Company: HBAN
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000049196-25-000038
Chunk: 241

Company: HUNTINGTON BANCSHARES INC /MD/
Filing Date: 2025-04-29
Form: 10-Q
Item: Part II, Item 8
Chunk 241
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. 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 positions of these derivatives at March 31, 2025 and December 31, 2024 were net assets of $1 million and $7 million, respectively. At March 31, 2025 and December 31, 2024, Huntington had commitments to sell residential real estate loans of $1.0 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 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.

72     Huntington Bancshares Incorporated

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 March 31, 2025At December 31, 2024Notional value$1,855 $1,780 Trading liabilities26 45 Three Months Ended(dollar amounts in millions)March 31, 2025March 31, 2024Trading gains (losses)$15 $(19)Derivatives used in customer-related activitiesVarious 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