| LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES | LOANS / LEASES AND ALLOWANCE FOR CREDIT LOSSES Loans and leases for which Huntington has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified in the Unaudited Condensed Consolidated Balance Sheets as loans and leases. Except for loans which are accounted for at fair value, loans are carried at the principal amount outstanding, net of unamortized premiums and discounts and deferred loan fees and costs, which resulted in a net premium of $246.6 million and $230.2 million at September 30, 2015 and December 31, 2014 , respectively. Loan and Lease Portfolio Compositioln The following table provides a detailed listing of Huntington’s loan and lease portfolio at September 30, 2015 and December 31, 2014 : (dollar amounts in thousands) September 30, December 31, Loans and leases: Commercial and industrial $ 20,039,429 $ 19,033,146 Commercial real estate 5,404,274 5,197,403 Automobile 9,160,241 8,689,902 Home equity 8,460,989 8,490,915 Residential mortgage 6,071,356 5,830,609 Other consumer 519,620 413,751 Loans and leases 49,655,909 47,655,726 Allowance for loan and lease losses (591,938 ) (605,196 ) Net loans and leases $ 49,063,971 $ 47,050,530 As shown in the table above, the primary loan and lease portfolios are: C&I, CRE, automobile, home equity, residential mortgage, and other consumer. For ACL purposes, these portfolios are further disaggregated into classes. The classes within each portfolio are as follows: Portfolio Class Commercial and industrial Owner occupied Purchased credit-impaired Other commercial and industrial Commercial real estate Retail properties Multi family Office Industrial and warehouse Purchased credit-impaired Other commercial real estate Automobile NA (1) Home equity Secured by first-lien Secured by junior-lien Residential mortgage Residential mortgage Purchased credit-impaired Other consumer Other consumer Purchased credit-impaired (1) Not applicable. The automobile loan portfolio is not further segregated into classes. Huntington Technology Finance acquisition On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which was re-branded Huntington Technology Finance. Lease receivables with a fair value of $838.6 million , including a lease residual value of approximately $200 million , were acquired by Huntington. These leases were recorded at fair value. The fair values for the leases were estimated using discounted cash flow analyses using interest rates currently being offered for leases with similar terms (Level 3), and reflected an estimate of credit and other risk associated with the leases. Camco Financial acquisition On March 1, 2014, Huntington completed its acquisition of Camco Financial. Loans with a fair value of $559.4 million were transferred to Huntington. Fidelity Bank acquisition On March 30, 2012, Huntington acquired the loans of Fidelity Bank located in Dearborn, Michigan from the FDIC. Under the agreement, loans with a fair value of $523.9 million were acquired by Huntington. Purchased Credit-Impaired Loans Purchased loans with evidence of deterioration in credit quality since origination for which it is probable at acquisition that we will be unable to collect all contractually required payments are considered to be credit impaired. Purchased credit-impaired loans are initially recorded at fair value, which is estimated by discounting the cash flows expected to be collected at the acquisition date. Because the estimate of expected cash flows reflects an estimate of future credit losses expected to be incurred over the life of the loans, an allowance for credit losses is not recorded at the acquisition date. The excess of cash flows expected at acquisition over the estimated fair value, referred to as the accretable yield, is recognized in interest income over the remaining life of the loan, or pool of loans, on a level-yield basis. The difference between the contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. A subsequent decrease in the estimate of cash flows expected to be received on purchased credit-impaired loans generally results in the recognition of an allowance for credit losses. Subsequent increases in cash flows result in reversal of any nonaccretable difference (or allowance for loan and lease losses to the extent any has been recorded) with a positive impact on interest