Company: HBAN
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000049196-25-000038
Chunk: 240

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-04-29
Form: 10-Q
Item: Part II, Item 8
Chunk 240
---
1Q Form 10-Q     71

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 March 31, 2025At December 31, 2024At March 31, 2025At December 31, 2024AssetsInvestment securities (1)$16,198 $16,390 $(336)$(458)LiabilitiesLong-term debt (2)11,606 11,589 (80)(223)(1)Amounts represent 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 that is expected to be remaining at the end of the hedging relationship. (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 $(53) million at March 31, 2025 and $(56) million at December 31, 2024.Cash Flow HedgesAt March 31, 2025, Huntington had $26.3 billion of interest rate swaps 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 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 March 31, 2025, net losses recognized in AOCI that are expected to be reclassified into earnings within the next 12 months totaled $30 million.Derivatives used in mortgage banking activitiesMortgage loan origination hedging activityHuntington uses derivatives, principally loan sale commitments, in hedging its mortgage loan interest rate lock commitments and its mortgage loans held for sale. Mortgage loan sale commitments and the related interest rate lock commitments are carried at fair value on the Unaudited Consolidated Balance Sheets with changes in fair value reflected in mortgage banking income. 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