Board or Governors of the Federal Reserve System

Washington, DC 20551

February 5, 2019

Mr. Stephen Steinour, CEO

Huntington Banchares Incorporated

41 South High Street

Columbus, OH 43287

Dear Mr. Steinour:

Huntington Bancshares Incorporated (“Huntington”) is subject to section 165 ofthe

Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and,

accordingly, would be required to participate in supervisory and company-run stress tests in

2019.1 For the reasons stated below, the Board is providing Huntington relieffrom all regulatory

requirements, including disclosure requirements, related to supervisory stress testing and

company-run stress testing for the 2019 stress test cycle and is providing related relieffrom

certain capital planning and regulatory reporting requirements that would otherwise apply in the

2019 stress test cycle. In addition, as discussed in detail below, Huntington will not be required

to submit a capital plan to the Board in 2019 or participate in the 2019 Comprehensive Capital

Analysis and Review (“CCAR 2019”).2

1 Pub. L. No. 111-203, 124 Stat. 1376 (2010); see 12 CFR part 252, subparts E and F.

2 Huntington remains subject to the requirement to develop and maintain a capital plan, and the

board of directors ofHuntington (or designated subcommittee thereof) remains subject to the

requirement to review and approve the firm’s capital plan.

3 12 CFR part 252, subparts E and F.

I. Background

Section 165 ofthe Dodd-Frank Act, as enacted, directed the Board to establish enhanced

prudential standards for bank holding companies with total consolidated assets of $50 billion or

more, including annual supervisory stress tests, and issue regulations requiring these bank

holding companies to conduct company-run stress tests (collectively, “stress test rules”).3

Pursuant to the Board’s stress test rules, the Board has conducted supervisory stress tests of bank

holding companies with total consolidated assets of $50 billion or more, and these bank holding
companies are required to conduct annual and mid-cycle company-run stress tests.4 In

conducting the supervisory stress tests, the Board projects balance sheets, risk-weighted assets,

net income, and resulting post stress capital levels and regulatory capital ratios over a planning

horizon under baseline, adverse, and severely adverse scenarios, incorporating capital action

assumptions prescribed in the Board’s stress test rules.5 For the annual company-run stress tests,

a bank holding company uses the same planning horizon, capital action assumptions, and

baseline, adverse, and severely adverse scenarios used in the supervisory stress test.6

4 On July 6, 2018, the Board issued a statement regarding the impact ofthe Economic Growth,

Regulatory Relief, and Consumer Protection Act. The Board announced that it will not take

action to require bank holding companies with total consolidated assets greater than or equal to

$50 billion but less than $100 billion to comply with the Board’s stress test rules. See

www.federalreserve.gov/newsevents/pressreleases/files/bcreg20180706b1.pdf.

5 See 12 CFR 252.44

6 See 12 CFR 252.54.

7 Pub. L. No. 115-174, 132 Stat. 1296 (2018).

8 Eighteen months after the date of EGRRCPA’s enactment, bank holding companies with total

consolidated assets ofless than $250 billion will no longer be subject to section 165, provided

that the Board may apply any enhanced prudential standard to a bank holding company with

between $100 billion and $250 billion in total consolidated assets ifthe Board determines that

application ofthe prudential standard is appropriate to prevent or mitigate risks to the financial

stability ofthe United States, or to promote safety and soundness.

9 EGRRCPA § 401(d)(3). Pub. L. No. 115-174, 132 Stat. 1296(2018).

10 EGRRCPA § 401 (a)(l)(B)(i) (to be codified at 12 U.S.C. § 5365(a)(2)(A)).

On May 24, 2018, Congress enacted the Economic Growth, Regulatory Relief, and

Consumer Protection Act (“EGRRCPA”).7 EGRRCPA amended section 165 ofthe Dodd-Frank

Act to increase the threshold for application of enhanced prudential standards to bank holding

companies.8 Prior to eighteen months after the date ofEGRRCPA’s enactment, the Board may

exempt by order any bank holding company with total consolidated assets of less than

$250 billion from any prudential standard under section 165 ofthe Dodd-Frank Act.9

