Huntington National Bank 2012 Annual Report Download - page 196

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The future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in
excess of one year as of December 31, 2012, were as follows: $47.1 million in 2013, $45.1 million in 2014, $42.4 million in 2015,
$38.5 million in 2016, $35.5 million in 2017, and $208.6 million thereafter. At December 31, 2012, total minimum lease payments
have not been reduced by minimum sublease rentals of $13.0 million due in the future under noncancelable subleases. At December
31, 2012, the future minimum sublease rental payments that Huntington expects to receive were as follows: $5.4 million in 2013, $3.8
million in 2014, $2.3 million in 2015, $0.8 million in 2016, $0.2 million in 2017, and $0.5 million thereafter. The rental expense for
all operating leases was $54.7 million, $53.5 million, and $50.3 million for 2012, 2011, and 2010, respectively. Huntington had no
material obligations under capital leases.
23. OTHER REGULATORY MATTERS
Huntington and its bank subsidiary, The Huntington National Bank (the Bank), are subject to various regulatory capital
requirements administered by federal and state banking agencies. These requirements involve qualitative judgments and quantitative
measures of assets, liabilities, capital amounts, and certain off-balance sheet items as calculated under regulatory accounting practices.
Failure to meet minimum capital requirements can initiate certain actions by regulators that, if undertaken, could have a material
adverse effect on Huntington’s and the Bank’s financial statements. Applicable capital adequacy guidelines require minimum ratios of
4.00% for Tier 1 risk-based Capital, 8.00% for total risk-based Capital, and 4.00% for Tier 1 leverage capital. To be considered well-
capitalized under the regulatory framework for prompt corrective action, the ratios must be at least 6.00%, 10.00%, and 5.00%,
respectively.
As of December 31, 2012, Huntington and the Bank met all capital adequacy requirements and had regulatory capital ratios in
excess of the levels established for well-capitalized institutions. The period-end capital amounts and capital ratios of Huntington and
the Bank are as follows:
Tier 1 risk-based capital Total risk-based capital Tier 1 leverage capital
(dollar amounts in thousands) 2012 2011 2012 2011 2012 2011
Huntington Bancshares
Incorporated
Amount $ 5,741,410 $ 5,556,829 $ 6,928,339 $ 6,778,398 $ 5,741,410 $ 5,556,829
Ratio 12.02 % 12.11 % 14.50 % 14.77 % 10.36 % 10.28
The Huntington National Bank
Amount $ 5,003,247 $ 4,245,101 $ 6,093,620 $ 5,752,723 $ 5,003,247 $ 4,245,101
Ratio 10.49 % 9.30 % 12.78 % 12.60 % 9.05 % 7.89
Tier 1 risk-based capital consists of total equity plus qualifying capital securities and minority interest, excluding unrealized gains
and losses accumulated in OCI, and non-qualifying intangible and servicing assets. Total risk-based capital is the sum of Tier 1 risk-
based capital and qualifying subordinated notes and allowable allowances for credit losses (limited to 1.25% of total risk-weighted
assets). Tier 1 leverage capital is equal to Tier 1 capital. Both Tier 1 capital and total risk-based capital ratios are derived by dividing
the respective capital amounts by net risk-weighted assets, which are calculated as prescribed by regulatory agencies. The Tier 1
leverage capital ratio is calculated by dividing the Tier 1 capital amount by average total assets for the fourth quarter of 2012 and
2011, less non-qualifying intangibles and other adjustments.
Huntington has the ability to provide additional capital to the Bank to maintain the Bank’s risk-based capital ratios at levels at
which would be considered well-capitalized.
The FRB requires bank holding companies with assets over $50.0 billion to submit capital plans annually. Per the FRB’s rule,
our submission included a comprehensive capital plan supported by an assessment of expected uses and sources of capital over a given
planning time period under a range of expected and stress scenarios. We participated in the FRB’s CapPR process and made our 2012
capital plan submission in January 2012. On March 14, 2012, we announced that the FRB had completed its review of our 2012
capital plan submission and did not object to our proposed capital actions. The planned actions included the potential repurchase of up
to $182.0 million of common stock and a continuation of our current common dividend through the 2013 first quarter. We submitted
our 2013 Capital Plan to the Federal Reserve on January 7, 2013, in accordance with the FRB’s requirements.
Huntington and its subsidiaries are also subject to various regulatory requirements that impose restrictions on cash, debt, and
dividends. The Bank is required to maintain cash reserves based on the level of certain of its deposits. This reserve requirement may
be met by holding cash in banking offices or on deposit at the Federal Reserve Bank. During 2012 and 2011, the average balances of
these deposits were $0.4 billion and $0.8 billion, respectively.