Item 1. Financial Statements

Huntington Bancshares Incorporated

Condensed Consolidated Balance Sheets

(Unaudited)

			September 30,						December 31,
(dollar amounts in millions)			2022						2021
Assets
Cash and due from banks			$	1,685					$	1,811
Interest-bearing deposits at Federal Reserve Bank			2,691						3,711
Interest-bearing deposits in banks			216						392
Trading account securities			32						46
Available-for-sale securities			23,306						28,460
Held-to-maturity securities			17,173						12,447
Other securities			818						648
Loans held for sale (includes $758 and $1,270 respectively, measured at fair value)(1)			893						1,676
Loans and leases (includes $182 and $171 respectively, measured at fair value)(1)			118,147						111,267
Allowance for loan and lease losses			(2,110)						(2,030)
Net loans and leases			116,037						109,237
Bank owned life insurance			2,768						2,765
Accrued income and other receivables			1,352						1,319
Premises and equipment			1,171						1,164
Goodwill			5,571						5,349
Servicing rights and other intangible assets			715						611
Other assets			4,974						4,428
Total assets			$	179,402					$	174,064
Liabilities and shareholders’ equity
Liabilities
Deposits:
Demand deposits—noninterest-bearing			$	40,762					$	43,236
Interest-bearing			105,551						100,027
Total deposits			146,313						143,263
Short-term borrowings			426						334
Long-term debt			10,168						7,108
Other liabilities			5,324						4,041
Total liabilities			162,231						154,746
Commitments and Contingent Liabilities (Note 16)
Shareholders’ equity
Preferred stock			2,167						2,167
Common stock			14						14
Capital surplus			15,282						15,222
Less treasury shares, at cost			(80)						(79)
Accumulated other comprehensive income (loss)			(3,276)						(229)
Retained earnings			3,029						2,202
Total Huntington Bancshares Inc shareholders’ equity			17,136						19,297
Non-controlling interest			35						21
Total equity			17,171						19,318
Total liabilities and shareholders’ equity			$	179,402					$	174,064
Common shares authorized (par value of $0.01)			2,250,000,000						2,250,000,000
Common shares outstanding			1,442,734,255						1,437,742,172
Treasury shares outstanding			6,341,958						6,298,288
Preferred stock, authorized shares			6,617,808						6,617,808
Preferred shares outstanding			557,500						557,500

(1)Amounts represent loans for which Huntington has elected the fair value option. See Note 13 “Fair Values of Assets and Liabilities”.

See Notes to Unaudited Condensed Consolidated Financial Statements

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Huntington Bancshares Incorporated
Condensed Consolidated Statements of Income
(Unaudited)
			Three months ended September 30,												Nine months ended September 30,
(dollar amounts in millions, except per share data, share count in thousands)			2022						2021						2022						2021
Interest and fee income:
Loans and leases			$	1,268					$	1,056					$	3,350					$	2,614
Available-for-sale securities
Taxable			165						68						378						184
Tax-exempt			20						15						52						41
Held-to-maturity securities—taxable			95						47						251						124
Other securities—taxable			7						2						18						6
Other			34						17						66						40
Total interest income			1,589						1,205						4,115						3,009
Interest expense:
Deposits			92						11						128						34
Short-term borrowings			22						—						36						—
Long-term debt			71						34						140						5
Total interest expense			185						45						304						39
Net interest income			1,404						1,160						3,811						2,970
Provision for credit losses			106						(62)						198						89
Net interest income after provision for credit losses			1,298						1,222						3,613						2,881
Service charges on deposit accounts			93						114						295						271
Card and payment processing income			96						96						278						241
Mortgage banking income			26						81						119						248
Trust and investment management services			60						61						188						169
Capital markets fees			73						40						169						104
Insurance income			28						25						86						77
Leasing revenue			29						42						91						58
Bank owned life insurance income			13						15						41						47
Gain on sale of loans			15						2						55						8
Net gains on sales of securities			—						—						—						10
Other noninterest income			65						59						160						141
Total noninterest income			498						535						1,482						1,374
Personnel costs			614						643						1,771						1,703
Outside data processing and other services			145						304						463						581
Net occupancy			63						95						185						209
Equipment			60						79						202						180
Professional services			18						26						56						91
Marketing			24						25						69						54
Deposit and other insurance expense			15						17						53						33
Amortization of intangibles			13						13						40						34
Lease financing equipment depreciation			11						19						36						24
Other noninterest expense			90						68						249						245
Total noninterest expense			1,053						1,289						3,124						3,154
Income before income taxes			743						468						1,971						1,101
Provision for income taxes			146						90						371						206
Income after income taxes			597						378						1,600						895
Income attributable to non-controlling interest			3						1						7						1
Net income attributable to Huntington Bancshares Inc			594						377						1,593						894
Dividends on preferred shares			29						29						85						103
Impact of preferred stock redemption			—						15						—						15
Net income applicable to common shares			$	565					$	333					$	1,508					$	776
Average common shares—basic			1,442,591						1,462,736						1,440,740						1,201,763
Average common shares—diluted			1,465,083						1,487,335						1,464,234						1,225,428
Per common share:
Net income—basic			$	0.39					$	0.23					$	1.05					$	0.65
Net income—diluted			0.39						0.22						1.03						0.63
See Notes to Unaudited Condensed Consolidated Financial Statements

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Huntington Bancshares Incorporated

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)			2022						2021						2022						2021
Net income attributable to Huntington Bancshares Inc			$	594					$	377					$	1,593					$	894
Other comprehensive (loss) income, net of tax:
Net unrealized losses on available-for-sale securities			(971)						(82)						(2,970)						(220)
Net impact of fair value hedges on available-for-sale securities			250						—						705						29
Change in fair value related to cash flow hedges			(456)						(29)						(782)						(131)
Translation adjustments, net of hedges			(4)						2						(6)						(4)
Change in accumulated unrealized gains for pension and other post-retirement obligations			3						3						6						9
Other comprehensive (loss) income, net of tax			(1,178)						(106)						(3,047)						(317)
Comprehensive (loss) income attributable to Huntington Bancshares			(584)						271						(1,454)						577
Comprehensive income attributed to non-controlling interest			3						1						7						1
Comprehensive (loss) income			$	(581)					$	272					$	(1,447)					$	578

See Notes to Unaudited Condensed Consolidated Financial Statements

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Huntington Bancshares Incorporated

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(dollar amounts in millions, share amounts in thousands)			Preferred Stock						Common Stock												Capital Surplus						Treasury Stock												Accumulated Other Comprehensive Income (Loss)						Retained Earnings												Non-controlling Interest						Total Equity
Amount						Shares						Amount									Shares						Amount												Total
Three Months Ended September 30, 2022
Balance, beginning of period			$	2,167					1,448,885						$	14					$	15,261					(6,691)						$	(85)					$	(2,098)					$	2,691					$	17,950					$	29					$	17,979
Net income																																													594						594						3						597
Other comprehensive income (loss), net of tax																																							(1,178)												(1,178)												(1,178)
Cash dividends declared:
Common ($0.155 per share)																																													(227)						(227)												(227)
Preferred																																													(29)						(29)												(29)
Recognition of the fair value of share-based compensation																					19																														19												19
Other share-based compensation activity									191						—						2																								—						2												2
Other																					—						349						5												—						5						3						8
Balance, end of period			$	2,167					1,449,076						$	14					$	15,282					(6,342)						$	(80)					$	(3,276)					$	3,029					$	17,136					$	35					$	17,171
Three Months Ended September 30, 2021
Balance, beginning of period			$	2,851					1,484,614						$	15					$	15,830					(8,056)						$	(105)					$	(19)					$	1,939					$	20,511					$	20					$	20,531
Net income																																													377						377						1						378
Other comprehensive income (loss), net of tax																																							(106)												(106)												(106)
Redemption of Preferred Series D Stock			(585)																																										(15)						(600)												(600)
Repurchases of common stock									(33,409)						—						(500)																														(500)												(500)
Cash dividends declared:
Common ($0.15 per share)																																													(221)						(221)												(221)
Preferred																																													(29)						(29)												(29)
Recognition of the fair value of share-based compensation																					32																														32												32
Other share-based compensation activity									1,562						—						(12)																								—						(12)												(12)
Other			1																		—						1,750						26												—						27						(1)						26
Balance, end of period			$	2,267					1,452,767						$	15					$	15,350					(6,306)						$	(79)					$	(125)					$	2,051					$	19,479					$	20					$	19,499

See Notes to Unaudited Condensed Consolidated Financial Statements

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(dollar amounts in millions, share amounts in thousands)			Preferred Stock						Common Stock												Capital Surplus						Treasury Stock												Accumulated Other Comprehensive Gain (Loss)						Retained Earnings												Non-controlling Interest						Total Equity
Amount						Shares						Amount									Shares						Amount												Total
Nine Months Ended September 30, 2022
Balance, beginning of period			$	2,167					1,444,040						$	14					$	15,222					(6,298)						$	(79)					$	(229)					$	2,202					$	19,297					$	21					$	19,318
Net income																																													1,593						1,593						7						1,600
Other comprehensive income (loss), net of tax																																							(3,047)												(3,047)												(3,047)
Cash dividends declared:
Common ($0.465 per share)																																													(681)						(681)												(681)
Preferred																																													(85)						(85)												(85)
Recognition of the fair value of share-based compensation																					82																														82												82
Other share-based compensation activity									5,036						—						(22)																								—						(22)												(22)
Other																					—						(44)						(1)						—						—						(1)						7						6
Balance, end of period			$	2,167					1,449,076						$	14					$	15,282					(6,342)						$	(80)					$	(3,276)					$	3,029					$	17,136					$	35					$	17,171
Nine Months Ended September 30, 2021
Balance, beginning of period			$	2,191					1,022,258						$	10					$	8,781					(5,062)						$	(59)					$	192					$	1,878					$	12,993					$	—					$	12,993
Net income																																													894						894						1						895
Other comprehensive income (loss), net of tax																																							(317)												(317)												(317)
TCF Financial Corp acquisition:
Issuance of common stock									458,171						5						6,993												(37)																		6,961												6,961
Issuance of Series I preferred stock			175																		10																														185												185
Non-controlling interest acquired																																																			—						22						22
Net proceeds from issuance of preferred stock			486																																																486												486
Redemption of Preferred Series D stock			(585)																																										(15)						(600)												(600)
Repurchases of common stock									(33,409)						—						(500)																														(500)												(500)
Cash dividends declared:
Common ($0.45 per share)																																													(601)						(601)												(601)
Preferred																																													(103)						(103)												(103)
Recognition of the fair value of share-based compensation																					97																														97												97
Other share-based compensation activity									5,747						—						(31)																								—						(31)												(31)
Other																					—						(1,244)						17												(2)						15						(3)						12
Balance, end of period			$	2,267					1,452,767						$	15					$	15,350					(6,306)						$	(79)					$	(125)					$	2,051					$	19,479					$	20					$	19,499

See Notes to Unaudited Condensed Consolidated Financial Statements

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Huntington Bancshares Incorporated

Condensed Consolidated Statements of Cash Flows

(Unaudited)

			Nine Months Ended September 30,
(dollar amounts in millions)			2022						2021
Operating activities
Net income			$	1,600					$	895
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			198						89
Depreciation and amortization			355						299
Share-based compensation expense			82						97
Deferred income tax expense			164						40
Net change in:
Trading account securities			15						(15)
Loans held for sale			464						(115)
Other assets			(1,109)						(247)
Other liabilities			893						455
Other, net			8						67
Net cash provided by operating activities			2,670						1,565
Investing activities
Change in interest bearing deposits in banks			287						611
Net cash (paid) received from business combinations			(223)						466
Proceeds from:
Maturities and calls of available-for-sale securities			3,298						5,408
Maturities and calls of held-to-maturity securities			2,306						3,073
Maturities and calls of other securities			829						—
Sales of available-for-sale securities			—						5,860
Purchases of available-for-sale securities			(6,365)						(14,995)
Purchases of held-to-maturity securities			(2,845)						(3,685)
Purchases of other securities			(1,009)						—
Net proceeds from sales of portfolio loans and leases			937						479
Principal payments received under direct finance and sales-type leases			1,389						899
Net loan and lease activity, excluding sales and purchases			(8,375)						5,130
Purchases of premises and equipment			(165)						(157)
Purchases of loans and leases			(569)						(771)
Net accrued income and other receivables activity			96						(1,009)
Net cash paid for branch disposition			—						(618)
Other, net			63						98
Net cash provided by (used in) investing activities			(10,346)						789
Financing activities
Increase in deposits			3,050						5,136
Increase (decrease) in short-term borrowings			783						(1,062)
Net proceeds from issuance of long-term debt			5,379						646
Maturity/redemption of long-term debt			(1,902)						(2,649)
Dividends paid on preferred stock			(84)						(109)
Dividends paid on common stock			(673)						(531)
Repurchases of common stock			—						(500)
Payment to repurchase preferred stock			—						(600)
Net proceeds from issuance of preferred stock			—						486
Other, net			(23)						(21)
Net cash provided by financing activities			6,530						796
Increase (decrease) in cash and cash equivalents			(1,146)						3,150
Cash and cash equivalents at beginning of period			5,522						6,595
Cash and cash equivalents at end of period			$	4,376					$	9,745

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			Nine Months Ended September 30,
(dollar amounts in millions)			2022						2021
Supplemental disclosures:
Interest paid			$	269					$	135
Income taxes (received) paid			(113)						262
Non-cash activities
Loans transferred to held-for-sale from portfolio			764						385
Loans transferred to portfolio from held-for-sale			65						83
Transfer of securities from available-for-sale to held-to-maturity			4,225						3,007
Business Combination (1)

(1) In the nine months ended September 30, 2021, the TCF acquisition included fair value of tangible assets acquired of $46.3 billion, goodwill and other intangible assets of $3.5 billion, liabilities assumed $42.6 billion, preferred stock of $185 million, and common stock of $7.0 billion.