income subsequently recognized. The measurement of cash flows involves assumptions and judgments for interest rates, prepayments, default rates, loss severity, and collateral values. All of these factors are inherently subjective and significant changes in the cash flow estimates over the life of the loan can result. The following table presents a rollforward of the accretable yield for purchased credit impaired loans by acquisition for the three-month and nine-month periods ended September 30, 2015 and 2014 : Three Months Ended Nine Months Ended (dollar amounts in thousands) 2015 2014 2015 2014 Fidelity Bank Balance, beginning of period $ 19,312 $ 24,596 $ 19,388 $ 27,995 Accretion (2,818 ) (3,070 ) (8,682 ) (10,722 ) Reclassification (to) from nonaccretable difference 1,089 (6 ) 6,877 4,247 Balance, end of period $ 17,583 $ 21,520 $ 17,583 $ 21,520 Camco Financial Balance, beginning of period $ 681 $ 154 $ 824 $ — Impact of acquisition/purchase on March 1, 2014 — — — 143 Accretion (106 ) (153 ) (1,357 ) (5,335 ) Reclassification (to) from nonaccretable difference (393 ) 816 715 6,009 Balance, end of period $ 182 $ 817 $ 182 $ 817 The allowance for loan losses recorded on the purchased credit-impaired loan portfolio at September 30, 2015 and December 31, 2014 was $0.7 million and $4.1 million , respectively. The following table reflects the ending and unpaid balances of all contractually required payments and carrying amounts of the acquired loans by acquisition at September 30, 2015 and December 31, 2014 : September 30, 2015 December 31, 2014 (dollar amounts in thousands) Ending Unpaid Ending Unpaid Fidelity Bank Commercial and industrial $ 19,484 $ 28,812 $ 22,405 $ 33,622 Commercial real estate 24,619 67,413 36,663 87,250 Residential mortgage 1,513 2,292 1,912 3,096 Other consumer 50 107 51 123 Total $ 45,666 $ 98,624 $ 61,031 $ 124,091 Camco Financial Commercial and industrial $ — $ — $ 823 $ 1,685 Commercial real estate 1,156 1,499 1,708 3,826 Residential mortgage — — — — Other consumer — — — — Total $ 1,156 $ 1,499 $ 2,531 $ 5,511 Loan Purchases and Sales The following table summarizes portfolio loan purchase and sale activity for the three-month and nine-month periods ended September 30, 2015 and 2014 . The table below excludes mortgage loans originated for sale. (dollar amounts in thousands) Commercial Commercial Automobile Home Residential Other Total Portfolio loans and leases purchased or transferred from held for sale during the: Three-month period ended September 30, 2015 $ 180,036 $ — $ — $ — $ 57,388 $ — $ 237,424 Nine-month period ended September 30, 2015 224,532 — 262,037 (2) — 164,425 $ — 650,994 Three-month period ended September 30, 2014 64,668 — — — 2,224 $ — 66,892 Nine-month period ended September 30, 2014 $ 270,272 $ — $ — $ — $ 16,547 $ — $ 286,819 Portfolio loans and leases sold or transferred to loans held for sale during the: Three-month period ended September 30, 2015 $ 98,117 $ — $ — $ 96,786 (3 ) $ — $ — $ 194,903 Nine-month period ended September 30, 2015 284,019 — 1,026,195 (1) 96,786 — — 1,407,000 Three-month period ended September 30, 2014 179,065 — — — — — 179,065 Nine-month period ended September 30, 2014 $ 283,796 $ 7,434 $ — $ — $ — $ 7,592 $ 298,822 (1) Reflects the transfer of approximately $1.0 billion automobile loans to loans held-for-sale at March 31, 2015. (2) Includes loans Huntington no longer has the intent to sell and, therefore transferred back to the portfolio in the 2015 second quarter. (3) Reflects the transfer of approximately $96.8 million home equity TDRs from loans to loans held for sale at September 30, 2015. NALs and Past Due Loans Loans are considered past due when the contractual amounts due with respect to principal and interest are not received within 30 days of the contractual due date. Any loan in any portfolio may be placed on nonaccrual status prior to the policies described below when collection of principal or interest is in doubt. When a borrower with debt is discharged in a Chapter 7 bankruptcy and not reaffirmed by the borrower, the loan is determined to be collateral dependent and placed on nonaccrual status. All classes within the C&I and CRE portfolios (except for purchased credit-impaired loans) are placed on nonaccrual status at 90 -days past due. Residential mortgage loans are placed on nonaccrual status at 150 -days past due, with the exception of residential mortgages guaranteed by government organizations. First-lien home equity loans are placed on nonaccrual status at 150 -days past due. Junior-lien home equity loans are placed on nonaccrual status at the earlier of 120 -days past due or when the related first-lien loan has been identified as nonaccrual. Automobile and other consumer loans are generally charged-off when the loan is 120 -days past due. For all classes within all loan portfolios, when a loan is placed on nonaccrual status, any accrued interest income is reversed with current year accruals charged to interest income, and prior year amounts are recognized as a credit loss. For all classes within all loan portfolios, cash receipts received on NALs are applied entirely against principal until the loan or lease has been collected in full, after which time any additional cash receipts are recognized as interest income. However, for secured non-reaffirmed debt in a Chapter 7 bankruptcy, payments are applied to principal and interest when the borrower has demonstrated a capacity to continue payment of the debt and collection of the debt is reasonably assured. For unsecured non-reaffirmed debt in a Chapter 7 bankruptcy where the carrying value has been fully charged-off, payments are recorded as loan recoveries. Regarding all classes within the C&I and CRE portfolios, the determination of a borrower’s ability to make the required principal and interest payments is based on an examination of the borrower’s current financial statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer loan portfolio, the determination of a borrower’s ability to make the required principal and interest payments is based on multiple factors, including number of days past due and, in some instances, an evaluation of the borrower’s financial condition. When, in Management’s judgment, the borrower’s ability to make required principal and interest payments resumes and collectability is no longer in doubt, supported by sustained repayment history, the loan or lease is returned to accrual status. For these loans that have been returned to accrual status, cash receipts are applied according to the contractual terms of the loan. The following table presents NALs by loan class at September 30, 2015 and December 31, 2014 : (dollar amounts in thousands) September 30, December 31, Commercial and industrial: Owner occupied $ 42,231 $ 41,285 Other commercial and industrial 115,671 30,689 Total commercial and industrial 157,902 71,974 Commercial real estate: Retail properties $ 7,887 $ 21,385 Multi family 9,183 9,743 Office 5,414 7,707 Industrial and warehouse 1,147 3,928 Other commercial real estate 3,885 5,760 Total commercial real estate 27,516 48,523 Automobile 5,551 4,623 Home equity: Secured by first-lien 33,974 46,938 Secured by junior-lien 32,472 31,577 Total home equity 66,446 78,515 Residential mortgage 98,908 96,609 Other consumer 154 — Total nonaccrual loans $ 356,477 $ 300,244 The following table presents an aging analysis of loans and leases, including past due loans, by loan class at September 30, 2015 and December 31, 2014 : (1) September 30, 2015 Past Due Total Loans 90 or more (dollar amounts in thousands) 30-59 Days 60-89 Days 90 or more days Total Current Commercial and industrial: Owner occupied $ 5,500 $ 3,742 $ 11,195 $ 20,437 $ 4,056,263 $ 4,076,700 $ — Purchased credit-impaired 802 1,622 3,412 5,836 13,648 19,484 3,412 (3) Other commercial and industrial 54,302 21,742 17,901 93,945 15,849,300 15,943,245 3,159 (2) Total commercial and industrial 60,604 27,106 32,508 120,218 19,919,211 20,039,429 6,571 Commercial real estate: Retail properties 10,095 297 3,769 14,161 1,408,479 1,422,640 $ — Multi family 1,078 3,620 2,605 7,303 1,210,792 1,218,095 — Office 5,889 1,094 2,211 9,194 916,636 925,830 — Industrial and warehouse 22 146 369 537 535,228 535,765 — Purchased credit-impaired 364 1,052 12,178 13,594 12,181 25,775 12,178 (3) Other commercial real estate 188 — 3,137 3,325 1,272,844 1,276,169 — Total commercial real estate 17,636 6,209 24,269 48,114 5,356,160 5,404,274 12,178 Automobile 58,391 14,051 6,934 79,376 9,080,865 9,160,241 6,873 Home equity: Secured by first-lien 13,269 7,241 26,321 46,831 5,110,070 5,156,901 4,207 Secured by junior-lien 21,693 10,523 32,952 65,168 3,238,920 3,304,088 6,557 