Huntington National Bank 2009 Annual Report Download - page 11

Federal law
p
ermits the OCC to order the
p
ro rata assessment of shareholders of a national bank whos
e
cap
i
ta
l
stoc
kh
as
b
ecome
i
mpa
i
re
d
,
by l
osses or ot
h
erw
i
se, to re
li
eve a
d
e
fi
c
i
enc
yi
n suc
h
nat
i
ona
lb
an
k
’s
capital stock. This statute also provides for the enforcement of an
y
such pro rata assessment of shareholders o
f
such national bank to cover such impairment of capital stock by sale, to the extent necessary, of the capita
l
stoc
k
owne
dby
an
y
assesse
d
s
h
are
h
o
ld
er
f
a
ili
n
g
to pa
y
t
h
e assessment. As t
h
eso
l
es
h
are
h
o
ld
er o
f
t
h
e Ban
k,
we are su
bj
ect to suc
h
prov
i
s
i
ons
.
Moreover, t
h
ec
l
a
i
ms o
f
a rece
i
ver o
f
an
i
nsure
dd
epos
i
tor
yi
nst
i
tut
i
on
f
or a
d
m
i
n
i
strat
i
ve expenses an
d
t
h
e
claims of holders of deposit liabilities of such an institution are accorded priorit
y
over the claims of
g
eneral
unsecured creditors of such an institution, includin
g
the holders of the institution’s note obli
g
ations, in the
event o
fli
qu
id
at
i
on or ot
h
er reso
l
ut
i
on o
f
suc
hi
nst
i
tut
i
on. C
l
a
i
ms o
f
a rece
i
ver
f
or a
d
m
i
n
i
strat
i
ve expense
s
an
d
c
l
a
i
ms o
fh
o
ld
ers o
fd
epos
i
t
li
a
bili
t
i
es o
f
t
h
e Ban
k
,
i
nc
l
u
di
n
g
t
h
e FDIC as t
h
e
i
nsurer o
f
suc
hh
o
ld
ers,
would receive priorit
y
over the holders of notes and other senior debt of the Bank in the event of liquidation
or other resolution and o
v
er our interests as sole shareholder of the Bank.
The Federal Reserve maintains a bank holdin
g
compan
y
ratin
g
s
y
stem that emphasizes risk mana
g
ement,
introduces a framework for anal
y
zin
g
and ratin
g
financial factors, and provides a framework for assessin
g
an
d
rat
i
n
g
t
h
e potent
i
a
li
mpact o
f
non-
d
epos
i
tor
y
ent
i
t
i
es o
f
a
h
o
ldi
n
g
compan
y
on
i
ts su
b
s
idi
ar
yd
epos
i
tor
y
i
nst
i
tut
i
on
(
s
)
.
A compos
i
te rat
i
n
gi
s ass
ig
ne
db
ase
d
on t
h
e
f
ore
g
o
i
n
g
t
h
ree components,
b
ut a
f
ourt
h
component
i
sa
l
s
o
rate
d
,re
fl
ect
i
n
gg
enera
lly
t
h
e assessment o
fd
epos
i
tor
yi
nst
i
tut
i
on su
b
s
idi
ar
i
es
by
t
h
e
i
rpr
i
nc
i
pa
l
re
g
u
l
ators.
Ratin
g
s are made on a scale of 1 to 5 (1 hi
g
hest) and are not made public. The bank holdin
g
compan
y
ratin
g
s
y
stem, which became effective in 200
5
, applies to us. The composite ratin
g
s assi
g
ned to us, like those
ass
ig
ne
d
to ot
h
er
fi
nanc
i
a
li
nst
i
tut
i
ons, are con
fid
ent
i
a
l
an
d
ma
y
not
b
e
di
rect
ly di
sc
l
ose
d
, except to t
h
e extent
required b
y
law
.
