Company: HBAN
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000049196-25-000020
Chunk: 206

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 206
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 not addressed within the quantitative transaction reserve. 

The most significant risk profiles the Company maintains at December 31, 2024 relate to business banking loans within the C&I portfolio and office loans within the CRE portfolio. The business banking risk profile addresses a modestly upward trend in default rates resulting from higher interest rates and inflationary impacts on business banking customers. The office portfolio risk profile addresses concerns relating to higher interest rates, upcoming maturities, falling property values, and uncertainty about demand for office space.

Our Allowance for Credit Loss Development Methodology Committee is responsible for developing the methodology, assumptions, and estimates used in the calculation, as well as determining the appropriateness of the ACL. The ALLL represents the estimate of lifetime expected losses in the loan and lease portfolio at the reported date. The loss modeling process uses an EAD concept to calculate total expected losses on both funded balances and unfunded lending commitments, where appropriate. Losses related to the unfunded lending commitments are then recorded as AULC within other liabilities in the Consolidated Balance Sheet. A liability for expected credit losses for off-balance sheet credit exposures is recognized if Huntington has a contractual obligation to extend the credit and the obligation is not unconditionally cancelable.

The AULC is determined by applying the same quantitative reserve determination process to the unfunded portion of the loan exposures adjusted by an applicable funding expectation. 

Our ACL evaluation process includes the assessment of credit quality metrics, and a comparison of certain ACL benchmarks to current performance. For further information, including the ALLL and AULC activity by portfolio segment, refer to Note 5 - “Allowance for Credit Losses” of the Notes to Consolidated Financial Statements. 

68     Huntington Bancshares Incorporated

Table of Contents

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 14 - Allocation of Allowance for Credit LossesAt December 31,20242023(dollar amounts in millions)Allocation of Allowance% of Total ALLL% of Total Loans and Leases (1)Allocation of Allowance% of Total ALLL% of Total Loans and Leases (1)CommercialCommercial and industrial$947 42 %43 %$993 44 %42 %Commercial real estate473 21 9 522 23 10 Lease financing64 3 4 48 2 4 Total commercial1,484 66