Huntington National Bank 2008 Annual Report Download - page 57

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OTTI is recorded when the fair value of an available for sale security is less than historical cost, and it is probable that all
contractual cash flows will not be collected. OTTI is recorded to noninterest income, and therefore, results in a negative impact to
net income. Because the available for sale securities portfolio is recorded at fair value, the conclusion as to whether an investment
decline is other-than-temporarily impaired, does not significantly impact our equity position, as the amount of the temporary
adjustment has already been reflected in accumulated other comprehensive income/loss. A recovery in the value of an other-than-
temporarily impaired security is recorded as additional interest income over the remaining life of the security.
Given the continued disruption in the financial markets, we may be required to recognize additional OTTI losses in future periods
with respect to our available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend
on the decline in the underlying cash flows of the securities.
The table below presents the credit ratings as of December 31, 2008, for certain investment securities:
Table 32 — Credit Ratings of Selected Investment Securities
(1)
(in thousands)
Amortized
Cost Fair Value AAA AA +/- A +/- BBB +/- ⬍BBB- Not Rated
Average Credit Rating of Fair Value Amount at December 31, 2008
Municipal securities $710,148 $710,346 $ 96,268 $472,094 $117,574 $11,394 $ — $13,016
Private label CMO securities 674,506 523,515 329,165 53,057 85,159 14,296 41,838 —
Alt-A mortgage-backed securities 368,927 322,421 51,341 19,320 88,947 9,380 153,433 —
Pooled-trust-preferred securities 283,954 141,606 10,142 12,000 — 26,024 93,440 —
(1) Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency.
Given the current economic conditions, the asset-backed securities and private-label CMO portfolios are noteworthy, and are
discussed below. Asset-backed securities comprise both Alt-A mortgage backed securities and pooled-trust-preferred securities.
55
Management’s Discussion and Analysis Huntington Bancshares Incorporated