E
mergenc
y
Economic Stabilization Act o
f
2008, Federal De
p
osit Insurance Cor
p
oration, Financial Stabil
-
i
t
y
P
l
an, American Recover
y
an
d
Reinvestment Act o
f
2009, Homeowner A
ff
or
d
a
b
i
l
it
y
an
d
Sta
b
i
l
it
y
P
l
an
,
Ot
h
er Regu
l
ator
y
Deve
l
o
p
ments an
d
Pen
d
ing Legis
l
ation
Emer
g
ency Economic
S
tabilization Act of 200
8
O
n Octo
b
er 3, 2008, t
h
e Emer
g
enc
y
Econom
i
c Sta
bili
zat
i
on Act o
f
2008 (EESA) was enacte
d
. EES
A
ena
bl
es t
h
e
f
e
d
era
lg
overnment, un
d
er terms an
d
con
di
t
i
ons
d
eve
l
ope
dby
t
h
e Secretar
y
o
f
t
h
e Treasur
y
,t
o
insure troubled assets, includin
g
mort
g
a
g
e-backed securities, and collect premiums from participatin
g
financia
l
institutions. EESA includes, amon
g
other provisions: (a) the $700 billion Troubled Assets Relief Pro
g
ra
m
(TARP), un
d
er w
hi
c
h
t
h
e Secretar
y
o
f
t
h
e Treasur
yi
s aut
h
or
i
ze
d
to purc
h
ase,
i
nsure,
h
o
ld
,an
d
se
ll
aw
ide
v
ariet
y
of financial instruments, particularl
y
those that are based on or related to residential or commercia
l
mort
g
a
g
es ori
g
inated or issued on or before March 14, 2008; and (b) an increase in the amount of deposi
t
i
nsurance prov
id
e
dby
t
h
eFe
d
era
l
Depos
i
t Insurance Corporat
i
on (FDIC). Bot
h
o
f
t
h
ese spec
ifi
c prov
i
s
i
ons are
di
scusse
di
nt
h
e
b
e
l
ow sect
i
ons. In Decem
b
er 2009, t
h
e Secretar
y
o
f
t
h
e Treasur
y
announce
d
t
h
e extens
i
on o
f
the TARP to October 2010, but indicated that not more than
$
550 billion of the total authorized would actuall
y
be deplo
y
ed.
Under the TARP, the Department of Treasur
y
authorized a voluntar
y
capital purchase pro
g
ram (CPP) t
o
purchase up to
$
250 billion of senior preferred shares of qualif
y
in
g
financial institutions that elected t
o
part
i
c
i
pate
by
Novem
b
er 14, 2008. Part
i
c
i
pat
i
n
g
compan
i
es must a
d
opt certa
i
n stan
d
ar
d
s
f
or execut
i
ve
compensation, includin
g
(a) prohibitin
g
“
g
olden parachute” pa
y
ments as defined in EESA to senior Executiv
e
Officers; (b) requirin
g
recover
y
of an
y
compensation paid to senior Executive Officers based on criteria that is
l
ater proven to
b
e mater
i
a
lly i
naccurate; an
d
(c) pro
hibi
t
i
n
gi
ncent
i
ve compensat
i
on t
h
at encoura
g
es unneces
-
sar
y
an
d
excess
i
ve r
i
s
k
st
h
at t
h
reaten t
h
eva
l
ue o
f
t
h
e
fi
nanc
i
a
li
nst
i
tut
i
on. T
h
e terms o
f
t
h
e CPP a
l
so
li
m
i
t
certain uses of capital b
y
the issuer, includin
g
repurchases of compan
y
stock, and increases in dividends. I
n
l
ate 2009, t
h
e Treasury Department announce
d
t
h
at t
h
e CPP was e
ff
ect
i
ve
l
yc
l
ose
d
,an
d
t
h
at certa
i
not
h
e
r
emer
g
enc
y
pro
g
rams un
d
er t
h
e TARP
h
a
db
een or wou
ld b
e term
i
nate
d
.
3