Total home equity 34,962 17,764 59,273 111,999 8,348,990 8,460,989 10,764 Residential mortgage: Residential mortgage 92,163 37,313 123,097 252,573 5,817,270 6,069,843 68,135 (4) Purchased credit-impaired — — — — 1,513 1,513 — Total residential mortgage 92,163 37,313 123,097 252,573 5,818,783 6,071,356 68,135 Other consumer: Other consumer 6,411 1,547 1,241 9,199 510,371 519,570 1,087 Purchased credit-impaired — — — — 50 50 — Total other consumer 6,411 1,547 1,241 9,199 510,421 519,620 1,087 Total loans and leases $ 270,167 $ 103,990 $ 247,322 $ 621,479 $ 49,034,430 $ 49,655,909 $ 105,608 December 31, 2014 Past Due Total Loans 90 or more (dollar amounts in thousands) 30-59 Days 60-89 Days 90 or more days Total Current Commercial and industrial: Owner occupied $ 5,232 $ 2,981 $ 18,222 $ 26,435 $ 4,228,440 $ 4,254,875 $ — Purchased credit-impaired 846 — 4,937 5,783 17,445 23,228 4,937 (3) Other commercial and industrial 15,330 1,536 9,101 25,967 14,729,076 14,755,043 — Total commercial and industrial 21,408 4,517 32,260 58,185 18,974,961 19,033,146 4,937 Commercial real estate: Retail properties 7,866 — 4,021 11,887 1,345,859 1,357,746 $ — Multi family 1,517 312 3,337 5,166 1,085,250 1,090,416 — Office 464 1,167 4,415 6,046 974,257 980,303 — Industrial and warehouse 688 — 2,649 3,337 510,064 513,401 — Purchased credit-impaired 89 289 18,793 19,171 19,200 38,371 18,793 (3) Other commercial real estate 847 1,281 3,966 6,094 1,211,072 1,217,166 — Total commercial real estate 11,471 3,049 37,181 51,701 5,145,702 5,197,403 18,793 Automobile 56,272 10,427 5,963 72,662 8,617,240 8,689,902 5,703 Home equity Secured by first-lien 15,036 8,085 33,014 56,135 5,072,669 5,128,804 4,471 Secured by junior-lien 22,473 12,297 33,406 68,176 3,293,935 3,362,111 7,688 Total home equity 37,509 20,382 66,420 124,311 8,366,604 8,490,915 12,159 Residential mortgage Residential mortgage 102,702 42,009 139,379 284,090 5,544,607 5,828,697 88,052 (5) Purchased credit-impaired — — — — 1,912 1,912 — Total residential mortgage 102,702 42,009 139,379 284,090 5,546,519 5,830,609 88,052 Other consumer Other consumer 5,491 1,086 837 7,414 406,286 413,700 837 Purchased credit-impaired — — — — 51 51 — Total other consumer 5,491 1,086 837 7,414 406,337 413,751 837 Total loans and leases $ 234,853 $ 81,470 $ 282,040 $ 598,363 $ 47,057,363 $ 47,655,726 $ 130,481 (1) NALs are included in this aging analysis based on the loan’s past due status. (2) Amounts include Huntington Technology Finance administrative lease delinquencies. (3) Amounts represent accruing purchased impaired loans related to acquisitions. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status. (4) Includes $50,643 thousand guaranteed by the U.S. government. (5) Includes $55,012 thousand guaranteed by the U.S. government. Allowance for Credit Losses Huntington maintains two reserves, both of which reflect Management’s judgment regarding the appropriate level necessary to absorb credit losses inherent in our loan and lease portfolio: the ALLL and the AULC. Combined, these reserves comprise the total ACL. The determination of the ACL requires significant estimates, including the timing and amounts of expected future cash flows on impaired loans and leases, consideration of current economic conditions, and historical loss experience pertaining to pools of homogeneous loans and leases, all of which may be susceptible to change. The appropriateness of the ACL is based on Management’s current judgments about the credit quality of the loan portfolio. These judgments consider on-going evaluations of the loan and lease portfolio, including such factors as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or other documented support. Further, Management evaluates the impact of changes in interest rates and overall economic conditions on the ability of borrowers to meet their financial obligations when quantifying our exposure to credit losses and assessing the appropriateness of our ACL at each reporting date. In addition to general economic conditions and the other factors described above, additional factors also considered include: the impact of increasing or decreasing residential real estate values; the diversification of CRE loans; the development of new or expanded Commercial business segments such as healthcare, ABL, and energy, and the overall condition of the