Huntington National Bank 2008 Annual Report Download - page 124

December 31, 2008, approximately $223 million of the standby letters of credit were rated strong; approximately $1 billion were
rated average; and approximately $47 million were rated substandard.
Commercial letters of credit represent short-term, self-liquidating instruments that facilitate customer trade transactions and
generally have maturities of no longer than 90 days. The merchandise or cargo being traded normally secures these instruments.
COMMITMENTS TO SELL LOANS
Huntington enters into forward contracts relating to its mortgage banking business. At December 31, 2008 and 2007, Huntington
had commitments to sell residential real estate loans of $759.4 million and $555.9 million, respectively. These contracts mature in
less than one year.
LITIGATION
Between December 19, 2007 and February 1, 2008, three putative class actions were filed in the United States District Court for the
Southern District of Ohio, Eastern Division, against Huntington and certain of its current or former officers and directors
purportedly on behalf of purchasers of Huntington securities during the periods July 20, 2007 to November 16, 2007 or July 20,
2007 to January 10, 2008. These complaints seek to allege that the defendants violated Section 10(b) of the Securities Exchange Act
of 1934, as amended (the Exchange Act), and Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange Act by
issuing a series of allegedly false and/or misleading statements concerning Huntington’s financial results, prospects, and condition,
relating, in particular, to its transactions with Franklin Credit Management (Franklin). On June 5, 2008, two cases were
consolidated into a single action. On August 22, 2008, a consolidated complaint was filed asserting a class period of July 19, 2007
through November 16, 2007. At this stage, it is not possible for management to assess the probability of an adverse outcome, or
reasonably estimate the amount of any potential loss. A third putative class action lawsuit was filed in the same court on
January 18, 2008, with substantially the same allegations, but was dismissed on March 4, 2008.
Three putative derivative class action lawsuits were filed in the Court of Common Pleas of Delaware County, Ohio, the United
States District Court for the Southern District of Ohio, Eastern Division, and the Court of Common Pleas of Franklin County,
Ohio, between January 16, 2008, and April 17, 2008, against certain of Huntington’s current or former officers and directors
variously seeking to allege breaches of fiduciary duty, waste of corporate assets, abuse of control, gross mismanagement, and unjust
enrichment, all in connection with Huntington’s acquisition of Sky Financial, certain transactions between Huntington and
Franklin, and the financial disclosures relating to such transactions. Huntington is named as a nominal defendant in each of these
actions. At this stage of the lawsuits, it is not possible for management to assess the probability of an adverse outcome, or
reasonably estimate the amount of any potential loss.
Between February 20, 2008 and February 29, 2008, three putative class action lawsuits were filed in the United States District Court
for the Southern District of Ohio, Eastern Division, against Huntington, the Huntington Bancshares Incorporated Pension Review
Committee, the Huntington Investment and Tax Savings Plan (the Plan) Administrative Committee, and certain of the Company’s
officers and directors purportedly on behalf of participants in or beneficiaries of the Plan between either July 1, 2007 or July 20,
2007 and the present. The complaints seek to allege breaches of fiduciary duties in violation of the Employee Retirement Income
Security Act (ERISA) relating to Huntington stock being offered as an investment alternative for participants in the Plan. The
complaints sought money damages and equitable relief. On May 13, 2008, the three cases were consolidated into a single action.
On August 4, 2008, a consolidated complaint was filed asserting a class period of July 1, 2007 through the present. On February 9,
2009, the court entered an order dismissing with prejudice the consolidated lawsuit in its entirety. Due to the possibility of an
appeal, it is not possible for management to assess the probability of an eventual material adverse outcome, or reasonably estimate
the amount of any potential loss at this time.
On May 7, 2008, a putative class action lawsuit was filed in the United States District Court for the Southern District of Ohio,
Eastern Division, against Huntington (as successor in interest to Sky Financial), and certain of Sky Financial’s former officers on
behalf of all persons who purchased or acquired Sky Financial common stock in connection with and as a result of Sky Financial’s
October 2006 acquisition of Waterfield Mortgage Company. The complaint seeks to allege that the defendants violated Sections 11,
12, and 15 of the Securities Act of 1933 in connection with the issuance of allegedly false and misleading registration and proxy
statements leading up to the Waterfield acquisition and their disclosures about the nature and extent of Sky Financial’s lending
relationship with Franklin. At this stage of this lawsuit, it is not possible for management to assess the probability of an adverse
outcome, or reasonably estimate the amount of any potential loss.
It is possible that the ultimate resolution of these matters, if unfavorable, may be material to the results of operations for a
particular period. However, although no assurance can be given, based on information currently available, consultation with
counsel, and available insurance coverage, management believes that the eventual outcome of these claims against the Company
will not, individually or in the aggregate, have a material adverse effect on Huntington’s consolidated financial position.
122
Notes to Consolidated Financial Statements Huntington Bancshares Incorporated