Company: HBAN
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000049196-25-000063
Chunk: 287

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-07-29
Form: 10-Q
Item: Part II, Item 8
Chunk 287
---
gage 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. 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. These derivatives were in a net liability position of $1 million at June 30, 2025 and a net asset position of $7 million at December 31, 2024. At June 30, 2025 and December 31, 2024, Huntington had commitments to sell residential real estate loans of $1.4 billion and $869 million, respectively. These contracts mature in less than one year.MSR hedging activityHuntington also uses certain derivative financial instruments to offset changes in value of its MSRs. These derivatives consist primarily of forward interest rate agreements and forward mortgage contracts. The derivative instruments used are not designated as qualifying hedges. Accordingly, such derivatives are recorded at fair value with changes in fair value reflected in mortgage banking income. Huntington’s MSR economic hedging activity uses securities and derivatives to manage the value of the MSR assets and to mitigate the various types of risk inherent in the MSR assets, 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.

2025 2Q Form 10-Q     80

Table of Contents

MSR hedging trading assets and liabilities are included in other assets and other liabilities, respectively, in the Unaudited Consolidated Balance Sheets. Trading gains (losses) are included in mortgage banking income in the Unaudited Consolidated Statements 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 are summarized in the following tables.(dollar amounts in millions)At June 30, 2025At December 31, 2024Notional value$1,850 $1