Huntington National Bank 2004 Annual Report Download - page 110

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED
At December 31, 2004
Total
Less than 12 Months Over 12 Months
Fair Unrealized Fair Unrealized Fair Unrealized
(in thousands of dollars) Value Losses Value Losses Value Losses
U.S. Treasury $ 19,794 $ (213) $ — $ — $ 19,794 $ (213)
Federal agencies
Mortgage-backed securities 810,462 (8,666) 115,418 (3,841) 925,880 (12,507)
Other agencies 509,153 (6,303) 255,809 (9,598) 764,962 (15,901)
Total U.S. Treasury and Federal Agencies 1,339,409 (15,182) 371,227 (13,439) 1,710,636 (28,621)
Municipal Securities 62,187 (273) 51,875 (1,521) 114,062 (1,794)
Private label CMO 343,929 (5,230) 2,046 (3) 345,975 (5,233)
Asset backed securities 416,476 (1,004) — — 416,476 (1,004)
Other securities 13,967 (659) — (2) 13,967 (661)
Total temporarily impaired securities $2,175,968 $(22,348) $425,148 $(14,965) $2,601,116 $(37,313)
Gross gains from sales of securities of $34.7 million, $14.5 million, and $5.4 million, were realized in 2004, 2003, and 2002,
respectively. Gross losses totaled $19.0 million in 2004, $9.2 million in 2003, and $0.5 million in 2002. At September 30, 2004,
Management determined that $11.0 million of equity securities, with unrealized losses of $0.9 million were other-than-temporarily
impaired. Consequently, Huntington recognized the unrealized losses in the third quarter of 2004. There were no
other-than-temporary impairments of any securities recognized in 2003 or 2002. Huntington has both the intent and ability to hold
the securities contained in the table above for a time necessary to recover the amortized cost.
4. LOANS AND LEASES
At December 31, 2004, $2.1 billion of commercial and industrial loans were pledged to secure potential discount window borrowings
from the Federal Reserve Bank. At this same date, $4.7 billion of real estate qualifying loans were pledged to secure advances from the
Federal Home Loan Bank. Real estate qualifying loans are comprised of residential mortgage loans secured by first and second liens.
Huntington’s loan and lease portfolio includes lease financing receivables consisting of direct financing leases on equipment, which
are included in commercial and industrial loans, and on automobiles. Net investment in lease financing receivables by category at
December 31 were as follows:
At December 31,
(in thousands of dollars) 2004 2003
Commercial and industrial
Lease payments receivable $ 391,157 $ 315,518
Estimated residual value of leased assets 37,704 36,300
Gross investment in commercial lease financing receivables 428,861 351,818
Unearned income (39,414) (33,478)
Total net investment in commercial lease financing receivables $ 389,447 $ 318,340
Consumer
Lease payments receivable $1,453,909 $1,238,843
Estimated residual value of leased assets 1,258,160 903,554
Gross investment in consumer lease financing receivables 2,712,069 2,142,397
Deferred origination fees and costs (2,130) (1,950)
Unearned income (266,484) (238,277)
Total net investment in consumer lease financing receivables $2,443,455 $1,902,170
Included in the estimated residual value of leased consumer assets, Huntington had a valuation reserve of $4.2 million and
$2.1 million at December 31, 2004 and 2003, respectively, for expected residual value impairment that is not covered by residual value
insurance.
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