Huntington National Bank 2011 Annual Report Download - page 194

Investments of the Plan are accounted for at cost on the trade date and are reported at fair value. All of the
Plan’s investments at December 31, 2011 are classified as Level 1 within the fair value hierarchy. In general,
investments of the Plan are exposed to various risks, such as interest rate risk, credit risk, and overall market
volatility. Due to the level of risk associated with certain investments, it is reasonably possible that changes in the
values of investments will occur in the near term and that such changes could materially affect the amounts
reported in the Plan assets.
The investment objective of the Plan is to maximize the return on Plan assets over a long time horizon,
while meeting the Plan obligations. At December 31, 2011, Plan assets were invested 61% in equity investments
and 32% in bonds, with an average duration of 3.3 years on fixed income investments. The estimated life of
benefit obligations was 13 years. Management believes that this mix is appropriate for the current economic
environment. Although it may fluctuate with market conditions, Management has targeted a long-term allocation
of Plan assets of 70% in equity investments and 30% in bond investments.
The following table shows the number of shares and dividends received on shares of Huntington stock held
by the Plan:
December 31,
2011 2010
(dollar amounts in millions, except share amounts)
Shares in Huntington common stock(1) ........................... 7,309,986 3,919,986
Dividends received on shares of Huntington stock .................. $ 0.4 $ 0.2
(1) The Plan has acquired and held Huntington common stock in compliance at all times with Section 407 of the
Employee Retirement Income Security Act of 1978.
At December 31, 2011, the following table shows when benefit payments, which include expected future
service, as appropriate, were expected to be paid:
Pension
Benefits
Post-
Retirement
Benefits
(dollar amounts in thousands)
2012 ......................................................... $ 34,124 $ 4,297
2013 ......................................................... 36,006 4,110
2014 ......................................................... 36,874 3,923
2015 ......................................................... 38,573 3,759
2016 ......................................................... 40,533 3,588
2017 through 2021 .............................................. 225,480 15,694
Although not required, Huntington may choose to make a cash contribution to the Plan up to the maximum
deductible limit in the 2012 plan year. Anticipated contributions for 2012 to the post-retirement benefit plan are
$3.5 million.
The assumed healthcare cost trend rate has an effect on the amounts reported. A one percentage point
increase would decrease service and interest costs and the post-retirement benefit obligation by less than $1.0
million and $0.2 million, respectively. A one percentage point decrease would increase service and interest costs
and the post-retirement benefit obligation by less than $1.0 million and $0.2 million, respectively.
The 2012 and 2011 healthcare cost trend rate was projected to be 8.0% for pre-65 aged participants and
8.5% for post-65 aged participants. These rates are assumed to decrease gradually until they reach 4.5% for both
pre-65 aged participants and post-65 aged participants in the year 2028 and remain at that level thereafter.
Huntington updated the immediate healthcare cost trend rate assumption based on current market data and
Huntington’s claims experience. This trend rate is expected to decline over time to a trend level consistent with
medical inflation and long-term economic assumptions.
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