Huntington National Bank 2009 Annual Report Download - page 150

i
n the risk ratin
g
process, and (c) the impact of portfolio performance, portfolio composition,
or
igi
nat
i
on c
h
anne
l
s, an
d
ot
h
er
f
actors.
•PD
f
actors were up
d
ate
d
to
i
nc
l
u
d
e current
d
e
li
nquenc
y
status across a
ll
consumer port
f
o
li
os
.
Ot
h
er Rea
l
Estate Owne
d
—Ot
h
er rea
l
estate owne
d
(OREO)
i
s compr
i
se
d
pr
i
nc
i
pa
lly
o
f
commerc
i
a
l
an
d
res
id
ent
i
a
l
rea
l
estate propert
i
es o
b
ta
i
ne
di
n part
i
a
l
or tota
l
sat
i
s
f
act
i
on o
fl
oan o
blig
at
i
ons. OREO a
l
s
o
includes
g
overnment insured loans in the process of foreclosure. OREO obtained in satisfaction of a loan i
s
recor
d
e
d
at t
h
e est
i
mate
df
a
i
rva
l
ue
l
ess ant
i
c
i
pate
d
se
lli
ng costs
b
ase
d
upon t
h
e property’s appra
i
se
d
va
l
ue at
t
h
e
d
ate o
f
trans
f
er, w
i
t
h
an
y diff
erence
b
etween t
h
e
f
a
i
rva
l
ue o
f
t
h
e propert
y
an
d
t
h
e carr
yi
n
g
va
l
ue o
f
t
he
loan char
g
ed to the allowance for loan losses. Subsequent chan
g
es in value are reported as ad
j
ustments to the
carr
y
in
g
amount, not to exceed the initial carr
y
in
g
value of the assets at the time of transfer. Chan
g
es in value
su
b
sequent to trans
f
er are recor
d
e
di
n non-
i
nterest expense. Ga
i
ns or
l
osses not prev
i
ous
ly
reco
g
n
i
ze
d
resu
l
t
i
n
g
f
rom t
h
esa
l
eo
f
OREO are reco
g
n
i
ze
di
n non-
i
nterest expense on t
h
e
d
ate o
f
sa
l
e.
R
ese
ll
an
d
Repurc
h
ase A
g
reements — Secur
i
t
i
es purc
h
ase
d
un
d
er a
g
reements to rese
ll
an
d
secur
i
t
i
es so
ld
un
d
er a
g
reements to repurc
h
ase are
g
enera
lly
treate
d
as co
ll
atera
li
ze
dfi
nanc
i
n
g
transact
i
ons an
d
are recor
d
e
d
at the amounts at which the securities were ac
q
uired or sold
p
lus accrued interest. The fair value of collatera
l
e
i
t
h
er rece
i
ve
df
rom or prov
id
e
d
to a t
hi
r
d
part
yi
s cont
i
nua
lly
mon
i
tore
d
an
d
a
ddi
t
i
ona
l
co
ll
atera
li
so
b
ta
i
ne
d
or
i
s requeste
d
to
b
e returne
d
to Hunt
i
n
g
ton as
i
n accor
d
ance w
i
t
h
t
h
ea
g
reement.
Goo
d
wi
ll
an
d
Ot
h
er Intan
g
i
bl
e Asset
s
—Un
d
er t
h
e acqu
i
s
i
t
i
on met
h
o
d
o
f
account
i
n
g
,t
h
e net assets o
f
ent
i
t
i
es acqu
i
re
dby
Hunt
i
n
g
ton are recor
d
e
d
at t
h
e
i
r est
i
mate
df
a
i
rva
l
ue at t
h
e
d
ate o
f
acqu
i
s
i
t
i
on. T
h
e excess
cost of the acquisition over the fair value of net assets acquired is recorded as
g
oodwill. Other intan
g
ible
assets are amort
i
ze
d
e
i
t
h
er on an acce
l
erate
d
or stra
igh
t-
li
ne
b
as
i
s over t
h
e
i
r est
i
mate
d
use
f
u
lli
ves. Goo
d
w
ill
i
seva
l
uate
df
or
i
mpa
i
rment on an annua
lb
as
i
s at Octo
b
er 1st o
f
eac
hy
ear or w
h
enever events or c
h
an
g
es
in
circumstances indicate that the carr
y
in
g
value ma
y
not be recoverable. Other intan
g
ible assets are reviewed for
impairment whenever events or chan
g
es in circumstances indicate that the carr
y
in
g
amount of the asset ma
y
not
b
e recovera
bl
e
.