II. Relief from Board’s stress test rules for the 2019 stress test cycle

In prescribing more stringent prudential standards under section 165, including stress test

requirements, the Board must differentiate among bank holding companies on an individual basis

or by category, taking into consideration their capital structure, riskiness, complexity, financial

activities (including the financial activities oftheir subsidiaries), size, and any other risk-related

factors that the Board deems appropriate.10

In assessing a bank holding company’s risk profile, the Board takes into consideration the

company’s size, scope of operations, activities, and systemic importance. Size provides a
measure ofthe extent to which customers or counterparties may be exposed to a risk ofloss or

suffer a disruption in the provision ofservices if a bank holding company were to experience

distress and can serve as an indicator of operational and managerial complexity. Nonbank assets

may involve a broader range ofrisks than those associated with purely banking activities, and

reflect the degree to which a firm may be engaged in activities through legal entities that are not

subject to separate capital requirements or to the direct regulation and supervision applicable to a

regulated banking entity. Other measures ofrisk include cross-jurisdictional activity, off-balance

sheet exposure, and weighted short-term wholesale funding, which provide measures of a bank 

holding company’s complexity, interconnectedness, and liquidity risk. As of

September 30, 2018, Huntington reported total consolidated assets of $105.7 billion, $0.2 billion 

in nonbank assets, $11.2 billion in off-balance sheet exposure,11 $5.0 billion in weighted shortterm wholesale funding, and $1.8 billion in cross-jurisdictional activity.

11 Measured as total exposure, as defined on FR Y-15, minus total consolidated assets, as

reported on the Consolidated Financial Statements for Holding Companies (FR Y-9C).

12 EGRRCPA § 401(d)(3). The Board’s stress test rules also permit the Board to extend any

deadline relating to company-run or supervisory stress testing. 12 CFR 252.3(b).

13 12CFR225.8(e)(1)(ii).

14 Id.

15 12 CFR 225.8(e)(1)(i), (iii).

In assessing Huntington’s risk profile, the Board also considered reports of examination

and other supervisory information, including a review ofHuntington’s 2018 capital plan and

capital planning process, and the result ofthe Board’s 2018 supervisory stress test, as well as

other publicly reported information. In 2018, Huntington received notice that the Federal

Reserve did not object to its capital plan or planned capital actions.

Based on this information, the Board has determined by order, through this letter, to

provide Huntington relief from the regulatory requirements ofthe Board’s stress test rules for the

2019 stress test cycle.12 Specifically, Huntington is not required to participate in the Board’s

supervisory stress test or conduct a company-run stress test for the 2019 stress test cycle.

III. Extension of 2019 capital plan submission requirement

Pursuant to the capital plan rule, Huntington is required to submit a capital plan to the 

Federal Reserve on an annual basis.13 Consistent with the relief described above, the Board is

providing a one-year extension ofthe requirement to submit a capital plan until April 5, 2020.14

Huntington is not required to participate in CCAR 2019. Huntington remains subject to the

requirement to develop and maintain a capital plan, and the board of directors of Huntington (or

designated subcommittee thereof) must review and approve the firm’s capital plan.15 The
Federal Reserve will continue to review the capital planning and risk-management practices of

Huntington through the regular supervisory process.

As noted above, Huntington received notice that the Federal Reserve did not object to the

capital plan submitted in 2018, including distributions planned for the period beginning

July 1, 2018, through June 30, 2019. For the period beginning July 1, 2019, through

June 30, 2020, the Board has approved Huntington to make capital distributions up to the amount

that would have allowed the firm to remain above all minimum capital requirements in CCAR

2018, adjusted for any changes in the firm’s regulatory capital ratios since the Federal Reserve

acted on the capital plan of Huntington. In particular, Huntington is authorized to distribute, net

of any issuance of capital, up to the sum ofthe following: (1) the additional capital the firm

could have distributed in CCAR 2018 and remained above minimum requirements; plus (2)

capital accretion, as measured by the change in its capital ratios since CCAR 2018; plus (3) its

approved planned capital distributions for the period January 1, 2018 through June 30, 2019;

minus (4) its actual capital distributions in the first quarter of 2019 and its planned capital

distributions for the second quarter of 2019.16

16 This letter also constitutes approval under 12 CFR 217.20 for any repurchases or redemptions

of capital instruments made by Huntington that are included in the amount of capital

distributions approved as part ofthis order. Such repurchases or redemptions must be included

on the firm’s list of planned distributions provided to the Board by April 5, 2019.

17 12 CFR 252.57(a)(1). IfHuntington’s capital plan includes any material business plan

changes, it may be required to provide supplemental information on any ofthese changes. The

Board may request additional information regarding Huntington’s capital adequacy and capital

planning. 12 CFR 225.8(e)(3).

18 IfHuntington wishes to make additional capital distributions beyond the amount approved

under this letter, Huntington may submit a capital plan to the Board or submit a request to the

Federal Reserve for approval to make such distributions before March 1, 2019, or after

July 1, 2019. 12 CFR 225.8(g)(4).

