Huntington National Bank 2013 Annual Report Download

Download and view the complete annual report

Please find the complete 2013 Huntington National Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 204

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204

2013 ANNUAL REPORT

Table of contents

  • Page 1
    2013 ANNUAL REPORT

  • Page 2
    ... bank holding company headquartered in Columbus, Ohio. The Huntington National Bank, founded in 1866, and its affiliates provide full-service commercial, small business, and consumer banking services; mortgage banking services; treasury management and foreign exchange services; equipment leasing...

  • Page 3
    ...strive to reach all of our long-term goals. The improvements in our efficiency ratio, credit quality, and capital levels demonstrated how Huntington colleagues have risen to meet the challenges of the current banking environment. Let me offer a recap of 2013 performance and then our expectations for...

  • Page 4
    ... annualized 0.45% of average loans and leases and compares well to our long-term expected range of 0.35% to 0.55%. Our capital levels continued to increase in the wake of the current regulatory rules for banks over $50 billion in assets. We focused most intently on two ratios: tangible common equity...

  • Page 5
    ...increase in customer activity. Our C&I loan pipeline remains robust with much of this reflecting the positive impact from our investments in specialized commercial verticals, automotive dealer relationships, focused OCR sales process, and continued support of middle market and small business lending...

  • Page 6
    ... 2010 2011 2012 2013 $0.75 0.85 1.00 1.06 0.66 0.04 0.04 0.10 0.16 0.19 Restated for stock dividends and stock splits as applicable. FORWARD-LOOKING STATEMENT DISCLOSURE This report, including the letter to shareholders, contains certain forward-looking statements, including certain plans...

  • Page 7
    ... 31-0724920 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 41 S. High Street, Columbus, Ohio 43287 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (614) 480-8300 Securities registered pursuant...

  • Page 8
    ... reporting company [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) [ ]Yes [X]No The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2013, determined by using a per share...

  • Page 9
    ... Equity Item 5. Securities Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Introduction Executive Overview Discussion of Results of Operations Risk Management and Capital: Credit Risk Market Risk Liquidity Risk Operational...

  • Page 10
    ... of Equity (see FNMA) Financial Accounting Standards Board Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation Improvement Act of 1991 Federal Housing Administration Federal Housing Finance Agency Federal Home Loan Bank Federal Home Loan Mortgage Corporation Federal Insurance...

  • Page 11
    ... loans and leases past due 90 days or more (Table 14) Real Estate Investment Trust Regulation E, of the Electronic Fund Transfer Act Risk Oversight Committee Special Assets Division Small Business Administration Securities and Exchange Commission Supplemental Executive Retirement Plan Sky Financial...

  • Page 12
    UPB USDA VA VIE WGH Unpaid Principal Balance U.S. Department of Agriculture U.S. Department of Veteran Affairs Variable Interest Entity Wealth Advisors, Government Finance, and Home Lending 6

  • Page 13
    ... to checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans and leases. Other financial services available to consumer and small business customers include investments, insurance services, interest rate risk protection products...

  • Page 14
    ..., equipment leasing, international services, capital markets services such as interest rate risk protection products, foreign exchange hedging and sales, trading of securities, and employee benefit programs (insurance, 401(k)). The Commercial Banking team specializes in serving a number of industry...

  • Page 15
    ... and financial services companies such as savings and loans, credit unions, and finance and trust companies, as well as mortgage banking companies, automobile and equipment financing companies (including captive automobile finance companies), insurance companies, mutual funds, investment advisors...

  • Page 16
    ... corporate governance requirements for all public companies including financial institutions with regard to executive compensation, proxy access by shareholders, and certain whistleblower provisions, and restricted certain proprietary trading and hedge fund and private equity activities of banks...

  • Page 17
    ... national banks, like The Huntington National Bank, conduct annual stress tests for submission in January 2014. The results of the stress tests will provide the OCC with forward-looking information that will be used in bank supervision and will assist the agency in assessing a company's risk profile...

