 188 4 2 
Mortgage banking income86 119 (33)(28)
Leasing revenue83 91 (8)(9)
Insurance income95 86 9 10 
Gain on sale of loans13 55 (42)(76)
Bank owned life insurance income50 41 9 22 
Net (losses) gains on sales of securities(4)— (4)NM
Other noninterest income271 160 111 69 
Total noninterest income1,516 1,482 34 2 
Personnel costs1,884 1,771 113 6 
Outside data processing and other services448 463 (15)(3)
Equipment193 202 (9)(4)
Net occupancy181 185 (4)(2)
Marketing86 69 17 25 
Professional services64 56 8 14 
Deposit and other insurance expense68 53 15 28 
Amortization of intangibles38 40 (2)(5)
Lease financing equipment depreciation22 36 (14)(39)
Other noninterest expense242 249 (7)(3)
Total noninterest expense3,226 3,124 102 3 
Income before income taxes2,137 1,971 166 8 
Provision for income taxes414 371 43 12 
Income after income taxes1,723 1,600 123 8 
Income attributable to non-controlling interest15 7 8 114 
Net income attributable to Huntington1,708 1,593 115 7 
Dividends on preferred shares106 85 21 25 
Net income applicable to common shares$1,602 $1,508 $94 6 %
Average common shares—basic1,446 1,441 5 — %
Average common shares—diluted1,468 1,464 4 — 
Net income per common share—basic$1.11 $1.05 $0.06 6 
Net income per common share—diluted1.09 1.03 0.06 6 
Revenue and Net Interest Income—FTE (Non-GAAP)
Net interest income$4,123 $3,811 $312 8 %
FTE adjustment31 22 9 41 
Net interest income, FTE (non-GAAP) (1)4,154 3,833 321 8 
Noninterest income1,516 1,482 34 2 
Total revenue, FTE (non-GAAP) (1)$5,670 $5,315 $355 7 %
(1)On an FTE basis assuming a 21% tax rate.


10 Huntington Bancshares Incorporated
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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 (1)
Three months ended September 30, 2023Three months ended September 30, 2022Change in
AverageInterestYield/AverageInterestYield/Average Balances
(dollar amounts in millions)BalancesIncome (FTE) (2)Rate (3)BalancesIncome (FTE) (2)Rate (3)AmountPercent
Assets:
Interest-bearing deposits at Federal Reserve Bank$9,286 $127 5.45 %$3,204 $19 2.39 %$6,082 NM
Interest-bearing deposits in banks261 4 6.59 260 2 3.31 1 — 
Securities:
Trading account securities128 1 4.98 24 — 4.12 104 NM
Available-for-sale securities:
Taxable19,834 259 5.22 21,677 165 3.06 (1,843)(9)
Tax-exempt2,807 37 5.08 2,917 25 3.39 (110)(4)
Total available-for-sale securities22,641 296 5.20 24,594 190 3.09 (1,953)(8)
Held-to-maturity securities—taxable16,356 99 2.43 17,188 95 2.21 (832)(5)
Other securities859 19 9.22 804 7 3.21 55 7 
Total securities39,984 415 4.15 42,610 292 2.74 (2,626)(6)
Loans held for sale633 10 6.42 986 13 4.98 (353)(36)
Loans and leases: (4)
Commercial:
Commercial and industrial49,448 776 6.15 46,029 515 4.37 3,419 7 
Commercial real estate12,955 253 7.63 13,671 165 4.75 (716)(5)
Lease financing5,050 73 5.60 4,981 63 4.95 69 1 
Total commercial67,453 1,102 6.39 64,681 743 4.50 2,772 4 
Consumer:
Residential mortgage23,278 213 3.66 21,552 174 3.23 1,726 8 
Automobile12,747 145 4.51 13,514 120 3.53 (767)(6)
Home equity10,108 195 7.66 10,431 143 5.43 (323)(3)
RV and marine5,813 73 4.96 5,454 59 4.29 359 7 
Other consumer1,385 40 11.67 1,332 32 9.55 53 4 
Total consumer53,331 666 4.97 52,283 528 4.02 1,048 2 
Total loans and leases120,784 1,768 5.76 116,964 1,271 4.28 3,820 3 
Total earning assets170,948 2,324 5.39 164,024 1,597 3.86 6,924 4 
Cash and due from banks1,559 1,697 (138)(8)
Goodwill and other intangible assets5,722 5,781 (59)(1)
All other assets10,576 10,154 422 4 
Allowance for loan and lease losses(2,206)(2,099)(107)(5)
Total assets$186,599 $179,557 $7,042 4 %
Liabilities and shareholders’ equity:
Interest-bearing deposits:
Demand deposits—interest-bearing$39,757 $199 1.98 %$42,038 $42 0.40 %$(2,281)(5)%
Money market deposits41,445 327 3.12 34,058 25 0.29 7,387 22 
Savings and other domestic deposits17,774 6 0.15 21,439 1 0.02 (3,665)(17)
Core certificates of deposit (5)11,348 119 4.17 2,040 1 0.10 9,308 NM
Other domestic deposits of $250,000 or more406 4 3.78 193 — 0.35 213 110 
Negotiable CDs, brokered and other deposits
4,634 58 4.93 4,124 23 2.25 510 12 
Total interest-bearing deposits115,364 713 2.45 103,892 92 0.35 11,472 11 
Short-term borrowings859 17 7.60 2,609 22 3.31 (1,750)(67)
Long-term debt13,772 215 6.27 8,251 71 3.40 5,521 67 
Total interest-bearing liabilities129,995 945 2.88 114,752 185 0.64 15,243 13 
Demand deposits—noninterest-bearing32,786 42,116 (9,330)(22)
All other liabilities5,028 4,340 688 16 
Total liabilities167,809 161,208 6,601 4 
Total Huntington shareholders’ equity18,741 18,317 424 2 
Non-controlling interest49 32 17 53 
Total equity18,790 18,349 441 2 
Total liabilities and equity$186,599 $179,557 $7,042 4 %
Net interest rate spread2.51 3.22 
Impact of noninterest-bearing funds on margin0.69 0.20 
Net interest margin/NII (FTE)$1,379 3.20 %$1,412 3.42 %
(1)During the 2023 second quarter, the process for assessing and monitoring the risk and performance of non-real estate secured commercial loans was revised, primarily loans to REITs. These loans were reclassified from CRE to the C&I loan category to align reporting with this process revision. All prior period results have been adjusted to conform to the current presentation.
(2)FTE yields are calculated assuming a 21% tax rate.
(3)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.
(4)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
(5)Includes consumer certificates of deposit of $250,000 or more.
2023 3Q Form 10-Q 11

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Quarterly Net Interest Income
Net interest income for the 2023 third quarter decreased $36 million, or 3%, from the 2022 third quarter. FTE net interest income, a non-GAAP financial measure, for the 2023 third quarter decreased $33 million, or 2%, from the 2022 third quarter. The decrease in FTE net interest income primarily reflects a 22 basis point decrease in the FTE NIM to 3.20% and a $15.2 billion, or 13%, increase in average interest-bearing liabilities, partially offset by a $6.9 billion, or 4%, increase in average earning assets. The NIM compression was primarily driven by higher cost of funds and an increase in deposits held at the Federal Reserve Bank, partially offset by the higher rate environment driving an increase in loan and lease and investment security yields.
Quarterly Average Balance Sheet
Average assets for the 2023 third quarter increased $7.0 billion, or 4%, to $186.6 billion from the 2022 third quarter, primarily due to an increase in average interest-bearing deposits at the Federal Reserve Bank of $6.1 billion, and average loans and leases of $3.8 billion, or 3%, partially offset by a decrease in average total securities of $2.6 billion, or 6%. The increase in average loans and leases was driven by growth in average commercial loans and leases of $2.8 billion, or 4%, and average consumer loans of $1.0 billion, or 2%.
Average liabilities for the 2023 third quarter increased $6.6 billion, or 4%, from the 2022 third quarter, primarily due to increases in average borrowings and deposits. Average borrowings increased $3.8 billion, or 35%, driven by new debt issuances and additional FHLB borrowings reflecting actions taken as part of normal management of funding needs. Average deposits increased $2.1 billion, primarily due to an increase in average interest-bearing deposits of $11.5 billion, or 11%, partially offset by a decrease in noninterest-bearing deposits of $9.3 billion, or 22%. The increase in average deposits was primarily due to increases in average certificate of deposits and money market deposits, partially offset by decreases in savings and other domestic deposits and interest-bearing demand deposits.
Average shareholders’ equity for the 2023 third quarter increased $424 million, or 2%, from the 2022 third quarter primarily due to earnings, partially offset by an increase in average accumulated other comprehensive loss driven by changes in interest rates.
12 Huntington Bancshares Incorporated
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Table 4 - Consolidated YTD Average Balance Sheets and Net Interest Margin (1)
 Nine months ended
September 30, 2023September 30, 2022Change in
AverageInterestYield/AverageInterestYield/Average Balances
(dollar amounts in millions)BalancesIncome (FTE) (2)Rate (2)BalancesIncome (FTE) (2)Rate (3)AmountPercent
Assets:
Interest-bearing deposits at Federal Reserve Bank$8,825 $339 5.12 %$4,629 $29 0.84 %$4,196 91 %
Interest-bearing deposits in banks246 14 7.60 200 3 1.85 46 23 
Securities:
Trading account securities61 2 4.98 33 1 3.75 28 85 
Available-for-sale securities:
Taxable20,702 743 4.79 22,509 378 2.24 (1,807)(8)
Tax-exempt2,731 99 4.79 2,887 66 3.04 (156)(5)
Total available-for-sale securities23,433 842 4.79 25,396 444 2.33 (1,963)(8)
Held-to-maturity securities—taxable16,696 303 2.42 16,336 251 2.05 360 2 
Other securities1,003 40 5.37 841 18 2.83 162 19 
Total securities41,193 1,187 3.84 42,606 714 2.23 (1,413)(3)
Loans held for sale548 25 6.13 1,086 33 4.00 (538)(50)
Loans and leases: (4)
Commercial:
Commercial and industrial49,559 2,208 5.88 44,641 1,343 3.97 4,918 11 
Commercial real estate13,323 729 7.21 13,412 389 3.83 (89)(1)
Lease financing5,137 212 5.44 4,938 185 4.95 199 4 
Total commercial68,019 3,149 6.10 62,991 1,917 4.01 5,028 8 
Consumer:
Residential mortgage22,793 603 3.53 20,536 478 3.10 2,257 11 
Automobile12,971 408 4.20 13,512 347 3.44 (541)(4)
Home equity10,173 563 7.40 10,406 360 4.62 (233)(2)
RV and marine5,554 194 4.67 5,293 166 4.19 261 5 
Other consumer1,341 115 11.49 1,301 90 9.21 40 3 
Total consumer52,832 1,883 4.76 51,048 1,441 3.77 1,784 3 
Total loans and leases120,851 5,032 5.52 114,039 3,358 3.91 6,812 6 
Total earning assets171,663 6,597 5.14 162,560 4,137 3.40 9,103 6 
Cash and due from banks1,598 1,672 (74)(4)
Goodwill and other intangible assets5,738 5,660 78 1 
All other assets10,594 10,092 502 5 
Allowance for loan and lease losses(2,174)(2,067)(107)(5)
Total assets$187,419 $177,917 $9,502 5 %
Liabilities and Shareholders’ Equity:
Interest-bearing deposits:
Demand deposits—interest-bearing$40,058 $498 1.66 %$41,467 $56 0.18 %$(1,409)(3)%
Money market deposits39,181 754 2.57 33,512 37 0.15 5,669 17 
Savings and other domestic deposits18,818 15 0.11 21,480 3 0.02 (2,662)(12)
Core certificates of deposit (5)8,659 245 3.79 2,274 2 0.10 6,385 NM
Other domestic deposits of $250,000 or more326 8 3.27 244 — 0.24 82 34 
Negotiable CDs, brokered and other deposits
4,650 169 4.85 3,522 30 1.14 1,128 32 
Total interest-bearing deposits111,692 1,689 2.02 102,499 128 0.17 9,193 9 
Short-term borrowings3,478 151 5.80 3,139 36 1.52 339 11 
Long-term debt13,700 603 5.87 7,401 140 2.51 6,299 85 
Total interest-bearing liabilities128,870 2,443 2.53 113,039 304 0.36 15,831 14 
Demand deposits—noninterest-bearing34,933 42,157 (7,224)(17)
All other liabilities4,960 4,158 802 19 
Total liabilities168,763 159,354 9,409 6 
Total Huntington shareholders’ equity18,607 18,534 73 — 
Non-controlling interest49 29 20 69 
Total equity18,656 18,563 93 1 
Total liabilities and shareholders’ equity$187,419 $177,917 $9,502 5 %
Net interest rate spread2.61 3.04 
Impact of noninterest-bearing funds on margin0.63 0.11 
Net interest margin/NII$4,154 3.24 %$3,833 3.15 %
(1)During the 2023 second quarter, the process for assessing and monitoring the risk and performance of non-real estate secured commercial loans was revised, primarily loans to REITs. These loans were reclassified from CRE to the C&I loan category to align reporting with this process revision. All prior period results have been adjusted to conform to the current presentation.
(2)FTE yields are calculated assuming a 21% tax rate.
(3)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.
(4)For purposes of this analysis, NALs are reflected in the average balances of loans and leases.
(5)Includes consumer certificates of deposit of $250,000 or more.


2023 3Q Form 10-Q 13

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Year to Date Net Interest Income
Net interest income for the first nine-month period of 2023 increased $312 million, or 8%, from the year-ago period. FTE net interest income, a non-GAAP financial measure, for the first nine-month period of 2023 increased $321 million, or 8%, from the year-ago period. The increase in FTE net interest income reflected the benefit of a 9 basis point increase in the FTE NIM to 3.24% and a $9.1 billion, or 6%, increase in average total earning assets, partially offset by a $15.8 billion, or 14%, increase in interest-bearing liabilities and lower purchase accounting accretion and accelerated PPP loan fees recognized upon forgiveness payments from the SBA.
The NIM expansion was driven by the higher rate environment driving an increase in loans and lease and investment security yields, partially offset by higher cost of funds and an increase in deposits held at the Federal Reserve Bank.
Net interest income for the first nine-month period of 2023 included $24 million of net interest income from purchase accounting accretion, compared to $50 million and $20 million from purchase accounting accretion and accelerated PPP loan fees recognized upon forgiveness payments from the SBA, respectively, in the year-ago period.
Year to Date Average Balance Sheet
Average assets for the first nine-month period of 2023 increased $9.5 billion, or 5%, to $187.4 billion from the year-ago period, primarily due to increases in average loans and leases of $6.8 billion, or 6%, and interest-bearing deposits at the Federal Reserve Bank of $4.2 billion, or 91%, partially offset by a decrease in total securities of $1.4 billion, or 3%. The increase in average loans and leases was driven by growth in average commercial loans and leases of $5.0 billion, or 8%, and average consumer loans of $1.8 billion, or 3%.
Average liabilities for the first nine-month period of 2023 increased $9.4 billion, or 6%, from the year-ago period, primarily due to increases in average borrowings and deposits. Average borrowings increased $6.6 billion, or 63%, driven by higher long-term FHLB borrowings and new debt issuances reflecting actions taken as part of normal management of funding needs. Total average deposits increased $2.0 billion, or 1%, primarily due to an increase in average interest-bearing deposits of $9.2 billion, or 9%, largely due to increases in average certificates of deposits and money market deposits, partially offset by a decrease in noninterest-bearing deposits of $7.2 billion, or 17%.
Average shareholders’ equity for the first nine-month of 2023 increased $73 million from the year-ago period primarily due to earnings, partially offset by an increase in average accumulated other comprehensive loss driven by changes in interest rates.
Provision for Credit Losses
(This section should be read in conjunction with the “Credit Risk” section.)
The provision for credit losses for the 2023 third quarter was $99 million, a decrease of $7 million, compared to the 2022 third quarter. On a year-to-date basis, the provision for credit losses for the first nine-month period of 2023 was $276 million, an increase of $78 million, or 39%, compared to the year-ago period. The decrease in provision expense over the prior year quarter was driven by a marginal reduction in loan and lease balances during the 2023 third quarter, compared to strong loan and lease growth in third quarter 2022. The increase over the prior year-to-date period was driven by modest allowance builds and higher levels of Commercial charge-off activity in 2023.
The components of the provision for credit losses were as follows:
Table 5 - Provision for Credit Losses
Three months endedNine months ended
September 30,September 30,September 30,September 30,
(dollar amounts in millions)2023202220232022
Provision for loan and lease losses$104 $80 $266 $151 
Provision for unfunded lending commitments(5)26 10 43 
Provision for securities— — — 4 
Total provision for credit losses$99 $106 $276 $198 
14 Huntington Bancshares Incorporated
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Noninterest Income
The following table reflects noninterest income for each of the periods presented: 

Table 6 - Noninterest Income
Three months endedNine months ended
September 30,September 30,ChangeSeptember 30,September 30,Change
(dollar amounts in millions)20232022Percent20232022Percent
Service charges on deposit accounts $97 $93 4 %$267 $295 (9)%
Card and payment processing income103 96 7 298 278 7 
Capital markets fees49 73 (33)165 169 (2)
Trust and investment management services62 60 3 192 188 2 
Mortgage banking income27 26 4 86 119 (28)
Leasing revenue32 29 10 83 91 (9)
Insurance income31 28 11 95 86 10 
Gain on sale of loans2 15 (87)13 55 (76)
Bank owned life insurance income18 13 38 50 41 22 
Net (losses) gains on sales of securities— — — (4)— (100)
Other noninterest income88 65 35 271 160 69 
Total noninterest income$509 $498 2 %$1,516 $1,482 2 %
Noninterest income for the 2023 third quarter was $509 million, an increase of $11 million, or 2%, from the year-ago quarter. Other noninterest income increased $23 million, or 35%, primarily due to a $33 million increase from favorable mark-to-market on pay-fixed swaptions. Additional increases included card and payment processing income of $7 million, or 7%, primarily driven by an increase in debit card usage, bank owned life insurance income of $5 million, or 38%, and service charges on deposit accounts of $4 million, or 4%. Partially offsetting these increases, capital markets fees decreased $24 million, or 33%, primarily driven by lower syndication and interest rate derivative fees, and gain on sale of loans decreased $13 million, or 87%, primarily resulting from the strategic decision to retain the guaranteed portion of SBA loans at origination.
Noninterest income for the first nine-month period of 2023 increased $34 million, or 2%, from the year-ago period. Other noninterest income increased $111 million, or 69%, primarily due to a $57 million gain on the sale of our RPS business, including associated goodwill allocation, and a $50 million increase from favorable mark-to-market on pay-fixed swaptions. Card and payments processing income increased $20 million, or 7%, largely due to an increase in debit card usage. Partially offsetting these increases, gain on sale of loans decreased $42 million, or 76%, primarily resulting from the strategic decision to retain the guaranteed portion of SBA loans at origination. Mortgage banking decreased $33 million, or 28%, primarily reflecting lower salable volume and spreads. Service charges on deposits accounts decreased $28 million, or 9%, primarily reflecting the impact from program changes.
2023 3Q Form 10-Q 15

