Huntington National Bank 2009 Annual Report Download - page 34

we estimate fair value primaril
y
b
y
usin
g
cash flow and other financial modelin
g
methods. Our valuation
methods consider factors such as liquidit
y
and concentration concerns and, for the derivatives portfolio
,
counterpart
y
credit risk. Other factors such as model assumptions, market dislocations, and unexpected
correlations can affect estimates of fair value. Chan
g
es in these underl
y
in
g
factors, assumptions, or estimate
s
i
nan
y
o
f
t
h
ese areas cou
ld
mater
i
a
lly i
mpact t
h
e amount o
f
revenue or
l
oss recor
d
e
d.
Assets an
dli
a
bili
t
i
es carr
i
e
d
at
f
a
i
rva
l
ue
i
n
h
erent
ly
resu
l
t
i
na
high
er
d
e
g
ree o
ffi
nanc
i
a
l
statemen
t
vo
l
at
ili
t
y
. Assets measure
d
at
f
a
i
rva
l
ue
i
nc
l
u
d
e
i
nvestment secur
i
t
i
es,
l
oans
h
e
ld
-
f
or-sa
l
e,
d
er
i
vat
i
ves, mort
g
a
ge
servicin
g
ri
g
hts (MSRs), and tradin
g
account securities. At December 31, 2009, approximatel
y
$9.2 billion o
f
our assets were recorded at fair value. In addition to the above mentioned on
g
oin
g
fair value measurements
,
f
a
i
rva
l
ue
i
sa
l
so t
h
eun
i
to
f
measure
f
or recor
di
n
gb
us
i
ness com
bi
nat
i
ons
.
T
h
eF
i
nanc
i
a
l
Account
i
n
g
Stan
d
ar
d
Boar
d
’s (FASB) Account
i
n
g
Stan
d
ar
d
sCo
difi
cat
i
on (ASC) Top
i
c 820
,
“
Fa
i
rVa
l
ue Measurements”, esta
bli
s
h
es a
f
ramewor
kf
or measur
i
n
g
t
h
e
f
a
i
rva
l
ue o
ffi
nanc
i
a
li
nstruments t
h
a
t
considers the attributes specific to particular assets or liabilities and establishes a three-level hierarch
y
fo
r
determinin
g
fair value based on the transparenc
y
of inputs to each valuation as of the fair value measurement
d
ate. T
h
et
h
ree
l
e
v
e
l
s are
d
e
fi
ne
d
as
f
o
ll
o
w
s
:
•
L
e
v
e
l
1
—
quote
d
pr
i
ces (una
dj
uste
d
)
f
or
id
ent
i
ca
l
assets or
li
a
bili
t
i
es
i
n act
i
ve mar
k
ets
.
•
Le
v
e
l
2—
i
nputs
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
es
i
n act
i
ve mar
k
ets, quote
d
pr
i
ces
o
fid
ent
i
ca
l
or s
i
m
il
ar assets or
li
a
bili
t
i
es
i
n mar
k
ets t
h
at are not act
i
ve, an
di
n
p
uts t
h
at are o
b
serva
ble
for the asset or liabilit
y
, either directl
y
or indirectl
y
, for substantiall
y
the full term of the financia
l
instrument
.
•
Le
v
el 3
—
inputs that are unobservable and si
g
nificant to the fair value measurement. Financia
l
i
nstruments are cons
id
ere
d
Leve
l
3w
h
en va
l
ues are
d
eterm
i
ne
d
us
i
n
g
pr
i
c
i
n
g
mo
d
e
l
s,
di
scounte
d
cas
h
fl
ow met
h
o
d
o
l
o
gi
es, or s
i
m
il
ar tec
h
n
i
ques, an
d
at
l
east one s
ig
n
ifi
cant mo
d
e
l
assumpt
i
on or
i
nput
i
s
unoberservable.
A
tt
h
een
d
o
f
eac
h
quarter, we assess t
h
eva
l
uat
i
on
hi
erarc
hy f
or eac
h
asset or
li
a
bili
t
y
measure
d
. From
time to time, assets or liabilities ma
y
be transferred within hierarch
y
levels due to chan
g
es in availabilit
y
of
o
b
serva
bl
e mar
k
et
i
n
p
uts to measure
f
a
i
rva
l
ue at t
h
e measurement
d
ate.
T
h
eta
bl
e
b
e
l
ow prov
id
es a
d
escr
i
pt
i
on an
d
t
h
eva
l
uat
i
on met
h
o
d
o
l
o
gi
es use
df
or
fi
nanc
i
a
li
nstrument
s
measure
d
at
f
a
i
rva
l
ue, as we
ll
as t
h
e
g
enera
l
c
l
ass
ifi
cat
i
on o
f
suc
hi
nstruments pursuant to t
h
eva
l
uat
i
o
n
hierarch
y
. The fair values measured at each level of the fair value hierarch
y
, as well as additional discussio
n
re
g
ardin
g
fair value measurements, can be found in Note 21 of the Notes to the Consolidated Financia
l
S
tatements
.
Table 2 — Fair
V
alue Measurement of Financial Instruments
Financial Instrument(1) Hierarchy Valuation methodolo
g
y
M
ortgage
l
oans
h
e
ld
-
f
or-sa
le
Leve
l
2 Mort
g
a
g
e
l
oans
h
e
ld
-
f
or-sa
l
e are est
i
mate
d
us
i
n
g
secur
i
t
y
pr
i
ce
s
f
or s
i
m
il
ar pro
d
uct t
y
pes
.
Investment Securities & Tra
d
in
g
A
ccount Securities
(
2
)
L
eve
l
1 Cons
i
st o
f
U.S. Treasur
y
an
d
ot
h
er
f
e
d
era
l
a
g
enc
y
secur
i
t
i
es
,
and mone
y
market mutual funds which
g
enerall
y
have quote
d
p
r
i
ces
.
L
eve
l
2 Cons
i
st o
f
U.S. Government an
d
a
g
enc
y
mort
g
a
g
e-
b
ac
k
e
d
secur
i
t
i
es an
d
mun
i
c
ip
a
l
secur
i
t
i
es
f
or w
hi
c
h
an act
i
ve mar
k
et
is
n
ot available. Third-part
y
pricin
g
services provide a fair valu
e
e
st
i
mate
b
ase
d
u
p
on tra
d
es o
f
s
i
m
il
ar
fi
nanc
i
a
li
nstruments
.
2
6