  • Page 18
    ... have issued policy statements that provide that insured banks and bank holding companies should generally only pay dividends out of current operating earnings. Additionally, the Federal Reserve may prohibit bank holding companies from making any capital distributions, including payment of preferred...

  • Page 19
    ... bank holding companies. Under the guidelines and related policies, bank holding companies must maintain capital sufficient to meet both a risk-based asset ratio test and a leverage ratio test on a consolidated basis. The risk-based ratio is determined by allocating assets and specified off-balance...

  • Page 20
    ...order, agreement, or directive to meet and maintain a specific capital level for any capital measure. (dollar amounts in billions) Well-capitalized minimums At December 31, 2013 Excess Actual Capital (1) Ratios: Tier 1 leverage ratio Tier 1 risk-based capital ratio Total risk-based capital ratio...

  • Page 21
    ... anti-money laundering and customer privacy regulations, as well as corporate governance, accounting, and reporting requirements. The USA Patriot Act of 2001 and its related regulations require insured depository institutions, broker-dealers, and certain other financial institutions to have policies...

  • Page 22
    ... filed by us with the SEC are also available at our Internet web site. The address of the site is http://www.huntington.com. Except as specifically incorporated by reference into this Annual Report on Form 10-K, information on those web sites is not part of this report. You also should be able...

  • Page 23
    ...oversee the quarterly self-assessment process. Segment risk officers report directly to the related segment manager with a dotted line to the Chief Risk Officer. Corporate Risk Management establishes policies, sets operating limits, reviews new or modified products/processes, ensures consistency and...

  • Page 24
    ... Risks: 1. Changes in interest rates could reduce our net interest income, reduce transactional income, and negatively impact the value of our loans, securities, and other assets. This could have a material adverse impact on our cash flows, financial condition, results of operations, and capital...

  • Page 25
    ... value of mortgage-backed securities investments. Liquidity Risks: 1. If we lose access to capital markets, we may not be able to meet the cash flow requirements of our depositors, creditors, and borrowers, or have the operating cash needed to fund corporate expansion and other corporate activities...

  • Page 26
    ...These operational risks could lead to expensive litigation and loss of confidence by our customers, regulators, and the capital markets. Moreover, negative public opinion can result from our actual or alleged conduct in any number of activities, including lending practices, corporate governance, and...

  • Page 27
    .... Item 2: Properties Our headquarters, as well as the Bank's, are located in the Huntington Center, a thirty-seven-story office building located in Columbus, Ohio. Of the building's total office space available, we lease approximately 28%. The lease term expires in 2030, with six five-year renewal...

  • Page 28
    ... Virginia Holland, Michigan Troy, Michigan Columbus, Ohio Columbus, Ohio Cleveland, Ohio Indianapolis, Indiana Own ¥ ¥ Lease ¥ ¥ ¥ ¥ Item 3: Legal Proceedings Information required by this item is set forth in Note 22 of the Notes to Consolidated Financial Statements and incorporated...

  • Page 29
    ... of its Common Stock during the three-month period ended December 31, 2013: Total Number of Shares Maximum Number of Shares (or Total Number Average Purchased as Part of Approximate Dollar Value) that of Shares Price Paid Publicly Announced May Yet Be Purchased Under the Purchased Per Share Plans or...

  • Page 30
    ...) (6), (8) Tangible equity to tangible assets (period end)(7), (8) Tier 1 leverage ratio (period end) Tier 1 risk-based capital ratio (period end) Total risk-based capital ratio (period end) Other data Full-time equivalent employees (average) Domestic banking offices (period end) $ 2013 1,860,637...

  • Page 31
    ... services. Our 695 branches are located in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Selected financial services and other activities are also conducted in various other states. International banking services are available through the headquarters office in Columbus, Ohio...

  • Page 32
    ... customers while our efficiency ratio decreased to 62.9% in 2013 from 63.4% in 2012. Results from our strategic business investments and OCR sales approach continued in 2013. (Also, see Significant Items Influencing Financial Performance Comparisons within the Discussion of Results of Operations...