See Notes to Unaudited Condensed Consolidated Financial Statements

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Huntington Bancshares Incorporated

Notes to Unaudited Condensed Consolidated Financial Statements

1. BASIS OF PRESENTATION

The accompanying Unaudited Condensed Consolidated Financial Statements of Huntington reflect all adjustments consisting of normal recurring accruals which are, in the opinion of management, necessary for a fair statement of the consolidated financial position, the results of operations, and cash flows for the periods presented. These Unaudited Condensed Consolidated Financial Statements have been prepared according to the rules and regulations of the SEC and, therefore, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. The Notes to Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K, which include descriptions of significant accounting policies, as updated by the information contained in this report, should be read in conjunction with these interim financial statements.

For statement of cash flow purposes, cash and cash equivalents are defined as the sum of cash and due from banks and interest-bearing deposits at Federal Reserve Bank.

Certain prior period amounts have been reclassified to conform to current year’s presentation.

Effective in the 2022 first quarter, a new classification within the Unaudited Condensed Consolidated Balance Sheet of accrued income and other receivables was established comprised of activity that was previously classified as loans and leases (other consumer loans and leases) and other assets. All prior period amounts and all related metrics have been revised to conform to the current presentation.

In conjunction with applicable accounting standards, all material subsequent events have been either recognized in the Unaudited Condensed Consolidated Financial Statements or disclosed in the Notes to Unaudited Condensed Consolidated Financial Statements. There were no material subsequent events to disclose for the current period.

2. ACCOUNTING STANDARDS UPDATE

Accounting standards adopted in the current period

Standard			Summary of guidance			Effects on financial Statements
ASU 2021-08-Business Combinations (Topic 805) Issued October 2021			•The amendments in this update require that an acquirer apply topic 606 to the recognition and measurement of revenue contract assets and liabilities acquired in a business combination.			•Management adopted the guidance during the second quarter 2022. •The ASU has been applied to all business combinations occurring during 2022 and will be applied prospectively to all future business combinations. •The adoption did not result in a material impact on Huntington’s Unaudited Condensed Consolidated Financial Statements.
ASU 2022-01-Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method Issued March 2022			•The amendments in this update expand the current last-of-layer method to allow for multiple hedge layers in a single closed portfolio. To reflect the expansion, the last-of-layer method has been renamed the portfolio layer method. The standard also expands the scope of the portfolio layer method to nonprepayable financial assets.			•Management early adopted the guidance during the second quarter of 2022 using the modified retrospective basis. There was no impact to Huntington’s Unaudited Condensed Consolidated Financial Statements as a result of the adoption. Amendments related to disclosures were applied prospectively from the initial adoption date. •The ASU also gives entities the option to reclassify debt securities classified in the held-to-maturity category at the date of adoption to the available-for-sale category if the entity applies the portfolio layer method hedging to one or more closed portfolios that include those debt securities, Huntington did not apply this option to any held-to-maturity securities.

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Accounting standards yet to be adopted

Standard			Summary of guidance			Effects on financial statements
ASU 2022-02- Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures Issued March 2022			•The amendments in this update eliminate TDR accounting for entities that have adopted Update 2016-13, while enhancing disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty. The ASU also requires disclosure of current period gross write-offs by year of origination for financing receivables and net investment in leases.			•Effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. •Adoption of the ASU will be applied prospectively, except for the portion of the standard related to the recognition and measurement of TDRs an entity may elect to use a modified retrospective transition method with a cumulative effect adjustment to retained earnings at the beginning of the period of adoption. The ASU does allow for early adoption. •Huntington is currently evaluating the impact of the ASU on its Consolidated Financial Statements, as well as which adoption method to apply. Huntington does not currently intend to adopt the ASU prior to the effective date.

3. BUSINESS COMBINATIONS

On June 15, 2022, Huntington acquired Capstone Partners, a leading middle market investment bank and advisory firm dedicated to servicing middle market companies throughout their full business lifecycle. The acquisition resulted in $192 million of goodwill, allocated to the Commercial segment, which approximates total consideration. Fair value estimates related to the acquired assets and liabilities are subject to adjustment during the one-year measurement period following the closing of the acquisition. The goodwill recognized is deductible for tax purposes.

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4. INVESTMENT SECURITIES AND OTHER SECURITIES

Debt securities purchased in which Huntington has the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other debt and equity securities are classified as either available-for-sale or other securities.

The following tables provide amortized cost, fair value, and gross unrealized gains and losses by investment category at September 30, 2022 and December 31, 2021:

									Unrealized
(dollar amounts in millions)			Amortized Cost (1)(2)						Gross Gains						Gross Losses						Fair Value
September 30, 2022
Available-for-sale securities:
U.S. Treasury			$	5					$	—					$	—					$	5
Federal agencies:
Residential CMO			3,417						—						(382)						3,035
Residential MBS			14,269						—						(2,286)						11,983
Commercial MBS			2,581						—						(543)						2,038
Other agencies			199						—						(9)						190
Total U.S. Treasury, federal agency, and other agency securities			20,471						—						(3,220)						17,251
Municipal securities			3,626						1						(251)						3,376
Private-label CMO			151						1						(10)						142
Asset-backed securities			414						1						(44)						371
Corporate debt			2,464						140						(442)						2,162
Other securities/Sovereign debt			4						—						—						4
Total available-for-sale securities			$	27,130					$	143					$	(3,967)					$	23,306
Held-to-maturity securities:
Federal agencies:
Residential CMO			$	4,757					$	—					$	(667)					$	4,090
Residential MBS			10,517						—						(1,474)						9,043
Commercial MBS			1,756						—						(188)						1,568
Other agencies			141						—						(9)						132
Total federal agency and other agency securities			17,171						—						(2,338)						14,833
Municipal securities			2						—						—						2
Total held-to-maturity securities			$	17,173					$	—					$	(2,338)					$	14,835
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock			$	245					$	—					$	—					$	245
Federal Reserve Bank stock			515						—						—						515
Equity securities			8						—						—						8
Other securities, at fair value:
Mutual funds			47						—						—						47
Equity securities			2						1						—						3
Total other securities			$	817					$	1					$	—					$	818

(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At September 30, 2022, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $71 million and $38 million, respectively.

(2)Excluded from the amortized cost are portfolio level basis adjustments for securities designated in fair value hedges under the portfolio layer method. The basis adjustments totaled $892 million and represent a reduction to the amortized cost of the securities being hedged. The securities being hedged under the portfolio layer method are primarily Residential CMO and Residential MBS securities.

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									Unrealized
(dollar amounts in millions)			Amortized Cost (1)						Gross Gains						Gross Losses						Fair Value
December 31, 2021
Available-for-sale securities:
U.S. Treasury			$	5					$	—					$	—					$	5
Federal agencies:
Residential CMO			4,649						40						(40)						4,649
Residential MBS			15,533						135						(160)						15,508
Commercial MBS			1,896						7						(38)						1,865
Other agencies			248						1						(1)						248
Total U.S. Treasury, federal agency, and other agency securities			22,331						183						(239)						22,275
Municipal securities			3,497						62						(33)						3,526
Private-label CMO			106						1						(1)						106
Asset-backed securities			385						1						(4)						382
Corporate debt			2,183						22						(38)						2,167
Other securities/Sovereign debt			4						—						—						4
Total available-for-sale securities			$	28,506					$	269					$	(315)					$	28,460
Held-to-maturity securities:
Federal agencies:
Residential CMO			$	2,602					$	35					$	(20)					$	2,617
Residential MBS			7,475						41						(59)						7,457
Commercial MBS			2,175						45						(5)						2,215
Other agencies			193						5						—						198
Total federal agency and other agency securities			12,445						126						(84)						12,487
Municipal securities			2						—						—						2
Total held-to-maturity securities			$	12,447					$	126					$	(84)					$	12,489
Other securities, at cost:
Non-marketable equity securities:
Federal Home Loan Bank stock			$	52					$	—					$	—					$	52
Federal Reserve Bank stock			512						—						—						512
Equity securities			12						—						—						12
Other securities, at fair value:
Mutual funds			65						—						—						65
Equity securities			6						1						—						7
Total other securities			$	647					$	1					$	—					$	648

(1)Amortized cost amounts exclude accrued interest receivable, which is recorded within accrued income and other receivables on the Consolidated Balance Sheets. At December 31, 2021, accrued interest receivable on available-for-sale securities and held-to-maturity securities totaled $62 million and $26 million, respectively.

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The following table provides the amortized cost and fair value of securities by contractual maturity at September 30, 2022 and December 31, 2021. Expected maturities may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without incurring penalties.

			September 30, 2022												December 31, 2021
(dollar amounts in millions)			Amortized Cost						Fair Value						Amortized Cost						Fair Value
Available-for-sale securities:
Under 1 year			$	462					$	448					$	377					$	374
After 1 year through 5 years			2,566						2,367						1,888						1,880
After 5 years through 10 years			3,059						2,735						3,166						3,180
After 10 years			21,043						17,756						23,075						23,026
Total available-for-sale securities			$	27,130					$	23,306					$	28,506					$	28,460
Held-to-maturity securities:
Under 1 year			$	1					$	1					$	2					$	2
After 1 year through 5 years			98						94						162						164
After 5 years through 10 years			57						53						44						45
After 10 years			17,017						14,687						12,239						12,278
Total held-to-maturity securities			$	17,173					$	14,835					$	12,447					$	12,489

The following tables provide detail on investment securities with unrealized losses aggregated by investment category and the length of time the individual securities have been in a continuous loss position at September 30, 2022 and December 31, 2021:

			Less than 12 Months												Over 12 Months												Total
(dollar amounts in millions)			Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
September 30, 2022
Available-for-sale securities:
Federal agencies:
Residential CMO			$	2,330					$	(220)					$	705					$	(162)					$	3,035					$	(382)
Residential MBS			5,580						(921)						6,402						(1,365)						11,982						(2,286)
Commercial MBS			1,462						(324)						576						(219)						2,038						(543)
Other agencies			28						(1)						52						(8)						80						(9)
Total federal agency and other agency securities			9,400						(1,466)						7,735						(1,754)						17,135						(3,220)
Municipal securities			2,863						(226)						401						(25)						3,264						(251)
Private-label CMO			94						(8)						20						(2)						114						(10)
Asset-backed securities			240						(20)						131						(24)						371						(44)
Corporate debt			1,240						(229)						920						(213)						2,160						(442)
Total temporarily impaired available-for-sale securities			$	13,837					$	(1,949)					$	9,207					$	(2,018)					$	23,044					$	(3,967)
Held-to-maturity securities:
Federal agencies:
Residential CMO			$	3,279					$	(510)					$	811					$	(157)					$	4,090					$	(667)
Residential MBS			5,851						(811)						3,174						(663)						9,025						(1,474)
Commercial MBS			1,360						(151)						207						(37)						1,567						(188)
Other agencies			132						(9)						—						—						132						(9)
Total federal agency and other agency securities			10,622						(1,481)						4,192						(857)						14,814						(2,338)
Total temporarily impaired held-to-maturity securities			$	10,622					$	(1,481)					$	4,192					$	(857)					$	14,814					$	(2,338)

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			Less than 12 Months												Over 12 Months												Total
(dollar amounts in millions)			Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses						Fair Value						Gross Unrealized Losses
December 31, 2021
Available-for-sale securities:
Federal agencies:
Residential CMO			$	2,925					$	(40)					$	—					$	—					$	2,925					$	(40)
Residential MBS			13,491						(160)						—						—						13,491						(160)
Commercial MBS			1,251						(38)						—						—						1,251						(38)
Other agencies			140						(1)						—						—						140						(1)
Total federal agency and other agency securities			17,807						(239)						—						—						17,807						(239)
Municipal securities			859						(22)						319						(11)						1,178						(33)
Private-label CMO			78						(1)						—						—						78						(1)
Asset-backed securities			237						(4)						—						—						237						(4)
Corporate debt			1,766						(38)						—						—						1,766						(38)
Total temporarily impaired available-for-sale securities			$	20,747					$	(304)					$	319					$	(11)					$	21,066					$	(315)
Held-to-maturity securities:
Federal agencies:
Residential CMO			$	1,453					$	(20)					$	—					$	—					$	1,453					$	(20)
Residential MBS			5,837						(59)						—						—						5,837						(59)
Commercial MBS			318						(5)						—						—						318						(5)
Total federal agency and other agency securities			7,608						(84)						—						—						7,608						(84)
Total temporarily impaired held-to-maturity securities			$	7,608					$	(84)					$	—					$	—					$	7,608					$	(84)

During the 2022 first quarter, Huntington transferred $4.2 billion of securities from the AFS portfolio to the HTM portfolio. At the time of the transfer, AOCI included $58 million of net unrealized losses (after-tax) attributed to these securities. This loss will be amortized into interest income over the remaining life of the securities.

At September 30, 2022 and December 31, 2021, the carrying value of investment securities pledged: (i) to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements, and (ii) to support borrowing capacity, totaled $28.0 billion and $21.7 billion, respectively. There were no securities of a single issuer, which were not governmental or government-sponsored, that exceeded 10% of shareholders’ equity at either September 30, 2022 or December 31, 2021. At September 30, 2022, all HTM debt securities are considered AAA rated. In addition, there were no HTM debt securities considered past due at September 30, 2022.

