Huntington National Bank 2011 Annual Report Download - page 96

Shareholders’ equity totaled $5.4 billion at December 31, 2011, representing a $0.4 billion, or 9%, increase
compared with December 31, 2010. This increase primarily reflected an increase in retained earnings. We believe
our current level of capital is adequate.
Preferred Stock Exchange Offer
(This section should be read in conjunction with Significant Item 1 and Notes 12, 14, and 21 of the Notes to
Consolidated Financial Statements.)
As a result of bank capital standards arising from the Dodd-Frank Act, beginning in 2013, trust preferred
securities will eventually no longer be considered Tier 1 risk-based capital. The Exchange Offer described below
is intended to improve our Tier 1 risk-based capital in anticipation of these regulations by replacing a portion of
our trust preferred securities with preferred stock, which we believe will qualify as additional Tier 1 risk-based
capital.
During the 2011 fourth quarter, Huntington issued $35.5 million par value Floating Rate Series B
Non-Cumulative Perpetual Preferred Stock in exchange for $35.5 million of (1) Huntington Capital I Floating
Rate Capital Securities, (2) Huntington Capital II Floating Rate Capital Securities, (3) Sky Financial Capital
Trust III Floating Rate Capital Securities and (4) Sky Financial Capital Trust IV Floating Rate Capital Securities.
Huntington will pay dividends on the Series B Preferred Stock at a floating rate equal to three-month LIBOR
plus a spread of 2.70%.
Upon receipt of the aforementioned trust preferred securities, Huntington exchanged $32.5 million of the
trust preferred securities with the applicable Trust for a like amount of debentures issued by us. The debentures
were surrendered to the applicable trustee for cancellation. Huntington anticipates exchanging the remaining $3.0
million of trust preferred securities and retiring the related subordinated debt obligation in the first quarter of
2012.
As a result of the exchange, we recognized pretax gains of $9.7 million. These transactions were recorded as
gains on early extinguishment of debt.
TARP Capital
During the 2011 first quarter, we fully exited our TARP relationship by repurchasing for $49.1 million the
ten-year warrant we had issued to the Treasury as part of the TARP. Refer to the 2010 Form 10-K for a complete
discussion regarding the issuing and repayment of our TARP Capital.
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