In addition, the Board is extending the deadline for submission of Schedule A -

Summary, Schedule B - Scenario, and Schedule F - Business Plan Changes ofthe FR Y-14A

until April 5, 2020.17 Huntington must continue to submit Schedule C - Regulatory Capital

Instruments and Schedule E - Operational Risk ofthe FR Y-14A, as well as all FR Y-14M and

FR Y-14Q reports.

Huntington must submit its planned capital actions for the period between July 1, 2019

through June 30, 2020, by April 5, 2019.18 If Huntington chooses to submit a capital plan to the

Board in the 2019 capital plan cycle notwithstanding the Board’s approval ofthe additional

capital distributions described above, Huntington must submit the capital plan to the Board by

April 5, 2019, in accordance with the Board’s capital plan rule, and the film will be subject to a

supervisory stress test by the Board, notwithstanding the reliefprovided in this letter.
The actions ofthe Board are based on the foregoing and all the facts ofrecord. The

actions should not be construed as granting relieffrom any other conditions or commitments to

which Huntington may be subject, including regulatory capital requirements19 and any

requirements under the Board’s stress test rules and related reporting requirements in the year

2020. Please contact Celeste Molleur at 202-452-2783 ifyou have questions.

19 See, e.g„ 12CFR217.11.

Sincerely yours,

Ann Misback

Secretary ofthe Board

cc: Jenni Frazer, Group Vice President

Steven Welch, Supervisory Examiner

Federal Reserve Bank ofCleveland
Appendix: Details on Federal Reserve’s calculation of maximum approved planned capital

actions for 2019

The Federal Reserve will use the following worksheet to compute the maximum planned capital

distributions that Huntington can make from July 1, 2019, through June 30, 2020, without

seeking approval from the Federal Reserve.

Worksheet for determining pre-approved 2019-2020 capital distributions, millions of dollars

Line / Item

A

CET1

capital

ratio

B

Tier 1

risk-based

capital

ratio

C

Tier 1

leverage

ratio

D

Total riskbased

capital

ratio

1. CCAR 2018 distributable capital

a. Capital ratio as of 12/31/2018

b. Decline in capital ratio in CCAR 2018 4.2 4.1 3.4 3.6

c. Minimum Requirement 4.5 6.0 4.0 8.0

d. Capital ratio denominator as of 12/31/2018

2. Adjusted CCAR 2018 additional distributable

capital

= ((1.a- 1.b - 1.c)*(1.d/100))

3. Planned capital actions

a. Planned capital actions PQ1-6 ofCCAR 2018

b. Actual capital actions 2019:Q1

c. Approved planned capital actions 2019:Q2

4. 2019 :Q3 - 2020:Q2 capital distribution capacity

= (2. + 3.a-3.b-3.c)

5. Maximum approved capital actions for 2019:Q3-2020:Q2

a. Net planned distributions from tier 2 capital

= (4.D)

b. Net planned distributions from additional tier 1 capital

= (Min (4.B, 4.C,

4. D - Net planned distributionsfrom tier 2 capital))

c. Net planned distributions from CET1 capital

= (Min (4.A,

4. B - net planned distributionsfrom additional tier 1 capital,

4. C - net planned distributionsfrom additional tier 1 capital,

4. D - net planned distributionsfrom additional tier 1 and tier 2 capital))
The Federal Reserve will complete the worksheet computing the maximum planned capital

distributions that Huntington can make from July 1, 2019, through June 30, 2020, consistent with

the following description of each line item:

Line 1. CCAR 2018 distributable capital.

This section includes the information necessary to determine the additional capital distributions 

that the firm could have made in CCAR 2018 and remained above minimum capital

requirements in the supervisory quantitative assessment, adjusted for the firm’s updated starting

capital ratios.

Line 1.a. Capital ratio as of 12/31/2018.

The regulatory capital ratios calculated using the standardized approaches as reported on the

FR Y-9C as of December 31, 2018. Specifically, for line 1.a., column A, the common equity tier 

1 capital ratio (BHCAP793); for line 1.a., column B, the Tier 1 capital ratio (BHCA7206); for

line 1.a., column C, the Tier 1 leverage ratio (BHCA7204), and for line 1.a., column D, the total

capital ratio (BHCA7205).

1. b . Decline in capital ratio in CCAR 2018.

For each capital ratio, the decline in the capital ratio equals the starting capital ratio minus the

minimum capital ratios in the CCAR 2018 supervisory quantitative assessment under the

severely adverse scenario or in any subsequent supervisory quantitative assessment conducted to

evaluate a resubmitted capital plan.

1.c. Minimum Requirement.

The applicable minimum requirement for each regulatory capital ratio. Specifically, for the line

1.c., column A, a 4.5 percent common equity tier 1 ratio; line 1.c., column B, a 6 percent tier 1

capital ratio; line 1.a., column C, a 4 percent tier 1 leverage ratio, and column D, an 8 percent

total capital ratio.