Based on an evaluation of available information including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, as of September 30, 2022, Huntington has concluded that except for one municipal bond classified as an AFS debt security for which a charge-off of $4 million was recognized during the 2022 first quarter, it expects to receive all contractual cash flows from each security held in its AFS and HTM debt securities portfolio. There was no allowance related to investment securities as of September 30, 2022 or December 31, 2021.

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5. LOANS AND LEASES

The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2022 and December 31, 2021.

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Commercial loan and lease portfolio:
Commercial and industrial			$	44,144					$	41,688
Commercial real estate			16,456						14,961
Lease financing			5,093						5,000
Total commercial loan and lease portfolio			65,693						61,649
Consumer loan portfolio:
Residential mortgage			21,816						19,256
Automobile			13,430						13,434
Home equity			10,440						10,550
RV and marine			5,436						5,058
Other consumer			1,332						1,320
Total consumer loan portfolio			52,454						49,618
Total loans and leases (1)(2)			118,147						111,267
Allowance for loan and lease losses			(2,110)						(2,030)
Net loans and leases			$	116,037					$	109,237

(1)Loans and leases are reported at principal amount outstanding including unamortized purchase premiums and discounts, unearned income, and net direct fees and costs associated with originating and acquiring loans and leases. The aggregate amount of these loan and lease adjustments was a net discount of $42 million and $111 million at September 30, 2022 and December 31, 2021, respectively.

(2)The total amount of accrued interest recorded for these loans and leases at September 30, 2022, was $190 million and $167 million of commercial and consumer loan and lease portfolios, respectively, and at December 31, 2021, was $148 million and $150 million of commercial and consumer loan and lease portfolios, respectively. Accrued interest is presented in accrued income and other receivables within the Condensed Consolidated Balance Sheets.

Lease Financing

Huntington leases equipment to customers, and substantially all such arrangements are classified as either sales-type or direct financing leases, which are included in commercial loans and leases. These leases are reported at the aggregate of lease payments receivable and estimated residual values, net of unearned and deferred income, and any initial direct costs incurred to originate these leases.

Huntington assesses net investments in leases (including residual values) for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. As such, net investments in leases may be reduced by an ACL, with changes recognized as provision expense.

The following table presents net investments in lease financing receivables by category at September 30, 2022 and December 31, 2021.

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Lease payments receivable			$	4,740					$	4,620
Estimated residual value of leased assets			769						774
Gross investment in lease financing receivables			5,509						5,394
Deferred origination costs			42						36
Deferred fees, unearned income and other			(458)						(430)
Total lease financing receivables			$	5,093					$	5,000

The carrying value of residual values guaranteed was $454 million and $473 million as of September 30, 2022 and December 31, 2021, respectively. The future lease rental payments due from customers on sales-type and direct financing leases at September 30, 2022, totaled $4.7 billion and were due as follows: $838 million in 2022, $820 million in 2023, $815 million in 2024, $733 million in 2025, $688 million in 2026, and $846 million thereafter. Interest income recognized for these types of leases was $41 million and $73 million for the three-month periods ended September 30, 2022 and 2021, respectively. For the nine-month periods ended September 30, 2022 and 2021, interest income recognized for these types of leases was $117 million and $154 million.

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Nonaccrual and Past Due Loans and Leases

The following table presents NALs by class at September 30, 2022 and December 31, 2021:

			September 30, 2022									December 31, 2021
(dollar amounts in millions)			Nonaccrual loans and leases with no ACL			Total nonaccrual loans and leases						Nonaccrual loans and leases with no ACL			Total nonaccrual loans and leases
Commercial and industrial			$	73		$	288					$	81		$	370
Commercial real estate			85			110						80			104
Lease financing			7			30						3			48
Residential mortgage			—			94						—			111
Automobile			—			4						—			3
Home equity			—			75						—			79
RV and marine			—			1						—			1
Total nonaccrual loans and leases			$	165		$	602					$	164		$	716

The following table presents an aging analysis of loans and leases, by class at September 30, 2022 and December 31, 2021:

			September 30, 2022
			Past Due (1)																																				Loans Accounted for Under FVO						Total Loans and Leases						90 or more days past due and accruing
(dollar amounts in millions)			30-59 Days						60-89 Days						90 or more days						Total						Current
Commercial and industrial			$	92					$	49					$	117					$	258					$	43,886											$	—					$	44,144					$	29		(2)
Commercial real estate			24						4						32						60						16,396												—						16,456						—
Lease financing			57						45						21						123						4,970												—						5,093						18			(3)
Residential mortgage			196						65						203						464						21,171												181						21,816						153			(4)
Automobile			72						18						9						99						13,331												—						13,430						6
Home equity			47						21						61						129						10,310												1						10,440						12
RV and marine			12						4						2						18						5,418												—						5,436						2
Other consumer			13						3						3						19						1,313												—						1,332						3
Total loans and leases			$	513					$	209					$	448					$	1,170					$	116,795											$	182					$	118,147					$	223

			December 31, 2021
			Past Due (1)																																				Loans Accounted for Under FVO						Total Loans and Leases						90 or more days past due and accruing
(dollar amounts in millions)			30-59 Days						60-89 Days						90 or more days						Total						Current
Commercial and industrial			$	72					$	69					$	107					$	248					$	41,440											$	—					$	41,688					$	13		(2)
Commercial real estate			9						1						9						19						14,942												—						14,961						—
Lease financing			39						13						17						69						4,931												—						5,000						11			(3)
Residential mortgage			151						49						233						433						18,653												170						19,256						157			(4)
Automobile			79						18						8						105						13,329												—						13,434						6
Home equity			48						35						76						159						10,390												1						10,550						17
RV and marine			14						4						3						21						5,037												—						5,058						3
Other consumer			13						2						3						18						1,302												—						1,320						3
Total loans and leases			$	425					$	191					$	456					$	1,072					$	110,024											$	171					$	111,267					$	210

(1)NALs are included in this aging analysis based on the loan’s past due status.

(2)Amounts include PPP (SBA guaranteed) and other SBA loans and leases.

(3)Amounts include Huntington Technology Finance administrative lease delinquencies.

(4)Amounts include mortgage loans insured by U.S. government agencies.

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Credit Quality Indicators

See Note 5 “Loans/Leases” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for a description of the credit quality indicators Huntington utilizes for monitoring credit quality and for determining an appropriate ACL level.

To facilitate the monitoring of credit quality for commercial loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following internally defined categories of credit grades:

• Pass - Higher quality loans that do not fit any of the other categories described below.

• OLEM - The credit risk may be relatively minor yet represents a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the loan may weaken or the collateral may be inadequate to protect Huntington’s position in the future. For these reasons, Huntington considers the loans to be potential problem loans.

• Substandard - Inadequately protected loans resulting from the borrower’s ability to repay, equity, and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. It is likely Huntington will sustain some loss if any identified weaknesses are not mitigated.

• Doubtful - Loans that have all of the weaknesses inherent in those loans classified as Substandard, with the added elements of the full collection of the loan is improbable and that the possibility of loss is high.

Loans are generally assigned a category of “Pass” rating upon initial approval and subsequently updated as appropriate based on the borrower’s financial performance.

Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are both considered Classified loans.

For all classes within the consumer loan portfolios, loans are assigned pool level PD factors based on the FICO range within which the borrower’s credit bureau score falls. A credit bureau score is a credit score developed by FICO based on data provided by the credit bureaus. The credit bureau score is widely accepted as the standard measure of consumer credit risk used by lenders, regulators, rating agencies, and consumers. The higher the credit bureau score, the higher likelihood of repayment and therefore, an indicator of higher credit quality.

Huntington assesses the risk in the loan portfolio by utilizing numerous risk characteristics. The classifications described above, and also presented in the table below, represent one of those characteristics that are closely monitored in the overall credit risk management processes.

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The following tables present the amortized cost basis of loans and leases by vintage and credit quality indicator at September 30, 2022 and December 31, 2021 respectively:

						As of September 30, 2022
						Term Loans Amortized Cost Basis by Origination Year																																				Revolver Total at Amortized Cost Basis						Revolver Total Converted to Term Loans
(dollar amounts in millions)						2022						2021						2020						2019						2018						Prior												Total
Commercial and industrial
Credit Quality Indicator (1):
Pass						$	13,212					$	7,720					$	3,808					$	2,328					$	1,228					$	1,314					$	11,998					$	4					$	41,612
OLEM						128						204						130						43						61						39						139						—						744
Substandard						227						199						194						244						155						277						491						—						1,787
Doubtful						—						—						—						—						—						1						—						—						1
Total Commercial and industrial						$	13,567					$	8,123					$	4,132					$	2,615					$	1,444					$	1,631					$	12,628					$	4					$	44,144
Commercial real estate
Credit Quality Indicator (1):
Pass						$	4,638					$	3,544					$	1,821					$	1,892					$	1,075					$	1,186					$	1,325					$	—					$	15,481
OLEM						44						26						4						11						12						39						—						—						136
Substandard						195						126						121						128						129						137						3						—						839
Total Commercial real estate						$	4,877					$	3,696					$	1,946					$	2,031					$	1,216					$	1,362					$	1,328					$	—					$	16,456
Lease financing
Credit Quality Indicator (1):
Pass						$	1,391					$	1,424					$	1,069					$	546					$	229					$	177					$	—					$	—					$	4,836
OLEM						25						14						32						6						7						4						—						—						88
Substandard						37						25						56						28						9						14						—						—						169
Total Lease financing						$	1,453					$	1,463					$	1,157					$	580					$	245					$	195					$	—					$	—					$	5,093
Residential mortgage
Credit Quality Indicator (2):
750+						$	2,993					$	6,251					$	3,611					$	864					$	485					$	2,165					$	—					$	—					$	16,369
650-749						1,260						1,308						670						235						146						814						—						—						4,433
<650						29						60						60						90						94						500						—						—						833
Total Residential mortgage						$	4,282					$	7,619					$	4,341					$	1,189					$	725					$	3,479					$	—					$	—					$	21,635
Automobile
Credit Quality Indicator (2):
750+						$	2,358					$	2,366					$	1,381					$	898					$	362					$	154					$	—					$	—					$	7,519
650-749						1,641						1,733						785						436						205						77						—						—						4,877
<650						231						364						186						128						79						46						—						—						1,034
Total Automobile						$	4,230					$	4,463					$	2,352					$	1,462					$	646					$	277					$	—					$	—					$	13,430
Home equity
Credit Quality Indicator (2):
750+						$	359					$	588					$	633					$	25					$	23					$	323					$	4,891					$	265					$	7,107
650-749						104						95						69						10						8						130						2,124						269						2,809
<650						2						3						3						2						2						55						324						132						523
Total Home equity						$	465					$	686					$	705					$	37					$	33					$	508					$	7,339					$	666					$	10,439
RV and marine
Credit Quality Indicator (2):
750+						$	1,059					$	1,070					$	764					$	379					$	373					$	465					$	—					$	—					$	4,110
650-749						247						335						213						126						122						180						—						—						1,223
<650						3						16						14						16						16						38						—						—						103
Total RV and marine						$	1,309					$	1,421					$	991					$	521					$	511					$	683					$	—					$	—					$	5,436
Other consumer
Credit Quality Indicator (2):
750+						$	202					$	71					$	39					$	40					$	15					$	55					$	360					$	3					$	785
650-749						57						34						14						18						4						16						330						18						491
<650						2						3						2						3						1						2						30						13						56
Total Other consumer						$	261					$	108					$	55					$	61					$	20					$	73					$	720					$	34					$	1,332

(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.

(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.

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						As of December 31, 2021
						Term Loans Amortized Cost Basis by Origination Year																																				Revolver Total at Amortized Cost Basis						Revolver Total Converted to Term Loans
(dollar amounts in millions)						2021						2020						2019						2018						2017						Prior												Total
Commercial and industrial
Credit Quality Indicator (1):
Pass						$	15,435					$	5,677					$	3,682					$	1,983					$	1,080					$	1,134					$	9,945					$	3					$	38,939
OLEM						183						178						87						83						38						73						166						—						808
Substandard						336						203						344						206						125						167						552						—						1,933
Doubtful						5						1						1						1						—						—						—						—						8
Total Commercial and industrial						$	15,959					$	6,059					$	4,114					$	2,273					$	1,243					$	1,374					$	10,663					$	3					$	41,688
Commercial real estate
Credit Quality Indicator (1):
Pass						$	4,144					$	2,367					$	2,593					$	1,456					$	761					$	1,124					$	798					$	—					$	13,243
OLEM						76						48						42						83						73						19						—						—						341
Substandard						224						362						448						115						151						46						30						—						1,376
Doubtful						—						—						—						1						—						—						—						—						1
Total Commercial real estate						$	4,444					$	2,777					$	3,083					$	1,655					$	985					$	1,189					$	828					$	—					$	14,961
Lease financing
Credit Quality Indicator (1):
Pass						$	1,851					$	1,441					$	809					$	417					$	226					$	131					$	—					$	—					$	4,875
OLEM						8						32						12						4						2						—						—						—						58
Substandard						6						23						19						2						9						8						—						—						67
Total Lease financing						$	1,865					$	1,496					$	840					$	423					$	237					$	139					$	—					$	—					$	5,000
Residential mortgage
Credit Quality Indicator (2):
750+						$	5,532					$	3,857					$	978					$	554					$	687					$	1,704					$	—					$	—					$	13,312
650-749						1,862						993						409						269						254						1,028						—						—						4,815
<650						48						56						104						120						99						532						—						—						959
Total Residential mortgage						$	7,442					$	4,906					$	1,491					$	943					$	1,040					$	3,264					$	—					$	—					$	19,086
Automobile
Credit Quality Indicator (2):
750+						$	2,993					$	1,927					$	1,381					$	666					$	345					$	129					$	—					$	—					$	7,441
650-749						2,393						1,237						736						380						168						55						—						—						4,969
<650						380						234						178						128						70						34						—						—						1,024
Total Automobile						$	5,766					$	3,398					$	2,295					$	1,174					$	583					$	218					$	—					$	—					$	13,434
Home equity
Credit Quality Indicator (2):
750+						$	645					$	701					$	32					$	31					$	34					$	387					$	4,772					$	272					$	6,874
650-749						129						94						15						13						13						161						2,324						324						3,073
<650						3						2						2						1						1						67						361						165						602
Total Home equity						$	777					$	797					$	49					$	45					$	48					$	615					$	7,457					$	761					$	10,549
RV and marine
Credit Quality Indicator (2):
750+						$	1,257					$	933					$	470					$	468					$	268					$	319					$	—					$	—					$	3,715
650-749						393						273						171						157						106						150						—						—						1,250
<650						6						11						13						18						18						27						—						—						93
Total RV and marine						$	1,656					$	1,217					$	654					$	643					$	392					$	496					$	—					$	—					$	5,058
Other consumer
Credit Quality Indicator (2):
750+						$	211					$	34					$	50					$	13					$	10					$	27					$	326					$	3					$	674
650-749						88						52						50						23						17						41						295						24						590
<650						2						2						5						2						—						1						27						17						56
Total Other consumer						$	301					$	88					$	105					$	38					$	27					$	69					$	648					$	44					$	1,320

(1)Consistent with the credit quality disclosures, indicators for the Commercial portfolio are based on internally defined categories of credit grades which are generally refreshed at least semi-annually.