  • Page 33
    ...increase in customer activity. Our C&I loan pipeline remains robust with much of this reflecting the positive impact from our investments in specialized commercial verticals, automotive dealer relationships, focused OCR sales process, and continued support of middle market and small business lending...

  • Page 34
    ... to show continued improvement. This year, NCOs represented the mid-point of our expected normalized range of 35 to 55 basis points. The level of provision for credit losses was below our long-term expectation, and we continue to expect moderate quarterly volatility. The effective tax rate for 2014...

  • Page 35
    ... credit losses Service charges on deposit accounts Mortgage banking income Trust services Electronic banking Insurance income Brokerage income Bank owned life insurance income Capital markets fees Gain on sale of loans Securities gains (losses) Other income Total noninterest income Personnel costs...

  • Page 36
    ...that time to be infrequent or short-term in nature. We refer to such items as Significant Items. Most often, these Significant Items result from factors originating outside the company; e.g., regulatory actions / assessments, windfall gains, changes in accounting principles, one-time tax assessments...

  • Page 37
    ... income from earning assets (primarily loans, securities, and direct financing leases), and interest expense of funding sources (primarily interest-bearing deposits and borrowings). Earning asset balances and related funding sources, as well as changes in the levels of interest rates, impact net...

  • Page 38
    ...(dollar amounts in millions) Loans and direct financing leases Investment securities Other earning assets Total interest income from earning assets Deposits Short-term borrowings Federal Home Loan Bank advances Subordinated notes and other long-term debt, including capital securities Total interest...

  • Page 39
    ...time deposits of $250,000 or more Brokered time deposits and negotiable CDs Deposits in foreign offices Total deposits Short-term borrowings Federal Home Loan Bank advances Subordinated notes and other long-term debt Total interest-bearing liabilities All other liabilities Shareholders' equity Total...

  • Page 40
    ... Brokered time deposits and negotiable CDs Deposits in foreign offices Total deposits Short-term borrowings Federal Home Loan Bank advances Subordinated notes and other long-term debt Total interest-bearing liabilities Net interest income Net interest rate spread Impact of noninterest-bearing funds...

  • Page 41
    ...13%, increase in money market deposits reflecting the strategic focus on customer growth and increased share of wallet among both consumer and commercial customers. While there was minimal impact on the full-year average balance sheet, average subordinated notes and other long-term debt reflect the...

  • Page 42
    ... assets and a 2 basis point decrease related to non-deposit funding and other items. The $3.1 billion, or 8%, increase in average total core deposits from the prior year reflected: x x $3.8 billion, or 27%, increase in total demand deposits. $0.6 billion, or 4%, increase in money market deposits...

  • Page 43
    ... in thousands) Service charges on deposit accounts Mortgage banking income Trust services Electronic banking Insurance income Brokerage income Bank owned life insurance income Capital markets fees Gain on sale of loans Securities gains (losses) Other income Total noninterest income $ 2013 271,802...

  • Page 44
    ... data processing and other services Net occupancy Equipment Marketing Deposit and other insurance expense Amortization of intangibles Professional services Gain on early extinguishment of debt Other expense Total noninterest expense Number of employees (average full-time equivalent) 2013 vs. 2012...

  • Page 45
    ... 2012. Both years included the benefits from tax-exempt income, tax-advantaged investments, and general business credits. In 2013, a $6.0 million reduction in the 2013 provision for state income taxes, net of federal, was recorded for the portion of state deferred tax assets and state net operating...

  • Page 46
    ... credit risk mitigation strategies of credit policies and processes, market risk management activities, and portfolio diversification, we use additional quantitative measurement capabilities utilizing external data sources, enhanced use of modeling technology, and internal stress testing processes...

  • Page 47
    ...centralized Commercial Lending area with designated experienced credit officers. CRE - CRE loans consist of loans to developers and REITs supporting income-producing or for-sale commercial real estate properties. We mitigate our risk on these loans by requiring collateral values that exceed the loan...

  • Page 48
    ... loans not secured by real estate, including personal unsecured loans. We introduced a consumer credit card product during 2013, utilizing a centralized underwriting system and focusing on existing Huntington customers. The table below provides the composition of our total loan and lease portfolio...

