Huntington National Bank 2011 Annual Report Download - page 142

derivative instruments and trading account securities. Changes in fair value of these derivatives and trading
account securities are reported as a component of mortgage banking income.
ACL — See Note 3 of the Notes to Consolidated Financial Statements.
NALs and Past Due Loans and Leases — See Note 3 of the Notes to Consolidated Financial Statements.
Charge-off of Uncollectible Loans — See Note 3 of the Notes to Consolidated Financial Statements.
Impaired Loans — See Note 3 of the Notes to Consolidated Financial Statements.
OREO — OREO is comprised principally of commercial and residential real estate properties obtained in
partial or total satisfaction of loan obligations, and is carried at the lower of cost or fair value. OREO obtained in
satisfaction of a loan is recorded at the estimated fair value less anticipated selling costs based upon the
property’s appraised value at the date of foreclosure, with any difference between the fair value of the property
and the carrying value of the loan recorded as a charge-off. Subsequent declines in value are reported as
adjustments to the carrying amount and are recorded in noninterest expense. Gains or losses resulting from the
sale of OREO are recognized in noninterest expense at the date of sale.
Resell and Repurchase Agreements — Securities purchased under agreements to resell and securities sold
under agreements to repurchase are treated as collateralized financing transactions and are recorded at the
amounts at which the securities were acquired or sold plus accrued interest. The fair value of collateral either
received from or provided to a third party is continually monitored and additional collateral is obtained or is
requested to be returned to Huntington as in accordance with the agreement.
Goodwill and Other Intangible Assets — Under the acquisition method of accounting, the net assets of
entities acquired by Huntington are recorded at their estimated fair value at the date of acquisition. The excess
cost of the acquisition over the fair value of net assets acquired is recorded as goodwill. Other intangible assets
are amortized either on an accelerated or straight-line basis over their estimated useful lives. Goodwill is
evaluated for impairment on an annual basis at October 1st of each year or whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. Other intangible assets are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not
be recoverable.
Premises and Equipment — Premises and equipment are stated at cost, less accumulated depreciation and
amortization. Depreciation is computed principally by the straight-line method over the estimated useful lives of
the related assets. Buildings and building improvements are depreciated over an average of 30 to 40 years and 10
to 20 years, respectively. Land improvements and furniture and fixtures are depreciated over 10 years, while
equipment is depreciated over a range of three to seven years. Leasehold improvements are amortized over the
lesser of the asset’s useful life or the lease term, including any renewal periods for which renewal is reasonably
assured. Maintenance and repairs are charged to expense as incurred, while improvements that extend the useful
life of an asset are capitalized and depreciated over the remaining useful life. Premises and equipment is
evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the
asset may not be recoverable.
Bank Owned Life Insurance — Huntington’s bank owned life insurance policies are carried at their cash
surrender value. Huntington recognizes tax-exempt income from the periodic increases in the cash surrender
value of these policies and from death benefits. A portion of cash surrender value is supported by holdings in
separate accounts. Huntington has also purchased insurance for these policies to provide protection of the value
of the holdings within these separate accounts. The value of the underlying holdings in the separate accounts
covered by these insurance policies exceeds the cash surrender value of the policies by approximately $7.0
million at December 31, 2011.
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