(2)Consistent with the credit quality disclosures, indicators for the Consumer portfolio are based on updated customer credit scores refreshed at least quarterly.

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TDR Loans

TDRs are modified loans where a concession was provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concessions provided would not otherwise be considered. However, not all loan modifications are TDRs. See Note 5 “Loans / Leases” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for an additional discussion of TDRs.

The following table presents, by class and modification type, the number of contracts, post-modification outstanding balance, and the financial effects of the modification for the three-month and nine-month periods ended September 30, 2022 and 2021.

			New Troubled Debt Restructurings (1)
			Three Months Ended September 30, 2022
			Number of Contracts						Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)						Interest rate reduction						Amortization or maturity date change						Chapter 7 bankruptcy						Other						Total
Commercial and industrial			81						$	39					$	22					$	—					$	13					$	74
Commercial real estate			7						5						10						—						—						15
Residential mortgage			184						—						25						1						—						26
Automobile			697						—						6						1						—						7
Home equity			54						—						1						—						—						1
RV and marine			31						—						1						1						—						2
Other consumer			38						—						—						—						—						—
Total new TDRs			1,092						$	44					$	65					$	3					$	13					$	125
			Three Months Ended September 30, 2021
			Number of Contracts						Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)						Interest rate reduction						Amortization or maturity date change						Chapter 7 bankruptcy						Other						Total
Commercial and industrial			16						$	—					$	3					$	—					$	—					$	3
Commercial real estate			4						—						—						—						—						—
Residential mortgage			74						—						7						2						—						9
Automobile			498						—						3						1						—						4
Home equity			42						—						1						1						—						2
RV and marine			19						—						—						—						—						—
Other consumer			49						—						—						—						—						—
Total new TDRs			702						$	—					$	14					$	4					$	—					$	18

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			New Troubled Debt Restructurings (1)
			Nine Months Ended September 30, 2022
			Number of Contracts						Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)						Interest rate reduction						Amortization or maturity date change						Chapter 7 bankruptcy						Other						Total
Commercial and industrial			222						$	69					$	37					$	—					$	14					$	120
Commercial real estate			12						42						10						—						—						52
Residential mortgage			629						—						85						5						—						90
Automobile			1,791						—						13						2						—						15
Home equity			166						—						5						3						—						8
RV and marine finance			105						—						2						1						—						3
Other consumer			91						—						—						—						—						—
Total new TDRs			3,016						$	111					$	152					$	11					$	14					$	288
			Nine Months Ended September 30, 2021
			Number of Contracts						Post-modification Outstanding Recorded Investment (2)
(dollar amounts in millions)						Interest rate reduction						Amortization or maturity date change						Chapter 7 bankruptcy						Other						Total
Commercial and industrial			53						$	15					$	23					$	—					$	—					$	38
Commercial real estate			4						—						—						—						—						—
Residential mortgage			232						—						31						4						—						35
Automobile			1,914						—						13						3						—						16
Home equity			155						—						3						5						—						8
RV and marine finance			103						1						1						1						—						3
Other consumer			214						—						—						—						1						1
Total new TDRs			2,675						$	16					$	71					$	13					$	1					$	101

(1)TDRs may include multiple concessions and the disclosure classifications are based on the primary concession provided to the borrower.

(2)Post-modification balances approximate pre-modification balances.

Pledged Loans

The Bank has access to the Federal Reserve’s discount window and advances from the FHLB. As of September 30, 2022 and December 31, 2021, these borrowings and advances are secured by $70.1 billion and $61.1 billion, respectively, of loans.

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6. ALLOWANCE FOR CREDIT LOSSES

Allowance for Credit Losses - Roll-forward

The following tables present ACL activity by portfolio segment for the three-month and nine-month periods ended September 30, 2022 and 2021.

(dollar amounts in millions)																																													Commercial						Consumer						Total
Three-month period ended September 30, 2022:
ALLL balance, beginning of period																																													$	1,342					$	732					$	2,074
Loan and lease charge-offs																																													(35)						(48)						(83)
Recoveries of loans and leases previously charged-off																																													20						19						39
Provision (benefit) for loan and lease losses																																													87						(7)						80
ALLL balance, end of period																																													$	1,414					$	696					$	2,110
AULC balance, beginning of period																																													$	53					$	41					$	94
Provision (benefit) for unfunded lending commitments																																													8						18						26
AULC balance, end of period																																													$	61					$	59					$	120
ACL balance, end of period																																													$	1,475					$	755					$	2,230
Nine-month period ended September 30, 2022:
ALLL balance, beginning of period																																													$	1,462					$	568					$	2,030
Loan and lease charge-offs																																													(77)						(139)						(216)
Recoveries of loans and leases previously charged-off																																													83						62						145
Provision for loan and lease losses																																													(54)						205						151
ALLL balance, end of period																																													$	1,414					$	696					$	2,110
AULC balance, beginning of period																																													$	41					$	36					$	77
Provision for unfunded lending commitments																																													20						23						43
AULC balance, end of period																																													$	61					$	59					$	120
ACL balance, end of period																																													$	1,475					$	755					$	2,230

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(dollar amounts in millions)																																													Commercial						Consumer						Total
Three-month period ended September 30, 2021:
ALLL balance, beginning of period																																													$	1,618					$	600					$	2,218
Loan and lease charge-offs																																													(74)						(32)						(106)
Recoveries of loans and leases previously charged-off																																													27						24						51
Provision (benefit) for loan and lease losses																																													(22)						(34)						(56)
ALLL balance, end of period																																													$	1,549					$	558					$	2,107
AULC balance, beginning of period																																													$	76					$	28					$	104
Provision (benefit) for unfunded lending commitments																																													2						(8)						(6)
AULC balance, end of period																																													$	78					$	20					$	98
ACL balance, end of period																																													$	1,627					$	578					$	2,205
Nine-month period ended September 30, 2021:
ALLL balance, beginning of period																																													$	1,236					$	578					$	1,814
Loan and lease charge-offs																																													(213)						(90)						(303)
Recoveries of loans and leases previously charged-off																																													58						64						122
Provision (benefit) for loan and lease losses (1)																																													94						(52)						42
Allowance on PCD loans and leases at acquisition																																													374						58						432
ALLL balance, end of period																																													$	1,549					$	558					$	2,107
AULC balance, beginning of period																																													$	34					$	18					$	52
Provision for unfunded lending commitments (2)																																													45						2						47
Unfunded lending commitment losses																																													(1)						—						(1)
AULC balance, end of period																																													$	78					$	20					$	98
ACL balance, end of period																																													$	1,627					$	578					$	2,205

(1)Includes $234 million of TCF acquisition initial provision for credit losses related to non-PCD loans and leases.

(2)Includes $60 million from acquired unfunded lending commitments.

At September 30, 2022, the ACL was $2.2 billion, an increase of $123 million from the December 31, 2021 balance of $2.1 billion.

The economic scenarios used in the September 30, 2022 ACL determination contained judgmental assumptions due to elevated levels of economic uncertainty associated with geopolitical instability, high inflation readings, and the expected path of interest rate increases by the Fed. Given the uncertainty associated with key economic scenario assumptions, the September 30, 2022 ACL included a general reserve that consists of various risk profile components to capture uncertainty not addressed within the quantitative transaction reserve.

7. MORTGAGE LOAN SALES AND SERVICING RIGHTS

Residential Mortgage Portfolio

The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the three-month and nine-month periods ended September 30, 2022 and 2021:

						Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)						2022						2021						2022						2021
Residential mortgage loans sold with servicing retained						$	1,310					$	2,298					$	4,557					$	7,302
Pretax gains resulting from above loan sales (1)						11						80						110						274

(1)Recorded in mortgage banking income.

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The following table summarizes the changes in MSRs recorded using the fair value method for the three-month and nine-month periods ended September 30, 2022 and 2021:

						Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)						2022						2021						2022						2021
Fair value, beginning of period						$	463					$	327					$	351					$	210
Servicing assets obtained in acquisition						—			``			—						—						59
New servicing assets created						20						31						68						103
Change in fair value during the period due to:
Time decay (1)						(6)						(4)						(16)						(11)
Payoffs (2)						(8)						(17)						(29)						(50)
Changes in valuation inputs or assumptions (3)						17						1						112						27
Fair value, end of period						$	486					$	338					$	486					$	338

(1)Represents decrease in value due to passage of time, including the impact from both regularly scheduled principal payments and partial loan paydowns.

(2)Represents decrease in value associated with loans that paid off during the period.

(3)Represents change in value resulting primarily from market-driven changes in interest rates.

MSRs do not trade in an active, open market with readily observable prices. Therefore, the fair value of MSRs is estimated using a discounted future cash flow model. Changes in the assumptions used may have a significant impact on the valuation of MSRs. MSR values are sensitive to movement in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which are impacted by the level of prepayments.

A summary of key assumptions and the sensitivity of the MSR value to changes in these assumptions at September 30, 2022, and December 31, 2021 follows:

			September 30, 2022																					December 31, 2021
												Decline in fair value due to																					Decline in fair value due to
(dollar amounts in millions)			Actual									10% adverse change						20% adverse change						Actual									10% adverse change						20% adverse change
Constant prepayment rate (annualized)			7.04		%							$	(12)					$	(24)					12.28		%							$	(17)					$	(32)
Spread over forward interest rate swap rates			579			bps						(11)						(22)						466			bps						(7)						(13)

Total servicing, late and other ancillary fees included in mortgage banking income was $23 million and $22 million for the three-month periods ended September 30, 2022 and 2021, respectively. Total servicing, late fees and other ancillary fees included in mortgage banking income was $68 million and $57 million for the nine-month periods ended September 30, 2022 and 2021, respectively. The unpaid principal balance of residential mortgage loans serviced for third parties was $32 billion and $31 billion at September 30, 2022 and December 31, 2021, respectively.

8. BORROWINGS

Borrowings with original maturities of one year or less are classified as short-term and were comprised of the following at September 30, 2022 and December 31, 2021, respectively:

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Federal funds purchased and securities sold under agreements to repurchase			$	300					$	320
Other borrowings			126						14
Total short-term borrowings			$	426					$	334

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Huntington’s long-term debt consisted of the following at September 30, 2022 and December 31, 2021, respectively:

(dollar amounts in millions)			September 30, 2022						December 31, 2021
The Parent Company:
Senior Notes			$	2,990					$	2,083
Subordinated Notes			973						1,028
Total notes issued by the parent			3,963						3,111
The Bank:
Senior Notes			2,287						2,434
Subordinated Notes			650						811
Total notes issued by the bank			2,937						3,245
FHLB Advances			2,712						215
Other			556						537
Total long-term debt			$	10,168					$	7,108

In May 2022, the Bank issued $500 million of senior notes at 99.8% of face value. The senior notes mature on May 16, 2025 and have a fixed coupon rate of 4.01%.

In May 2022, the Bank issued $800 million of senior notes at 99.7% of face value. The senior notes mature on May 17, 2028 and have a fixed coupon rate of 4.55%.

In May 2022, the Bank issued $300 million of senior notes at 99.8% of face value. The senior notes mature on May 16, 2025 and have a floating rate equal to SOFR plus 119 basis points resetting quarterly.

In May 2022, Huntington issued $400 million of senior notes at 100% of face value. The senior notes mature on May 17, 2033 and have a fixed coupon rate of 5.02%.

In August 2022, Huntington issued $750 million of senior notes at 99.7% of face value. The senior notes mature on August 4, 2028 and have a fixed coupon rate of 4.44%.

