Huntington National Bank 2011 Annual Report Download - page 210

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The following table presents the gains and (losses) recognized in OCI and the location in the Consolidated
Statements of Income of gains and (losses) reclassified from OCI into earnings for derivatives designated as
effective cash flow hedges:
Derivatives in cash
flow hedging relationships
Amount of
gain or (loss) recognized in
OCI on derivatives
(effective portion)
Location of gain or (loss)
reclassified from accumulated
OCI into earnings
(effective portion)
Amount of gain
or (loss) reclassified from
accumulated OCI into earnings
(effective portion)
2011 2010 2009 2011 2010 2009
(dollar amounts in thousands)
Interest rate contracts
Loans ............... $2,469 $51,943 $(68,365) Interest and fee income
— loans and leases $3,080 $(116,881) $117,669
Investment securities . . . 703 — — Interest and fee income
— investment securities ———
FHLB Advances ...... —— 1,338 Interest expense —
FHLB Advances —2,580 6,890
Deposits ............. —— 326 Interest expense —
deposits —— 4,153
Subordinated notes ..... —— 101 Interest expense —
subordinated notes and
other long-term debt 27 (1,391) (2,717)
Other long-term debt . . . —— — Interest expense —
subordinated notes and
other long-term debt —— (899)
Total ................. $3,172 $51,943 $(66,600) $3,107 $(115,692) $125,096
Reclassified gains and losses on swaps related to loans and investment securities and swaps related to
subordinated debt are recorded within interest income and interest expense, respectively. During the next twelve
months, Huntington expects to reclassify to earnings $30.2 million after-tax, of unrealized gains on cash flow
hedging derivatives currently in OCI.
The following table presents the gains and (losses) recognized in noninterest income for the ineffective
portion of interest rate contracts for derivatives designated as cash flow hedges for the years ending
December 31, 2011, 2010, and 2009.
December 31,
2011 2010 2009
(dollar amounts in thousands)
Derivatives in cash flow hedging relationships Interest rate contracts
Loans ..................................................... $98 $947 $16,638
FHLB Deposits ............................................. — — (792)
Derivatives used in trading 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 consisted predominantly of interest rate swaps, but also included interest rate caps, floors, and futures,
as well as foreign exchange options. Interest rate options grant the option holder the right to buy or sell an
underlying financial instrument for a predetermined price before the contract expires. Interest rate futures are
commitments to either purchase or sell a financial instrument at a future date for a specified price or yield and
may be settled in cash or through delivery of the underlying financial instrument. Interest rate caps and floors are
option-based contracts that entitle the buyer to receive cash payments based on the difference between a
designated reference rate and a strike price, applied to a notional amount. Written options, primarily caps, expose
196