1.d. Capital ratio denominator as of 12/31/2018.

The applicable denominator for each regulatory capital ratio using the standardized approaches

as reported on the FR Y-9C as ofDecember 31, 2018. Specifically, for line 1.d., column A, B,

and D, total risk-weighted assets (BHCAA223) and for line 1.d, column C, total assets for the

leverage ratio (BHCAA224). To align with the format ofthe FR Y-14A, this item is divided by

1,000 so as to be expressed in millions of dollars.

2. Adjusted CCAR 2018 additional distributable capital.

For each column equal to (Line 1.a -line 1.b -line 1.c)*(line 1.d/100)).

This is the amount of additional capital the firm could have distributed in CCAR 2018 or in any

subsequent quantitative assessment conducted to evaluate a resubmitted capital plan and

remained above minimum requirements.
3. Planned capital actions.

The capital ratio declines in line 1.b. include the effect ofthe firm’s 2018 planned capital actions.

The sum ofthe additional distributable capital calculated in line 2 and the firm’s 2018 planned

capital actions comprise the maximum planned capital distributions that the firm can make for

the 2019 capital plan cycle without seeking approval from the Federal Reserve.

Lines 3.a, 3.b, and 3.c adjust for any changes to the firm’s planned capital actions for PQ1-6.

The firm’s 2018 PQ7-9 planned capital actions are assumed to be representative ofits 2019 PQ7-

9 planned capital actions.

For column A, common equity tier 1 planned capital actions are the sum of cash dividends

declared on common stock (CPSK4460), cash dividends declared on preferred stock

(CPSK4598), and total share repurchases (CPSDQ288) minus total issuance of common stock

(CPSDQ285).

For column B and C, tier 1 capital planned capital actions are the sum of common equity capital

actions in column A plus the amount recognized in regulatory capital from redemption or

repurchases of non-cumulative perpetual preferred stock (CACIY515) and other additional tier 1

instruments (CACIY527) minus issuance of non-cumulative perpetual preferred stock

(CACIY544) and other additional tier 1 instruments (CACIY556).

For column D, total capital planned capital actions are the sum oftier 1 capital actions in

columns B and C plus the amount recognized in regulatory capital from redemption or

repurchases ofsubordinated debt (CACIY528), cumulative dated preferred (TRUPS) instruments

(CACIY535), and tier 2 capital instruments issued by subsidiaries (CACIY529) minus issuance

ofsubordinated debt (CACIY557), cumulative dated preferred (TRUPS) instruments

(CACIY564), and tier 2 capital instruments issued by subsidiaries (CAC1Y558).

3.a. Planned capital actions PQ1-6 of CCAR 2018.

For each category ofregulatory capital, the firm’s planned capital actions for the first through

sixth quarters ofthe CCAR 2018 planning horizon.

3.b. Actual capital actions 2019:Q1.

The firm’s actual capital actions taken in 2019:Q1 as reported on the FR Y-9C and FR Y-14.

3. c. Approved planned capital actions 2019:Q2.

The firm’s capital distributions already included in the capital plan from the prior year and not

objected to by the Federal Reserve for that quarter, including any approved requests for

additional planned capital distributions.

4. 2019:Q3 - 2020:Q2 capital distribution capacity.

For each column equal to Line 2. + line 3.a -line 3.b -line 3.c.
This amount represents the amount of capital above each minimum requirement that the firm

could distribute and still remain adequately capitalized in the severely adverse scenario, based on

the CCAR 2018 supervisory quantitative assessment.

5. Maximum approved capital actions for 2019:Q3 - 2020:Q2.

This section computes the maximum net planned distributions approved for each category of

regulatory capital (i.e. common equity tier 1 capital, additional tier 1 capital, tier 2 capital) that

the firm can make for the period 2019:Q3 through 2020:Q2 without seeking approval from the

Federal Reserve. Each value is expressed in millions of dollars.

5.a. Net planned distributions from tier 2 capital.

Equal to line 4. Column D.

5. b Net planned distributions from additional tier 1 capital.

Equal to the minimum of:

• line 4. Column B;

• line 4. Column C; and

• line 4. Column D - net planned distributions from tier 2 capital.

5. c Net planned distributions from CET1 capital.

Equal to the minimum of:

• line 4. Column A;

• line 4. Column B - net planned distributions from additional tier 1 capital;

• line 4. Column C - net planned distributions from additional tier 1 capital; and

• line 4. Column D - net planned distributions from additional tier 1capital and tier 2

capital.