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9. OTHER COMPREHENSIVE INCOME

The components of Huntington’s OCI for the three-month and nine-month periods ended September 30, 2022 and 2021, were as follows:

(dollar amounts in millions)			Pretax						Tax (Expense) benefit						After-tax
Three Months Ended September 30, 2022
Unrealized losses on available-for-sale securities arising during the period			$	(1,265)					$	291					$	(974)
Reclassification adjustment for realized net losses included in net income			4						(1)						3
Total unrealized losses on available-for-sale securities			(1,261)						290						(971)
Net impact of fair value hedges on available-for-sale securities			325						(75)						250
Change in fair value related to cash flow hedges			(591)						135						(456)
Foreign currency translation adjustment (1)			(15)						—						(15)
Net unrealized gains (losses) on net investment hedges			11						—						11
Translation adjustments, net of hedges (1)			(4)						—						(4)
Change in accumulated unrealized gains for pension and other post retirement obligations			3						—						3
Other comprehensive loss			$	(1,528)					$	350					$	(1,178)
Three Months Ended September 30, 2021
Unrealized gains on available-for-sale securities arising during the period			$	(112)					$	26					$	(86)
Reclassification adjustment for realized net losses included in net income			5						(1)						4
Total unrealized losses on available-for-sale securities			(107)						25						(82)
Change in fair value related to cash flow hedges			(43)						14						(29)
Foreign currency translation adjustment (1)			(7)						—						(7)
Net unrealized gains (losses) on net investment hedges			9						—						9
Translation adjustments, net of hedges (1)			2						—						2
Change in accumulated unrealized gains for pension and other post retirement obligations			3						—						3
Other comprehensive income			$	(145)					$	39					$	(106)
Nine Months Ended September 30, 2022
Unrealized losses on available-for-sale securities arising during the period			$	(3,952)					$	909					$	(3,043)
Reclassification adjustment for realized net losses (gains) included in net income			95						(22)						73
Total unrealized gains (losses) on available-for-sale securities			(3,857)						887						(2,970)
Net impact of fair value hedges on available-for-sale securities			917						(212)						705
Change in fair value related to cash flow hedges			(1,012)						230						(782)
Foreign currency translation adjustment (1)			(21)						—						(21)
Net unrealized gains (losses) on net investment hedges			15						—						15
Translation adjustments, net of hedges (1)			(6)						—						(6)
Change in accumulated unrealized gains for pension and other post retirement obligations			8						(2)						6
Other comprehensive loss			$	(3,950)					$	903					$	(3,047)
Nine Months Ended September 30, 2021
Unrealized losses on available-for-sale securities arising during the period			$	(311)					$	70					$	(241)
Reclassification adjustment for realized net losses (gains) included in net income			27						(6)						21
Total unrealized losses on available-for-sale securities			(284)						64						(220)
Net impact of fair value hedges on available-for-sale securities			38						(9)						29
Change in fair value related to cash flow hedges			(173)						42						(131)
Foreign currency translation adjustment (1)			(13)						—						(13)
Net unrealized gains (losses) on net investment hedges			9						—						9
Translation adjustments, net of hedges (1)			(4)						—						(4)
Change in accumulated unrealized gains for pension and other post retirement obligations			12						(3)						9
Other comprehensive loss			$	(411)					$	94					$	(317)

(1)Foreign investments are deemed to be permanent in nature and, therefore, Huntington does not provide for taxes on foreign currency translation adjustments.

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Activity in accumulated OCI for the three-month and nine-month periods ended September 30, 2022 and 2021, were as follows:

(dollar amounts in millions)			Unrealized gains (losses) on available-for-sale securities (1)						Net impact of fair value hedges on available-for-sale securities						Change in fair value related to cash flow hedges																		Translation adjustments, net of hedges						Unrealized gains (losses) for pension and other post- retirement obligations						Total
Three Months Ended September 30, 2022
Balance, beginning of period			$	(2,152)					$	544					$	(263)																	$	(5)					$	(222)					$	(2,098)
Other comprehensive income (loss) before reclassifications			(974)						250						(456)																		(4)						—						(1,184)
Amounts reclassified from accumulated OCI to earnings			3						—						—																		—						3						6
Period change			(971)						250						(456)																		(4)						3						(1,178)
Balance, end of period			$	(3,123)					$	794					$	(719)																	$	(9)					$	(219)					$	(3,276)
Three Months Ended September 30, 2021
Balance, beginning of period			$	50					$	31					$	153																	$	(6)					$	(247)					$	(19)
Other comprehensive income (loss) before reclassifications			(86)						—						(29)																		2						—						(113)
Amounts reclassified from accumulated OCI to earnings			4						—						—																		—						3						7
Period change			(82)						—						(29)																		2						3						(106)
Balance, end of period			$	(32)					$	31					$	124																	$	(4)					$	(244)					$	(125)
Nine Months Ended September 30, 2022
Balance, beginning of period			$	(153)					$	89					$	63																	$	(3)					$	(225)					$	(229)
Other comprehensive loss before reclassifications			(3,043)						705						(782)																		(6)						—						(3,126)
Amounts reclassified from accumulated OCI to earnings			73						—						—																		—						6						79
Period change			(2,970)						705						(782)																		(6)						6						(3,047)
Balance, end of period			$	(3,123)					$	794					$	(719)																	$	(9)					$	(219)					$	(3,276)
Nine Months Ended September 30, 2021
Balance, beginning of period			$	188					$	2					$	255																	$	—					$	(253)					$	192
Other comprehensive income before reclassifications			(241)						29						(131)																		(4)						—						(347)
Amounts reclassified from accumulated OCI to earnings			21						—						—																		—						9						30
Period change			(220)						29						(131)																		(4)						9						(317)
Balance, end of period			$	(32)					$	31					$	124																	$	(4)					$	(244)					$	(125)

(1)AOCI amounts at September 30, 2022 and September 30, 2021 include $69 million and $41 million, respectively, of net unrealized losses (after-tax) on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. The net unrealized losses will be recognized in earnings over the remaining life of the security using the effective interest method.

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10. SHAREHOLDERS’ EQUITY

Preferred Stock

The following is a summary of Huntington’s non-cumulative, non-voting, perpetual preferred stock outstanding.

(dollar amounts in millions)																														Carrying Amount
Series												Issuance Date						Shares Outstanding						Dividend Rate						Earliest Redemption Date (1)						September 30, 2022						December 31, 2021
Series B (2)												12/28/2011						35,500						3-mo. LIBOR + 270 bps						1/15/2017						$	23					$	23
Series E (3)												2/27/2018						5,000						5.70						4/15/2023						495						495
Series F (3)												5/27/2020						5,000						5.625						7/15/2030						494						494
Series G (3)												8/3/2020						5,000						4.45						10/15/2027						494						494
Series H (2)												2/2/2021						500,000						4.50						4/15/2026						486						486
Series I (4)												6/9/2021						7,000						5.70						12/01/2022						175						175
Total																		557,500																		$	2,167					$	2,167

(1) Denotes earliest option redemption date. Earlier redemption is solely at Huntington’s option, subject to prior approval of FRB.

(2) Series B and H preferred stock have a liquidation value and redemption price per share of $1,000, plus any declared and unpaid dividends.

(3) Series E, F, and G preferred stock have a liquidation value and redemption price per share of $100,000, plus any declared and unpaid dividends.

(4) Series I preferred stock has a liquidation value and redemption price per share of $25,000, plus any declared and unpaid dividends.

The following table presents the dividends declared for each series of Preferred shares for the three-month and nine-month periods ended September 30, 2022 and 2021:

						Three Months Ended September 30,																								Nine months ended September 30,
(amounts in millions, except per share data)						2022												2021												2022												2021
			Cash Dividend Declared Per Share												Cash Dividend Declared Per Share												Cash Dividend Declared Per Share												Cash Dividend Declared Per Share
Preferred Series									Amount ($)									Amount ($)									Amount ($)									Amount ($)
Series B						$	16.95					$	—					$	7.07					$	—					$	39.34					$	—					$	21.63					$	—
Series C						—						—						14.69						(1)						—						—						44.07						(4)
Series D						—						—						—						—						—						—						31.25						(18)
Series E						1,425.00						(7)						1,425.00						(7)						4,275.00						(21)						4,275.00						(21)
Series F						1,406.25						(7)						1,406.25						(7)						4,218.75						(21)						4,218.75						(21)
Series G						1,112.50						(6)						1,112.50						(6)						3,337.50						(18)						3,337.50						(18)
Series H						11.25						(6)						11.25						(6)						33.75						(18)						30.75						(16)
Series I						356.25						(3)						356.25						(2)						1,068.75						(7)						712.50						(5)
Total												$	(29)											$	(29)											$	(85)											$	(103)

Treasury shares

Treasury shares includes shares held for deferred compensation plans, at cost, of $80 million at September 30, 2022 and $79 million at December 31, 2021.

Non-controlling Interest in Subsidiaries

Through the acquisition of TCF, Huntington acquired a joint venture in which Huntington maintains a 55% ownership interest. As Huntington has a controlling financial interest, its financial results are consolidated in Huntington's financial statements and the other party’s 45% ownership interest is reported as a non-controlling interest within equity.

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11. EARNINGS PER SHARE

Basic earnings per share is the amount of earnings (adjusted for dividends declared on preferred stock and impact of preferred stock redemption) available to each share of common stock outstanding during the reporting period. Diluted earnings per share is the amount of earnings available to each share of common stock outstanding during the reporting period adjusted to include the effect of potentially dilutive common shares. Potentially dilutive common shares include incremental shares issued for stock options, restricted stock units and awards, and distributions from deferred compensation plans. Potentially dilutive common shares are excluded from the computation of diluted earnings per share in periods in which the effect would be antidilutive.

The calculation of basic and diluted earnings per share for the three-month and nine-month periods ended September 30, 2022 and 2021 was as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions, except per share data, share count in thousands)			2022						2021						2022						2021
Basic earnings per common share:
Net income attributable to Huntington Bancshares Inc			$	594					$	377					$	1,593					$	894
Preferred stock dividends			29						29						85						103
Impact of preferred stock redemption			—						15						—						15
Net income available to common shareholders			$	565					$	333					$	1,508					$	776
Average common shares issued and outstanding			1,442,591						1,462,736						1,440,740						1,201,763
Basic earnings per common share			$	0.39					$	0.23					$	1.05					$	0.65
Diluted earnings per common share:
Dilutive potential common shares:
Stock options and restricted stock units and awards			16,064						17,536						17,078						17,623
Shares held in deferred compensation plans			6,428						7,063						6,416						6,042
Dilutive potential common shares			22,492						24,599						23,494						23,665
Total diluted average common shares issued and outstanding			1,465,083						1,487,335						1,464,234						1,225,428
Diluted earnings per common share			$	0.39					$	0.22					$	1.03					$	0.63
Anti-dilutive awards (1)			7,121						4,609						5,565						4,410

(1)Reflects the total number of shares related to outstanding options and awards that have been excluded from the computation of diluted earnings per share because the impact would have been anti-dilutive.

12. NONINTEREST INCOME

Huntington earns a variety of revenue including interest and fees from customers as well as revenues from non-customers. Certain sources of revenue are recognized within interest or fee income and are outside of the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Other sources of revenue fall within the scope of ASC 606 and are generally recognized within noninterest income. These revenues are included within various sections of the Unaudited Condensed Consolidated Financial Statements. The following table shows Huntington’s total noninterest income segregated between contracts with customers within the scope of ASC 606 and those within the scope of other GAAP Topics.

(dollar amounts in millions)						Three Months Ended September 30,												Nine Months Ended September 30,
Noninterest income						2022						2021						2022						2021
Noninterest income from contracts with customers						$	345					$	315					$	975					$	794
Noninterest income within the scope of other GAAP topics						153						220						507						580
Total noninterest income						$	498					$	535					$	1,482					$	1,374

The following table illustrates the disaggregation by operating segment and major revenue stream and reconciles disaggregated revenue to segment revenue presented in Note 17 “Segment Reporting”.

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			Three Months Ended September 30, 2022
(dollar amounts in millions)			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts			$	20					$	70					$	2					$	1					$	—					$	93
Card and payment processing income			6						84						—						—						—						90
Trust and investment management services			1						16						—						43						—						60
Insurance income			2						14						—						11						1						28
Capital markets fees			37						2						1						—						(2)						38
Other noninterest income			29						6						1						1						(1)						36
Net revenue from contracts with customers			$	95					$	192					$	4					$	56					$	(2)					$	345
Noninterest income within the scope of other GAAP topics			86						51						—						1						15						153
Total noninterest income			$	181					$	243					$	4					$	57					$	13					$	498
									Three Months Ended September 30, 2021
(dollar amounts in millions)			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts			$	23					$	89					$	1					$	1					$	—					$	114
Card and payment processing income			6						85						—						—						—						91
Trust and investment management services			—						17						—						44						—						61
Insurance income			2						12						—						11						—						25
Capital markets fees			4						1						—						1						—						6
Other noninterest income			1						7						1						1						8						18
Net revenue from contracts with customers			$	36					$	211					$	2					$	58					$	8					$	315
Noninterest income within the scope of other GAAP topics			114						91						2						—						13						220
Total noninterest income			$	150					$	302					$	4					$	58					$	21					$	535

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			Nine Months Ended September 30, 2022
(dollar amounts in millions)			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts			$	65					$	222					$	5					$	3					$	—					$	295
Card and payment processing income			17						242						—						—						—						259
Trust and investment management services			3						51						—						134						—						188
Insurance income			6						40						—						39						1						86
Capital markets fees			48						6						2						1						(2)						55
Other noninterest income			72						18						1						2						(1)						92
Net revenue from contracts with customers			$	211					$	579					$	8					$	179					$	(2)					$	975
Noninterest income within the scope of other GAAP topics			262						206						2						2						35						507
Total noninterest income			$	473					$	785					$	10					$	181					$	33					$	1,482
			Nine Months Ended September 30, 2021
(dollar amounts in millions)			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
Major Revenue Streams
Service charges on deposit accounts			$	64					$	201					$	4					$	2					$	—					$	271
Card and payment processing income			14						211						—						—						—						225
Trust and investment management services			1						45						—						122						—						168
Insurance income			5						38						—						33						1						77
Capital markets fees			11						4						1						1						—						17
Other noninterest income			3						15						1						6						11						36
Net revenue from contracts with customers			$	98					$	514					$	6					$	164					$	12					$	794
Noninterest income within the scope of other GAAP topics			255						266						3						1						55						580
Total noninterest income			$	353					$	780					$	9					$	165					$	67					$	1,374

Huntington generally provides services for customers in which it acts as principal. Payment terms and conditions vary amongst services and customers, and thus impact the timing and amount of revenue recognition. Some fees may be paid before any service is rendered and accordingly, such fees are deferred until the obligations pertaining to those fees are satisfied. Most Huntington contracts with customers are cancelable by either party without penalty or they are short-term in nature, with a contract duration of less than one year. Accordingly, most revenue deferred for the reporting period ended September 30, 2022 is expected to be earned within one year. Huntington does not have significant balances of contract assets or contract liabilities and any change in those balances during the reporting period ended September 30, 2022 was determined to be immaterial.