  • Page 49
    ...handle the day-to-day management of workouts, commercial recoveries, and problem loan sales. Its responsibilities include developing and implementing action plans, assessing risk ratings, and determining the appropriateness of the allowance, the accrual status, and the ultimate collectability of the...

  • Page 50
    ...the underwriting process. The portfolio is diversified by project type and loan size, and this diversification represents a significant portion of the credit risk management strategies employed for this portfolio. Subsequent to the origination of the loan, the Credit Review group performs testing to...

  • Page 51
    ... The LTV ratios for home equity loans and home equity lines-of-credit are cumulative and reflect the balance of any senior loans. LTV ratios reflect collateral values at the time of loan origination. (2) Portfolio weighted average FICO scores reflect currently updated customer credit scores whereas...

  • Page 52
    ...and LTV ratios. We offer closed-end home equity loans which are generally fixed-rate with principal and interest payments, and variable-rate interest-only home equity lines-of-credit which do not require payment of principal during the 10-year revolving period of the line-of-credit. Applications are...

  • Page 53
    ...Maturity Schedule of Home Equity Line-of-Credit Portfolio December 31, 2013 (dollar amounts in millions) Secured by first-lien Secured by junior-lien 1 Year or Less 1 to 2 years 2 to 3 years 3 to 4 years $ 52 $ 29 229 216 130 112 281 $ 245 $ 130 $ 112 $ More than 4 years 2,383 $ 2,301 4,684 $ Total...

  • Page 54
    ...reversed with current year accruals charged to earnings and prior year amounts generally charged-off as a credit loss. When, in our judgment, the borrower's ability to make required interest and principal payments has resumed and collectability is no longer in doubt, the loan or lease is returned to...

  • Page 55
    ... five years: Table 13 - Nonaccrual Loans and Leases and Nonperforming Assets At December 31, (dollar amounts in thousands) 2013 2012 2011 2010 2009 Nonaccrual loans and leases: Commercial and industrial Commercial real estate Automobile Residential mortgages Home equity Total nonaccrual loans...

  • Page 56
    ...dollar amounts in thousands) 2013 2012 2011 2010 2009 Accruing loans and leases past due 90 days or more Commercial and industrial(1) Commercial real estate Automobile Residential mortgage (excluding loans guaranteed by the U.S. government) Home equity Other loans and leases Total, excl. loans...

  • Page 57
    ...order to return to accruing status. This six-month period could extend before or after the restructure date. TDRs in the home equity and residential mortgage portfolio will continue to increase for a time as we continue to appropriately manage the portfolio. Any granted change in terms or conditions...

  • Page 58
    ... impact of collateral value trends and portfolio diversification. In 2013, we implemented an enhanced commercial risk rating system and ACL calculation process. In addition, we enhanced some of our qualitative assessments, specifically around the impact of the prevailing economic conditions. These...

  • Page 59
    ... Total commercial real estate Total commercial Consumer: Automobile Home equity Residential mortgage Other consumer Total consumer Total recoveries Net loan and lease charge-offs Provision for loan and lease losses Allowance for assets sold and securitized or transferred to loans held for sale...

  • Page 60
    ...44 Commercial: Commercial and industrial $ Commercial real estate Total commercial Consumer: Automobile Home equity Residential mortgage Other loans Total consumer Total allowance for loan and lease losses Allowance for unfunded loan commitments Total allowance for credit losses $ 647,870 100 % 62...

  • Page 61
    ...) Net charge-offs by loan and lease type Commercial: Commercial and industrial Commercial real estate: Construction Commercial Total commercial real estate Total commercial Consumer: Automobile Home equity Residential mortgage Other consumer Total consumer Total net charge-offs Net charge-offs ratio...

  • Page 62
    ... over time. The ALLL established is consistent with the level of risk associated with the original underwriting. As a part of our normal portfolio management process for commercial loans, the loan is periodically reviewed and the ALLL is increased or decreased based on the updated risk rating. In...