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Noninterest Expense
The following table reflects noninterest expense for each of the periods presented: 
Table 7 - Noninterest Expense
Three months endedNine months ended
September 30,September 30,ChangeSeptember 30,September 30,Change
(dollar amounts in millions)20232022Percent20232022Percent
Personnel costs$622 $614 1 %$1,884 $1,771 6 %
Outside data processing and other services149 145 3 448 463 (3)
Equipment65 60 8 193 202 (4)
Net occupancy67 63 6 181 185 (2)
Marketing29 24 21 86 69 25 
Professional services27 18 50 64 56 14 
Deposit and other insurance expense25 15 67 68 53 28 
Amortization of intangibles12 13 (8)38 40 (5)
Lease financing equipment depreciation6 11 (45)22 36 (39)
Other noninterest expense88 90 (2)242 249 (3)
Total noninterest expense$1,090 $1,053 4 %$3,226 $3,124 3 %
Number of employees (average full-time equivalent)19,826 19,997 (1)%20,073 19,884 1 %
Noninterest expense for the 2023 third quarter was $1.1 billion, an increase of $37 million, or 4%, from the year-ago quarter. There were no acquisition-related expenses for the 2023 third quarter, compared to $10 million in the year-ago quarter. Deposit and other insurance expense increased $10 million, or 67%, primarily due to the 2 basis point higher base assessment rate enacted for the banking industry at the beginning of 2023 and a shift in balance sheet mix. Professional services increased $9 million, or 50%, largely due to an increase in consulting fees. Personnel costs increased $8 million, or 1%, primarily reflecting $8 million of severance expense related to staffing efficiencies. Additionally, net occupancy expense for the 2023 third quarter included $7 million of corporate real estate consolidation expense.
Noninterest expense for the first nine-month period of 2023 increased $102 million, or 3%, from the year-ago period. There were no acquisition-related expenses for the first nine-month period of 2023, compared to $80 million in the year-ago period. Personnel costs increased $113 million, or 6%, primarily due to $50 million of expense related to staffing efficiencies, the impact of Capstone Partners acquisition, and merit increases, partially offset by an $8 million decrease in acquisition-related expenses. Marketing expense increased $17 million, or 25%, primarily reflecting actions taken to deepen and acquire new customer relationships. Deposit and other insurance expense increased $15 million, or 28%, primarily due to the 2 basis point higher base assessment rate enacted for the banking industry at the beginning of 2023 and a shift in balance sheet mix. Partially offsetting these increases, outside data processing decreased $15 million, or 3%, primarily due to a decrease of $39 million in acquisition-related expenses, partially offset by higher technology investments, and lease financing equipment depreciation decreased $14 million, or 39%. Net occupancy decreased $4 million, or 2%, primarily due to a $22 million decrease in acquisition-related expenses, partially offset by an increase in corporate real estate and branch consolidation expense and a decrease in gain on sale of fixed assets.
Provision for Income Taxes
The provision for income taxes in the 2023 third quarter was $136 million, compared to $146 million in the 2022 third quarter. The provision for income taxes for the nine-month periods ended September 30, 2023 and September 30, 2022 were $414 million and $371 million, respectively. All periods included the benefits from general business credits, tax-exempt income, tax-exempt bank owned life insurance income, and investments in qualified affordable housing projects. The effective tax rate for both the 2023 third quarter and 2022 third quarter was 19.7%. The effective tax rates for the nine-month periods ended September 30, 2023 and September 30, 2022 were 19.4% and 18.8%, respectively. The variance between the nine-month period ended September 30, 2023 compared to the nine-month period ended September 30, 2022 provision for income taxes and effective tax rates relates primarily to a reduction in capital losses, partially offset by an increase in tax credits.
16 Huntington Bancshares Incorporated

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The net federal deferred tax asset was $570 million, and the net state deferred tax asset was $108 million at September 30, 2023.
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 2016. Also, with few exceptions, the Company is no longer subject to state and local income tax examinations for tax years before 2018.
RISK MANAGEMENT AND CAPITAL
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 use a multi-faceted approach to risk governance. It begins with the Board of Directors defining our risk appetite as aggregate moderate-to-low, through-the-cycle.
We classify/aggregate risk into seven risk pillars: credit, market; liquidity, operational, compliance, strategic, and reputation. More information on risk can be found in Item 1A Risk Factors below, the Risk Factors section included in Item 1A of our 2022 Annual Report on Form 10-K and subsequent filings with the SEC. The MD&A included in our 2022 Annual Report on Form 10-K should be read in conjunction with this MD&A, as this discussion provides only material updates to the 2022 Annual Report on Form 10-K. This MD&A should also be read in conjunction with the Unaudited Consolidated Financial Statements, Notes to Unaudited 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 2022 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 3 “Investment Securities and Other Securities” of the Notes to the Unaudited 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, swaptions, swaption collars, 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 disciplined portfolio management processes are 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.
Loan and Lease Credit Exposure Mix
Refer to the “Loan and Lease Credit Exposure Mix” section of our 2022 Annual Report on Form 10-K for a brief description of each portfolio segment. During the 2023 second quarter, Huntington revised its process for assessing and monitoring the risk and performance of non-real estate secured commercial loans, primarily loans to REITs. These loans were reclassified from CRE to the C&I loan category to align reporting with this process revision. All prior period results have been adjusted to conform to the current presentation.
2023 3Q Form 10-Q 17

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The table below provides the composition of our total loan and lease portfolio: 
Table 8 - Loan and Lease Portfolio Composition
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Commercial:
Commercial and industrial$49,422 41 %$48,121 41 %
Commercial real estate12,668 11 13,640 11 
Lease financing5,161 4 5,252 4 
Total commercial
67,251 56 67,013 56 
Consumer:
Residential mortgage23,427 19 22,226 19 
Automobile
12,724 11 13,154 11 
Home equity
10,118 8 10,375 9 
RV and marine
5,937 5 5,376 4 
Other consumer
1,396 1 1,379 1 
Total consumer
53,602 44 52,510 44 
Total loans and leases
$120,853 100 %$119,523 100 %
Our loan and lease 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 2022 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 2022 Annual Report on Form 10-K for our consumer credit underwriting and on-going credit management processes.
18 Huntington Bancshares Incorporated

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The table below provides our total loan and lease portfolio by industry type:
Table 9 - Loan and Lease Portfolio by Industry Type
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Commercial loans and leases:
Real estate and rental and leasing (1)$16,272 13 %$16,310 14 %
Retail trade (2)10,776 9 9,894 8 
Manufacturing7,564 6 7,809 7 
Finance and insurance (1)4,856 4 5,005 4 
Health care and social assistance (1)4,370 4 4,293 4 
Wholesale Trade3,656 3 3,922 3 
Accommodation and food services3,137 3 3,335 3 
Transportation and warehousing3,101 3 3,246 3 
Professional, scientific, and technical services1,998 2 1,899 2 
Utilities1,932 2 1,298 1 
Other Services1,816 2 2,097 2 
Construction1,679 1 1,757 1 
Admin./Support/Waste Mgmt. and Remediation Services1,446 1 1,370 1 
Arts, entertainment, and recreation1,357 1 1,424 1 
Information1,246 1 1,167 1 
Public administration651 1 667 1 
Educational services434 — 513 — 
Agriculture, forestry, fishing, and hunting407 — 455 — 
Management of companies and enterprises128 — 127 — 
Mining, quarrying, and oil and gas extraction123 — 196 — 
Unclassified/other302 — 229 — 
Total commercial loans and leases by industry category67,251 56 67,013 56 
Residential mortgage23,427 19 22,226 19 
Automobile12,724 11 13,154 11 
Home equity10,118 8 10,375 9 
RV and marine5,937 5 5,376 4 
Other consumer loans1,396 1 1,379 1 
Total loans and leases$120,853 100 %$119,523 100 %
(1)     Non-real estate secured commercial loans to REITs, which are classified in the C&I loan category, are included in the real estate, finance and insurance, and health care industry types.
(2)    Amounts include $2.9 billion and $2.3 billion of auto dealer services loans at September 30, 2023 and December 31, 2022, respectively.
Credit Quality
(This section should be read in conjunction with Note 4 “Loans and Leases” and Note 5 “Allowance for Credit Losses” of the Notes to Unaudited 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 2023 third quarter reflected NCOs of $73 million, or 0.24% of average total loans and leases, annualized, an increase of $29 million, compared to $44 million, or 0.15%, in the year-ago quarter. The increase was driven by a $30 million increase in commercial NCOs to $45 million in the 2023 third quarter. NPAs increased from December 31, 2022 by $40 million, or 7%, largely driven by an increase in commercial NALs.
2023 3Q Form 10-Q 19

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NPAs and NALs
(This section should be read in conjunction with Note 4 “Loans and Leases” and Note 5 “Allowance for Credit Losses” of the Notes to Consolidated Financial Statements and “Credit Quality” section appearing in Huntington’s 2022 Annual Report on Form 10-K.)
NPAs and NALs
Commercial loans and leases are placed on nonaccrual status at 90-days past due, or earlier if repayment of principal and interest is in doubt. Of the $430 million of commercial related NALs at September 30, 2023, $286 million, or 67%, represent loans and leases 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 10 - Nonaccrual Loans and Leases and Nonperforming Assets
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Nonaccrual loans and leases (NALs):
Commercial and industrial$314 $288 
Commercial real estate102 92 
Lease financing14 18 
Residential mortgage75 90 
Automobile4 4 
Home equity82 76 
RV and marine1 1 
Total nonaccrual loans and leases592 569 
Other real estate, net14 11 
Other NPAs (1)28 14 
Total nonperforming assets$634 $594 
Nonaccrual loans and leases as a % of total loans and leases0.49 %0.48 %
NPA ratio (2)0.52 0.50 
(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
The baseline scenario used for the 2023 third quarter assumes softening of the labor market is underway and will continue through the middle of 2025 causing the unemployment rate to gradually increase, peaking at 4.2% in mid-2025 and remaining at that level through 2027. The overnight federal funds rate is forecasted to have peaked during the third quarter of 2023, remaining at this terminal level until mid-2024 as the Federal Reserve continues to address inflation levels and tightness in the labor market. The expectation is that the Federal Reserve would then start to cut rates in the second half of 2024, although monetary policy remains restrictive until the end of 2026. The federal funds rate is forecasted to return to its neutral rate of 2.5% in early 2027. Inflation is forecasted to drop from an average of 4.1% in 2023 to 2.7% in 2024, approaching the Federal Reserve target level of 2% by third quarter 2024, as a result of the Federal Reserve’s actions. The GDP forecast for the fourth quarter of 2023 into 2024 has fallen somewhat from year end, a result of elevated interest rates and tightening credit conditions. GDP is now forecasted to be 1.9% by the fourth quarter of 2024.
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Management uses a probability-weighted approach that incorporates a baseline, an adverse and a more favorable economic scenario when formulating that quantitative estimate for the allowance. The table below is intended to show how the forecasted path of unemployment and GDP in the baseline scenario has changed since the end of 2022:
Table 11 - Forecasted Key Macroeconomic Variables
Baseline scenario forecast202220232024
Q4Q2Q4Q2Q4
Unemployment rate (1)
4Q 20223.7 %3.9 %4.1 %4.1 %3.9 %
3Q 2023N/AN/A3.7 4.0 4.2 
Gross Domestic Product (1)
4Q 2022(0.1)%0.4 %2.0 %2.3 %2.7 %
3Q 2023N/AN/A0.3 1.5 1.9 
(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 political uncertainty, geopolitical instability, and current inflation levels, considering multiple macroeconomic forecasts that reflected a range of possible outcomes. While we have incorporated estimates of economic uncertainty into our ACL, the ultimate impact of recent inflation levels, higher interest rates, and the significant conflicts on-going around the world will have on the economy remains unknown.
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 September 30, 2023 ACL included a general reserve that consists of various risk profile components, including profiles to capture uncertainty not addressed within the quantitative transaction reserve.
Our ACL evaluation process includes the on-going assessment of credit quality metrics, and a comparison of certain ACL benchmarks to current performance.
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The table below reflects the allocation of our ALLL among our various loan and lease categories as well as certain coverage metrics of the reported ALLL and ACL:
Table 12 - Allocation of Allowance for Credit Losses
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Allocation of Allowance% of Total ALLL% of Total Loans and Leases (1) Allocation of Allowance% of Total ALLL% of Total Loans and Leases (1)
Commercial
Commercial and industrial$973 44 %41 %$939 45 %41 %
Commercial real estate483 22 11 433 20 11 
Lease financing48 2 4 52 2 4 
Total commercial1,504 68 56 1,424 67 56 
Consumer
Residential mortgage200 10 19 187 8 19 
Automobile143 6 11 141 7 11 
Home equity115 5 8 105 5 9 
RV and marine151 7 5 143 7 4 
Other consumer95 4 1 121 6 1 
Total consumer704 32 %44 %697 33 %44 %
Total ALLL2,208 2,121 
AULC160 150 
Total ACL$2,368 $2,271 
Total ALLL as a % of
Total loans and leases1.83 %1.77 %
Nonaccrual loans and leases373 373 
NPAs348 357 
Total ACL as % of
Total loans and leases1.96 %1.90 %
Nonaccrual loans and leases400 400 
NPAs373 382 
(1)Percentages represent the percentage of each loan and lease category to total loans and leases.
At September 30, 2023, the ACL was $2.4 billion, or 1.96% of total loans and leases, compared to $2.3 billion, or 1.90%, at December 31, 2022. The increase in the total ACL was driven by a combination of loan and lease growth and modest overall coverage ratio builds throughout 2023. The ACL coverage ratio at September 30, 2023 is reflective of the current macro-economic environment including recognition of the near-term recessionary risks.
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NCOs
The table below reflects NCO detail for each of the periods presented: 
Table 13 - Net Charge-off Analysis
Three months endedNine months ended
September 30,September 30,September 30,September 30,
(dollar amounts in millions)2023202220232022
Net charge-offs (recoveries) by loan and lease type:
Commercial:
Commercial and industrial$32 $16 $68 $(11)
Commercial real estate11 (3)36 1 
Lease financing2 2 (3)4 
Total commercial45 15 101 (6)
Consumer:
Residential mortgage1 (1)2 (2)
Automobile4 3 12 3 
Home equity— (2)(1)(5)
RV and marine3 2 7 6 
Other consumer20 27 58 75 
Total consumer28 29 78 77 
Total net charge-offs$73 $44 $179 $71 
Net charge-offs (recoveries) - annualized percentages:
Commercial:
Commercial and industrial0.26 %0.14 %0.18 %(0.03)%
Commercial real estate0.35 (0.07)0.37 0.01 
Lease financing0.12 0.17 (0.08)0.11 
Total commercial0.27 0.10 0.20 (0.01)
Consumer:
Residential mortgage0.01 (0.02)0.01 (0.01)
Automobile0.14 0.07 0.13 0.03 
Home equity(0.01)(0.07)(0.02)(0.06)
RV and marine0.16 0.17 0.16 0.16 
Other consumer6.09 8.09 5.88 7.72 
Total consumer0.21 0.22 0.20 0.20 
Net charge-offs as a % of average loans and leases0.24 %0.15 %0.20 %0.08 %
NCOs were an annualized 0.24% of average loans and leases in the current quarter, up from 0.15% in the 2022 third quarter. NCOs for the commercial portfolios were higher, with annualized net charge-offs of 0.27% in the current quarter, compared to 0.10% in the year-ago quarter, reflecting the continued normalization of net charge-offs. Consumer charge-offs were modestly lower in the quarter, compared to the year-ago quarter.