13. FAIR VALUES OF ASSETS AND LIABILITIES

See Note 19 “Fair Value of Assets and Liabilities” to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K for a description of the valuation methodologies used for instruments measured at fair value. Assets and liabilities measured at fair value rarely transfer between Level 1 and Level 2 measurements. There were no such transfers during the three-month and nine-month periods ended September 30, 2022 and 2021.

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Assets and Liabilities measured at fair value on a recurring basis

			Fair Value Measurements at Reporting Date Using																		Netting Adjustments (1)						September 30, 2022
(dollar amounts in millions)			Level 1						Level 2						Level 3
Assets
Trading account securities:
Municipal securities			$	—					$	32					$	—					$	—					$	32
Available-for-sale securities:
U.S. Treasury securities			5						—						—						—						5
Residential CMOs			—						3,035						—						—						3,035
Residential MBS			—						11,983						—						—						11,983
Commercial MBS			—						2,038						—						—						2,038
Other agencies			—						190						—						—						190
Municipal securities			—						44						3,332						—						3,376
Private-label CMO			—						121						21						—						142
Asset-backed securities			—						301						70						—						371
Corporate debt			—						2,162						—						—						2,162
Other securities/sovereign debt			—						4						—						—						4
Total available-for-sale securities			5						19,878						3,423						—						23,306
Other securities			47						3						—						—						50
Loans held for sale			—						758						—						—						758
Loans held for investment			—						166						16						—						182
MSRs			—						—						486						—						486
Other assets:
Derivative assets			—						2,521						2						(2,104)						419
Assets held in trust for deferred compensation plans			111						—						—						—						111
Liabilities
Derivative liabilities			—						2,652						11						(1,460)						1,203

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			Fair Value Measurements at Reporting Date Using																		Netting Adjustments (1)						December 31, 2021
(dollar amounts in millions)			Level 1						Level 2						Level 3
Assets
Trading account securities:
Municipal securities			$	—					$	46					$	—					$	—					$	46
Available-for-sale securities:
U.S. Treasury securities			5						—						—						—						5
Residential CMOs			—						4,649						—						—						4,649
Residential MBS			—						15,508						—						—						15,508
Commercial MBS			—						1,865						—						—						1,865
Other agencies			—						248						—						—						248
Municipal securities			—						49						3,477						—						3,526
Private-label CMO			—						86						20						—						106
Asset-backed securities			—						312						70						—						382
Corporate debt			—						2,167						—						—						2,167
Other securities/sovereign debt			—						4						—						—						4
Total available-for-sale securities			5						24,888						3,567						—						28,460
Other securities			65						7						—						—						72
Loans held for sale			—						1,270						—						—						1,270
Loans held for investment			—						152						19						—						171
MSRs			—						—						351						—						351
Other assets:
Derivative assets			—						1,055						10						(465)						600
Assets held in trust for deferred compensation plans			156						—						—						—						156
Liabilities
Derivative liabilities			—						737						6						(624)						119

(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

The following tables present a rollforward of the balance sheet amounts measured at fair value on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 measurements may also include observable components of value that can be validated externally. Accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology.

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			Level 3 Fair Value Measurements
															Available-for-sale securities																					Loans held for investment
(dollar amounts in millions)			MSRs						Derivative instruments						Municipal securities						Private- label CMO						Asset-backed securities
Three Months Ended September 30, 2022
Opening balance			$	463					$	(5)					$	3,377					$	22					$	44											$	17
Transfers out of Level 3 (1)			—						(6)						—						—						—												—
Total gains/losses for the period:
Included in earnings:
Mortgage banking income			17						2						—						—						—												—
Included in OCI			—						—						(66)						—						—												—
Purchases/originations			20						—						309						—						26												—
Repayments			—						—						—						—						—												(1)
Settlements			(14)						—						(288)						(1)						—												—
Closing balance			$	486					$	(9)					$	3,332					$	21					$	70											$	16
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date			$	17					$	(8)					$	—					$	—					$	—											$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period			—						—						(69)						—						(1)												—
Three Months Ended September 30, 2021
Opening balance			$	327					$	23					$	3,609					$	18					$	46											$	21
Transfers out of Level 3 (1)			—						(39)						—						—						—												—
Total gains/losses for the period:
Included in earnings:
Mortgage banking income			1						28						—						—						—												—
Interest and fee income			—						—						(1)						—						—												—
Included in OCI			—						—						(8)						—						—												—
Purchases/originations			31						—						260						—						—												—
Sales			—						—						(17)						—						—												—
Repayments			—						—						—						—						—												(1)
Settlements			(21)						—						(261)						—						(11)												—
Closing balance			$	338					$	12					$	3,582					$	18					$	35											$	20
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date			$	1					$	(12)					$	—					$	—					$	—											$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period			—						—						(10)						—						—												—

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			Level 3 Fair Value Measurements
															Available-for-sale securities																		Loans held for investment
(dollar amounts in millions)			MSRs						Derivative instruments						Municipal securities						Private- label CMO						Asset-backed securities
Nine Months Ended September 30, 2022
Opening balance			$	351					$	4					$	3,477					$	20					$	71					$	19
Transfers out of Level 3 (1)			—						(6)						—						—						—						—
Total gains/losses for the period:
Included in earnings:
Mortgage banking income			112						(7)						—						—						—						—
Interest and fee income			—						—						(2)						(2)						—						—
Provision for credit losses			—						—						(4)						—						—						—
Included in OCI			—						—						(274)						—						(1)						—
Purchases/originations			68						—						867						4						26						—
Repayments			—						—						—						—						—						(3)
Settlements			(45)						—						(732)						(1)						(26)						—
Closing balance			$	486					$	(9)					$	3,332					$	21					$	70					$	16
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date			$	112					$	(17)					$	—					$	—					$	—					$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period			—						—						(274)						—						(1)						—
Nine Months Ended September 30, 2021
Opening balance			$	210					$	41					$	2,951					$	9					$	10					$	23
Transfers out of Level 3 (1)			—						(109)						—						—						—						—
Total gains/losses for the period:
Included in earnings
Mortgage banking income			27						73						—						—						—						—
Interest and fee income			—						—						(1)						—						—						—
Included in OCI			—						—						(13)						—						—						—
Purchases/originations/acquisitions			162						7						1,613						8						75						—
Sales			—						—						(369)						—						—						—
Repayments			—						—						—						—						—						(3)
Settlements			(61)						—						(599)						1						(50)						—
Closing balance			$	338					$	12					$	3,582					$	18					$	35					$	20
Change in unrealized gains or losses for the period included in earnings for assets held at end of the reporting date			$	27					$	(33)					$	—					$	—					$	—					$	—
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period			—						—						(14)						—						—						—

(1)Transfers out of Level 3 represent the settlement value of the derivative instruments (i.e., interest rate lock agreements) that are transferred to loans held for sale, which is classified as Level 2.

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Assets and liabilities under the fair value option

The following tables present the fair value and aggregate principal balance of certain assets and liabilities under the fair value option:

(dollar amounts in millions)			Total Loans																		Loans that are 90 or more days past due
			Fair value carrying amount						Aggregate unpaid principal						Difference						Fair value carrying amount						Aggregate unpaid principal						Difference
September 30, 2022
Assets
Loans held for sale			$	758					$	781					$	(23)					$	—					$	—					$	—
Loans held for investment			182						187						(5)						3						3						—
December 31, 2021
Assets
Loans held for sale			$	1,270					$	1,237					$	33					$	—					$	—					$	—
Loans held for investment			171						177						(6)						4						4						—

The following table presents the net gains (losses) from fair value changes.

(dollar amounts in millions)						Three Months Ended September 30,												Nine Months Ended September 30,
Assets						2022						2021						2022						2021
Loans held for sale (1)						$	(22)					$	(4)					$	(56)					$	(30)
Loans held for investment						—						—						1						—

(1)The net gains (losses) from fair value changes are included in Mortgage banking income on the Unaudited Condensed Consolidated Statements of Income.

Assets and Liabilities measured at fair value on a nonrecurring basis

Certain assets and liabilities may be required to be measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition. These assets and liabilities are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The amounts presented represent the fair value on the various measurement dates throughout the period. The gains (losses) represent the amounts recorded during the period regardless of whether the asset is still held at period end.

The amounts measured at fair value on a nonrecurring basis were as follows:

																					Fair Value Measurements Using Significant Other Unobservable Inputs (Level 3)																		Total Gains (Losses)
																														Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)																					September 30, 2022						December 31, 2021												2022						2021						2022						2021
Collateral-dependent loans																					$	47					$	39											$	—					$	—					$	(1)					$	(2)
Loans held for sale																					61						—												1						(1)						1						1

Huntington records nonrecurring adjustments of collateral-dependent loans held for investment. Such amounts are generally based on the fair value of the underlying collateral supporting the loan. Appraisals are generally obtained to support the fair value of the collateral and incorporate measures such as recent sales prices for comparable properties and cost of construction. Periodically, in cases where the carrying value exceeds the fair value of the collateral less cost to sell, an impairment charge is recognized in the form of a charge-off.

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Significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis

The table below presents quantitative information about the significant unobservable inputs for assets and liabilities measured at fair value on a recurring and nonrecurring basis:

									Quantitative Information about Level 3 Fair Value Measurements
																					At September 30, 2022 (1)																		At December 31, 2021 (1)
(dollar amounts in millions)									Valuation Technique						Significant Unobservable Input						Range												Weighted Average						Range												Weighted Average
Measured at fair value on a recurring basis:
MSRs									Discounted cash flow						Constant prepayment rate						5		%	-			22%						7		%				8		%	—%			23		%				12		%
															Spread over forward interest rate swap rates						5		%	-			13%						6		%				3		%	—%			11		%				5		%
Derivative instruments									Consensus Pricing						Net market price						(20)		%	-			6%						(3)		%				(4)		%	—%			8		%				1		%
															Estimated pull through %						5		%	-			100%						94		%				6		%	—%			100		%				92		%
Municipal securities and asset-backed securities									Discounted cash flow						Discount rate						4		%	-			5%						5		%				—		%	—%			2		%				1		%
															Cumulative default						—		%	-			64%						7		%				—		%	—%			64		%				5		%
															Loss given default						5		%	-			80%						25		%				5		%	—%			80		%				23		%

(1) Certain disclosures related to quantitative level 3 fair value measurements do not include those deemed to be immaterial.

The following provides a general description of the impact of a change in an unobservable input on the fair value measurement and the interrelationship between unobservable inputs, where relevant/significant. Interrelationships may also exist between observable and unobservable inputs.

Credit loss estimates, such as probability of default, constant default, cumulative default, loss given default, cure given deferral, and loss severity, are driven by the ability of the borrowers to pay their loans and the value of the underlying collateral and are impacted by changes in macroeconomic conditions, typically increasing when economic conditions worsen and decreasing when conditions improve. An increase in the estimated prepayment rate typically results in a decrease in estimated credit losses and vice versa. Higher credit loss estimates generally result in lower fair values. Credit spreads generally increase when liquidity risks and market volatility increase and decrease when liquidity conditions and market volatility improve.

Discount rates and spread over forward interest rate swap rates typically increase when market interest rates increase and/or credit and liquidity risks increase and decrease when market interest rates decline and/or credit and liquidity conditions improve. Higher discount rates and credit spreads generally result in lower fair market values.

Net market price and pull through percentages generally increase when market interest rates increase and decline when market interest rates decline. Higher net market price and pull through percentages generally result in higher fair values.

