Huntington National Bank 2011 Annual Report Download - page 173

The following table rolls forward the OTTI recognized in earnings on debt securities held by Huntington for
the years ended December 31, 2011 and 2010 as follows.
Year Ended December 31,
2011 2010
(dollar amounts in thousands)
Balance, beginning of year ......................................... $54,536 $ 53,801
Reductions from sales .......................................... (4,481) (12,968)
Credit losses not previously recognized ............................. 42 2,381
Additional credit losses ......................................... 6,667 11,322
Balance, end of year ............................................. $56,764 $ 54,536
The fair values of these assets have been impacted by various market conditions. The unrealized losses were
primarily the result of wider liquidity spreads on asset-backed securities and, additionally, increased market
volatility on nonagency mortgage and asset-backed securities that are collateralized by certain mortgage loans. In
addition, the expected average lives of the asset-backed securities backed by trust-preferred securities have been
extended, due to changes in the expectations of when the underlying securities would be repaid. The contractual
terms and/or cash flows of the investments do not permit the issuer to settle the securities at a price less than the
amortized cost. Huntington does not intend to sell, nor does it believe it will be required to sell these securities
until the fair value is recovered, which may be maturity and, therefore, does not consider them to be other-than-
temporarily impaired at December 31, 2011.
As of December 31, 2011, Management has evaluated all other investment securities with unrealized losses
and all nonmarketable securities for impairment and concluded no additional OTTI is required.
5. HELD-TO-MATURITY SECURITIES
These are debt securities that Huntington has the intent and ability to hold until maturity. The debt securities
are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the
interest method.
Huntington transferred $469.1 million of federal agencies, mortgage-backed securities from the
available-for-sale securities portfolio to the held-to-maturity securities portfolio during 2011. At the time of the
transfer, $0.5 million of unrealized net gains were recognized in OCI. The amounts in OCI will be recognized in
earnings over the remaining life of the securities as an offset to the adjustment of yield in a manner consistent
with the amortization of the premium on the same transferred securities, resulting in an immaterial impact on net
income.
During 2011, Huntington purchased additional federal agencies, mortgage-backed securities, which were
classified directly into the held-to-maturity portfolio.
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