Huntington National Bank 2009 Annual Report Download - page 152

credit losses are miti
g
ated throu
g
h careful evaluation of counterpart
y
credit standin
g
, selection of counter-
parties from a limited
g
roup of hi
g
h qualit
y
institutions, collateral a
g
reements, and other contract provisions.
Huntin
g
ton considers the value of collateral held and collateral provided in determinin
g
the net carr
y
in
g
value
of it deri
v
ati
v
es
.
A
dvertisin
g
Costs — Advertisin
g
costs are expensed as incurred and recorded as a marketin
g
expense,
a
com
p
onent o
f
non
i
nterest ex
p
ense.
I
ncome
T
axes — Income taxes are accounte
df
or un
d
er t
h
e asset an
dli
a
bili
t
y
met
h
o
d
. Accor
di
n
gly
,
d
e
f
erre
d
tax assets an
dli
a
bili
t
i
es are reco
g
n
i
ze
df
or t
h
e
f
uture
b
oo
k
an
d
tax consequences attr
ib
uta
bl
et
o
temporar
y diff
erences
b
etween t
h
e
fi
nanc
i
a
l
statement carr
yi
n
g
amounts o
f
ex
i
st
i
n
g
assets an
dli
a
bili
t
i
es an
d
their respective tax bases. Deferred tax assets and liabilities are determined usin
g
enacted tax rates expected t
o
app
ly i
nt
h
e
y
ear
i
nw
hi
c
h
t
h
ose temporar
y diff
erences are expecte
d
to
b
e recovere
d
or sett
l
e
d
.T
h
ee
ff
ect o
n
d
e
f
erre
d
tax assets an
dli
a
bili
t
i
es o
f
ac
h
an
g
e
i
n tax rates
i
s reco
g
n
i
ze
di
n
i
ncome at t
h
et
i
me o
f
enactment o
f
such chan
g
e in tax rates. An
y
interest or penalties due for pa
y
ment of income taxes are included in th
e
provision for income taxes. To the extent that Huntin
g
ton does not consider it more likel
y
than not that
a
d
e
f
erre
d
tax asset w
ill b
e recovere
d
,ava
l
uat
i
on a
ll
owance
i
s recor
d
e
d
.A
ll
pos
i
t
i
ve an
d
ne
g
at
i
ve ev
id
ence
i
s
rev
i
ewe
d
w
h
en
d
eterm
i
n
i
n
gh
ow muc
h
o
f
ava
l
uat
i
on a
ll
owance
i
s reco
g
n
i
ze
d
on a quarter
ly b
as
i
s. I
n
determinin
g
the requirements for a valuation allowance, sources of possible taxable income are evaluate
d
i
nc
l
u
di
ng
f
uture reversa
l
so
f
ex
i
st
i
ng taxa
bl
e temporary
diff
erences,
f
uture taxa
bl
e
i
ncome exc
l
us
i
ve o
f
revers
i
n
g
temporar
y diff
erences an
d
carr
yf
orwar
d
s, taxa
bl
e
i
ncome
i
n appropr
i
ate carr
yb
ac
ky
ears, an
d
tax
-
plannin
g
strate
g
ies. Huntin
g
ton applies a more likel
y
than not reco
g
nition threshold for all tax uncertainties
.
Huntin
g
ton reviews its tax positions quarterl
y
.
Treasur
y
Stoc
k
— Acquisitions of treasur
y
stock are recorded at cost. The reissuance of shares in treasur
y
i
s recor
d
e
d
at we
igh
te
d
-avera
g
e cost
.
Share-Based Com
p
ensatio
n
— Huntin
g
ton uses the fair value reco
g
nition concept relatin
g
to its share-
b
ase
d
compensat
i
on p
l
ans. Compensat
i
on expense
i
s reco
g
n
i
ze
db
ase
d
on t
h
e
f
a
i
rva
l
ue o
f
unveste
d
stoc
k
o
p
tions and awards over the re
q
uisite service
p
eriod
.
Se
g
ment Resu
l
t
s
— Account
i
n
g
po
li
c
i
es
f
or t
h
e
li
nes o
fb
us
i
ness are t
h
e same as t
h
ose use
di
nt
h
e
preparation of the consolidated financial statements with respect to activities specificall
y
attributable to each
business line. However, the preparation of business line results requires mana
g
ement to establish methodolo
-
gi
es to a
ll
ocate
f
un
di
n
g
costs an
db
ene
fi
ts, expenses, an
d
ot
h
er
fi
nanc
i
a
l
e
l
ements to eac
hli
ne o
fb
us
i
ness.
Chan
g
es are made in these methodolo
g
ies utilized for certain balance sheet and income statement allocation
s
performed b
y
Huntin
g
ton’s mana
g
ement reportin
g
s
y
stem, as appropriate
.
Statement o
f
Cash Flows — Cash and cash e
q
uivalents are defined as “Cash and due from banks” whic
h
i
nc
l
u
d
es amounts on
d
epos
i
tw
i
t
h
t
h
eFe
d
era
l
Reserve an
d
“Fe
d
era
lf
un
d
sso
ld
an
d
secur
i
t
i
es purc
h
ase
d
un
d
er
resa
l
ea
g
reements.”
Fair
V
a
l
ue Measurements —T
h
e Compan
y
recor
d
s certa
i
no
fi
ts assets an
dli
a
bili
t
i
es at
f
a
i
rva
l
ue. Fa
ir
va
l
ue
i
s
d
e
fi
ne
d
as t
h
eexc
h
an
g
epr
i
ce t
h
at wou
ld b
e rece
i
ve
df
or an asset or pa
id
to trans
f
er a
li
a
bili
t
y
(an ex
it
price) in the principal or most advanta
g
eous market for the asset or liabilit
y
in an orderl
y
transaction between
mar
k
et
p
art
i
c
ip
ants on t
h
e measurement
d
ate. Fa
i
rva
l
ue measurements are c
l
ass
ifi
e
d
w
i
t
hi
n one o
f
t
h
ree
l
eve
ls
i
nava
l
uat
i
on
hi
erarc
hy b
ase
d
upon t
h
e transparenc
y
o
fi
nputs to t
h
eva
l
uat
i
on o
f
an asset or
li
a
bili
t
y
as o
f
t
he
measurement date. The three le
v
els are defined as follo
w
s
:
L
e
v
e
l1
—
i
nputs to t
h
eva
l
uat
i
on met
h
o
d
o
l
o
gy
are quote
d
pr
i
ces (una
dj
uste
d
)
f
or
id
ent
i
ca
l
assets o
r
l
iabilities in active markets
.
L
eve
l2
—
i
nputs to t
h
eva
l
uat
i
on met
h
o
d
o
l
o
gy i
nc
l
u
d
e quote
d
pr
i
ces
f
or s
i
m
il
ar assets an
dli
a
bili
t
i
e
s
in active markets, and inputs that are observable for the asset or liabilit
y
, either directl
y
or indirectl
y
, for
su
b
stant
i
a
lly
t
h
e
f
u
ll
term o
f
t
h
e
fi
nanc
i
a
li
nstrument
.
L
eve
l3
—
i
nputs to t
h
eva
l
uat
i
on met
h
o
d
o
l
o
gy
are uno
b
serva
bl
ean
d
s
ig
n
ifi
cant to t
h
e
f
a
i
rva
l
u
e
measuremen
t
.
144