Huntington National Bank 2012 Annual Report Download - page 154

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146
The following table provides amortized cost, gross unrealized gains and losses, and fair value by investment category at
December 31, 2012 and 2011:
Unrealized
Amortized Gross Gross Fair
(dollar amounts in thousands) Cost Gains Losses Value
December 31, 2012
Federal Agencies:
Mortgage-backed securities $ 1,649,384 $ 48,219 $ (162) $ 1,697,441
Other agencies 84,507 2,172 --- 86,679
Total U.S. Government
backed securities 1,733,891 50,391 (162) 1,784,120
Municipal securities 9,985 --- --- 9,985
Total held-to-maturity securities $ 1,743,876 $ 50,391 $ (162) $ 1,794,105
Unrealized
Amortized Gross Gross Fair
(dollar amounts in thousands) Cost Gains Losses Value
December 31, 2011
Federal Agencies:
Mortgage-backed securities $ 640,551 $ 19,652 $ (17) $ 660,186
Other agencies --- --- --- ---
Total U.S. Government
backed securities 640,551 19,652 (17) 660,186
Municipal securities --- --- --- ---
Total held-to-maturity securities $ 640,551 $ 19,652 $ (17) $ 660,186
Security Impairment
Huntington evaluates the held-to-maturity securities portfolio on a quarterly basis for impairment. Impairment would exist when
the present value of the expected cash flows is not sufficient to recover the entire amortized cost basis at the balance sheet date. Under
these circumstances, any impairment would be recognized in earnings. As of December 31, 2012, Management has evaluated held-to-
maturity securities with unrealized losses for impairment and concluded no OTTI is required.
6. LOAN SALES AND SECURITIZATIONS
Residential Mortgage Portfolio
The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended
December 31, 2012, 2011, and 2010:
(dollar amounts in thousands) 2012 2011 2010
Residential mortgage loans sold with servicing retained $ 3,954,762 $ 3,078,475 $ 3,943,830
Pretax gains resulting from above loan sales (1) 128,408 77,591 106,495
(1) Recorded in mortgage banking income.
A MSR is established only when the servicing is contractually separated from the underlying mortgage loans by sale or
securitization of the loans with servicing rights retained. At initial recognition, the MSR asset is established at its fair value using
assumptions consistent with assumptions used to estimate the fair value of existing MSRs. At the time of initial capitalization, MSRs
are recorded using either the fair value method or the amortization method. The election of the fair value method or amortization
method is made at the time each servicing class is established. Any increase or decrease in the fair value of MSRs carried under the
fair value method, as well as amortization or impairment of MSRs recorded using the amortization method, during the period is
recorded as an increase or decrease in mortgage banking income, which is reflected in noninterest income in the Consolidated
Statements of Income.