NCOs were an annualized 0.20% of average loans and leases for the first nine-month period of 2023, up from 0.08% in the year ago period. NCOs for the commercial portfolios were higher with annualized net charge-offs of 0.20% in the current period compared to net recoveries of 0.01% in the year-ago period. Consumer charge-offs remained consistent in the period, compared to the year-ago period.
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Market Risk
(This section should be read in conjunction with the “Market Risk” section appearing in Huntington’s 2022 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.
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. Our models incorporate market-based assumptions that include the impact of changing interest rates on prepayment rates of assets and runoff rates of deposits. The models also include our projections of the future volume and pricing of various business lines.
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 14 - Net Interest Income at Risk
 Net Interest Income at Risk (%)
Basis point change scenario-200-100+100+200
At September 30, 2023-5.3 -2.7 2.9 5.6 
At December 31, 2022-4.1 -2.0 2.0 4.0 
NII at Risk is used by management to measure the risk and impact to earnings over the next 12 months, using a variety of interest rate scenarios. The NII at Risk results included in the table above reflect the analysis used monthly by management. It models gradual “ramp” -200, -100, +100 and +200 basis point parallel shift scenarios, implied by the forward yield curve over the next 12 months.
The NII at Risk shows that the balance sheet is asset sensitive at both September 30, 2023, and December 31, 2022. A key driver of the change in sensitivity can be attributed to hedging activity, which has supported an increase to asset sensitivity in rising rate scenarios, while minimizing the impact to falling rate scenarios. Other drivers to the change in sensitivity include changes in the funding mix, deposit modeling assumptions, and market rates.
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Table 15 - Economic Value of Equity at Risk
 Economic Value of Equity at Risk (%)
Basis point change scenario-200-100+100+200
At September 30, 20231.7 1.9 -3.2 -6.7 
At December 31, 20229.0 5.9 -8.0 -17.3 
EVE at Risk provides a sensitivity analysis on shareholder’s equity for longer-term interest rate risk in the banking book. The EVE results included in the table above reflect the analysis used monthly by management. It models immediate -200, -100, +100 and +200 basis point parallel “shock” scenarios.
The change in sensitivity from December 31, 2022 was driven primarily by updated deposit modeling assumptions and market rates, as well as changes in the funding mix and hedging activity.
To address the discontinuance of LIBOR, we established a LIBOR transition team and project plan under the oversight of the CRO and CFO, providing periodic updates to the ROC. Contract remediation efforts coordinated by the LIBOR transition team were complete as of June 2023. Upon the discontinuation of LIBOR, loans and leases that reference LIBOR were transitioned to a SOFR-based replacement rate as set forth in the related contract. For further details on the transition of notional derivatives, refer to the Use of Derivatives to Manage Interest Rate Risk section below.
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 16 shows all swap, swaption, swaption 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 13 “Derivative Financial Instruments” of the Notes to Unaudited Consolidated Financial Statements.
In the second quarter of 2023, all cleared derivatives that referenced LIBOR transitioned from LIBOR to a SOFR-based replacement rate in accordance with the conventions established by the applicable clearinghouse. Upon the discontinuation of LIBOR, all over-the-counter derivatives that referenced LIBOR were transitioned to a SOFR-based replacement rate as set forth in the related contract. Those derivatives that did not have a clearly defined or practicable replacement benchmark rate set forth in the related contract used the LIBOR Act to replace LIBOR with a SOFR-based rate established by FRB rulemaking. For every LIBOR referenced instrument with a reset date after the LIBOR cessation date, counterparties received a LIBOR referenced instrument maturing on the first reset date after the LIBOR cessation date, and a forward starting SOFR instrument. The instruments received through the transition were economically similar to the instruments held prior to the transition.
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The following table presents additional information about the interest rate swaps, swaptions, swaption collars, and floors used in Huntington’s asset and liability management activities at September 30, 2023 and December 31, 2022.
Table 16 - Weighted-Average Maturity, Receive Rate and SOFR/LIBOR Reset Rate on Asset Liability Management Instruments
 Average Maturity (years)
Weighted-Average
Fixed Rate
Weighted-Average Reset Rate
(dollar amounts in millions)Notional ValueFair Value
At September 30, 2023
Asset conversion swaps
Securities (1):
Pay Fixed - Receive SOFR$10,791 3.34 $992 1.37 %5.40 %
Pay Fixed - Receive SOFR - forward starting (2)928 8.71 43 2.81 — 
Loans:
Receive Fixed - Pay SOFR - forward starting (3)1,400 4.45 (53)2.90 — 
Receive Fixed - Pay SOFR9,275 3.31 (486)2.77 5.31 
Liability conversion swaps
Receive Fixed - Pay SOFR7,568 3.65 (400)2.95 4.82 
Purchased swaption collars
Purchased Interest Rate Swaption Collars (4)2,000 0.41 (12)3.20 / 4.50— 
Purchased floors
Purchased Floor Spread - SOFR (4)5,000 2.54 24 2.97 / 3.97— 
Basis swaps
Pay SOFR- Receive Fed Fund (economic hedges) (5)174 2.83 — 5.33 5.32 
Pay Fed Fund - Receive SOFR (economic hedges) (5)1 12.06 — 5.36 5.33 
Purchased swaptions
Pay Fixed - Receive SOFR Swaptions (economic hedges)15,450 0.71 98 5.03 — 
Total swap portfolio$52,587 $206 
At December 31, 2022
Asset conversion swaps
Securities (1):
Pay Fixed - Receive 1 month LIBOR$8,024 3.89 $834 0.93 %4.37 %
Pay Fixed - Receive SOFR366 7.02 49 1.46 3.82 
Pay Fixed - Receive 1 month LIBOR - forward starting (6)91 7.31 12 1.62 — 
Pay Fixed - Receive SOFR - forward starting (7)1,926 6.17 85 2.17 — 
Loans:
Receive Fixed - Pay SOFR - forward starting (8)
2,950 4.91 (109)2.64 — 
Receive Fixed - Pay 1 month LIBOR7,875 1.41 (390)1.21 4.20 
Receive Fixed - Pay SOFR8,700 3.55 (351)2.57 3.90 
Liability conversion swaps
Receive Fixed - Pay 1 month LIBOR1,430 1.85 (60)2.01 4.25 
Receive Fixed - Pay SOFR6,299 4.91 (201)3.16 3.36 
Purchased swaption collars
Purchased Interest Rate Swaption Collars (4)4,800 0.27 (6)2.87 / 4.05— 
Basis swaps
Pay SOFR- Receive Fed Fund (economic hedges) (5)174 3.58 — 4.33 4.31 
Pay Fed Fund - Receive SOFR (economic hedges) (5)1 12.81 — 4.35 4.33 
Total swap portfolio$42,636 $(137)
(1)Amounts include interest rate swaps as fair value hedges of fixed-rate investment securities using the portfolio layer method.
(2)Forward starting swaps effective starting from April 2025 to October 2027.
(3)Forward starting swaps effective starting from July 2024 to January 2025.
(4)The weighted average fixed rates for floor spread and swaption collars are the weighted average strike rates for the upper and lower bounds of the instruments.
(5)Swaps have variable pay and variable receive resets. Weighted average fixed fate column represents pay rate reset.
(6)Forward starting swaps effective starting from January 2023 to February 2023.
(7)Forward starting swaps effective starting from January 2023 to October 2027.
(8)Forward starting swaps effective starting from January 2023 to July 2024.
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As of September 30, 2023, we have $15.5 billion of interest rate swaptions with an average strike price of 5.03% to reduce the impact on capital from rising rates. These swaptions are economic hedges of interest rate risk attributable to our investment securities with the change in value of these instruments recorded in other noninterest income.
MSRs
(This section should be read in conjunction with Note 6 “Mortgage Loan Sales and Servicing Rights” of Notes to the Unaudited Consolidated Financial Statements.)
At September 30, 2023, we had a total of $547 million of capitalized MSRs representing the right to service $33.0 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 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.
Liquidity Risk
(This section should be read in conjunction with the “Liquidity Risk” section appearing in Huntington’s 2022 Annual Report on Form 10-K for our on-going liquidity risk management processes.)
Liquidity risk is the possibility of us being unable to meet current and future financial obligations in a timely manner. The goal of liquidity management is to ensure adequate, stable, reliable, and cost-effective sources of funds to satisfy changes in loan and lease demand, unexpected levels of deposit withdrawals, investment opportunities, and other contractual obligations. We consider core earnings, strong capital ratios, and credit quality essential for maintaining high credit ratings, which allows us cost-effective access to market-based liquidity. We mitigate liquidity risk by maintaining liquid assets in the form of cash and cash equivalents and securities. In addition, we maintain a large, stable core deposit base and a diversified base of readily available wholesale funding sources, including secured funding sources from the FHLB and Federal Reserve through pledged borrowing capacity, issuance through dealers in the capital markets, and access to certificates of deposit issued through brokers. Liquidity risk is reviewed and managed continuously for the Bank and the parent company, as well as its subsidiaries. At September 30, 2023, management believes current sources of liquidity are sufficient to meet Huntington’s on and off-balance sheet obligations.
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We maintain a contingency funding plan that provides for liquidity stress testing, which assesses the potential erosion of funds in the event of an institution-specific event or systemic financial market crisis. Examples of institution specific events could include a downgrade in our public credit rating by a rating agency, a large charge to earnings, declines in profitability or other financial measures, declines in liquidity sources including reductions in deposit balances or access to contingent funding sources, or a significant merger or acquisition. Examples of systemic events unrelated to us that could have an effect on our access to liquidity would be terrorism or war, natural disasters, political events, seizure of a major financial institution, or the default or bankruptcy of a major, corporation, mutual fund, or hedge fund. Similarly, market speculation or rumors about us, or the banking industry in general, may adversely affect the cost and availability of normal funding sources. The contingency funding plan outlines the process for addressing a liquidity crisis and provides for an evaluation of funding sources under various market conditions. It also assigns specific roles and responsibilities and communication protocols for effectively managing liquidity through a problem period.
Our largest source of liquidity on a consolidated basis is core deposits, which provide stable and lower-cost funding. Core deposits were $144.2 billion at September 30, 2023 which comprised 97% of total deposits, compared to $142.1 billion, and 96% of total deposits, at December 31, 2022. The $2.1 billion increase in core deposits, compared to December 31, 2022, was primarily driven by an increase in consumer core deposits, partially offset by a decrease in commercial core deposits driven by shifts to off-balance sheet liquidity solutions we provide for our customers. Our core deposits come from a base of primary bank customer relationships, and we continue to focus on acquiring and deepening those relationships resulting in our granular and diversified deposit base.
The following table reflects deposit composition detail.
Table 17 - Deposit Composition
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Total deposits by type:
Demand deposits—noninterest-bearing$31,666 21 %$38,242 26 %
Demand deposits—interest-bearing39,822 27 43,136 29 
Money market deposits42,996 29 36,082 24 
Savings and other domestic deposits17,350 12 20,357 14 
Core certificates of deposit (1)12,372 8 4,324 3 
Total core deposits:144,206 97 142,141 96 
Other domestic deposits of $250,000 or more446 — 220 — 
Negotiable CDs, brokered and other deposits
4,215 3 5,553 4 
Total deposits$148,867 100 %$147,914 100 %
Total core deposits:
Commercial$61,379 43 %$64,107 45 %
Consumer82,827 57 78,034 55 
Total core deposits$144,206 100 %$142,141 100 %
Total deposits (insured/uninsured):
Insured deposits$104,183 70 %$100,631 68 %
Uninsured deposits (2)44,684 30 47,283 32 
Total deposits$148,867 100 %$147,914 100 %
(1)Includes consumer certificates of deposit of $250,000 or more.
(2)Represents consolidated Huntington uninsured deposits, determined by adjusting the amounts reported in the Bank Call Report (FFIEC 031) by inter-company deposits, which are not customer deposits and are therefore eliminated through consolidation. As of September 30, 2023, the Bank Call Report uninsured deposit balance was $49.1 billion, which includes $4.5 billion of inter-company deposits. As of December 31, 2022, the Bank Call Report uninsured deposit balance was $84.6 billion, which includes $37.3 billion of inter-company deposits.
Cash and cash equivalents were $11.4 billion and $6.7 billion at September 30, 2023 and December 31, 2022, respectively. The $4.7 billion increase in cash and cash equivalents is primarily due to an increase in interest-bearing deposits at the Federal Reserve Bank to support short-term liquidity.
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Total investment securities were $38.1 billion at September 30, 2023, compared to $40.5 billion at December 31, 2022. The $2.4 billion decrease in securities compared to December 31, 2022, was primarily due to runoff during the period. At September 30, 2023, the duration of the investment securities portfolio was 4.5 years, or 3.6 years net of hedging. Securities are pledged to secure borrowing capacity with the FHLB and the Federal Reserve, discussed further in the Bank Liquidity and Sources of Funding section below. At September 30, 2023, investment securities with market value of $5.2 billion were unpledged.
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 totaled $18.2 billion at September 30, 2023, compared to $17.5 billion at December 31, 2022. The increase from year-end is primarily due to increases in long-term FHLB borrowings and senior notes, partially offset by decreases in negotiable CDs, brokered and other deposits, and short-term FHLB borrowings.
Bank Liquidity and Sources of Funding
Our primary sources of funding for the Bank are consumer and commercial core deposits. At September 30, 2023, these core deposits funded 77% of total assets (119% of total loans and leases). To the extent we are unable to obtain sufficient liquidity through core deposits and cash and cash equivalents, we may meet our liquidity needs through sources of wholesale funding and asset securitization or sale.
The Bank maintains borrowing capacity at both the FHLB and the Federal Reserve secured by pledged loans and securities. The Bank does not consider borrowing capacity at the Federal Reserve a primary source of funding, however, it could be used as a potential source of liquidity in a stressed environment or during a market disruption. At September 30, 2023, the Bank’s available contingent borrowing capacity at the FHLB and Federal Reserve totaled $79.9 billion, compared to $53.5 billion at December 31, 2022. The increase reflects our optimization of contingent borrowing capacity through the pledge of incremental assets. The amount of available contingent borrowing capacity may fluctuate based on the level of borrowings outstanding and level of assets pledged.
Following the first quarter 2023 bank failures, the Federal Reserve Bank established the Bank Term Funding Program as an additional source of available liquidity to support depository institutions through pledging qualifying assets as collateral. The Bank has taken steps to support readiness but has not participated through September 30, 2023.
At September 30, 2023, 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.
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 $4.1 billion and $3.5 billion at September 30, 2023 and December 31, 2022 in cash and cash equivalents, respectively.
On October 18, 2023, our Board of Directors declared a quarterly common stock cash dividend of $0.155 per common share. The dividend is payable on January 2, 2024, to shareholders of record on December 18, 2023. 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 October 18, 2023, our Board of Directors declared a quarterly Series B, Series E, Series F, Series G, Series H, and Series J Preferred Stock dividend payable on January 16, 2024 to shareholders of record on January 1, 2024. On September 12, 2023, our Board of Directors declared a quarterly dividend for the Series I Preferred Stock payable on December 1, 2023 to shareholders of record on November 15, 2023. Total cash demands required for preferred stock dividends are expected to be approximately $38 million per quarter.
During the first nine months of 2023, the Bank paid preferred and common dividends to the parent company of $34 million and $1.4 billion, respectively. To meet any additional liquidity needs, the parent company may issue debt or equity securities.
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At September 30, 2023, 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, swaption 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 cyberattacks 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. 
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 of Directors, 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.
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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.
The following table presents certain regulatory capital data at both the consolidated and Bank levels for each of the periods presented:
Table 18 - Regulatory Capital Data (1)
(dollar amounts in millions) At September 30, 2023At December 31, 2022
Total risk-weighted assetsConsolidated$140,688 $141,940 
Bank140,738 141,571 
CET1 risk-based capitalConsolidated14,211 13,290 
Bank14,574 14,133 
Tier 1 risk-based capitalConsolidated16,705 15,467 
Bank15,785 15,334 
Tier 2 risk-based capitalConsolidated3,141 3,106 
Bank2,350 2,313 
Total risk-based capitalConsolidated19,846 18,573 
Bank18,135 17,647 
CET1 risk-based capital ratioConsolidated10.10 %9.36 %
Bank10.36 9.98 
Tier 1 risk-based capital ratioConsolidated11.87 10.90 
Bank11.22 10.83 
Total risk-based capital ratioConsolidated14.11 13.09 
Bank12.89 12.47 
Tier 1 leverage ratioConsolidated9.43 8.60 
Bank8.53 8.54 
(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 September 30, 2023 and December 31, 2022, we have phased in 50% and 25%, respectively, of the cumulative CECL deferral with the remaining impact to be recognized over the remainder of the three-year transition period.
At September 30, 2023, at both the consolidated and Bank level, we maintained Basel III capital ratios in excess of the well-capitalized standards established by the Federal Reserve. The increase in the consolidated CET1 risk-based capital ratio, compared to the prior year end, was primarily driven by current period earnings and a decline in risk-weighted assets, partially offset by dividends and the CECL transitional amount.
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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 $18.5 billion at September 30, 2023, an increase of $752 million, or 4%, when compared with December 31, 2022. The increase was primarily driven by earnings, net of dividends, and the issuance of perpetual preferred stock, partially offset by accumulated other comprehensive loss driven by changes in interest rates.
Huntington is authorized to make capital distributions that are consistent with the requirements in the Federal Reserve’s capital rule, inclusive of the SCB requirement. Huntington’s SCB requirement associated with its 2022 Capital Plan is 3.3%, effective for the period of October 1, 2022 through September 30, 2023. On April 5, 2023, Huntington submitted its 2023 Capital Plan to the Federal Reserve for supervisory review. By notice dated June 28, 2023, the Federal Reserve informed Huntington that its indicative SCB requirement associated with its 2023 Capital Plan is 3.2%, effective for the period of October 1, 2023 through September 30, 2024. Although we were not subject to the Federal Reserve’s 2023 supervisory stress test, our indicative SCB was updated for 2023 based on the dividend add-on component of the SCB.
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.
On January 18, 2023, our Board authorized the repurchase of up to $1.0 billion of common shares within the eight quarter period ending December 31, 2024, subject to the Federal Reserve’s capital regulations. Purchases of common stock under the authorization may include open market purchases, privately negotiated transactions, and accelerated share repurchase programs. During the nine months ended September 30, 2023, we repurchased no shares of common stock under the current repurchase authorization. As part of the 2023 capital plan and our current expectation that organic capital will be used for funding loan and lease growth and proposed changes to regulatory capital requirements, we do not expect to utilize the share repurchase program through 2024. However, we may at our discretion resume share repurchases at any time while considering factors including, but not limited to, capital requirements and market conditions.
BUSINESS SEGMENT DISCUSSION
Overview
To align with our strategic priorities, during the second quarter 2023, we completed an organizational realignment and now report on two business segments: Consumer & Regional Banking and Commercial Banking. The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense. Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The organizational realignment primarily involved consolidating our previously reported Consumer and Business Banking, Vehicle Finance and RBHPCG, into one new business segment called Consumer & Regional Banking. Prior period results have been adjusted to conform to the new segment presentation.
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Following is a description of our business segments and the Treasury/Other function:
Consumer & Regional Banking - The Consumer & Regional Banking segment provides a wide array of financial products and services to consumer and business customers including, but not limited to, deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. We serve our customers through our network of channels, including branches, online banking, mobile banking, telephone banking, and ATMs.
We have a “Fair Play” banking philosophy: providing differentiated products and services, built on a strong foundation of customer friendly products and advocacy. Our brand resonates with consumers and businesses, helping us acquire new customers and deepen relationships with current customers. Our Fair Play banking suite of products includes 24-Hour Grace®, Perks and Asterisk-Free Checking®, Money Scout℠, $50 Safety Zone℠, Standby Cash®, Early Pay, Instant Access, The Hub, and Huntington Heads Up®.
Consumer & Regional Banking offers a comprehensive set of digitally powered consumer and business financial solutions to Consumer Lending, Regional Banking, Branch Banking, and Wealth Management customers.
Consumer Lending provides direct and indirect consumer loans, as well as dealer finance loans and deposits. The direct consumer loan products, including mortgage and home equity, are originated through branch, online, and third-party channels. Indirect consumer loans are originated through deep relationships with dealerships to finance consumer purchases of automobiles, recreational vehicles, marine craft, and powersports. We also provide dealer finance loans (including floorplan loans), deposits, and other financial products to these dealerships and their owners.
Regional Banking, along with our business and specialty banking offerings, is a dynamic part of our business and we are committed to being the bank of choice for businesses in our markets. Regional Banking is defined as serving small to mid-sized businesses. Beyond conventional lending solutions, Huntington offers access to capital markets, practice finance and SBA lending capabilities. We are the #1 SBA lender in the nation in units as of federal fiscal year end September 30, 2022. In addition, our payments business provides credit and debit cards and treasury management services to our customers. Huntington continues to develop products and services that are designed specifically to meet the needs of business customers and looks for ways to help companies find solutions to their financing needs.
Branch Banking provides a full range of financial products and services to consumer and business customers through our extensive branch and ATM network. The branch network offers full-service branches that are primarily located in Ohio, Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Pennsylvania, West Virginia, and Wisconsin.
Wealth Management has a comprehensive product offering, including private banking, wealth management and legacy planning through investment and portfolio management, fiduciary administration and trust services, institutional custody services, and full-service retail brokerage investments.
Commercial Banking - The Commercial Banking segment provides expertise through bankers, capabilities, and digital channels, and includes a comprehensive set of product offerings. Our target clients span from mid-market to large corporates across a national footprint. The Commercial Banking segment leverages internal partnerships for wealth management, trust, insurance, payments, and treasury management capabilities. In particular, our payments capabilities continue to expand as we develop unique solutions for our diverse client segments, including Huntington ChoicePay. This segment includes customers in Middle Market Banking, Corporate, Specialty, and Government Banking, Asset Finance, Commercial Real Estate Banking, and Capital Markets.
Middle Market Banking serves the banking needs of mid-sized clients who reside in our geographic footprint. We leverage our local presence to serve our clients, extending our full suite of banking products including lending, liquidity, treasury management and other payment services, and capital markets.
Corporate, Specialty, and Government Banking serves medium to large enterprises. We focus on specific industry verticals such as government and non-profits, healthcare, technology and telecommunications, franchises, financial sponsors, and global services. Our expertise in these markets allows us to uniquely serve our clients’ sophisticated banking, capital markets, and payments requirements.
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Asset Finance serves our clients’ capital expenditure and working capital needs through equipment financing, asset-based lending, distribution finance, structured lending, and municipal financing solutions. Our relationship with large manufacturers is bolstered by a strong commitment to their dealers and financing needs.
Commercial Real Estate Banking provides banking solutions to commercial real estate developers and institutional sponsors across the nation. Within this group, Huntington Community Development improves the quality of life for our communities and the residents of low-to-moderate income neighborhoods by developing and delivering innovative products and services to support affordable housing and neighborhood stabilization, including tax credit investments.
Capital Markets delivers corporate risk management, institutional sales and trading, debt and equity issuance, and additional advisory services.
Treasury / Other - 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 the 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 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).
Net Income by Business Segment
Net income by business segment for the nine-month periods ending September 30, 2023 and September 30, 2022 is presented in the following table:
Table 19 - Net Income by Business Segment
 Nine months ended September 30,
(dollar amounts in millions)20232022
Consumer & Regional Banking$1,617 $670 
Commercial Banking1,002 803 
Treasury / Other(911)120 
Net income attributable to Huntington$1,708 $1,593 
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Consumer & Regional Banking
Table 20 - Key Performance Indicators for Consumer & Regional Banking
 Nine months ended September 30,Change
(dollar amounts in millions)20232022AmountPercent
Net interest income$3,569 $2,237 $1,332 60 %
Provision for credit losses192 189 3 2 
Noninterest income953 979 (26)(3)
Noninterest expense2,283 2,179 104 5 
Provision for income taxes430 178 252 142 %
Net income attributable to Huntington$1,617 $670 $947 141 %
Number of employees (average full-time equivalent)11,673 12,002 (329)(3)%
Total average assets$70,791 $68,967 $1,824 3 
Total average loans/leases64,914 62,558 2,356 4 
Total average deposits105,019 106,025 (1,006)(1)
Net interest margin4.47 %2.77 %1.70 %61 
NCOs$106 $85 $21 25 
NCOs as a % of average loans and leases0.22 %0.18 %0.04 %22 
Total assets under management (in billions)—eop$22.3 $20.2 $2.1 10 
Total trust assets (in billions)—eop163.4 138.2 25.2 18 
Consumer & Regional Banking reported net income of $1.6 billion in the nine-month period of 2023, an increase of $947 million, or 141%, compared to the year-ago period. Segment net interest income increased $1.3 billion, or 60%, primarily due to a 170 basis point increase in NIM driven by the higher rate environment and a $2.4 billion, or 4%, increase in average loans and leases. Noninterest income decreased $26 million, or 3%, primarily due to decreases in service charges primarily reflecting the impact from program changes, lower mortgage banking income primarily reflecting lower salable volume, and in gain on sale of loans resulting from the strategic decision to retain the guaranteed portion of SBA loans at origination, partially offset by a $57 million gain on the sale of our RPS business and an increase in card and payment processing income. Noninterest expense increased $104 million, or 5%, primarily due to gains from branch sales in the nine-month period of 2022, in addition to increases in personnel expense, deposit and other insurance expense, and overhead allocations.