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Fair values of financial instruments

The following table provides the carrying amounts and estimated fair values of Huntington’s financial instruments:

(dollar amounts in millions)			Amortized Cost						Lower of Cost or Market						Fair Value or Fair Value Option						Total Carrying Amount						Estimated Fair Value
September 30, 2022
Financial Assets
Cash and short-term assets			$	4,592					$	—					$	—					$	4,592					$	4,592
Trading account securities			—						—						32						32						32
Available-for-sale securities			—						—						23,306						23,306						23,306
Held-to-maturity securities			17,173						—						—						17,173						14,835
Other securities			768						—						50						818						818
Loans held for sale			—						135						758						893						900
Net loans and leases (1)			115,855						—						182						116,037						110,944
Derivative assets			—						—						419						419						419
Assets held in trust for deferred compensation plans			—						—						111						111						111
Financial Liabilities
Deposits			146,313						—						—						146,313						146,211
Short-term borrowings			426						—						—						426						426
Long-term debt			10,168						—						—						10,168						9,995
Derivative liabilities			—						—						1,203						1,203						1,203
December 31, 2021
Financial Assets
Cash and short-term assets			$	5,914					$	—					$	—					$	5,914					$	5,914
Trading account securities			—						—						46						46						46
Available-for-sale securities			—						—						28,460						28,460						28,460
Held-to-maturity securities			12,447						—						—						12,447						12,489
Other securities			576						—						72						648						648
Loans held for sale			—						406						1,270						1,676						1,621
Net loans and leases (1)			109,066						—						171						109,237						109,695
Derivative assets			—						—						600						600						600
Assets held in trust for deferred compensation plans			—						—						156						156						156
Financial Liabilities
Deposits			143,263						—						—						143,263						143,574
Short-term borrowings			334						—						—						334						334
Long-term debt			7,108						—						—						7,108						7,319
Derivative liabilities			—						—						119						119						119

(1)Includes collateral-dependent loans.

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The following table presents the level in the fair value hierarchy for the estimated fair values at September 30, 2022 and December 31, 2021:

			Estimated Fair Value Measurements at Reporting Date Using																		Netting Adjustments (1)			Presented Balance
(dollar amounts in millions)			Level 1						Level 2						Level 3
September 30, 2022
Financial Assets
Trading account securities			$	—					$	32					$	—								$	32
Available-for-sale securities			5						19,878						3,423									23,306
Held-to-maturity securities			—						14,835						—									14,835
Other securities (2)			47						3						—									50
Loans held for sale			—						758						142									900
Net loans and leases			—						166						110,778									110,944
Derivative assets			—						2,521						2						$	(2,104)		419
Financial Liabilities
Deposits			—						142,710						3,501									146,211
Short-term borrowings			—						426						—									426
Long-term debt			—						6,631						3,364									9,995
Derivative liabilities			—						2,652						11						(1,460)			1,203
December 31, 2021
Financial Assets
Trading account securities			$	—					$	46					$	—								$	46
Available-for-sale securities			5						24,888						3,567									28,460
Held-to-maturity securities			—						12,489						—									12,489
Other securities (2)			65						7						—									72
Loans held for sale			—						1,270						351									1,621
Net loans and leases			—						152						109,543									109,695
Derivative assets			—						1,055						10						$	(465)		600
Financial Liabilities
Deposits			—						139,047						4,527									143,574
Short-term borrowings			—						334						—									334
Long-term debt			—						6,441						878									7,319
Derivative liabilities			—						737						6						(624)			119

(1)Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

(2)Excludes securities without readily determinable fair values.

The short-term nature of certain assets and liabilities result in their carrying value approximating fair value. These include trading account securities, customers’ acceptance liabilities, short-term borrowings, bank acceptances outstanding, FHLB advances, and cash and short-term assets, which include cash and due from banks, interest-bearing deposits in banks, interest-bearing deposits at FRB, federal funds sold, and securities purchased under resale agreements. Loan commitments and letters-of-credit generally have short-term, variable-rate features and contain clauses that limit Huntington’s exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value.

Certain assets, the most significant being operating lease assets, bank owned life insurance, and premises and equipment, do not meet the definition of a financial instrument and are excluded from this disclosure. Similarly, mortgage servicing rights and relationship intangibles are not considered financial instruments and are not included above. Accordingly, this fair value information is not intended to, and does not, represent Huntington’s underlying value. Many of the assets and liabilities subject to the disclosure requirements are not actively traded, requiring fair values to be estimated by management. These estimations necessarily involve the use of judgment about a wide variety of factors, including but not limited to, relevancy of market prices of comparable instruments, expected future cash flows, and appropriate discount rates.

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14. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments are recorded in the Unaudited Condensed Consolidated Balance Sheets as either an asset or a liability (in other assets or other liabilities, respectively) and measured at fair value.

Derivative financial instruments can be designated as accounting hedges under GAAP. Designating a derivative as an accounting hedge allows Huntington to recognize gains and losses on the hedging instruments in the income statement line item where the gains and losses on the hedged item are recognized. Gains and losses on derivatives that are not designated in an effective hedge relationship under GAAP immediately impact earnings within the period they occur.

The following table presents the fair values and notional values of all derivative instruments included in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021. Amounts in the table below are presented gross without the impact of any net collateral arrangements.

			September 30, 2022																		December 31, 2021
(dollar amounts in millions)			Notional Value						Asset						Liability						Notional Value						Asset						Liability
Derivatives designated as Hedging Instruments
Interest rate contracts			$	38,351					$	1,036					$	1,205					$	21,306					$	258					$	32
Foreign exchange contracts			206						—						13						210						1						—
Derivatives not designated as Hedging Instruments
Interest rate contracts			39,835						1,188						1,181						45,286						587						498
Foreign exchange contracts			4,483						98						64						3,524						29						31
Commodities contracts			1,045						201						198						1,077						178						177
Equity contracts			559						—						2						685						12						5
Total Contracts			$	84,479					$	2,523					$	2,663					$	72,088					$	1,065					$	743

The following table presents the amount of gain or loss recognized in income for derivatives not designated as hedging instruments under ASC Subtopic 815-10 in the Unaudited Condensed Consolidated Income Statement for the three-month and nine-month periods ended September 30, 2022 and 2021, respectively.

						Location of Gain or (Loss) Recognized in Income on Derivative						Amount of Gain or (Loss) Recognized in Income on Derivative
									Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)									2022						2021						2022						2021
Interest rate contracts:
Customer						Capital markets fees						$	12					$	13					$	37					$	37
Mortgage banking						Mortgage banking income						—						5						(80)						(24)
Interest rate floors						Interest and fee income on loans and leases						—						(4)						—						(8)
Interest rate caps						Interest expense on long-term debt						—						—						—						89
Foreign exchange contracts						Capital markets fees						12						9						32						22
Commodities contracts						Capital markets fees						1						(1)						4						(1)
Equity contracts						Other noninterest expense						(1)						(2)						(4)						(6)
Total												$	24					$	20					$	(11)					$	109

Derivatives used in asset and liability management activities

Huntington engages in balance sheet hedging activity, principally for asset and liability management purposes. Balance sheet hedging activity is generally arranged to receive hedge accounting treatment that can be classified as either fair value or cash flow hedges. Fair value hedges are executed to hedge changes in fair value of outstanding fixed-rate debt and investment securities caused by fluctuations in market interest rates. Cash flow hedges are executed to modify interest rate characteristics of designated commercial loans in order to reduce the impact of changes in future cash flows due to market interest rate changes.

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The following table presents the gross notional values of derivatives used in Huntington’s asset and liability management activities at September 30, 2022 and December 31, 2021, identified by the underlying interest rate-sensitive instruments.

			September 30, 2022
(dollar amounts in millions)			Fair Value Hedges						Cash Flow Hedges						Economic Hedges						Total
Instruments associated with:
Investment securities			$	10,297					$	—					$	—					$	10,297
Loans			—						22,325						271						22,596
Long-term debt			5,729						—						—						5,729
Total notional value at September 30, 2022			$	16,026					$	22,325					$	271					$	38,622
			December 31, 2021
(dollar amounts in millions)			Fair Value Hedges						Cash Flow Hedges						Economic Hedges						Total
Instruments associated with:
Investment securities			$	8,228					$	—					$	—					$	8,228
Loans			—						11,150						271						11,421
Long-term debt			1,928						—						—						1,928
Total notional value at December 31, 2021			$	10,156					$	11,150					$	271					$	21,577

These derivative financial instruments were entered into for the purpose of managing the interest rate risk of assets and liabilities. Net amounts receivable or payable on contracts hedging either interest earning assets or interest bearing liabilities were accrued as an adjustment to either interest income or interest expense. Adjustments to interest income were also recorded for the amounts related to the amortization of premiums for collars, floors, and forward-starting floors that were excluded from the hedge effectiveness, changes in the fair value of economic hedges, as well as the amounts related to terminated hedges reclassified from AOCI. The net amounts resulted in an increase to net interest income of $21 million and $61 million for the three-month periods ended September 30, 2022, and 2021, respectively. For the nine-month periods ended September 30, 2022, and 2021, the net amounts resulted in an increase to net interest income of $108 million and $291 million, respectively.

Fair Value Hedges

The changes in fair value of the fair value hedges are recorded through earnings and offset against changes in the fair value of the hedged item.

Huntington has designated $9.4 billion of interest rate swaps as fair value hedges of fixed-rate investment securities using the portfolio layer method. This approach allows the Company to designate as the hedged item a stated amount of the assets that are not expected to be affected by prepayments, defaults and other factors affecting the timing and amount of cash flows. The fair value portfolio level basis adjustment on our hedged mortgage-backed securities portfolio has not been attributed to the individual available-for-sale securities in our Unaudited Condensed Consolidated Statements of Financial Condition. Huntington has also designated $869 million of interest rate swaps as fair value hedges of fixed-rate corporate bonds.

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The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting change in fair value on the hedged item for the three-month and nine-month periods ended September 30, 2022 and 2021.

						Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)						2022						2021						2022						2021
Interest rate contracts
Change in fair value of interest rate swaps hedging investment securities (1)						$	340					$	2					$	926					$	39
Change in fair value of hedged investment securities (1)						(324)						—						(914)						(40)
Change in fair value of interest rate swaps hedging long-term debt (2)						(178)						(22)						(314)						(95)
Change in fair value of hedged long term debt (2)						178						22						315						96

(1)Recognized in Interest income—available-for-sale securities—taxable in the Unaudited Condensed Consolidated Statements of Income.

(2)Recognized in Interest expense—long-term debt in the Unaudited Condensed Consolidated Statements of Income.

As of September 30, 2022, and December 31, 2021, the following amounts were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges.

			Amortized Cost												Cumulative Amount of Fair Value Hedging Adjustment To Hedged Items
(dollar amounts in millions)			September 30, 2022						December 31, 2021						September 30, 2022						December 31, 2021
Assets
Investment securities (1)			$	18,026					$	17,150					$	(1,032)					$	(117)
Liabilities
Long-term debt (2)			4,095						1,981						(271)						45

(1)Amounts include 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 which is expected to be remaining at the end of the hedging relationship. As of September 30, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $17.2 billion, the cumulative basis adjustments associated with these hedging relationships was $892 million, and the amounts of the designated hedging instruments were $9.4 billion.

(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 $(69) million at September 30, 2022 and $17 million at December 31, 2021.

Cash Flow Hedges

At September 30, 2022, Huntington has $22.3 billion of interest rate swaps and collars. 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 collar contracts represents the time value of the contracts and is not included in the measurement of hedge effectiveness. Any change in fair value related to time value is recognized in OCI. The initial premium paid is amortized on a straight line basis as a reduction to interest income over the contractual life of these contracts.

Gains and (losses) on interest rate floors, floor spreads, and swaps recognized in other comprehensive income (loss) after-tax were $(456) million and $(29) million for the three-month periods ended September 30, 2022 and 2021, respectively. For the nine-month periods ended September 30, 2022 and 2021, gains and (losses) on interest rate floors and swaps recognized in other comprehensive income were $(782) million and $(131) million, respectively.

Derivatives used in mortgage banking activities

Mortgage loan origination hedging activity

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. The net asset position of these derivatives at September 30, 2022 and December 31, 2021 were $41 million and $15 million, respectively. At September 30, 2022 and December 31, 2021, Huntington had commitments to sell residential real estate loans of $1.2 billion and $2.1 billion, respectively. These contracts mature in less than one year.

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MSR hedging activity

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.

MSR hedging trading assets and liabilities are included in other assets and other liabilities, respectively, in the Unaudited Condensed Balance Sheets. Trading gains (losses) are included in mortgage banking income in the Unaudited Condensed Consolidated Statement 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 is summarized in the following table:

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Notional value			$	1,095					$	1,330
Trading assets			4						19
Trading liabilities			(80)						—

			Three Months Ended September 30, 2022												Nine Months Ended September 30, 2022
(dollar amounts in millions)			2022						2021						2022						2021
Trading gains (losses)			$	(25)					$	(4)					$	(105)					$	(28)

Derivatives used in customer related activities

Various 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 currencies in order to economically hedge significant exposure related to derivatives used in trading activities.

The interest rate or price risk of customer derivatives is mitigated by entering into similar derivatives having offsetting terms with other counterparties. The credit risk to these customers is evaluated and included in the calculation of fair value. Foreign currency derivatives help the customer hedge risk and reduce exposure to fluctuations in exchange rates. Transactions are primarily in liquid currencies with Canadian dollars and Euros comprising a majority of all transactions. Commodity derivatives help the customer hedge risk and reduce exposure to fluctuations in the price of various commodities. Hedging of energy-related products and base metals comprise the majority of these transactions.

The net fair values of these derivative financial instruments, for which the gross amounts are included in other assets or other liabilities at both September 30, 2022 and December 31, 2021, were $76 million and $51 million, respectively. The total notional values of derivative financial instruments used by Huntington on behalf of customers, including offsetting derivatives, were $42.1 billion and $45.1 billion at September 30, 2022 and December 31, 2021, respectively. Huntington’s credit risk from customer derivatives was $146 million and $551 million at the same dates, respectively.

Financial assets and liabilities that are offset in the Unaudited Condensed Consolidated Balance Sheets

Huntington records derivatives at fair value as further described in Note 13 “Fair Values of Assets and Liabilities”.