manufacturing industry. Management’s determinations regarding the appropriateness of the ACL are reviewed and approved by the Company’s board of directors. The ALLL consists of two components: (1) the transaction reserve, which includes a loan level allocation, specific reserves related to loans considered to be impaired, and loans involved in troubled debt restructurings, and (2) the general reserve. The transaction reserve component includes both (1) an estimate of loss based on pools of commercial and consumer loans and leases with similar characteristics and (2) an estimate of loss based on an impairment review of each impaired C&I and CRE loan greater than $1.0 million. For the C&I and CRE portfolios, the estimate of loss based on pools of loans and leases with similar characteristics is made by applying a PD factor and a LGD factor to each individual loan based on a regularly updated loan grade, using a standardized loan grading system. The PD factor and an LGD factor are determined for each loan grade using statistical models based on historical performance data. The PD factor considers on-going reviews of the financial performance of the specific borrower, including cash flow, debt-service coverage ratio, earnings power, debt level, and equity position, in conjunction with an assessment of the borrower’s industry and future prospects. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. These reserve factors are developed and updated periodically based on credit migration models that track historical movements of loans between loan ratings over time and a combination of long-term average loss experience of our own portfolio and external industry data. In the case of other homogeneous portfolios, such as automobile loans, home equity loans, and residential mortgage loans, the determination of the transaction reserve also incorporates PD and LGD factors. The estimate of loss is based on pools of loans and leases with similar characteristics. The PD factor considers current credit scores unless the account is delinquent, in which case a higher PD factor is used. The credit score provides a basis for understanding the borrower’s past and current payment performance, and this information is used to estimate expected losses over the emergence period. The performance of first-lien loans ahead of our junior-lien loans is available to use as part of our updated score process. The LGD factor considers analysis of the type of collateral and the relative LTV ratio. Credit scores, models, analyses, and other factors used to determine both the PD and LGD factors are updated frequently to capture the recent behavioral characteristics of the subject portfolios, as well as any changes in loss mitigation or credit origination strategies, and adjustments to the reserve factors are made as required. Models utilized in the ALLL estimation process are subject to the Company’s model validation policies. The general reserve consists of our risk-profile reserve components, which includes items unique to our structure, policies, processes, and portfolio composition, as well as qualitative measurements and assessments of the loan portfolios including, but not limited to, management quality, concentrations, portfolio composition, industry comparisons, and internal review functions. The estimate for the AULC is determined using the same procedures and methodologies as used for the ALLL. The loss factors used in the AULC are the same as the loss factors used in the ALLL while also considering a historical utilization of unused commitments. The AULC is reflected in accrued expenses and other liabilities in the Unaudited Condensed Consolidated Balance Sheet. The ACL is increased through a provision for credit losses that is charged to earnings, based on Management’s quarterly evaluation of the factors previously mentioned, and is reduced by charge-offs, net of recoveries, and the ACL associated with securitized or sold loans. During the 2015 first quarter, we reviewed our existing commercial and consumer credit models and enhanced certain processes and methods of ACL estimation. During this review, we analyzed the loss emergence periods used for consumer receivables collectively evaluated for impairment and, as a result, extended our loss emergence periods for products within these portfolios. As part of these