Commercial Banking
Table 21 - Key Performance Indicators for Commercial Banking
 Nine months ended September 30,Change
(dollar amounts in millions)20232022AmountPercent
Net interest income$1,722 $1,327 $395 30 %
Provision for credit losses84 9 75 NM
Noninterest income479 470 9 2 
Noninterest expense830 763 67 9 
Provision for income taxes270 215 55 26 
Income attributable to non-controlling interest15 7 8 114 %
Net income attributable to Huntington$1,002 $803 $199 25 %
Number of employees (average full-time equivalent)2,258 2,079 179 9 %
Total average assets$64,184 $58,699 $5,485 9 
Total average loans/leases55,719 51,185 4,534 9 
Total average deposits36,242 34,269 1,973 6 
Net interest margin3.95 %3.29 %0.66 %20 
NCOs $73 $(13)$86 NM
NCOs as a % of average loans and leases0.17 %(0.03)%0.20 %NM
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Commercial Banking reported net income of $1.0 billion in the nine-month period of 2023, compared to $803 million in the year-ago period. Segment net interest income increased $395 million, or 30%, primarily due to a 66 basis point increase in NIM, driven by the higher rate environment resulting in an increase in spreads and an increase in average loans and leases, partially offset by an increase in average deposits. The provision for credit losses increased $75 million, due to a combination of coverage level builds in the commercial real estate portfolio and C&I loan growth during 2023. Noninterest income increased $9 million, or 2%, primarily due to increases in capital markets fees, primarily due to higher advisory fees supported by the impact of the Capstone Partners acquisition, partially offset by lower interest rate derivative and syndication fees, and in trust and investment management services. Partially offsetting these increases was a decrease in service charges on deposit accounts. Noninterest expense increased $67 million, or 9%, primarily due to an increase in personnel costs reflecting the impact of the Capstone Partners acquisition and an increase in average full-time equivalent employees, partially offset by lower lease financing equipment depreciation, equipment expense, and outside data and other processing services.
Treasury / Other
The Treasury / Other function includes revenue and expense related to assets, liabilities, derivatives, and equity not directly assigned or allocated to one of the two 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.
Treasury / Other reported a net loss of $911 million in the nine-month period of 2023, a decrease of $1.0 billion, compared to the year-ago period, driven by a decrease in net interest income, partially offset by a decrease in provision for income tax. Treasury / Other net interest income decreased $1.4 billion, primarily due to an increase in FTP credit rates on deposits allocated to the business segments.
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; deterioration in business and economic conditions, including persistent inflation, supply chain issues or labor shortages, instability in global economic conditions and geopolitical matters, as well as volatility in financial markets; the impact of pandemics, including 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; the impacts related to or resulting from recent bank failures and other volatility, including potential increased regulatory requirements and costs, such as FDIC special assessments, long-term debt requirements and heightened capital requirements, and potential impacts to macroeconomic conditions, which could affect the ability of depository institutions, including us, to attract and retain depositors and to borrow or raise capital; unexpected outflows of uninsured deposits which may require us to sell investment securities at a loss; rising interest rates which could negatively impact the value of our portfolio of investment securities; the loss of value of our investment portfolio which could negatively impact market perceptions of us and could lead to deposit withdrawals; the effects of social media on market perceptions of us and banks generally; cybersecurity risks; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve; volatility and disruptions in global capital and credit markets; movements in interest rates; transition away from 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; 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 an FTE basis are considered non-GAAP financial measures. Management believes net interest income on an 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 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.
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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.
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 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 2022 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 critical accounting policies include the allowance for credit losses, fair value measurement, and goodwill. The policies, assumptions, and judgments related to fair value measurement and goodwill are described in the Critical Accounting Policies and Use of Significant Estimates section within the MD&A of Huntington’s 2022 Annual Report on Form 10-K. The following details the policies, assumption, and judgments related to the allowance for credit losses.
Allowance for Credit Losses
Our ACL at September 30, 2023 represents our current estimate of the lifetime credit losses expected from our loan and lease portfolio and our unfunded lending commitments.
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 unemployment rates and GDP. 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.
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However, to illustrate a hypothetical sensitivity analysis, management calculated a quantitative allowance using a 100% weighting applied to an adverse scenario. This scenario contemplates persisting inflation concerns at the Federal Reserve causing the federal funds rate to remain elevated through fourth quarter of 2023, ongoing banking industry uncertainty and the tightening of lending standards. Increased geopolitical tensions between China and Taiwan impact the supply chain for semiconductors. The threat of a wider conflict causes consumer confidence to fall. Additionally, the Russian invasion lasts longer than in the baseline scenario further impacting the supply chain. The combination of elevated inflation, banking industry uncertainty, increasing supply chain shortages, political tensions and the federal funds rate remaining elevated cause the stock market to fall. The economy falls into a recession in the fourth quarter of 2023. In response to the recession, the Federal Reserve starts lowering the federal funds rate in the first quarter of 2024 with significant rate reductions by the end of 2024. 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 5.5% and 7.8% at the end of 2023 and 2024, respectively. This forecast reflects unemployment rates that are approximately 1.8% and 3.6% higher than baseline scenario projections of 3.7% and 4.2%, respectively, for the same time periods.
To demonstrate the sensitivity to key economic parameters used in the calculation of our ACL at September 30, 2023, 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 $1.1 billion at September 30, 2023. This hypothetical increase is reflective of the sensitivity of the rate of change in the unemployment variable on our models.
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 or risks of inflation including a near-term recession, 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 and risks of inflation 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.

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Item 1: Financial Statements
Huntington Bancshares Incorporated
Consolidated Balance Sheets
(Unaudited)
At September 30, At December 31,
(dollar amounts in millions)20232022
Assets
Cash and due from banks
$1,602 $1,796 
Interest-bearing deposits at Federal Reserve Bank
9,833 4,908 
Interest-bearing deposits in banks
258 214 
Trading account securities
121 19 
Available-for-sale securities
21,863 23,423 
Held-to-maturity securities
16,148 17,052 
Other securities
718 854 
Loans held for sale (includes $601 and $520 respectively, measured at fair value)(1)
603 529 
Loans and leases (includes $175 and $185 respectively, measured at fair value)(1)
120,853 119,523 
Allowance for loan and lease losses(2,208)(2,121)
Net loans and leases
118,645 117,402 
Bank owned life insurance
2,757 2,753 
Accrued income and other receivables1,496 1,573 
Premises and equipment
1,096 1,156 
Goodwill
5,561 5,571 
Servicing rights and other intangible assets
718 712 
Other assets
5,231 4,944 
Total assets$186,650 $182,906 
Liabilities and shareholders’ equity
Liabilities
Deposits:
Demand deposits—noninterest-bearing$31,666 $38,242 
Interest-bearing117,201 109,672 
Total deposits148,867 147,914 
Short-term borrowings
681 2,027 
Long-term debt
12,822 9,686 
Other liabilities
5,750 5,510 
Total liabilities168,120 165,137 
Commitments and Contingent Liabilities (Note 15)
Shareholders’ Equity
Preferred stock
2,484 2,167 
Common stock
15 14 
Capital surplus
15,363 15,309 
Less treasury shares, at cost
(91)(80)
Accumulated other comprehensive income (loss)(3,622)(3,098)
Retained earnings
4,334 3,419 
Total Huntington shareholders’ equity18,483 17,731 
Non-controlling interest47 38 
Total equity18,530 17,769 
Total liabilities and equity$186,650 $182,906 
Common shares authorized (par value of $0.01)
2,250,000,000 2,250,000,000 
Common shares outstanding1,448,075,093 1,443,068,036 
Treasury shares outstanding7,391,874 6,322,052 
Preferred stock, authorized shares6,617,808 6,617,808 
Preferred shares outstanding882,500 557,500 
(1)Amounts represent loans for which Huntington has elected the fair value option. See Note 12 “Fair Values of Assets and Liabilities”.
See Notes to Unaudited Consolidated Financial Statements
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Huntington Bancshares Incorporated
Consolidated Statements of Income
(Unaudited)
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions, except per share data, share count in thousands)2023202220232022
Interest and fee income:
Loans and leases$1,764 $1,268 $5,022 $3,350 
Available-for-sale securities
Taxable259 165 743 378 
Tax-exempt29 20 78 52 
Held-to-maturity securities—taxable99 95 303 251 
Other securities—taxable19 7 40 18 
Other143 34 380 66 
Total interest income2,313 1,589 6,566 4,115 
Interest expense:
Deposits713 92 1,689 128 
Short-term borrowings17 22 151 36 
Long-term debt215 71 603 140 
Total interest expense945 185 2,443 304 
Net interest income1,368 1,404 4,123 3,811 
Provision for credit losses99 106 276 198 
Net interest income after provision for credit losses1,269 1,298 3,847 3,613 
Service charges on deposit accounts 97 93 267 295 
Card and payment processing income103 96 298 278 
Capital markets fees49 73 165 169 
Trust and investment management services62 60 192 188 
Mortgage banking income27 26 86 119 
Leasing revenue32 29 83 91 
Insurance income31 28 95 86 
Gain on sale of loans2 15 13 55 
Bank owned life insurance income18 13 50 41 
Net (losses) gains on sales of securities— — (4)— 
Other noninterest income88 65 271 160 
Total noninterest income509 498 1,516 1,482 
Personnel costs622 614 1,884 1,771 
Outside data processing and other services149 145 448 463 
Equipment65 60 193 202 
Net occupancy67 63 181 185 
Marketing29 24 86 69 
Professional services27 18 64 56 
Deposit and other insurance expense25 15 68 53 
Amortization of intangibles12 13 38 40 
Lease financing equipment depreciation6 11 22 36 
Other noninterest expense88 90 242 249 
Total noninterest expense1,090 1,053 3,226 3,124 
Income before income taxes688 743 2,137 1,971 
Provision for income taxes136 146 414 371 
Income after income taxes552 597 1,723 1,600 
Income attributable to non-controlling interest5 3 15 7 
Net income attributable to Huntington547 594 1,708 1,593 
Dividends on preferred shares37 29 106 85 
Net income applicable to common shares$510 $565 $1,602 $1,508 
Average common shares—basic1,447,993 1,442,591 1,445,878 1,440,740 
Average common shares—diluted1,467,611 1,465,083 1,467,537 1,464,234 
Per common share:
Net income—basic$0.35 $0.39 $1.11 $1.05 
Net income—diluted0.35 0.39 1.09 1.03 
See Notes to Unaudited Consolidated Financial Statements
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Huntington Bancshares Incorporated
Consolidated Statements of Comprehensive Income
(Unaudited)
 Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Net income attributable to Huntington$547 $594 $1,708 $1,593 
Other comprehensive income (loss), net of tax:
Net unrealized gains (losses) on available-for-sale securities(633)(971)(529)(2,970)
Net impact of fair value hedges on available-for-sale securities67 250 34 705 
Net change related to cash flow hedges on loans(50)(456)(30)(782)
Translation adjustments, net of hedges(1)(4)— (6)
Change in accumulated unrealized gains for pension and other post-retirement obligations1 3 1 6 
Other comprehensive income (loss), net of tax(616)(1,178)(524)(3,047)
Comprehensive income (loss) attributable to Huntington (69)(584)1,184 (1,454)
Comprehensive income attributed to non-controlling interest5 3 15 7 
Comprehensive income (loss)$(64)$(581)$1,199 $(1,447)
See Notes to Unaudited Consolidated Financial Statements
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Huntington Bancshares Incorporated
Consolidated Statements of Changes in Shareholders’ Equity
(Unaudited)
(dollar amounts in millions, share amounts in thousands)Preferred StockCommon StockCapital SurplusTreasury StockAOCI
Retained Earnings
Huntington Shareholders’ EquityNon-controllingTotal
AmountSharesAmountSharesAmountInterestEquity
Three months ended September 30, 2023
Balance, beginning of period$2,484 1,455,312 $15 $15,335 (7,430)$(92)$(3,006)$4,052 $18,788 $50 $18,838 
Net income547 547 5 552 
Other comprehensive income (loss), net of tax(616)(616)(616)
Cash dividends declared:
Common ($0.155 per share)
(228)(228)(228)
Preferred(37)(37)(37)
Recognition of the fair value of share-based compensation26 26 26 
Other share-based compensation activity155 — 2 — 2 2 
Other— 38 1 — — 1 (8)(7)
Balance, end of period$2,484 1,455,467 $15 $15,363 (7,392)$(91)$(3,622)$4,334 $18,483 $47 $18,530 
Three months ended September 30, 2022
Balance, beginning of period$2,167 1,448,885 $14 $15,261 (6,691)$(85)$(2,098)$2,691 $17,950 $29 $17,979 
Net income594 594 3 597 
Other comprehensive (loss) income, net of tax(1,178)(1,178)(1,178)
Cash dividends declared:
Common ($0.155 per share)
(227)(227)(227)
Preferred(29)(29)(29)
Recognition of the fair value of share-based compensation19 19 19 
Other share-based compensation activity191 — 2 — 2 2 
Other— 349 5 — 5 3 8 
Balance, end of period$2,167 1,449,076 $14 $15,282 (6,342)$(80)$(3,276)$3,029 $17,136 $35 $17,171 
See Notes to Unaudited Consolidated Financial Statements





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(dollar amounts in millions, share amounts in thousands)Preferred StockCommon StockCapital SurplusTreasury StockAOCIRetained EarningsHuntington Shareholders’ EquityNon-controlling InterestTotal Equity
AmountSharesAmountSharesAmount
Nine months ended September 30, 2023
Balance, beginning of period$2,167 1,449,390 $14 $15,309 (6,322)$(80)$(3,098)$3,419 $17,731 $38 $17,769 
Net income1,708 1,708 15 1,723 
Other comprehensive income (loss), net of tax(524)(524)(524)
Net proceeds from issuance of Series J Preferred Stock317 317 317 
Cash dividends declared:
Common ($0.465 per share)
(683)(683)(683)
Preferred(106)(106)(106)
Recognition of the fair value of share-based compensation73 73 73 
Other share-based compensation activity6,077 1 (19)(4)(22)(22)
Other— (1,070)(11)— — (11)(6)(17)
Balance, end of period$2,484 1,455,467 $15 $15,363 (7,392)$(91)$(3,622)$4,334 $18,483 $47 $18,530 
Nine months ended September 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 income1,593 1,593 7 1,600 
Other comprehensive income (loss), net of tax(3,047)(3,047)(3,047)
Cash dividends declared:
Common ($0.465 per share)
(681)(681)(681)
Preferred(85)(85)(85)
Recognition of the fair value of share-based compensation82 82 82 
Other share-based compensation activity5,036 — (22)— (22)(22)
Other— (44)(1)— (1)7 6 
Balance, end of period$2,167 1,449,076 $14 $15,282 (6,342)$(80)$(3,276)$3,029 $17,136 $35 $17,171 
See Notes to Unaudited Consolidated Financial Statements
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Huntington Bancshares Incorporated
Consolidated Statements of Cash Flows
(Unaudited)
 Nine months ended September 30,
(dollar amounts in millions)20232022
Operating activities
Net income$1,723 $1,600 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses276 198 
Depreciation and amortization558 355 
Share-based compensation expense73 82 
Deferred income tax expense12 164 
Net change in:
Trading account securities(102)15 
Loans held for sale(159)464 
Other assets(915)(1,109)
Other liabilities289 893 
Other, net4 8 
Net cash provided by operating activities1,759 2,670 
Investing activities
Change in interest bearing deposits in banks(24)287 
Net cash paid from business combinations
— (223)
Proceeds from:
Maturities and calls of available-for-sale securities1,743 3,298 
Maturities and calls of held-to-maturity securities1,132 2,306 
Maturities and calls of other securities596 829 
Sales of available-for-sale securities738 — 
Sales of other securities143 9 
Purchases of available-for-sale securities(1,710)(6,365)
Purchases of held-to-maturity securities(255)(2,845)
Purchases of other securities(603)(1,009)
Net proceeds from sales of portfolio loans and leases355 937 
Principal payments received under direct finance and sales-type leases1,411 1,389 
Net loan and lease activity, excluding sales and purchases(3,273)(8,375)
Purchases of premises and equipment(80)(165)
Purchases of loans and leases(52)(569)
Net accrued income and other receivables activity126 96 
Other, net65 54 
Net cash (used in) provided by investing activities312 (10,346)
Financing activities
Increase in deposits
953 3,050 
Increase (decrease) in short-term borrowings
(1,066)783 
Net proceeds from issuance of long-term debt14,897 5,379 
Maturity/redemption of long-term debt(11,632)(1,902)
Dividends paid on preferred stock(97)(84)
Dividends paid on common stock(674)(673)
Net proceeds from issuance of preferred stock317 — 
Other, net(38)(23)
Net cash provided by financing activities2,660 6,530 
Increase (decrease) in cash and cash equivalents4,731 (1,146)
Cash and cash equivalents at beginning of period6,704 5,522 
Cash and cash equivalents at end of period$11,435 $4,376 
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 Nine months ended September 30,
(dollar amounts in millions)20232022
Supplemental disclosures:
Interest paid$2,342 $269 
Income taxes (received) paid6 (113)
Non-cash activities
Loans transferred to held-for-sale from portfolio336 764 
Loans transferred to portfolio from held-for-sale18 65 
Transfer of securities from available-for-sale to held-to-maturity — 4,225 
See Notes to Unaudited Consolidated Financial Statements


