Huntington National Bank 2004 Annual Report Download - page 124

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED
At September 30, 2004 and 2003, The Huntington National Bank, as trustee, held all Plan assets. The Plan assets consisted of
investments in a variety of Huntington mutual funds, Huntington common stock, and other equity investments as follows:
Fair Value
2004 2003
(in thousands of dollars) Balance % Balance %
Cash $ 300 —% $— —%
Huntington Funds — money market 500 — 1,570 1
Huntington Funds — equity funds 240,456 68 191,616 66
Huntington Funds — fixed income funds 95,837 27 82,520 29
Huntington Common Stock 16,129 5 12,863 4
Fair value of plan assets at September 30 353,222 100% 288,569 100%
The number of shares of Huntington common stock held by the Plan was 642,364 at December 31, 2004 and 2003. Dividends and
interest received by the Plan during 2004 and 2003 were $11.0 million and $7.0 million, respectively. The Plan has acquired and held
Huntington common stock in compliance at all times with Section 407 of the Employee Retirement Income Security Act of 1978.
The following table shows when benefit payments, which include expected future service, as appropriate, are expected to be paid:
(in thousands of dollars) Pension Benefits Post-Retirement Benefits
Fiscal Year:
2005 $ 16,194 $ 3,948
2006 17,126 4,131
2007 19,249 4,268
2008 21,228 4,355
2009 22,741 4,437
2010 through 2014 134,355 23,409
There is no expected minimum contribution for 2005 to the Plan. However, Huntington may choose to make a contribution to the
Plan up to the maximum deductible limit in the 2005 plan year. Expected contributions for 2005 for the Post-Retirement Benefit plan
are $4.0 million.
The assumed health-care cost trend rate has a significant effect on the amounts reported. A one-percentage point increase would
increase service and interest costs and the post-retirement benefit obligation by $48,000 and $0.7 million, respectively. A one-
percentage point decrease would reduce service and interest costs by $44,000 and the post-retirement benefit obligation by
$0.6 million. The 2005 health care cost trend rate was projected to be 10.99% for pre-65 participants and 10.86% for post-65
participants compared with an estimate of 12.18% for pre-65 participants and 12.23% for post-65 participants in 2003. These rates are
assumed to decrease gradually until they reach 5.09% for pre-65 participants and 5.17% for post-65 participants in the year 2017 and
remain at that level thereafter. Huntington updated the immediate health care cost trend rate assumption based on current market
data and Huntington’s claims experience. This trend rate is expected to decline over time to a trend level consistent with medical
inflation and long-term economic assumptions.
Huntington also sponsors other retirement plans, the most significant being the Supplemental Executive Retirement Plan and the
Supplemental Retirement Income Plan. These plans are nonqualified plans that provide certain former officers and directors of
Huntington and its subsidiaries with defined pension benefits in excess of limits imposed by federal tax law. At December 31, 2004
and 2003, the accrued pension liability for these plans totaled $25.1 million and $23.3 million, respectively. Pension expense for the
plans was $2.1 million, $1.7 million, and $2.3 million in 2004, 2003, and 2002, respectively. Huntington recorded a $1.1 million, net
of tax, minimum pension liability adjustment within other comprehensive income associated with these unfunded plans in 2004.
Huntington has a defined contribution plan that is available to eligible employees. Matching contributions by Huntington equal 100%
on the first 3%, then 50% on the next 2%, of participant elective deferrals. The cost of providing this plan was $9.2 million in 2004,
$8.6 million in 2003, and $8.4 million in 2002. The number of shares of Huntington common stock held by this plan was 7,914,602 at
December 31, 2004, and 8,368,383 at the end of the prior year. The market value of these shares was $195.8 million and
$188.3 million at the same respective dates. Dividends received by the plan were $10.1 million during 2004 and $7.6 million
during 2003.
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