enhancements to our credit reserve process, we evaluated the methods used to separately estimate economic risks inherent in our portfolios and decided to no longer utilize these separate estimation techniques. Economic risks are incorporated in our loss estimates elsewhere in our reserve calculation. The enhancements made to our credit reserve processes during the quarter allow for increased segmentation and analysis of the estimated incurred losses within our loan portfolios. The net ACL impact of these enhancements was immaterial. During the 2015 third quarter, we reviewed our existing commercial and consumer credit models and completed a periodic reassessment of certain ACL assumptions. Specifically, we updated our analysis of the loss emergence periods used for commercial receivables collectively evaluated for impairment. Based on our observed portfolio experience, we extended our loss emergence periods for the C&I portfolio and CRE portfolios. We also updated loss factors in our consumer home equity and residential mortgage portfolios based on more recently observed portfolio experience. The net ACL impact of these enhancements was immaterial. The following table presents ALLL and AULC activity by portfolio segment for the three-month and nine-month periods ended September 30, 2015 and 2014 : (dollar amounts in thousands) Commercial Commercial Automobile Home Residential Other Total Three-month period ended September 30, 2015: ALLL balance, beginning of period $ 285,041 $ 92,060 $ 39,102 $ 111,178 $ 51,679 $ 20,482 $ 599,542 Loan charge-offs (26,016 ) (3,976 ) (9,084 ) (10,164 ) (3,192 ) (8,443 ) (60,875 ) Recoveries of loans previously charged-off 16,158 17,797 4,176 4,295 1,182 1,104 44,712 Provision (reduction in allowance) for loan and lease losses 9,146 4,086 9,755 (13,406 ) (6,875 ) 10,918 13,624 Write-downs of loans sold or transferred to loans held for sale — — — (5,065 ) — — (5,065 ) ALLL balance, end of period $ 284,329 $ 109,967 $ 43,949 $ 86,838 $ 42,794 $ 24,061 $ 591,938 AULC balance, beginning of period $ 41,849 $ 5,778 $ — $ 2,522 $ 17 $ 5,205 $ 55,371 Provision (reduction in allowance) for unfunded loan commitments and letters of credit 6,794 1,965 — (619 ) — 712 8,852 AULC balance, end of period $ 48,643 $ 7,743 $ — $ 1,903 $ 17 $ 5,917 $ 64,223 ACL balance, end of period $ 332,972 $ 117,710 $ 43,949 $ 88,741 $ 42,811 $ 29,978 $ 656,161 Nine-month period ended September 30, 2015: ALLL balance, beginning of period $ 286,995 $ 102,839 $ 33,466 $ 96,413 $ 47,211 $ 38,272 $ 605,196 Loan charge-offs (62,841 ) (14,277 ) (24,878 ) (27,379 ) (11,665 ) (21,880 ) (162,920 ) Recoveries of loans previously charged-off 37,169 26,585 12,280 12,235 4,697 3,984 96,950 Provision (reduction in allowance) for loan and lease losses 23,006 (5,180 ) 25,373 10,634 2,551 3,685 60,069 Write-downs of loans sold or transferred to loans held for sale — — (2,292 ) (5,065 ) — — (7,357 ) ALLL balance, end of period $ 284,329 $ 109,967 $ 43,949 $ 86,838 $ 42,794 $ 24,061 $ 591,938 AULC balance, beginning of period $ 48,988 $ 6,041 $ — $ 1,924 $ 8 $ 3,845 $ 60,806 Provision for (reduction in allowance) unfunded loan commitments and letters of credit (345 ) 1,702 — (21 ) 9 2,072 3,417 AULC balance, end of period $ 48,643 $ 7,743 $ — $ 1,903 $ 17 $ 5,917 $ 64,223 ACL balance, end of period $ 332,972 $ 117,710 $ 43,949 $ 88,741 $ 42,811 $ 29,978 $ 656,161 (dollar amounts in thousands) Commercial Commercial Automobile Home Residential Other Total Three-month period ended September 30, 2014: ALLL balance, beginning of period $ 278,512 $ 137,346 $ 27,158 $ 105,943 $ 47,191 $ 38,951 $ 635,101 Loan charge-offs (20,723 ) (4,664 ) (7,292 ) (9,584 ) (6,477 ) (9,771 ) (58,511 ) Recoveries of loans previously charged-off 8,136 10,671 3,316 3,136 1,049 2,180 28,488 Provision for (reduction in allowance) loan and lease losses 25,476 (27,881 ) 7,550 880 10,895 9,038 25,958 Allowance for loans sold or transferred to loans held for sale — — — — — — — ALLL balance, end of period $ 291,401 $ 115,472 $ 30,732 $ 100,375 $ 52,658 $ 40,398 $ 631,036 AULC balance, beginning of period $ 44,750 $ 7,530 $ — $ 1,977 $ 8 $ 2,662 $ 56,927 Provision for (reduction in allowance) unfunded loan commitments and letters of credit (1,545 ) (552 ) — (18 ) 2 635 (1,478 ) AULC balance, end of period $ 43,205 $ 6,978 $ — $ 1,959 $ 10 $ 3,297 $ 55,449 