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Huntington Bancshares Incorporated
Notes to Unaudited Consolidated Financial Statements
1. BASIS OF PRESENTATION
The accompanying Unaudited 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 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 2022 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.
During the 2023 second quarter, Huntington revised its process for assessing and monitoring the risk and performance of non-real estate secured commercial loans, primarily loans to REITs. These loans were reclassified from commercial real estate to the commercial and industrial loan category to align reporting with this process revision. All prior period results have been adjusted to conform to the current presentation.
During the 2023 second quarter, Huntington completed an organizational realignment and now reports on two business segments: Consumer & Regional Banking and Commercial Banking. The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense. Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The organizational realignment primarily involved consolidating our previously reported Consumer and Business Banking, Vehicle Finance and RBHPCG, into one new business segment called Consumer & Regional Banking. Prior period results have been adjusted to conform to the new segment presentation. See Note 16 “Segment Reporting” for a description of our business segments.
Effective January 1, 2023, Huntington adopted ASU 2022-02 Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings (TDR) and Vintage Disclosures, which removed the existing measurement and disclosure requirements for TDR loans and added additional disclosure requirements related to modifications provided to borrowers experiencing financial difficulty. Prior to adoption a change in contractual terms of a loan where a borrower was experiencing financial difficulty and received a concession not available through other sources the loans was required to be disclosed as a TDR, whereas now a borrower that is experiencing financial difficulty and receives a modification in the form of principal forgiveness, interest rate reduction, an other-than-insignificant payment delay or a term extension in the current period needs to be disclosed. Huntington may modify loans to borrowers experiencing financial difficulty as a way of managing risk and mitigating credit loss from the borrower. Huntington may make various types of modifications and may in certain circumstances use a combination of modification types in order to mitigate future loss. The amount of defined modifications given to borrowers experiencing financial difficulty is disclosed in the Notes to the Consolidated Financial Statements, along with the financial impact of those modifications.
In conjunction with applicable accounting standards, all material subsequent events have been either recognized in the Unaudited Consolidated Financial Statements or disclosed in the Notes to Unaudited Consolidated Financial Statements. There were no material subsequent events to disclose for the current period.
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2. ACCOUNTING STANDARDS UPDATE
Accounting standards adopted in the current period
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 while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. The ASU also requires disclosure of current period gross charge-offs by year of origination for financing receivables and net investments in leases.
•Management adopted the guidance during the first quarter 2023.
•The ASU has been applied prospectively, except the portion of the standard related to the recognition and measurement of TDRs where we elected to use a modified retrospective transition method.
•The adoption did not result in a material impact on Huntington’s Unaudited Consolidated Financial Statements.
Accounting standards yet to be adopted
StandardSummary of guidanceEffects on financial statements
ASU 2023-02 Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Issued: March 2023
•Permits the election of the proportional amortization method for any tax equity investment that meets specific criteria.
•Requires that the election be made on a tax-credit-program-by-tax-credit-program basis.
•Receipt of tax credits must be accounted for using the flow through method.
•Required that a liability be recorded for delayed equity contributions.
•Expands disclosure requirements for the nature of investments and financial statement effect.
•Effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
•Early adoption is permitted in any interim period.
•If adopted in an interim period, it shall be adopted as if adopted at the beginning of the fiscal year.
•The amendments can be applied in retrospective or modified retrospective basis, with a cumulative effect adjustment reflected in retained earnings.
•Huntington does not expect adoption of the standard to have a material impact on its Unaudited Consolidated Financial Statements.
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3. 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 September 30, 2023 and December 31, 2022:
Unrealized
(dollar amounts in millions)
Amortized
Cost (1)(2)
Gross
Gains		Gross
Losses		Fair Value
At September 30, 2023
Available-for-sale securities:
U.S. Treasury$5 $— $— $5 
Federal agencies:
Residential CMO3,661 1 (531)3,131 
Residential MBS13,445 — (2,529)10,916 
Commercial MBS2,544 — (815)1,729 
Other agencies168 — (9)159 
Total U.S. Treasury, federal agency, and other agency securities
19,823 1 (3,884)15,940 
Municipal securities3,702 1 (226)3,477 
Private-label CMO133 — (15)118 
Asset-backed securities391 — (40)351 
Corporate debt2,209 109 (345)1,973 
Other securities/Sovereign debt4 — — 4 
Total available-for-sale securities$26,262 $111 $(4,510)$21,863 
Held-to-maturity securities:
Federal agencies:
Residential CMO$4,881 $— $(839)$4,042 
Residential MBS9,578 — (1,691)7,887 
Commercial MBS1,580 — (300)1,280 
Other agencies107 — (9)98 
Total federal agency and other agency securities16,146 — (2,839)13,307 
Municipal securities2 — — 2 
Total held-to-maturity securities$16,148 $— $(2,839)$13,309 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock$156 $— $— $156 
Federal Reserve Bank stock517 — — 517 
Equity securities15 — — 15 
Other securities, at fair value:
Mutual funds29 — — 29 
Equity securities1 — — 1 
Total other securities$718 $— $— $718 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At September 30, 2023, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $70 million and $37 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 $916 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)(2)		Gross
Gains		Gross
Losses		Fair Value
At December 31, 2022
Available-for-sale securities:
U.S. Treasury$103 $— $— $103 
Federal agencies:
Residential CMO3,336 — (422)2,914 
Residential MBS14,349 4 (2,090)12,263 
Commercial MBS2,565 — (612)1,953 
Other agencies190 1 (9)182 
Total U.S. Treasury, federal agency, and other agency securities20,543 5 (3,133)17,415 
Municipal securities3,527 1 (238)3,290 
Private-label CMO146 — (18)128 
Asset-backed securities416 — (44)372 
Corporate debt2,467 132 (385)2,214 
Other securities/Sovereign debt4 — — 4 
Total available-for-sale securities$27,103 $138 $(3,818)$23,423 
Held-to-maturity securities:
Federal agencies:
Residential CMO$4,970 $4 $(714)$4,260 
Residential MBS10,295 — (1,375)8,920 
Commercial MBS1,652 — (204)1,448 
Other agencies133 — (9)124 
Total federal agency and other agency securities17,050 4 (2,302)14,752 
Municipal securities2 — — 2 
Total held-to-maturity securities$17,052 $4 $(2,302)$14,754 
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock$312 $— $— $312 
Federal Reserve Bank stock500 — — 500 
Equity securities10 — — 10 
Other securities, at fair value:
Mutual funds31 — — 31 
Equity securities1 — — 1 
Total other securities$854 $— $— $854 
(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At December 31, 2022, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $64 million and $39 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 $849 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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The following table provides the amortized cost and fair value of securities by contractual maturity at September 30, 2023 and December 31, 2022. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.
At September 30, 2023At December 31, 2022
(dollar amounts in millions)
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Available-for-sale securities:
Under 1 year$434 $425 $518 $511 
After 1 year through 5 years2,636 2,437 2,182 2,033 
After 5 years through 10 years2,537 2,321 3,106 2,814 
After 10 years20,655 16,680 21,297 18,065 
Total available-for-sale securities$26,262 $21,863 $27,103 $23,423 
Held-to-maturity securities:
Under 1 year$1 $1 $— $— 
After 1 year through 5 years52 49 72 68 
After 5 years through 10 years72 66 71 66 
After 10 years16,023 13,193 16,909 14,620 
Total held-to-maturity securities$16,148 $13,309 $17,052 $14,754 
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 September 30, 2023 and December 31, 2022:
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
At September 30, 2023
Available-for-sale securities:
Federal agencies:
Residential CMO$544 $(16)$2,587 $(515)$3,131 $(531)
Residential MBS456 (21)10,461 (2,508)10,917 (2,529)
Commercial MBS— — 1,729 (815)1,729 (815)
Other agencies16 — 73 (9)89 (9)
Total federal agency and other agency securities1,016 (37)14,850 (3,847)15,866 (3,884)
Municipal securities713 (29)2,665 (197)3,378 (226)
Private-label CMO— — 95 (15)95 (15)
Asset-backed securities— — 351 (40)351 (40)
Corporate debt— — 1,973 (345)1,973 (345)
Total temporarily impaired available-for-sale securities$1,729 $(66)$19,934 $(4,444)$21,663 $(4,510)
Held-to-maturity securities:
Federal agencies:
Residential CMO$561 $(16)$3,481 $(823)$4,042 $(839)
Residential MBS150 (7)7,737 (1,684)7,887 (1,691)
Commercial MBS— — 1,280 (300)1,280 (300)
Other agencies— — 98 (9)98 (9)
Total federal agency and other agency securities711 (23)12,596 (2,816)13,307 (2,839)
Total temporarily impaired held-to-maturity securities$711 $(23)$12,596 $(2,816)$13,307 $(2,839)
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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
At December 31, 2022
Available-for-sale securities:
Federal agencies:
Residential CMO$2,096 $(224)$818 $(198)$2,914 $(422)
Residential MBS2,455 (286)9,490 (1,804)11,945 (2,090)
Commercial MBS1,090 (249)863 (363)1,953 (612)
Other agencies40 (1)56 (8)96 (9)
Total federal agency and other agency securities5,681 (760)11,227 (2,373)16,908 (3,133)
Municipal securities2,298 (174)807 (64)3,105 (238)
Private-label CMO64 (13)43 (5)107 (18)
Asset-backed securities174 (10)199 (34)373 (44)
Corporate debt727 (105)1,487 (280)2,214 (385)
Total temporarily impaired available-for-sale securities$8,944 $(1,062)$13,763 $(2,756)$22,707 $(3,818)
Held-to-maturity securities:
Federal agencies:
Residential CMO$1,702 $(238)$2,283 $(476)$3,985 $(714)
Residential MBS4,151 (462)4,711 (913)8,862 (1,375)
Commercial MBS1,201 (154)247 (50)1,448 (204)
Other agencies124 (9)— — 124 (9)
Total federal agency and other agency securities7,178 (863)7,241 (1,439)14,419 (2,302)
Total temporarily impaired held-to-maturity securities$7,178 $(863)$7,241 $(1,439)$14,419 $(2,302)
At September 30, 2023 and December 31, 2022, the carrying value of investment securities pledged: (i) to secure certain uninsured deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements, and (ii) to support borrowing capacity totaled $32.6 billion and $26.9 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 September 30, 2023 or December 31, 2022. At September 30, 2023, all HTM debt securities are considered investment grade. In addition, there were no HTM debt securities considered past due at September 30, 2023.
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 September 30, 2023, Huntington has concluded that 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 September 30, 2023 or December 31, 2022. A $4 million charge-off was recognized during the 2022 first quarter for one municipal bond classified as an AFS debt security.
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4. LOANS AND LEASES
The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2023 and December 31, 2022.
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Commercial loan and lease portfolio:
Commercial and industrial$49,422 $48,121 
Commercial real estate12,668 13,640 
Lease financing5,161 5,252 
Total commercial loan and lease portfolio67,251 67,013 
Consumer loan portfolio:
Residential mortgage23,427 22,226 
Automobile12,724 13,154 
Home equity10,118 10,375 
RV and marine5,937 5,376 
Other consumer1,396 1,379 
Total consumer loan portfolio53,602 52,510 
Total loans and leases (1)(2)120,853 119,523 
Allowance for loan and lease losses(2,208)(2,121)
Net loans and leases$118,645 $117,402 
(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) premium of $(150) million and $3 million at September 30, 2023 and December 31, 2022, respectively.
(2)The total amount of accrued interest recorded for these loans and leases at September 30, 2023, was $323 million and $209 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2022, was $274 million and $186 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in accrued income and other receivables within the Consolidated Balance Sheets.
Lease Financing
The following table presents net investments in lease financing receivables by category at September 30, 2023 and December 31, 2022.
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Lease payments receivable$4,867 $4,916 
Estimated residual value of leased assets805 788 
Gross investment in lease financing receivables5,672 5,704 
Deferred origination costs53 46 
Deferred fees, unearned income and other(564)(498)
Total lease financing receivables$5,161 $5,252 
The carrying value of residual values guaranteed was $481 million and $466 million as of September 30, 2023 and December 31, 2022, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at September 30, 2023, totaled $4.9 billion and were due as follows: $813 million in 2023, $792 million in 2024, $722 million in 2025, $778 million in 2026, $764 million in 2027, and $998 million thereafter. Interest income recognized for these types of leases was $73 million and $41 million for the three-month periods ended September 30, 2023 and 2022, respectively. For the nine-month periods ended September 30, 2023 and 2022, interest income recognized for these types of leases was $211 million and $117 million, respectively.
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Nonaccrual and Past Due Loans and Leases
The following table presents NALs by class at September 30, 2023 and December 31, 2022:
At September 30, 2023At December 31, 2022
(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$48 $314 $49 $288 
Commercial real estate69 102 63 92 
Lease financing3 14 — 18 
Residential mortgage— 75 — 90 
Automobile— 4 — 4 
Home equity— 82 — 76 
RV and marine— 1 — 1 
Total nonaccrual loans and leases$120 $592 $112 $569 
The following tables present an aging analysis of loans and leases, by class at September 30, 2023 and December 31, 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
At September 30, 2023
Commercial and industrial$45 $31 $81 $157 $49,265 $— $49,422 $— 
Commercial real estate21 5 27 53 12,615 — 12,668 — 
Lease financing39 18 9 66 5,095 — 5,161 7 (2)
Residential mortgage230 68 170 468 22,785 174 23,427 124 (3)
Automobile81 20 11 112 12,612 — 12,724 8 
Home equity56 28 76 160 9,957 1 10,118 19 
RV and marine17 5 3 25 5,912 — 5,937 2 
Other consumer11 5 3 19 1,377 — 1,396 3 
Total loans and leases$500 $180 $380 $1,060 $119,618 $175 $120,853 $163 
At December 31, 2022
Commercial and industrial$53 $19 $108 $180 $47,941 $— $48,121 $23 
(4)
Commercial real estate2 1 9 12 13,628 — 13,640 — 
Lease financing36 18 10 64 5,188 — 5,252 9 (2)
Residential mortgage246 69 199 514 21,528 184 22,226 146 (3)
Automobile88 20 11 119 13,035 — 13,154 9 
Home equity56 30 66 152 10,222 1 10,375 15 
RV and marine15 5 3 23 5,353 — 5,376 3 
Other consumer13 3 3 19 1,360 — 1,379 2 
Total loans and leases$509 $165 $409 $1,083 $118,255 $185 $119,523 $207 
(1)NALs are included in this aging analysis based on the loan’s past due status.
(2)Amounts include Huntington Technology Finance administrative lease delinquencies.
(3)Amounts include mortgage loans insured by U.S. government agencies.
(4)Amounts include SBA loans and leases.
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Credit Quality Indicators
See Note 5 “Loans and Leases” to the Consolidated Financial Statements appearing in Huntington’s 2022 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.
For all classes within the consumer loan portfolios, borrower credit bureau scores are monitored as an indicator of credit quality. 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 September 30, 2023 and December 31, 2022 respectively:
At September 30, 2023
Term Loans Amortized Cost Basis by Origination YearRevolver Total at Amortized Cost BasisRevolver Total Converted to Term Loans
(dollar amounts in millions)20232022202120202019PriorTotal
Commercial and industrial
Credit Quality Indicator (1):
Pass$12,138 $11,025 $4,096 $2,354 $1,381 $1,593 $13,929 $5 $46,521 
OLEM98 214 81 31 15 13 344 — 796 
Substandard306 324 193 159 151 230 732 — 2,095 
Doubtful9 1 — — — — — — 10 
Total Commercial and industrial$12,551 $11,564 $4,370 $2,544 $1,547 $1,836 $15,005 $5 $49,422 
Commercial real estate
Credit Quality Indicator (1):
Pass$1,200 $3,562 $2,050 $1,154 $1,294 $1,469 $533 $— $11,262 
OLEM117 290 116 53 33 25 1 — 635 
Substandard152 234 103 18 133 115 16 — 771 
Total Commercial real estate$1,469 $4,086 $2,269 $1,225 $1,460 $1,609 $550 $— $12,668 
Lease financing
Credit Quality Indicator (1):
Pass$1,449 $1,479 $933 $680 $298 $155 $— $— $4,994 
OLEM4 10 9 9 3 1 — — 36 
Substandard8 49 38 13 14 8 — — 130 
Doubtful— — 1 — — — — — 1 
Total Lease financing$1,461 $1,538 $981 $702 $315 $164 $— $— $5,161 
Residential mortgage
Credit Quality Indicator (2):
750+$1,609 $3,972 $6,077 $3,330 $769 $2,253 $— $— $18,010 
650-749882 1,023 970 515 188 794 — — 4,372 
<65054 72 81 64 86 514 — — 871 
Total Residential mortgage
$2,545 $5,067 $7,128 $3,909 $1,043 $3,561 $— $— $23,253 
Automobile
Credit Quality Indicator (2):
750+$1,993 $2,158 $1,709 $862 $457 $135 $— $— $7,314 
650-7491,250 1,423 1,007 426 205 78 — — 4,389 
<650164 306 294 134 75 48 — — 1,021 
Total Automobile
$3,407 $3,887 $3,010 $1,422 $737 $261 $— $— $12,724 
Home equity
Credit Quality Indicator (2):
750+$322 $443 $530 $553 $18 $261 $4,490 $231 $6,848 
650-74999 103 68 59 7 105 2,046 231 2,718 
<6502 6 4 3 2 45 360 129 551 
Total Home equity$423 $552 $602 $615 $27 $411 $6,896 $591 $10,117 
RV and marine
Credit Quality Indicator (2):
750+$1,070 $1,007 $899 $616 $308 $647 $— $— $4,547 
650-749273 256 260 164 95 222 — — 1,270 
<6504 13 22 19 15 47 — — 120 
Total RV and marine$1,347 $1,276 $1,181 $799 $418 $916 $— $— $5,937 
Other consumer
Credit Quality Indicator (2):
750+$152 $89 $44 $22 $20 $53 $398 $3 $781 
650-74975 48 19 7 6 13 366 14 548 
<6504 6 3 1 2 1 37 13 67 
Total Other consumer$231 $143 $66 $30 $28 $67 $801 $30 $1,396 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades.
(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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At December 31, 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$18,092 $6,742 $3,332 $2,107 $1,156 $1,186 $13,060 $3 $45,678 
OLEM108 139 72 21 49 26 113 — 528 
Substandard368 183 203 212 142 256 550 — 1,914 
Doubtful— — — — — 1 — — 1 
Total Commercial and industrial$18,568 $7,064 $3,607 $2,340 $1,347 $1,469 $13,723 $3 $48,121 
Commercial real estate
Credit Quality Indicator (1):
Pass$4,022 $3,115 $1,562 $1,662 $829 $1,020 $519 $— $12,729 
OLEM61 53 1 43 6 9 — — 173 
Substandard231 116 92 74 84 140 1 — 738 
Total Commercial real estate$4,314 $3,284 $1,655 $1,779 $919 $1,169 $520 $— $13,640 
Lease financing
Credit Quality Indicator (1):
Pass$1,930 $1,291 $952 $447 $186 $143 $— $— $4,949 
OLEM32 9 15 18 6 3 — — 83 
Substandard65 37 74 24 9 11 — — 220 
Total Lease financing$2,027 $1,337 $1,041 $489 $201 $157 $— $— $5,252 
Residential mortgage
Credit Quality Indicator (2):
750+$3,666 $6,274 $3,566 $846 $469 $2,070 $— $— $16,891 
650-7491,394 1,172 617 211 137 777 — — 4,308 
<65049 68 61 95 90 480 — — 843 
Total Residential mortgage$5,109 $7,514 $4,244 $1,152 $696 $3,327 $— $— $22,042 
Automobile
Credit Quality Indicator (2):
750+$2,770 $2,212 $1,243 $777 $289 $98 $— $— $7,389 
650-7491,944 1,508 683 367 162 52 — — 4,716 
<650307 352 173 115 67 35 — — 1,049 
Total Automobile$5,021 $4,072 $2,099 $1,259 $518 $185 $— $— $13,154 
Home equity
Credit Quality Indicator (2):
750+$463 $573 $611 $23 $20 $301 $4,787 $252 $7,030 
650-749131 88 68 9 8 122 2,129 261 2,816 
<6503 3 3 2 2 51 335 129 528 
Total Home equity$597 $664 $682 $34 $30 $474 $7,251 $642 $10,374 
RV and marine
Credit Quality Indicator (2):
750+$1,148 $1,031 $731 $361 $354 $438 $— $— $4,063 
650-749290 315 200 118 113 169 — — 1,205 
<6505 18 15 17 17 36 — — 108 
Total RV and marine$1,443 $1,364 $946 $496 $484 $643 $— $— $5,376 
Other consumer
Credit Quality Indicator (2):
750+$207 $64 $35 $34 $13 $52 $393 $3 $801 
650-74971 30 12 15 4 14 355 16 517 
<6503 3 2 3 1 2 33 14 61 
Total Other consumer$281 $97 $49 $52 $18 $68 $781 $33 $1,379 
(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades.
(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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The following tables present the gross charge-offs of loans and leases by vintage.
Term Loans Gross Charge-offs by Origination Year
Revolver Gross Charge-offs
Revolver Converted to Term Loans Gross Charge-offs
(dollar amounts in millions)20232022202120202019PriorTotal
Three months ended September 30, 2023
Commercial and industrial$2 $21 $6 $6 $15 $1 $3 $— $54 
Commercial real estate5 6 — — 10 — 7 — 28 
Lease Financing— 3 — — — — — — 3 
Residential mortgage— — — — — 1 — — 1 
Automobile1 5 3 1 1 1 — — 12 
Home equity— — — — — 1 — 1 2 
RV and marine— — 1 1 1 2 — — 5 
Other consumer5 5 3 1 1 4 — 7 26 
Total $13 $40 $13 $9 $28 $10 $10 $8 $131 
Nine months ended September 30, 2023
Commercial and industrial$4 $39 $23 $13 $26 $11 $7 $1 $124 
Commercial real estate5 9 19 — 15 5 7 — 60 
Lease Financing— 3 1 1 — 1 — — 6 
Residential mortgage— — 1 — — 3 — — 4 
Automobile1 11 11 5 4 3 — — 35 
Home equity— — — — — 1 1 4 6 
RV and marine— 1 2 2 2 5 — — 12 
Other consumer8 18 11 4 4 10 — 20 75 
Total $18 $81 $68 $25 $51 $39 $15 $25 $322 
Modifications to Debtors Experiencing Financial Difficulty
Effective January 1, 2023, Huntington adopted ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information on the adoption, refer to both Note 1 “Basis of Presentation” and Note 2 “Accounting Standards Update.”
Huntington will modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations.
A debtor is considered to be experiencing financial difficulty when there is significant doubt about the debtor’s ability to make required payments on the debt or to get equivalent financing from another creditor at a market rate for similar debt. A loan placed on nonaccrual because the borrower is experiencing financial difficulty may be returned to accrual status when all contractually due interest and principal has been paid and the borrower demonstrates the financial capacity to continue to pay as agreed, with the risk of loss diminished.
Reported Modification Types
Modifications in the form of principal forgiveness, an interest rate reduction, an other than insignificant payment delay or a term extension that have occurred in the current reporting period to a borrower experiencing financial difficulty are disclosed along with the financial impact of the modifications.
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Huntington will generally try other forms of relief before principal forgiveness but would define any contractual reduction in the amount of principal due without receiving payment or assets as forgiveness. For the purpose of the disclosure Huntington considers any contractual change in interest rate that results in the borrower receiving a below market rate to be an interest rate reduction. Many factors can go into what is considered an other than insignificant payment delay such as the significance of the restructured payment amount relative to the normal loan payment or the relative significance of the delay to the original loan terms. Generally, Huntington would consider any delay in payment of greater than 90 days in the last 12 months to be significant. For the purpose of the disclosure modification of contingent payment features or covenants that would have accelerated payment are not considered term extensions.
Following is a description of what is considered a borrower experiencing financial difficulty by the different loan types:
Commercial loan modifications – Our strategy involving commercial borrowers generally includes working with these borrowers to allow them time to improve their financial position and remain a Huntington customer through restructuring their notes or to restructure elsewhere if necessary. Borrowers that are rated substandard or worse in accordance with the regulatory definition, or that cannot otherwise restructure at market terms and conditions, are considered to be experiencing financial difficulty. A subsequent restructuring or modification of a loan may occur when either the loan matures according to the terms of the modified agreement, or the borrower requests a change to the loan agreements. It is subjected to the normal underwriting standards and processes for other similar credit extensions, both new and existing. The restructured note is evaluated to determine if it is considered a new loan or a continuation of the prior loan. 
Consumer loan modifications – Consumer loans in which a borrower requires a modification as a result of negative changes to their financial condition or to avoid default, generally indicate the borrower is experiencing financial difficulty. The primary modifications made to consumer loans are amortization, maturity date and interest rate changes. Consumer borrowers identified as experiencing financial difficulty are unable to refinance their loans through the Company’s normal origination channels or through other independent sources. Most, but not all, of the loans may be delinquent. The Company’s primary loan categories that receive modifications are residential mortgage, automobile, home equity, RV and marine, and other consumer loans.
Impact on Credit Quality of Borrowers Experiencing Financial Difficulty
Huntington’s ALLL is influenced by loan level characteristics that inform the assessed propensity to default. As such, the provision for credit losses is impacted primarily by changes in such loan level characteristics, such as payment performance. Commercial borrowers experiencing financial difficulty are risk rated to reflect the increase in default characteristics so that that the ALLL reflects the future risk of loss. Borrowers experiencing financial difficulty can be classified as either accrual or nonaccrual loans.
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The following table summarizes the amortized cost basis of loans modified during the reporting period to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of modification.
Amortized Cost
(dollar amounts in millions)Interest rate reductionTerm extensionPayment deferralCombo - interest rate reduction and term extensionTotal% of total loan class (1)
Three months ended September 30, 2023
Commercial and industrial$1 $147 $— $1 $149 0.30 %
Commercial real estate— 52 — 4 56 0.44 
Residential mortgage— 15 — 1 16 0.07 
Automobile— 4 — — 4 0.03 
Home equity— — — 3 3 0.03 
Total loans to borrowers experiencing financial difficulty in which modifications were made$1 $218 $— $9 $228 0.19 %
Nine months ended September 30, 2023
Commercial and industrial$33 $291 $— $4 $328 0.66 %
Commercial real estate— 138 — 4 142 1.12 
Residential mortgage— 50 2 3 55 0.23 
Automobile— 11 — 1 12 0.09 
Home equity— 1 — 8 9 0.09 
RV and marine— 1 — — 1 0.02 
Other consumer1 — — — 1 0.07 
Total loans to borrowers experiencing financial difficulty in which modifications were made$34 $492 $2 $20 $548 0.45 %
(1)Represents the amortized cost of loans modified during the reporting period as a percentage of the period-end loan balance by class.
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The following table describes the financial effect of the modification made to borrowers experiencing financial difficulty.
Interest Rate Reduction (1)
Term Extension (1)
Weighted-average contractual interest rateWeighted-average years added to the life
FromTo
Three months ended September 30, 2023
Commercial and industrial10.56 %8.11 %1.0
Commercial real estate13.78 9.12 0.6
Residential mortgage6.98 5.14 8.4
Nine months ended September 30, 2023
Commercial and industrial7.96 %7.25 %1.0
Commercial real estate13.76 9.12 0.7
Residential mortgage6.04 4.59 7.6
Automobile6.53 6.18 2.0
Home equity8.71 6.04 14.6
(1)     Certain disclosures related to financial effects of modifications do not include those deemed to be immaterial.
The performance of loans made to borrowers experiencing financial difficulty in which modifications were made is closely monitored to understand the effectiveness of modification efforts. Loans are considered to be in payment default at 90 or more days past due. The following table depicts the performance of loans that have been modified during the reporting period.
At September 30, 2023
Past Due
(dollar amounts in millions)30-59
 Days		60-89
 Days		90 or 
more days		TotalCurrentTotal
Commercial and industrial$2 $1 $3 $6 $322 $328 
Commercial real estate— 5 1 6 136 142 
Residential mortgage10 5 7 22 33 55 
Automobile1 — — 1 11 12 
Home equity— — 1 1 8 9 
RV and marine— — — — 1 1 
Other consumer— — — — 1 1 
Total loans to borrowers experiencing financial difficulty in which modifications were made in the nine months ended September 30, 2023
$13 $11 $12 $36 $512 $548 
TDR Loans
The following provides additional disclosures previously required by ASC Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, related to the three-month and nine-month period ended September 30, 2022.
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 1 “Significant Accounting Policies” and Note 5 “Loans and Leases” to the Consolidated Financial Statements appearing in Huntington’s 2022 Annual Report on Form 10-K for additional discussion of TDRs.
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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 nine-month period ended September 30, 2022.
New Troubled Debt Restructurings (1)
Number of
Contracts		Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)Interest rate reductionAmortization or maturity date changeChapter 7 bankruptcyOtherTotal
Three months ended September 30, 2022
Commercial and industrial81 $39 $22 $— $13 $74 
Commercial real estate7 5 10 — — 15 
Residential mortgage184 — 25 1 — 26 
Automobile697 — 6 1 — 7 
Home equity54 — 1 — — 1 
RV and marine31 — 1 1 — 2 
Other consumer38 — — — — — 
Total new TDRs1,092 $44 $65 $3 $13 $125 
Nine months ended September 30, 2022
Commercial and industrial222 $69 $37 $— $14 $120 
Commercial real estate12 42 10 — — 52 
Residential mortgage629 — 85 5 — 90 
Automobile1,791 — 13 2 — 15 
Home equity166 — 5 3 — 8 
RV and marine105 — 2 1 — 3 
Other consumer91 — — — — — 
Total new TDRs3,016 $111 $152 $11 $14 $288 
(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 September 30, 2023 and December 31, 2022, these borrowings and advances are secured by $101.5 billion and $70.9 billion, respectively, of loans.
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5. ALLOWANCE FOR CREDIT LOSSES
Allowance for Credit Losses - Roll-forward
The following tables present ACL activity by portfolio segment for the three-month and nine-month periods ended September 30, 2023 and 2022.
(dollar amounts in millions)CommercialConsumerTotal
Three months ended September 30, 2023
ALLL balance, beginning of period$1,483 $694 $2,177 
Loan and lease charge-offs(85)(46)(131)
Recoveries of loans and leases previously charged-off40 18 58 
Provision for loan and lease losses66 38 104 
ALLL balance, end of period$1,504 $704 $2,208 
AULC balance, beginning of period$78 $87 $165 
Provision for unfunded lending commitments(2)(3)(5)
AULC balance, end of period$76 $84 $160 
ACL balance, end of period$1,580 $788 $2,368 
Nine months ended September 30, 2023
ALLL balance, beginning of period$1,424 $697 $2,121 
Loan and lease charge-offs(190)(132)(322)
Recoveries of loans and leases previously charged-off89 54 143 
Provision for loan and lease losses181 85 266 
ALLL balance, end of period$1,504 $704 $2,208 
AULC balance, beginning of period$71 $79 $150 
Provision for unfunded lending commitments5 5 10 
AULC balance, end of period$76 $84 $160 
ACL balance, end of period$1,580 $788 $2,368 
(dollar amounts in millions)CommercialConsumerTotal
Three months ended September 30, 2022
ALLL balance, beginning of period$1,342 $732 $2,074 
Loan and lease charge-offs (35)(48)(83)
Recoveries of loans and leases previously charged-off20 19 39 
Provision (benefit) for loan and lease losses 87 (7)80 
ALLL balance, end of period$1,414 $696 $2,110 
AULC balance, beginning of period$53 $41 $94 
Provision (benefit) for unfunded lending commitments 8 18 26 
AULC balance, end of period$61 $59 $120 
ACL balance, end of period$1,475 $755 $2,230 
Nine months ended September 30, 2022
ALLL balance, beginning of period$1,462 $568 $2,030 
Loan and lease charge-offs (77)(139)(216)
Recoveries of loans and leases previously charged-off83 62 145 
Provision (benefit) for loan and lease losses (54)205 151 
ALLL balance, end of period$1,414 $696 $2,110 
AULC balance, beginning of period$41 $36 $77 
Provision for unfunded lending commitments 20 23 43 
AULC balance, end of period$61 $59 $120 
ACL balance, end of period$1,475 $755 $2,230 
At September 30, 2023, the ACL was $2.4 billion, an increase of $97 million compared to December 31, 2022.
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The commercial ACL was $1.6 billion at September 30, 2023 and $1.5 billion at December 31, 2022. The increase of $85 million since year end was due to a combination of C&I loan growth and increased coverage levels in the commercial real estate portfolio during 2023.
The consumer ACL was $788 million, relatively flat compared to the December 31, 2022 balance of $776 million. The modest increase is attributable to loan and lease growth in the consumer portfolio.
The baseline economic scenario used in the September 30, 2023 ACL determination included the federal funds rate projected to peak in the third quarter of 2023 as the Federal Reserve continues to address inflation levels and tightness in the labor market. As a result, inflation is forecast to drop from an average of 4.1% in 2023 to 2.7% by 2024. However, unemployment is expected to gradually increase to a projected level of 4.2% by Q4 2024.
The economic scenarios used included elevated levels of economic uncertainty associated with geopolitical instability, high inflation readings, and the expected path of interest rate increases by the Federal Reserve. Given the uncertainty associated with key economic scenario assumptions, the September 30, 2023 ACL included a general reserve that consists of various risk profile components to capture uncertainty not addressed within the quantitative transaction reserve.
6. 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 nine-month periods ended September 30, 2023 and 2022:
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Residential mortgage loans sold with servicing retained$1,100 $1,310 $3,079 $4,557 
Pretax gains resulting from above loan sales (1)21 11 43 110 
(1)Recorded in mortgage banking income.
The following table summarizes the changes in MSRs recorded using the fair value method for the three-month and nine-month periods ended September 30, 2023 and 2022:
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)20232022 20232022
Fair value, beginning of period$505 $463 $494 $351 
New servicing assets created17 20 48 68 
Change in fair value during the period due to:
Time decay (1)(6)(6)(18)(16)
Payoffs (2)(7)(8)(18)(29)
Changes in valuation inputs or assumptions (3)38 17 41 112 
Fair value, end of period$547 $486 $547 $486 
(1)Represents decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.
(2)Represents decrease in value associated with loans that paid off during the period.
(3)Represents change in value resulting primarily from market-driven changes in interest rates.
A summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at September 30, 2023, and December 31, 2022 follows:
At September 30, 2023At December 31, 2022
Decline in fair value due toDecline in fair value due to
(dollar amounts in millions)Actual10%
adverse
change		20%
adverse
change		Actual10%
adverse
change		20%
adverse
change
Constant prepayment rate (annualized)
6.86 %$(13)$(26)7.05 %$(13)$(25)
Spread over forward interest rate swap rates557 bps(12)(24)578 bps(12)(22)
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Total servicing, late and other ancillary fees included in mortgage banking income was $25 million and $23 million for the three-month periods ended September 30, 2023 and 2022, respectively. Total servicing, late and other ancillary fees included in mortgage banking income was $72 million and $68 million for the nine-month periods ended September 30, 2023 and 2022, respectively. The unpaid principal balance of residential mortgage loans serviced for third parties was $33 billion and $32.4 billion at September 30, 2023 and December 31, 2022, respectively.
7. BORROWINGS
Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following at September 30, 2023 and December 31, 2022, respectively: 
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Federal funds purchased and securities sold under agreements to repurchase$656 $253 
FHLB advances— 1,700 
Other borrowings25 74 
Total short-term borrowings$681 $2,027 
Huntington’s long-term debt consisted of the following at September 30, 2023 and December 31, 2022, respectively:
(dollar amounts in millions)At September 30, 2023At December 31, 2022
The Parent Company:
Senior Notes$4,116 $3,005 
Subordinated Notes730 975 
Total notes issued by the parent4,846 3,980 
The Bank:
Senior Notes4,114 4,272 
Subordinated Notes651 651 
Total notes issued by the bank4,765 4,923 
FHLB Advances (1)
2,707 211 
Other504 572 
Total long-term debt$12,822 $9,686 
(1)    4.21% weighted average rate, varying maturities greater than one year.
During the 2023 third quarter, Huntington issued $1.3 billion of fixed-to-floating senior notes. The fixed-to-floating senior notes are due August 21, 2029 and bear an initial fixed interest rate of 6.208%. Commencing August 21, 2028, the interest rate will reset to a floating rate equal to a benchmark rate based on the Compounded SOFR Index Rate plus 202 basis points.
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8. OTHER COMPREHENSIVE INCOME
The components of Huntington’s OCI for the three-month and nine-month periods ended September 30, 2023 and 2022, were as follows:
(dollar amounts in millions)PretaxTax (expense) benefitAfter-tax
Three months ended September 30, 2023
Unrealized gains (losses) on available-for-sale securities arising during the period$(826)$190 $(636)
Reclassification adjustment for realized net losses included in net income3 — 3 
Total unrealized gains (losses) on available-for-sale securities(823)190 (633)
Net impact of fair value hedges on available-for-sale securities87 (20)67 
Unrealized gains (losses) on cash flow hedges during the period(119)28 (91)
Reclassification adjustment for cash flow hedges included in net income67 (26)41 
Net change related to cash flow hedges on loans(52)2 (50)
Foreign currency translation adjustment (1)(6)— (6)
Net unrealized gains (losses) on net investment hedges5 — 5 
Translation adjustments, net of hedges (1)(1)— (1)
Change in accumulated unrealized gains for pension and other post-retirement obligations1 — 1 
Other comprehensive income (loss)$(788)$172 $(616)
Three months ended September 30, 2022
Unrealized losses on available-for-sale securities arising during the period$(1,265)$291 $(974)
Reclassification adjustment for realized net losses included in net income4 (1)3 
Total unrealized losses on available-for-sale securities(1,261)290 (971)
Net impact of fair value hedges on available-for-sale securities325 (75)250 
Net change related to cash flow hedges on loans(591)135 (456)
Translation adjustments, net of hedges (1)(4)— (4)
Change in accumulated unrealized gains for pension and other post-retirement obligations3 — 3 
Other comprehensive income (loss)$(1,528)$350 $(1,178)
Nine months ended September 30, 2023
Unrealized gains (losses) on available-for-sale securities arising during the period$(729)$168 $(561)
Reclassification adjustment for realized net losses included in net income41 (9)32 
Total unrealized gains (losses) on available-for-sale securities(688)159 (529)
Net impact of fair value hedges on available-for-sale securities44 (10)34 
Unrealized gains (losses) on cash flow hedging relationships arising during the period(154)40 (114)
Reclassification adjustment for cash flow hedges included in net income113 (29)84 
Net change related to cash flow hedges(41)11 (30)
Translation adjustments, net of hedges (1)— — — 
Change in accumulated unrealized gains for pension and other post-retirement obligations1 — 1 
Other comprehensive income (loss)$(684)$160 $(524)
Nine months ended September 30, 2022
Unrealized losses on available-for-sale securities arising during the period$(3,952)$909 $(3,043)
Reclassification adjustment for realized net losses included in net income95 (22)73 
Total unrealized losses on available-for-sale securities(3,857)887 (2,970)
Net impact of fair value hedges on available-for-sale securities917 (212)705 
Net change related to cash flow hedges(1,012)230 (782)
Translation adjustments, net of hedges (1)(6)— (6)
Change in accumulated unrealized gains for pension and other post-retirement obligations8 (2)6 
Other comprehensive income (loss)$(3,950)$903 $(3,047)
(1)Foreign investments are deemed to be permanent in nature and, therefore, Huntington does not provide for taxes on foreign currency translation adjustments.
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Activity in accumulated OCI for the three-month and nine-month periods ended September 30, 2023 and 2022, were as follows:
(dollar amounts in millions)
Unrealized
 gains (losses) on
available-for-sale securities (1)
Net impact of fair value hedges on available-for-sale securitiesNet change related to cash flow hedges on loansTranslation adjustments, net of hedges
Unrealized
 gains
(losses) for
pension and
other post-
retirement
obligations
Total
Three months ended September 30, 2023
Balance, beginning of period$(2,898)$721 $(612)$(7)$(210)$(3,006)
Other comprehensive income (loss) before reclassifications(636)67 (91)(1)— (661)
Amounts reclassified from accumulated OCI to earnings3 — 41 — 1 45 
Period change(633)67 (50)(1)1 (616)
Balance, end of period$(3,531)$788 $(662)$(8)$(209)$(3,622)
Three months ended September 30, 2022
Balance, beginning of period$(2,152)$544 $(263)$(5)$(222)$(2,098)
Other comprehensive income (loss) before reclassifications(974)250 (456)(4)— (1,184)
Amounts reclassified from accumulated OCI to earnings3 — — — 3 6 
Period change(971)250 (456)(4)3 (1,178)
Balance, end of period$(3,123)$794 $(719)$(9)$(219)$(3,276)
Nine months ended September 30, 2023
Balance, beginning of period$(3,002)$754 $(632)$(8)$(210)$(3,098)
Other comprehensive income (loss) before reclassifications(561)34 (114)— — (641)
Amounts reclassified from accumulated OCI to earnings32 84 — 1 117 
Period change(529)34 (30)— 1 (524)
Balance, end of period$(3,531)$788 $(662)$(8)$(209)$(3,622)
Nine months ended September 30, 2022
Balance, beginning of period$(153)$89 $63 $(3)$(225)$(229)
Other comprehensive income (loss) before reclassifications(3,043)705 (782)(6)— (3,126)
Amounts reclassified from accumulated OCI to earnings73 — — — 6 79 
Period change(2,970)705 (782)(6)6 (3,047)
Balance, end of period$(3,123)$794 $(719)$(9)$(219)$(3,276)
(1)AOCI amounts at September 30, 2023 and September 30, 2022 include $60 million and $69 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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9. 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)
At September 30, 2023At December 31, 2022
Series B (2)12/28/201135,500 Variable (3)1/15/2017$23 $23 
Series E (4)2/27/20185,000 Variable (5)4/15/2023495 495 
Series F (4)5/27/20205,000 5.625 7/15/2030494 494 
Series G (4)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 (6)6/9/20217,000 5.70 12/01/2022175 175 
Series J (2)3/6/2023325,000 6.875 4/15/2028317 — 
Total882,500 $2,484 $2,167 
(1)     Redeemable at Huntington’s option on the date stated or on a quarterly basis thereafter.
(2)     Series B, H, and J preferred stock have a liquidation value and redemption price per share of $1,000, plus any declared and unpaid dividends.
(3)    Series B dividend rate converted to 3-month CME Term SOFR + 26 bps LIBOR spread adjustment + 270 bps effective July 15, 2023. Prior to July 15, 2023, the dividend rate was 3-mo. LIBOR + 270 bps.
(4)     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.
(5)    Series E dividend rate converted to 3-month CME Term SOFR + 26 bps LIBOR spread adjustment + 288 bps effective July 15, 2023. Prior to July 15, 2023, the dividend rate was 3-mo. LIBOR +288 bps.
(6)     Series I preferred stock has a liquidation value and redemption price per share of $25,000, plus any declared and unpaid dividends.
The following table presents the dividends declared for each series of Preferred shares for the three-month and nine-month periods ended September 30, 2023 and 2022:
Three months ended September 30,Nine months ended September 30,
(amounts in millions, except per share data)2023202220232022
Cash Dividend Declared Per ShareCash Dividend Declared Per ShareCash Dividend Declared Per ShareCash Dividend Declared Per Share
Preferred SeriesAmount ($)Amount ($)Amount ($)Amount ($)
Series B$20.67 $(1)$16.95 $— $59.39 $(2)$39.34 $— 
Series E2,112.39 (11)1,425.00 (7)5,572.46 (28)4,275.00 (21)
Series F1,406.25 (7)1,406.25 (7)4,218.75 (21)4,218.75 (21)
Series G1,112.50 (5)1,112.50 (6)3,337.50 (17)3,337.50 (18)
Series H11.25 (5)11.25 (6)33.75 (17)33.75 (18)
Series I356.25 (2)356.25 (3)1,068.75 (7)1,068.75 (7)
Series J 17.19 (6)— — 41.83 (14)— — 
Total$(37)$(29)$(106)$(85)
10. 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.
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The calculation of basic and diluted earnings per share for the three-month and nine-month periods ended September 30, 2023 and 2022 was as follows:
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions, except per share data, share count in thousands)2023202220232022
Basic earnings per common share:
Net income attributable to Huntington$547 $594 $1,708 $1,593 
Preferred stock dividends37 29 106 85 
Net income available to common shareholders$510 $565 $1,602 $1,508 
Average common shares issued and outstanding1,447,993 1,442,591 1,445,878 1,440,740 
Basic earnings per common share$0.35 $0.39 $1.11 $1.05 
Diluted earnings per common share:
Average dilutive potential common shares:
Stock options and restricted stock units and awards12,183 16,064 14,670 17,078 
Shares held in deferred compensation plans7,435 6,428 6,989 6,416 
Average dilutive potential common shares19,618 22,492 21,659 23,494 
Total diluted average common shares issued and outstanding1,467,611 1,465,083 1,467,537 1,464,234 
Diluted earnings per common share$0.35 $0.39 $1.09 $1.03 
Anti-dilutive awards (1)11,736 7,121 11,188 5,565 
(1)Reflects the total number of shares related to outstanding options that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.
11. 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 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 September 30,Nine months ended September 30,
Noninterest income2023202220232022
Noninterest income from contracts with customers$338 $345 $1,047 $975 
Noninterest income within the scope of other GAAP topics171 153 469 507 
Total noninterest income$509 $498 $1,516 $1,482 
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The following table illustrates the disaggregation by operating segment and major revenue stream and reconciles disaggregated revenue to segment revenue presented in Note 16 “Segment Reporting”.
(dollar amounts in millions)Consumer & Regional BankingCommercial BankingTreasury / OtherHuntington Consolidated
Major Revenue Streams
Three months ended September 30, 2023
Service charges on deposit accounts $78 $19 $— $97 
Card and payment processing income89 7 — 96 
Trust and investment management services58 4 — 62 
Insurance income29 2 — 31 
Capital markets fees2 25 (1)26 
Other noninterest income9 18 (1)26 
Net revenue from contracts with customers265 75 (2)338 
Noninterest income within the scope of
other GAAP topics
42 81 48 171 
Total noninterest income$307 $156 $46 $509 
Three months ended September 30, 2022
Service charges on deposit accounts $73 $20 $— $93 
Card and payment processing income84 6 — 90 
Trust and investment management services59 1 — 60 
Insurance income25 2 1 28 
Capital markets fees3 37 (2)38 
Other noninterest income8 29 (1)36 
Net revenue from contracts with customers252 95 (2)345 
Noninterest income within the scope of
other GAAP topics
53 85 15 153 
Total noninterest income$305 $180 $13 $498 
Nine months ended September 30, 2023
Service charges on deposit accounts $211 $56 $— $267 
Card and payment processing income258 20 — 278 
Trust and investment management services181 11 — 192 
Insurance income88 7 — 95 
Capital markets fees9 71 (1)79 
Other noninterest income79 59 (2)136 
Net revenue from contracts with customers826 224 (3)1,047 
Noninterest income within the scope of
other GAAP topics
127 255 87 469 
Total noninterest income$953 $479 $84 $1,516 
Nine months ended September 30, 2022
Service charges on deposit accounts $230 $65 $— $295 
Card and payment processing income242 17 — 259 
Trust and investment management services185 3 — 188 
Insurance income79 6 1 86 
Capital markets fees9 48 (2)55 
Other noninterest income21 72 (1)92 
Net revenue from contracts with customers766 211 (2)975 
Noninterest income within the scope of
other GAAP topics
213 259 35 507 
Total noninterest income$979 $470 $33 $1,482 


