Huntington National Bank 2009 Annual Report Download - page 48

• Increased reported noninterest expense items as a result of costs incurred as part of mer
g
er inte
g
ratio
n
and post-mer
g
er restructurin
g
activities, most notabl
y
emplo
y
ee retention bonuses, outside pro
g
rammin
g
services related to s
y
stems conversions, and marketin
g
expenses related to customer retention initiatives
.
These net mer
g
er costs were
$
21.8 million (
$
0.04 per common share) in 2008 and
$
85.1 million (
$
0.1
8
p
er common s
h
are)
i
n 2007
.
3
.Franklin Relationshi
p.
Our relationship with Franklin was acquired in the Sk
y
Financial acquisition
.
On Marc
h
31, 2009, we restructure
d
our re
l
at
i
ons
hip
w
i
t
h
Fran
kli
n(see “Critica
l
Accountin
g
Po
l
icies an
d
Use
o
f
Signi
f
icant Estimates” section). Performance for 2009 included a nonrecurrin
g
net tax benefit of
$
159.9 mil
-
lion ($0.30 per common share) related to this restructurin
g
. Also as a result of the restructurin
g
, althou
gh
earnin
g
s were not si
g
nificantl
y
impacted, commercial NCOs increased
$
128.3 million as the previousl
y
established
$
130.0 million Franklin-specific ALLL was utilized to write-down the acquired mort
g
a
g
es an
d
O
RE
O
co
ll
atera
l
to
f
a
i
r
v
a
l
ue.
4.
Ear
l
y Extinguis
h
ment o
f
De
b
t
.
T
h
e pos
i
t
i
ve
i
mpacts re
l
at
i
n
g
to t
h
e ear
ly
ext
i
n
g
u
i
s
h
ment o
fd
e
b
to
n
our re
p
orted results were:
$
147.4 million (
$
0.18
p
er common share) in 2009,
$
23.5 million (
$
0.04
p
er commo
n
share) in 2008, and $8.1 million ($0.02
p
er common share) in 2008. These amounts were recorded t
o
non
i
nterest ex
p
ense
.
5
.
Pre
f
erred Stock Conversion
.
Durin
g
the 2009 first and second quarters, we converted 114,109 and
92,384 shares, respectivel
y
, of Series A 8.
5
0% Non-cumulative Perpetual Preferred (Series A Preferred Stock)
stoc
ki
nto common stoc
k
.As
p
art o
f
t
h
ese transact
i
ons, t
h
ere was a
d
eeme
ddi
v
id
en
d
t
h
at
did
not
i
m
p
act net
income, but resulted in a ne
g
ative impact of $0.11 per common share for 2009. (See “Ca
p
ital” discussion
located within the “Risk Management and Capital” section
f
or additional in
f
ormation.
)
6.
V
is
a
»
.
Prior to the Visa
»
IPO occurrin
g
in March 2008, Visa
»
w
as owned b
y
its member banks,
which included the Bank. In 2009
,
we sold our investment in Vis
a
»
stock. The im
p
acts related to our Visa
»
stoc
k
owners
hi
p, an
d
su
b
sequent sa
l
e,
f
or 2009, 2008, an
d
2007 are presente
di
nt
h
e
f
o
ll
ow
i
n
g
ta
bl
e
:
Table 4 —
Vi
sa
»
i
m
p
acts
Earnin
g
sEP
S
Earnin
g
sEP
S
Earnin
g
sEP
S
2009 2008 2007
(
In millions
)
Gain related to sale of Vis
a
»
stock
(
1
)
............
$
31.4
$
0.04
$
25.1
$
0.04
$
—
$—
V
is
a
»
indemnification liabilit
y
(2
)
...............
——
17.0 0.03
(
24.9
)(
0.05
)
(
1
)
Pr
etax.
Recorded to noninterest income, and represented a
g
ain on the sale of ownership interest i
n
V
is
a
».As
p
art of the sale of our Vis
a
»stock in 2009
,
we released $8.2 million
,
as of June 30
,
2009
,
of
t
h
e rema
i
n
i
n
gi
n
d
emn
ifi
cat
i
on
li
a
bili
t
y
. Concurrent
ly
, we esta
bli
s
h
e
d
a swap
li
a
bili
t
y
assoc
i
ate
d
w
i
t
h
t
he
convers
i
on
p
rotect
i
on
p
rov
id
e
d
to t
h
e
p
urc
h
asers o
f
t
h
eV
i
sa
»
s
h
ares
.
(2)
P
r
etax.
Recor
d
e
d
to non
i
nterest ex
p
ense, an
d
re
p
resente
d
our
p
ro-rata
p
ort
i
on o
f
an
i
n
d
emn
ifi
cat
i
on
li
a
-
bilit
y
provided to Visa
»
b
y
its member banks for various liti
g
ation filed a
g
ainst Visa
»
. Subsequentl
y
,in
2008, an escrow account was esta
bli
s
h
e
dby
V
i
s
a
»
us
i
n
g
a port
i
on o
f
t
h
e procee
d
s rece
i
ve
df
rom t
h
e IPO
.
Thi
s act
i
on resu
l
te
di
n a reversa
l
o
f
a port
i
on o
f
t
h
e
li
a
bili
t
y
as t
h
e escrow account re
d
uce
d
our potent
i
a
l
ex
p
osure related to the indemnification.
7
.Ot
h
er Signi
f
icant Items In
fl
uencing Earnings Per
f
ormance Comparisons
.
In a
ddi
t
i
on to t
h
e
i
tem
s
discussed separatel
y
in this section, a number of other items impacted financial results. These included
:
2
00
9
•
$
23.6 million (
$
0.03 per common share) ne
g
ative impact due to a special Federal Deposit Insurance
Cor
p
orat
i
on (FDIC)
i
nsurance
p
rem
i
um assessment. T
hi
s amount was recor
d
e
d
to non
i
nterest ex
p
ense
.
40