ACL balance, end of period $ 334,606 $ 122,450 $ 30,732 $ 102,334 $ 52,668 $ 43,695 $ 686,485 Nine-month period ended September 30, 2014: ALLL balance, beginning of period $ 265,801 $ 162,557 $ 31,053 $ 111,131 $ 39,577 $ 37,751 $ 647,870 Loan charge-offs (60,305 ) (17,772 ) (21,969 ) (43,844 ) (21,525 ) (24,934 ) (190,349 ) Recoveries of loans previously charged-off 28,515 26,957 10,425 13,218 4,832 4,750 88,697 Provision for (reduction in allowance) loan and lease losses 57,390 (56,270 ) 11,223 19,870 29,774 23,958 85,945 Allowance for loans sold or transferred to loans held for sale — — — — — (1,127 ) (1,127 ) ALLL balance, end of period $ 291,401 $ 115,472 $ 30,732 $ 100,375 $ 52,658 $ 40,398 $ 631,036 AULC balance, beginning of period $ 49,596 $ 9,891 $ — $ 1,763 $ 9 $ 1,640 $ 62,899 Provision for (reduction in allowance) unfunded loan commitments and letters of credit (6,391 ) (2,913 ) — 196 1 1,657 (7,450 ) AULC balance, end of period $ 43,205 $ 6,978 $ — $ 1,959 $ 10 $ 3,297 $ 55,449 ACL balance, end of period $ 334,606 $ 122,450 $ 30,732 $ 102,334 $ 52,668 $ 43,695 $ 686,485 Any loan in any portfolio may be charged-off prior to the policies described below if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment. Additionally, discharged, collateral dependent non-reaffirmed debt in Chapter 7 bankruptcy filings will result in a charge-off to estimated collateral value, less anticipated selling costs. C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due. Automobile loans and other consumer loans are charged-off or written down to net realizable value at 120-days past due. First-lien and junior-lien home equity loans are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due and 120-days past due, respectively. Residential mortgages are charged-off to the estimated fair value of the collateral, less anticipated selling costs, at 150-days past due. Credit Quality Indicators To facilitate the monitoring of credit quality for C&I and CRE loans, and for purposes of determining an appropriate ACL level for these loans, Huntington utilizes the following 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 represent 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 by 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. The categories above, which are derived from standard regulatory rating definitions, are assigned upon initial approval of the loan or lease and subsequently updated as appropriate. Commercial loans categorized as OLEM, Substandard, or Doubtful are considered Criticized loans. Commercial loans categorized as Substandard or Doubtful are also considered Classified loans. For all classes within all consumer loan portfolios, each loan is assigned a specific PD factor that is partially based on the borrower’s most recent credit bureau score, which we update quarterly. A credit bureau score is a credit score developed by Fair Isaac Corporation 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. The following table presents each loan and lease class by credit quality indicator at September 30, 2015 and December 31, 2014 : September 30, 2015 Credit Risk Profile by UCS Classification (dollar amounts in thousands) Pass OLEM Substandard Doubtful Total Commercial and industrial: Owner occupied $ 3,763,002 $ 96,338 $ 213,755 $ 3,605 $ 4,076,700 Purchased credit-impaired 4,321 641 14,522 — 19,484 Other commercial and industrial 15,031,737 289,321 616,708 5,479 15,943,245 Total commercial and industrial 18,799,060 386,300 844,985 9,084 20,039,429 Commercial real estate: Retail properties 1,372,078 10,659 39,903 — 1,422,640 Multi family 1,162,776 32,220 22,733 366 1,218,095 Office 861,564 27,713 35,267 1,286 925,830 Industrial and warehouse 527,047 268 8,374 76 535,765 Purchased credit-impaired 8,333 189 15,456 1,797 25,775 Other commercial real estate 1,240,034 7,114 28,460 561 1,276,169 Total commercial real estate 5,171,832 78,163 150,193 4,086 5,404,274 Credit Risk Profile by FICO Score (1) 750+ 650-749 <650 Other (2) Total Automobile 4,465,597 3,388,521 1,053,464 252,659 9,160,241 Home equity: Secured by first-lien 3,314,317 1,436,522 252,179 153,883 5,156,901 Secured by junior-lien 1,829,202 1,035,173 336,424 103,289 3,304,088 Total home equity 5,143,519 2,471,695 588,603 257,172 8,460,989 Residential mortgage: Residential mortgage 3,563,718 1,859,268 602,172 44, |