Derivative balances are presented on a net basis taking into consideration the effects of legally enforceable master netting agreements. Additionally, collateral exchanged with counterparties is also netted against the applicable derivative fair values. Huntington enters into derivative transactions with two primary groups: broker-dealers and banks, and Huntington’s customers. Different methods are utilized for managing counterparty credit exposure and credit risk for each of these groups.

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Huntington enters into transactions with broker-dealers and banks for various risk management purposes. These types of transactions generally are high dollar volume. Huntington enters into collateral and master netting agreements with these counterparties, and routinely exchanges cash and high quality securities collateral. Huntington enters into transactions with customers to meet their financing, investing, payment and risk management needs. These types of transactions generally are low dollar volume. Huntington enters into master netting agreements with customer counterparties; however, collateral is generally not exchanged with customer counterparties.

In addition to the customer derivative credit exposure, aggregate credit risk associated with broker-dealer and bank derivative transactions was net excess collateral of $280 million and net credit risk of $44 million at September 30, 2022 and December 31, 2021, respectively. The net credit risk associated with derivatives is calculated after considering master netting agreements and is reduced by collateral that has been pledged by the counterparty.

At September 30, 2022, Huntington pledged $298 million of investment securities and cash collateral to counterparties, while other counterparties pledged $861 million of investment securities and cash collateral to Huntington to satisfy collateral netting agreements. In the event of credit downgrades, Huntington would not be required to provide additional collateral.

The following tables present the gross amounts of these assets and liabilities with any offsets to arrive at the net amounts recognized in the Unaudited Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021.

Offsetting of Financial Assets and Derivative Assets
												Gross amounts offset in the unaudited condensed consolidated balance sheets						Net amounts of assets presented in the unaudited condensed consolidated balance sheets						Gross amounts not offset in the unaudited condensed consolidated balance sheets
(dollar amounts in millions)						Gross amounts of recognized assets												Financial instruments						Cash collateral received						Net amount
September 30, 2022						$	2,523					$	(2,104)					$	419					$	(6)					$	(121)					$	292
December 31, 2021						1,065						(465)						600						(65)						(31)						504

Offsetting of Financial Liabilities and Derivative Liabilities
												Gross amounts offset in the unaudited condensed consolidated balance sheets						Net amounts of liabilities presented in the unaudited condensed consolidated balance sheets						Gross amounts not offset in the unaudited condensed consolidated balance sheets
(dollar amounts in millions)						Gross amounts of recognized liabilities												Financial instruments						Cash collateral delivered						Net amount
September 30, 2022						$	2,663					$	(1,460)					$	1,203					$	(79)					$	(148)					$	976
December 31, 2021						743						(624)						119						(3)						(116)						—

15. VIEs

Unconsolidated VIEs

The following tables provide a summary of the assets and liabilities included in Huntington’s Unaudited Condensed Consolidated Financial Statements, as well as the maximum exposure to losses, associated with its interests related to unconsolidated VIEs for which Huntington holds an interest in, but is not the primary beneficiary, of the VIE at September 30, 2022, and December 31, 2021:

			September 30, 2022
(dollar amounts in millions)			Total Assets						Total Liabilities						Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships			$	1,910					$	1,169					$	1,910
Trust Preferred Securities			8						179						—
Other Investments			522						148						522
Total			$	2,440					$	1,496					$	2,432

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			December 31, 2021
(dollar amounts in millions)			Total Assets						Total Liabilities						Maximum Exposure to Loss
Affordable Housing Tax Credit Partnerships			$	1,652					$	949					$	1,652
Trust Preferred Securities			14						248						—
Other Investments			484						146						484
Total			$	2,150					$	1,343					$	2,136

Trust-Preferred Securities

Huntington has certain wholly-owned trusts whose assets, liabilities, equity, income, and expenses are not included within Huntington’s Unaudited Condensed Consolidated Financial Statements. These trusts have been formed for the sole purpose of issuing trust-preferred securities, from which the proceeds are then invested in Huntington junior subordinated debentures, which are reflected in Huntington’s Unaudited Condensed Consolidated Balance Sheet as long-term debt. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington’s Unaudited Condensed Consolidated Financial Statements.

A list of trust preferred securities outstanding at September 30, 2022 follows:

(dollar amounts in millions)			Rate						Principal amount of subordinated note/ debenture issued to trust (1)						Investment in unconsolidated subsidiary
Huntington Capital II			4.38			(2)			$	32					$	3
Sky Financial Capital Trust III			5.15			(3)			72						2
Sky Financial Capital Trust IV			5.15			(3)			75						3
Total									$	179					$	8

(1)Represents the principal amount of debentures issued to each trust, including unamortized original issue discount.

(2)Variable effective rate at September 30, 2022, based on three-month LIBOR +0.625%.

(3)Variable effective rate at September 30, 2022, based on three-month LIBOR +1.40%.

Each issue of the junior subordinated debentures has an interest rate equal to the corresponding trust securities distribution rate. Huntington has the right to defer payment of interest on the debentures at any time, or from time-to-time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the related debentures. During any such extension period, distributions to the trust securities will also be deferred and Huntington’s ability to pay dividends on its common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to trust securities are guaranteed by Huntington to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to all indebtedness of the Company to the same extent as the junior subordinated debt. The guarantee does not place a limitation on the amount of additional indebtedness that may be incurred by Huntington.

Affordable Housing Tax Credit Partnerships

Huntington makes certain equity investments in various limited partnerships that sponsor affordable housing projects utilizing the LIHTC pursuant to Section 42 of the Internal Revenue Code. The purpose of these investments is to achieve a satisfactory return on capital, to facilitate the sale of additional affordable housing product offerings, and to assist in achieving goals associated with the Community Reinvestment Act. The primary activities of the limited partnerships include the identification, development, and operation of multi-family housing that is leased to qualifying residential tenants. Generally, these types of investments are funded through a combination of debt and equity.

Huntington uses the proportional amortization method to account for a majority of its investments in these entities. These investments are included in other assets. Investments that do not meet the requirements of the proportional amortization method are accounted for using the equity method. Investment losses are included in Other noninterest income in the Unaudited Condensed Consolidated Statements of Income.

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The following table presents the balances of Huntington’s affordable housing tax credit investments and related unfunded commitments at September 30, 2022 and December 31, 2021.

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Affordable housing tax credit investments			$	2,743					$	2,376
Less: amortization			(833)						(724)
Net affordable housing tax credit investments			$	1,910					$	1,652
Unfunded commitments			$	1,169					$	949

The following table presents other information relating to Huntington’s affordable housing tax credit investments for the three-month and nine-month periods ended September 30, 2022 and 2021.

						Three Months Ended September 30,												Nine Months Ended September 30,
(dollar amounts in millions)						2022						2021						2022						2021
Tax credits and other tax benefits recognized						$	52					$	36					$	159					$	113
Proportional amortization expense included in provision for income taxes						45						34						131						92

There were no sales of affordable housing tax credit investments during the three-month and nine-month periods ended September 30, 2022 and 2021. There was no impairment recognized for the three-month and nine-month periods ended September 30, 2022 and 2021.

Other investments

Other investments determined to be VIE’s include investments in Small Business Investment Companies, Historic Tax Credit Investments, certain equity method investments, renewable energy financings, and other miscellaneous investments.

16. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments to extend credit

In the ordinary course of business, Huntington makes various commitments to extend credit that are not reflected in the Unaudited Condensed Consolidated Financial Statements. The contract amounts of these financial agreements at September 30, 2022 and December 31, 2021, were as follows:

(dollar amounts in millions)			September 30, 2022						December 31, 2021
Contract amount representing credit risk
Commitments to extend credit:
Commercial			$	30,478					$	27,933
Consumer			19,283						18,513
Commercial real estate			3,491						3,042
Standby letters of credit and guarantees on industrial revenue bonds			733						694
Commercial letters of credit			14						36

Commitments to extend credit generally have fixed expiration dates, are variable-rate, and contain clauses that permit Huntington to terminate or otherwise renegotiate the contracts in the event of a significant deterioration in the customer’s credit quality. These arrangements normally require the payment of a fee by the customer, the pricing of which is based on prevailing market conditions, credit quality, probability of funding, and other relevant factors. Since many of these commitments are expected to expire without being drawn upon, the contract amounts are not necessarily indicative of future cash requirements. The interest rate risk arising from these financial instruments is insignificant as a result of their predominantly short-term, variable-rate nature. Collateral to secure any funding of these commitments predominately consists of residential and commercial real estate mortgage loans.

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Standby letters-of-credit and guarantees on industrial revenue bonds are conditional commitments issued to guarantee the performance of a customer to a third-party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Most of these arrangements mature within two years. Since the conditions under which Huntington is required to fund these commitments may not materialize, the cash requirements are expected to be less than the total outstanding commitments. The carrying amount of deferred revenue associated with these guarantees was $20 million and $7 million at September 30, 2022 and December 31, 2021, respectively.

Commercial letters-of-credit represent short-term, self-liquidating instruments that facilitate customer trade transactions and generally have maturities of no longer than 90 days. The goods or cargo being traded normally secure these instruments.

Litigation and Regulatory Matters

In the ordinary course of business, Huntington is routinely a defendant in or party to pending and threatened legal and regulatory actions and proceedings.

In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, Huntington generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each matter may be.

Huntington establishes an accrued liability when those matters present loss contingencies that are both probable and estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. Huntington thereafter continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established.

For certain matters, Huntington is able to estimate a range of possible loss. In cases in which Huntington possesses information to estimate a range of possible loss, that estimate is aggregated and disclosed below. There may be other matters for which a loss is probable or reasonably possible but such an estimate of the range of possible loss may not be possible. For those matters where an estimate of the range of possible loss is possible, management currently estimates the aggregate range of reasonably possible loss is $0 to $15 million at September 30, 2022 in excess of the accrued liability (if any) related to those matters. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. The estimated range of possible loss does not represent Huntington’s maximum loss exposure.

Based on current knowledge, management does not believe that loss contingencies arising from pending matters will have a material adverse effect on the consolidated financial position of Huntington. Further, management believes that amounts accrued are adequate to address Huntington’s contingent liabilities. However, in light of the inherent uncertainties involved in these matters, some of which are beyond Huntington’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to Huntington’s results of operations for any particular reporting period.

17. SEGMENT REPORTING

Huntington’s business segments are based on our internally-aligned segment leadership structure, which is how management monitors results and assesses performance. The Company has four major business segments: Commercial Banking, Consumer and Business Banking, Vehicle Finance, and Regional Banking and The Huntington Private Client Group (RBHPCG). The Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and expense. For a description of our business segments, see Note 25 - Segment Reporting to the Consolidated Financial Statements appearing in Huntington’s 2021 Annual Report on Form 10-K.

Listed in the following tables is certain operating basis financial information reconciled to Huntington’s September 30, 2022, December 31, 2021, and September 30, 2021, reported results by business segment.

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			Three Months Ended September 30,
Income Statements			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
(dollar amounts in millions)
2022
Net interest income			$	495					$	708					$	120					$	63					$	18					$	1,404
Provision (benefit) for credit losses			84						64						(43)						1						—						106
Noninterest income			181						243						4						57						13						498
Noninterest expense			271						605						41						79						57						1,053
Provision (benefit) for income taxes			66						60						27						8						(15)						146
Income attributable to non-controlling interest			3						—						—						—						—						3
Net income (loss) attributable to Huntington Bancshares Inc			$	252					$	222					$	99					$	32					$	(11)					$	594
2021
Net interest income			$	416					$	483					$	123					$	42					$	96					$	1,160
Provision (benefit) for credit losses			(34)						(7)						(25)						4						—						(62)
Noninterest income			150						302						4						58						21						535
Noninterest expense			247						637						48						84						273						1,289
Provision (benefit) for income taxes			73						33						22						3						(41)						90
Income attributable to non-controlling interest			1						—						—						—						—						1
Net income (loss) attributable to Huntington Bancshares Inc			$	279					$	122					$	82					$	9					$	(115)					$	377

			Nine Months Ended September 30,
Income Statements			Commercial Banking						Consumer & Business Banking						Vehicle Finance						RBHPCG						Treasury / Other						Huntington Consolidated
(dollar amounts in millions)
2022
Net interest income			$	1,339					$	1,701					$	357					$	167					$	247					$	3,811
Provision for credit losses			9						138						36						15						—						198
Noninterest income			473						785						10						181						33						1,482
Noninterest expense			767						1,807						127						241						182						3,124
Provision (benefit) for income taxes			217						114						43						19						(22)						371
Income attributable to non-controlling interest			7						—						—						—						—						7
Net income attributable to Huntington Bancshares Inc			$	812					$	427					$	161					$	73					$	120					$	1,593
2021
Net interest income			$	873					$	1,187					$	340					$	113					$	457					$	2,970
Provision (benefit) for credit losses			107						57						(77)						2						—						89
Noninterest income			353						780						9						165						67						1,374
Noninterest expense			553						1,617						119						217						648						3,154
Provision (benefit) for income taxes			119						62						64						12						(51)						206
Income attributable to non-controlling interest			1						—						—						—						—						1
Net income (loss) attributable to Huntington Bancshares Inc			$	446					$	231					$	243					$	47					$	(73)					$	894

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			Assets at												Deposits at
(dollar amounts in millions)			September 30, 2022						December 31, 2021						September 30, 2022						December 31, 2021
Commercial Banking			$	62,924					$	57,071					$	37,194					$	31,845
Consumer & Business Banking			38,424						39,929						93,854						95,352
Vehicle Finance			21,461						20,752						1,173						1,401
RBHPCG			9,876						8,325						8,982						10,162
Treasury / Other			46,717						47,987						5,110						4,503
Total			$	179,402					$	174,064					$	146,313					$	143,263

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