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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 September 30, 2023 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 September 30, 2023 was determined to be immaterial.
12. FAIR VALUES OF ASSETS AND LIABILITIES
See Note 19 “Fair Value of Assets and Liabilities” to the Consolidated Financial Statements appearing in Huntington’s 2022 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 nine-month periods ended September 30, 2023 and 2022.
Assets and Liabilities measured at fair value on a recurring basis
Fair Value Measurements at Reporting Date UsingNetting Adjustments (1)At September 30, 2023
(dollar amounts in millions)Level 1Level 2Level 3
Assets
Trading account securities:
U.S. Treasury securities$90 $— $— $— $90 
Municipal securities— 20 — — 20 
Corporate debt— 11 — — 11 
Total trading account securities
90 31 — — 121 
Available-for-sale securities:
U.S. Treasury securities5 — — — 5 
Residential CMO— 3,131 — — 3,131 
Residential MBS— 10,916 — — 10,916 
Commercial MBS— 1,729 — — 1,729 
Other agencies— 159 — — 159 
Municipal securities— 40 3,437 — 3,477 
Private-label CMO— 98 20 — 118 
Asset-backed securities— 276 75 — 351 
Corporate debt— 1,973 — — 1,973 
Other securities/sovereign debt— 4 — — 4 
Total available-for-sale securities
5 18,326 3,532 — 21,863 
Other securities29 1 — — 30 
Loans held for sale— 601 — — 601 
Loans held for investment— 122 53 — 175 
MSRs— — 547 — 547 
Other assets:
Derivative assets— 2,383 4 (1,923)464 
Assets held in trust for deferred compensation plans161 — — — 161 
Liabilities
Derivative liabilities— 2,232 5 (1,160)1,077 
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Fair Value Measurements at Reporting Date Using
Netting Adjustments (1)
At December 31, 2022
(dollar amounts in millions)
Level 1
Level 2
Level 3
Assets
Trading account securities:
Municipal securities$— $19 $— $— $19 
Available-for-sale securities:
U.S. Treasury securities103 — — — 103 
Residential CMOs— 2,914 — — 2,914 
Residential MBS— 12,263 — — 12,263 
Commercial MBS— 1,953 — — 1,953 
Other agencies— 182 — — 182 
Municipal securities— 42 3,248 — 3,290 
Private-label CMO— 108 20 — 128 
Asset-backed securities— 298 74 — 372 
Corporate debt— 2,214 — — 2,214 
Other securities/sovereign debt— 4 — — 4 
Total available-for-sale securities103 19,978 3,342 — 23,423 
Other securities31 1 — — 32 
Loans held for sale— 520 — — 520 
Loans held for investment— 169 16 — 185 
MSRs— — 494 — 494 
Other assets:
Derivative assets— 2,161 3 (1,808)356 
Assets held in trust for deferred compensation plans155 — — — 155 
Liabilities
Derivative liabilities— 2,332 5 (1,345)992 
(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 September 30, 2023
Opening balance$505 $(2)$3,496 $20 $75 $33 
Transfers into Level 3— — — — — 21 
Transfers out of Level 3 (1)— (8)— — — — 
Total gains/losses for the period:
Included in earnings:
Mortgage banking income37 9 — — — — 
Interest and fee income— — (2)— — (3)
Included in OCI— — 17 — — — 
Purchases/originations18 — 160 — — — 
Repayments— — — — — 2 
Settlements(13)— (234)— — — 
Closing balance$547 $(1)$3,437 $20 $75 $53 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$37 $(3)$— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — 12 — — — 
Three months ended September 30, 2022
Opening balance$463 $(5)$3,377 $22 $44 $17 
Transfers out of Level 3 (1)— (6)— — — — 
Total gains/losses for the period:
Included in earnings:
Mortgage banking income17 2 — — — — 
Included in OCI— — (66)— — — 
Purchases/originations20 — 309 — 26 — 
Repayments— — — — — (1)
Settlements(14)— (288)(1)— — 
Closing balance$486 $(9)$3,332 $21 $70 $16 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$17 $(8)$— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (69)— (1)— 
(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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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
Nine months ended September 30, 2023
Opening balance$494 $(2)$3,248 $20 $74 $16 
Transfers into Level 3— — — — — 40 
Transfers out of Level 3 (1)— (18)— — — — 
Total gains/losses for the period:
Included in earnings:
Mortgage banking income40 19 — — — — 
Interest and fee income— — (2)(1)— (3)
Included in OCI— — 13 — 1 — 
Purchases/originations49 — 715 1 — — 
Settlements(36)— (537)— — — 
Closing balance$547 $(1)$3,437 $20 $75 $53 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$40 $1 $— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — 2 — — — 
Nine months ended September 30, 2022
Opening balance$351 $4 $3,477 $20 $71 $19 
Transfers out of Level 3 (1)— (6)— — — — 
Total gains/losses for the period:
Included in earnings
Mortgage banking income112 (7)— — — — 
Interest and fee income— — (2)(2)— — 
Provision for credit losses— — (4)— — — 
Included in OCI— — (274)— (1)— 
Purchases/originations68 — 867 4 26 — 
Repayments— — — — — (3)
Settlements(45)— (732)(1)(26)— 
Closing balance$486 $(9)$3,332 $21 $70 $16 
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date$112 $(17)$— $— $— $— 
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period— — (274)— (1)— 
(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 table presents the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:
Total LoansLoans that are 90 or more days past due
(dollar amounts in millions)Fair value
carrying
amount		Aggregate
unpaid
principal		DifferenceFair value
carrying
amount		Aggregate
unpaid
principal		Difference
At September 30, 2023
Loans held for sale$601 $598 $3 $— $— $— 
Loans held for investment175 185 (10)3 3 — 
At December 31, 2022
Loans held for sale$520 $513 $7 $— $— $— 
Loans held for investment185 190 (5)11 11 — 
The following table presents the net gains (losses) from fair value changes.
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Loans held for sale (1)$(4)$(22)$(4)$(56)
Loans held for investment(2)— (5)1 
(1)The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited 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 Losses
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)At September 30, 2023At December 31, 20222023202220232022
Collateral-dependent loans$24 $16 $6 $— $13 $(1)
Loans held for sale— — — 1 — 1 
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 September 30, 2023 (1)
At December 31, 2022 (1)
(dollar amounts in millions)Valuation TechniqueSignificant Unobservable InputRange Weighted AverageRangeWeighted Average
Measured at fair value on a recurring basis:
MSRsDiscounted cash flowConstant prepayment rate4 %-33 %7 %5 %-40 %7 %
Spread over forward interest rate swap rates5 %-13 %6 %5 %-13 %6 %
Municipal securities and asset-backed securities Discounted cash flowDiscount rate5 %-6 %6 %5 %-5 %5 %
Cumulative default— %-64 %7 %— %-64 %7 %
Loss given default20 %-20 %20 %20 %-20 %20 %
(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.
Fair values of financial instruments
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.
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 the Federal Reserve Bank, and federal funds sold. 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 and relationship intangibles are not considered financial instruments and are not included in following tables. Accordingly, this fair value information is not intended to, and does not, represent Huntington’s underlying value.
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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
At September 30, 2023
Financial Assets
Cash and short-term assets$11,693 $— $— $11,693 $11,693 
Trading account securities— — 121 121 121 
Available-for-sale securities— — 21,863 21,863 21,863 
Held-to-maturity securities16,148 — — 16,148 13,309 
Other securities688 — 30 718 718 
Loans held for sale— 2 601 603 603 
Net loans and leases (1)118,470 — 175 118,645 114,540 
Derivative assets— — 464 464 464 
Assets held in trust for deferred compensation plans— — 161 161 161 
Financial Liabilities
Deposits148,867 — — 148,867 148,771 
Short-term borrowings681 — — 681 681 
Long-term debt12,822 — — 12,822 12,584 
Derivative liabilities— — 1,077 1,077 1,077 
At December 31, 2022
Financial Assets
Cash and short-term assets$6,918 $— $— $6,918 $6,918 
Trading account securities— — 19 19 19 
Available-for-sale securities— — 23,423 23,423 23,423 
Held-to-maturity securities17,052 — — 17,052 14,754 
Other securities822 — 32 854 854 
Loans held for sale— 9 520 529 529 
Net loans and leases (1)117,217 — 185 117,402 112,591 
Derivative assets— — 356 356 356 
Assets held in trust for deferred compensation plans— — 155 155 155 
Financial Liabilities
Deposits147,914 — — 147,914 147,796 
Short-term borrowings2,027 — — 2,027 2,027 
Long-term debt9,686 — — 9,686 9,564 
Derivative liabilities— — 992 992 992 
(1)Includes collateral-dependent loans.
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The following table presents the level in the fair value hierarchy for the estimated fair values at September 30, 2023 and December 31, 2022:
Estimated Fair Value Measurements at Reporting Date UsingNetting Adjustments (1) Presented Balance
(dollar amounts in millions)Level 1Level 2Level 3
At September 30, 2023
Financial Assets
Trading account securities$90 $31 $— $121 
Available-for-sale securities5 18,326 3,532 21,863 
Held-to-maturity securities— 13,309 — 13,309 
Other securities (2)29 1 — 30 
Loans held for sale— 603 — 603 
Net loans and leases— 122 114,418 114,540 
Derivative assets— 2,383 4 $(1,923)464 
Financial Liabilities
Deposits— 134,529 14,242 148,771 
Short-term borrowings— 681 — 681 
Long-term debt— 9,275 3,309 12,584 
Derivative liabilities— 2,232 5 (1,160)1,077 
At December 31, 2022
Financial Assets
Trading account securities$— $19 $— $19 
Available-for-sale securities103 19,978 3,342 23,423 
Held-to-maturity securities— 14,754 — 14,754 
Other securities (2)31 1 — 32 
Loans held for sale— 520 9 529 
Net loans and leases— 169 112,422 112,591 
Derivative assets— 2,161 3 $(1,808)356 
Financial Liabilities
Deposits— 142,081 5,715 147,796 
Short-term borrowings— 2,027 — 2,027 
Long-term debt— 8,680 884 9,564 
Derivative liabilities— 2,332 5 (1,345)992 
(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.
13. DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are recorded in the Unaudited 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.
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The following table presents the fair values and notional values of all derivative instruments included in the Unaudited Consolidated Balance Sheets at September 30, 2023 and December 31, 2022. Amounts in the table below are presented gross without the impact of any net collateral arrangements.
At September 30, 2023At December 31, 2022
(dollar amounts in millions)Notional ValueAssetLiabilityNotional ValueAssetLiability
Derivatives designated as Hedging Instruments
Interest rate contracts$36,962 $1,089 $981 $42,461 $1,008 $1,145 
Foreign exchange contracts216 — — 202 2 — 
Derivatives not designated as Hedging Instruments
Interest rate contracts57,539 1,182 1,135 37,562 968 1,008 
Foreign exchange contracts4,654 65 50 4,889 68 68 
Commodities contracts688 51 49 762 114 113 
Equity contracts682 — 22 636 4 3 
Total contracts$100,741 $2,387 $2,237 $86,512 $2,164 $2,337 
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 Consolidated Income Statement for the three-month and nine-month periods ended September 30, 2023 and 2022, respectively.
Location of Gain or (Loss) Recognized in Income
on Derivative
Amount of Gain or (Loss) Recognized in Income on Derivative
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Interest rate contracts:
CustomerCapital markets fees$6 $12 $23 $37 
Mortgage bankingMortgage banking income(37)— (28)(80)
Interest rate swaptionsOther noninterest income33 — 50 — 
Foreign exchange contractsCapital markets fees9 12 34 32 
Commodities contractsCapital markets fees1 1 4 4 
Equity contractsOther noninterest expense(2)(1)(7)(4)
Total$10 $24 $76 $(11)
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 September 30, 2023 and December 31, 2022, identified by the underlying interest rate-sensitive instruments.
(dollar amounts in millions)Fair Value HedgesCash Flow HedgesEconomic HedgesTotal
At September 30, 2023
Instruments associated with:
Investment securities$11,719 $— $15,450 $27,169 
Loans— 17,675 175 17,850 
Long-term debt7,568 — — 7,568 
Total notional value$19,287 $17,675 $15,625 $52,587 
At December 31, 2022
Instruments associated with:
Investment securities$10,407 $— $— $10,407 
Loans— 24,325 175 24,500 
Long-term debt7,729 — — 7,729 
Total notional value$18,136 $24,325 $175 $42,636 
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 premiums for collars and floors that were not included in the measurement of hedge effectiveness, as well as the amounts related to terminated hedges reclassified from AOCI. The net amounts resulted in a decrease to net interest income of $62 million and an increase to net interest income of $21 million for the three-month periods ended September 30, 2023, and 2022, respectively. For the nine-month periods ended September 30, 2023, and 2022, the net amounts resulted in a decrease to net interest income of $178 million and an increase to net interest income of $108 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 $11.1 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 portfolio has not been attributed to the individual available-for-sale securities in our Unaudited Consolidated Statements of Financial Condition. Huntington has also designated $662 million of interest rate swaps as fair value hedges of fixed-rate corporate bonds.
The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2023 and 2022.
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Interest rate contracts
Change in fair value of interest rate swaps hedging investment securities (1)$88 $340 $44 $926 
Change in fair value of hedged investment securities (1)(87)(324)(45)(914)
Change in fair value of interest rate swaps hedging long-term debt (2)(87)(178)(109)(314)
Change in fair value of hedged long term debt (2)87 178 109 315 
(1)Recognized in Interest income—available-for-sale securities—taxable in the Unaudited Consolidated Statements of Income.
(2)Recognized in Interest expense—long-term debt in the Unaudited Consolidated Statements of Income.
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As of September 30, 2023 and December 31, 2022, 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)At September 30, 2023At December 31, 2022At September 30, 2023At December 31, 2022
Assets
Investment securities (1)$18,291 $18,029 $(1,024)$(979)
Liabilities
Long-term debt (2)7,134 7,175 (365)(256)
(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 September 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $17.7 billion, the cumulative basis adjustments associated with these hedging relationships was $916 million, and the amounts of the designated hedging instruments were $11.1 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 $(71) million at September 30, 2023 and $(70) million at December 31, 2022.
Cash Flow Hedges
At September 30, 2023, Huntington has $17.7 billion of interest rate swaps, swaption collars, and floors. 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 and floor contracts represents the time value of the contracts and is not included in the measurement of hedge effectiveness. The initial premium paid is amortized on a straight line basis as a reduction to interest income over the contractual life of these contracts.
At September 30, 2023, the net losses recognized in AOCI that are expected to be reclassified into earnings within the next 12 months were $261 million.
Economic Hedges
At September 30, 2023, Huntington has $15.5 billion of interest rate swaptions to reduce the impact on capital from rising rates. These swaptions are economic hedges of interest rate risk attributable to our investment securities with the change in value of these instruments recorded in other noninterest income.
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 position of these derivatives at September 30, 2023 and December 31, 2022 were a net asset of $12 million and a net liability of $3 million, respectively. At September 30, 2023 and December 31, 2022, Huntington had commitments to sell residential real estate loans of $893 million and $766 million, 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.
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MSR hedging trading assets and liabilities are included in other assets and other liabilities, respectively, in the Unaudited Balance Sheets. Trading gains (losses) are included in mortgage banking income in the Unaudited Consolidated Statement of Income. The notional value of the derivative financial instruments, the corresponding trading assets and liabilities positions, and net trading gains (losses) related to MSR hedging activity is summarized in the following tables:
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Notional value$1,200 $1,120 
Trading assets1 4 
Trading liabilities(102)(78)
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Trading losses$(37)$(25)$(43)$(105)
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.
The net fair values of these derivative financial instruments, for which the gross amounts are included in other assets or other liabilities at both September 30, 2023 and December 31, 2022, were $61 million and $59 million, respectively. The total notional values of derivative financial instruments used by Huntington on behalf of customers, including offsetting derivatives, were $44.6 billion and $40.7 billion at September 30, 2023 and December 31, 2022, respectively. Huntington’s credit risk from customer derivatives was $64 million and $118 million at the same dates, respectively.
Financial assets and liabilities that are offset in the Unaudited Consolidated Balance Sheets
Huntington records derivatives at fair value as further described in Note 12 “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.
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In addition to the customer derivative credit exposure, aggregate credit risk associated with broker-dealer and bank derivative transactions was net credit risk of $359 million and $227 million at September 30, 2023 and December 31, 2022, respectively. The net credit risk associated with derivatives is calculated after considering master netting agreements and is reduced by collateral that has been pledged by the counterparty.
At September 30, 2023, Huntington pledged $207 million of investment securities and cash collateral to counterparties, while other counterparties pledged $1.1 billion 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 Consolidated Balance Sheets at September 30, 2023 and December 31, 2022.
Offsetting of Financial Assets and Derivative Assets
Gross amounts
offset in the unaudited
consolidated
balance sheets		Net amounts of
assets
presented in
the unaudited
consolidated
balance sheets		Gross amounts not offset in the
unaudited consolidated
balance sheets
(dollar amounts in millions)Gross amounts of recognized assetsFinancial instrumentsCash collateral receivedNet amount
At September 30, 2023$2,387 $(1,923)$464 $(267)$(12)$185 
At December 31, 20222,164 (1,808)356 (7)(56)293 
Offsetting of Financial Liabilities and Derivative Liabilities
Gross amounts offset in the unaudited consolidated balance sheetsNet amounts of liabilities presented in the unaudited consolidated balance sheetsGross amounts not offset in the
unaudited consolidated
balance sheets
(dollar amounts in millions)Gross amounts of recognized liabilitiesFinancial instrumentsCash collateral deliveredNet amount
At September 30, 2023$2,237 $(1,160)$1,077 $— $(114)$963 
At December 31, 20222,337 (1,345)992 (79)(118)795 
14. VARIABLE INTEREST ENTITIES
Unconsolidated VIEs
The following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary, of the VIE at September 30, 2023, and December 31, 2022:
At September 30, 2023
(dollar amounts in millions)
Total Assets
Total Liabilities
Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships$2,231 $1,309 $2,231 
Trust Preferred Securities14 248 — 
Other Investments
777 136 777 
Total
$3,022 $1,693 $3,008 
At December 31, 2022
(dollar amounts in millions)Total AssetsTotal LiabilitiesMaximum Exposure to Loss
Affordable Housing Tax Credit Partnerships$2,036 $1,260 $2,036 
Trust Preferred Securities14 248 — 
Other Investments522 141 522 
Total$2,572 $1,649 $2,558 
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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 Consolidated Statements of Income.
The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at September 30, 2023 and December 31, 2022.
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Affordable housing tax credit investments$3,229 $2,891 
Less: amortization(998)(855)
Net affordable housing tax credit investments$2,231 $2,036 
Unfunded commitments$1,309 $1,260 
The following table presents other information relating to Huntington’s affordable housing tax credit investments for the three-month and nine-month periods ended September 30, 2023 and 2022.
Three months ended September 30,Nine months ended September 30,
(dollar amounts in millions)2023202220232022
Tax credits and other tax benefits recognized$66 $52 $197 $159 
Proportional amortization expense included in provision for income taxes55 45 164 131 
There were no sales of affordable housing tax credit investments during the three-month and nine-month periods ended September 30, 2023 and 2022. There was no impairment recognized for the three-month and nine-month periods ended September 30, 2023 and 2022.
Trust-Preferred Securities
Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Unaudited Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing trust-preferred securities, from which the proceeds are then invested in Huntington junior subordinated debentures, which are reflected in Huntington’s Unaudited Consolidated Balance Sheet as long-term debt. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Unaudited Consolidated Financial Statements.
Other investments
Other investments determined to be VIE’s include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, renewable energy financings, and other miscellaneous investments.
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15. 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 Consolidated Financial Statements. The contract amounts of these financial agreements at September 30, 2023 and December 31, 2022, were as follows:
(dollar amounts in millions)At September 30, 2023At December 31, 2022
Contract amount representing credit risk
Commitments to extend credit:
Commercial$32,426 $32,500 
Consumer19,598 19,064 
Commercial real estate2,816 3,393 
Standby letters of credit and guarantees on industrial revenue bonds761 714 
Commercial letters of credit10 15 
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 $13 million and $27 million at September 30, 2023 and December 31, 2022, 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 $20 million at September 30, 2023 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.
Following the failure of several financial institutions in the first half of 2023, the FDIC issued a notice of proposed rulemaking in May 2023 that would implement a special assessment to recover the cost associated with protecting uninsured depositors as part of those financial institution failures. We continue to monitor the status of the proposed special assessment and the impact to our future operating results. We expect to record the impact when the final rule is enacted.
16. 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 two business segments: Consumer & Regional Banking and Commercial Banking. The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense. See Note 1 “Basis of Presentation” for a description of the changes made during the second quarter 2023. Prior period results have been adjusted to conform to the new segment presentation.
Consumer & Regional Banking - Consumer & Regional Banking offers a comprehensive set of digitally powered consumer and business financial solutions to Consumer Lending, Regional Banking, Branch Banking, and Wealth Management customers. The Consumer & Regional Banking segment provides a wide array of financial products and services to consumer and business customers including, but not limited to, deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. We serve our customers through our network of channels, including branches, online banking, mobile banking, telephone banking, and ATMs.
Commercial Banking - The Commercial Banking segment provides expertise through bankers, capabilities, and digital channels, and includes a comprehensive set of product offerings. Our target clients span from mid-market to large corporates across a national footprint. The Commercial Banking segment leverages internal partnerships for wealth management, trust, insurance, payments, and treasury management capabilities. In particular, our payments capabilities continue to expand as we develop unique solutions for our diverse client segments, including Huntington ChoicePay. This segment includes customers in Middle Market Banking, Corporate, Specialty, and Government Banking, Asset Finance, Commercial Real Estate Banking, and Capital Markets.
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Listed in the following tables is certain operating basis financial information reconciled to Huntington’s September 30, 2023, December 31, 2022, and September 30, 2022, reported results by business segment.
Income Statements
Consumer & Regional BankingCommercial BankingTreasury / OtherHuntington Consolidated
(dollar amounts in millions)
Three months ended September 30, 2023
Net interest income (loss)
$1,211 $582 $(425)$1,368 
Provision for credit losses82 17 — 99 
Noninterest income
307 156 46 509 
Noninterest expense
764 278 48 1,090 
Provision (benefit) for income taxes
141 93 (98)136 
Income attributable to non-controlling interest— 5 — 5 
Net income (loss) attributable to Huntington$531 $345 $(329)$547 
Three months ended September 30, 2022
Net interest income
$896 $490 $18 $1,404 
Provision for credit losses
22 84 — 106 
Noninterest income
305 180 13 498 
Noninterest expense
726 270 57 1,053 
Provision (benefit) for income taxes
94 67 (15)146 
Income attributable to non-controlling interest— 3 — 3 
Net income (loss) attributable to Huntington
$359 $246 $(11)$594 
Nine months ended September 30, 2023
Net interest income (loss)
$3,569 $1,722 $(1,168)$4,123 
Provision for credit losses192 84 — 276 
Noninterest income953 479 84 1,516 
Noninterest expense2,283 830 113 3,226 
Provision (benefit) for income taxes430 270 (286)414 
Income attributable to non-controlling interest— 15 — 15 
Net income (loss) attributable to Huntington$1,617 $1,002 $(911)$1,708 
Nine months ended September 30, 2022
Net interest income$2,237 $1,327 $247 $3,811 
Provision for credit losses
189 9 — 198 
Noninterest income979 470 33 1,482 
Noninterest expense2,179 763 182 3,124 
Provision (benefit) for income taxes178 215 (22)371 
Income attributable to non-controlling interest— 7 — 7 
Net income attributable to Huntington$670 $803 $120 $1,593 
Assets atDeposits at
(dollar amounts in millions)September 30,
2023		December 31,
2022		September 30,
2023		December 31,
2022
Consumer & Regional Banking$72,192 $70,268 $108,182 $105,064 
Commercial Banking63,473 63,611 36,023 36,807 
Treasury / Other50,985 49,027 4,662 6,043 
Total
$186,650 $182,906 $148,867 $147,914 