M
ortgage Ban
k
ing Activities — Hunt
i
n
g
ton reco
g
n
i
zes t
h
er
igh
ts to serv
i
ce mort
g
a
g
e
l
oans as separat
e
assets, w
hi
c
h
are
i
nc
l
u
d
e
di
not
h
er assets
i
nt
h
e conso
lid
ate
db
a
l
ance s
h
eets, on
ly
w
h
en purc
h
ase
d
or w
h
en
servicin
g
is contractuall
y
separated from the underl
y
in
g
mort
g
a
g
e loans b
y
sale or securitization of the loan
s
with servicin
g
ri
g
hts retained. Servicin
g
ri
g
hts are initiall
y
recorded at fair value. All mort
g
a
g
e loan servicin
g
r
igh
ts (MSRs) are su
b
sequent
ly
carr
i
e
d
at e
i
t
h
er
f
a
i
rva
l
ue or amort
i
ze
d
cost, an
d
are
i
nc
l
u
d
e
di
not
h
er assets.
To
d
eterm
i
ne t
h
e
f
a
i
rva
l
ue o
f
MSRs, Hunt
i
n
g
ton uses a opt
i
on a
dj
uste
d
sprea
d
cas
hfl
ow ana
ly
s
is
i
ncorporat
i
n
g
mar
k
et
i
mp
li
e
df
orwar
di
nterest rates to est
i
mate t
h
e
f
uture
di
rect
i
on o
f
mort
g
a
g
ean
d
mar
k
e
t
interest rates. The forward rates utilized are derived from the current
y
ield curve for U.S. dollar interest rat
e
swaps and are consistent with pricin
g
of capital markets instruments. The current and pro
j
ected mort
g
a
ge
i
nterest rate
i
n
fl
uences t
h
e prepa
y
ment rate; an
d
t
h
ere
f
ore, t
h
et
i
m
i
n
g
an
d
ma
g
n
i
tu
d
eo
f
t
h
e cas
hfl
ow
s
assoc
i
ate
d
w
i
t
h
t
h
e MSR. Expecte
d
mort
g
a
g
e
l
oan prepa
y
ment assumpt
i
ons are
d
er
i
ve
df
rom a t
hi
r
d
part
y
model. Mana
g
ement believes these prepa
y
ment assumptions are consistent with assumptions used b
y
other
mar
k
et part
i
c
i
pants va
l
u
i
n
g
s
i
m
il
ar MSRs
.
Huntin
g
ton hed
g
es the value of MSRs usin
g
derivative instruments and tradin
g
account securities
.
C
h
an
g
es
i
n
f
a
i
rva
l
ue o
f
t
h
ese
d
er
i
vat
i
ves an
d
tra
di
n
g
account secur
i
t
i
es are reporte
d
as a component o
f
mort
g
a
g
e
b
an
ki
n
gi
ncome
.
Premises an
d
E
q
uipmen
t
— Prem
i
ses an
d
e
q
u
ip
ment are state
d
at cost,
l
ess accumu
l
ate
dd
e
p
rec
i
at
i
on an
d
amortization. Depreciation is computed principall
y
b
y
the strai
g
ht-line method over the estimated useful live
s
of the related assets. Buildin
g
s and buildin
g
improvements are depreciated over an avera
g
eof30to40
y
ear
s
an
d
10 to 20
y
ears, respect
i
ve
ly
. Lan
di
mprovements an
df
urn
i
ture an
dfi
xtures are
d
eprec
i
ate
d
over 10
y
ears
,
w
hil
e equ
i
pment
i
s
d
eprec
i
ate
d
over a ran
g
eo
f
t
h
ree to seven
y
ears. Lease
h
o
ld i
mprovements are amort
i
ze
d
over the lesser of the asset’s useful life or the term of the related leases, includin
g
an
y
renewal periods for
w
hi
c
h
renewa
li
s reasona
bly
assure
d
.Ma
i
ntenance an
d
repa
i
rs are c
h
ar
g
e
d
to expense as
i
ncurre
d
,w
hile
i
mprovements t
h
at exten
d
t
h
e use
f
u
l lif
eo
f
an asset are cap
i
ta
li
ze
d
an
dd
eprec
i
ate
d
over t
h
e rema
i
n
i
n
g
use
f
u
l
142