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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 2022 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 September 30, 2023. Based upon such evaluation, Huntington’s Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2023, 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 September 30, 2023, 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 15 “Commitments and Contingent Liabilities” of the Notes to Unaudited 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 2022 Annual Report on Form 10-K, which could materially affect our business, financial condition, or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) and (b)
Not Applicable
(c)
PeriodTotal Number of Shares PurchasedAverage
Price Paid
Per Share		Maximum Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs (1)
July 1, 2023 to July 31, 2023— $— $1,000,000,000 
August 1, 2023 to August 31, 2023— — 1,000,000,000 
September 1, 2023 to September 30, 2023— — 1,000,000,000 
Total— $— 
(1)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. The shares may be purchased, from time-to-time, depending on market conditions.
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Item 5. Other Information
Trading Plans
During the three months ended September 30, 2023, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
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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
3.10
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
101.INS***The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH*Inline XBRL Taxonomy Extension Schema Document
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
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained within Exhibit 101 attachments)
* Filed herewith
** Furnished herewith
***    The following material from Huntington’s Form 10-Q Report for the quarterly period ended September 30, 2023 formatted in Inline XBRL: (1) Unaudited Consolidated Balance Sheets, (2) Unaudited Consolidated Statements of Income, (3) Unaudited Consolidated Statements of Comprehensive Income (4) Unaudited Consolidated Statement of Changes in Shareholders’ Equity, (5) Unaudited Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Consolidated Financial Statements.
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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:October 27, 2023 /s/ Stephen D. Steinour
 Stephen D. Steinour
 Chairman, President, and Chief Executive Officer (Principal Executive Officer)
Date:October 27, 2023 /s/ Zachary Wasserman
 Zachary Wasserman
 
Chief Financial Officer
(Principal Financial Officer)

2023 3Q Form 10-Q 91