  • Page 63
    ... investment portfolio, and higher market rates.  MSR (This section should be read in conjunction with Note 6 of the Notes to the Consolidated Financial Statements.) At December 31, 2013 we had a total of $162.3 million of capitalized MSRs representing the right to service $15.2 billion in mortgage...

  • Page 64
    ...to Consolidated Financial Statements.) Our investment securities portfolio is evaluated under established asset/liability management objectives. Changing market conditions could affect the profitability of the portfolio, as well as the level of interest rate risk exposure. Our available-for-sale and...

  • Page 65
    ... following two tables: Table 22 - Available-for-sale and other securities Portfolio Summary at Fair Value (dollar amounts in thousands) U.S. Government backed agencies Other Total available-for-sale and other securities Duration in years (1) $ $ 2013 At December 31, 2012 4,676,607 $ 2,889,568 7,566...

  • Page 66
    ... deposits funded 76% of total assets (105% of total loans). At December 31, 2013, total core deposits represented 95% of total deposits, relatively unchanged from prior year-end. Core deposits are comprised of interest-bearing and noninterest-bearing demand deposits, money market deposits, savings...

  • Page 67
    ...-bearing Money market deposits Savings and other domestic deposits Core certificates of deposit Total core deposits Other domestic deposits of $250,000 or more Brokered deposits and negotiable CDs Deposits in foreign offices Total deposits Total core deposits: Commercial Personal Total core deposits...

  • Page 68
    ...time deposits of $250,000 or more, brokered deposits and negotiable CDs, deposits in foreign offices, short-term borrowings, FHLB advances, other long-term debt, and subordinated notes. At December 31, 2013, total wholesale funding was $7.0 billion, an increase from $5.2 billion at December 31, 2012...

  • Page 69
    ... of our stock, and acquisitions. The parent company obtains funding to meet obligations from interest received from the Bank, interest and dividends received from direct subsidiaries, net taxes collected from subsidiaries included in the federal consolidated tax return, fees for services provided to...

  • Page 70
    ...) Deposits without a stated maturity Certificates of deposit and other time deposits FHLB advances Short-term borrowings Other long-term debt Subordinated notes Operating lease obligations Purchase commitments (1) Amounts do not include associated interest payments. Operational Risk Total 40...

  • Page 71
    ... Risk Financial institutions are subject to several laws, rules, and regulations at both the federal and state levels. These broad-based mandates include, but are not limited to, expectations relating to anti-money laundering, lending limits, client privacy, fair lending, and community reinvestment...

  • Page 72
    ... asset deferred tax liability(1) Total tangible assets(2) Tier 1 capital Preferred shareholders' equity Trust-preferred securities REIT-preferred stock Tier 1 common equity(2) Risk-weighted assets (RWA) Tier 1 common equity / RWA ratio(2) Tangible equity / tangible asset ratio (2) 2013 2012...

  • Page 73
    ... capital at an amount commensurate with our risk profile and risk tolerance objectives, to meet both regulatory and market expectations, and to provide the flexibility needed for future growth and business opportunities. Shareholders' equity totaled $6.1 billion at December 31, 2013, representing...

  • Page 74
    ... and Commercial Banking; Automobile Finance and Commercial Real Estate; and Wealth Advisors, Government Finance, and Home Lending. A Treasury / Other function also includes our insurance business and other unallocated assets, liabilities, revenue, and expenses. While this section reviews financial...

  • Page 75
    ...function includes revenue and expense related to our insurance business, and assets, liabilities, and equity not directly assigned or allocated to one of the four business segments. Other assets include investment securities and bank owned life insurance. The financial impact associated with our FTP...

  • Page 76
    ... checking accounts and improved retention of existing commercial accounts. The overall objective is to grow the number of relationships, along with an increase in product service distribution. The commercial relationship is defined as a business banking or commercial banking customer with a checking...

  • Page 77
    ... - Commercial Relationship OCR Cross-sell Report Year ended December 31, 2013 Commercial Relationships Product Penetration by Number of Services 1 Service 2-3 Services 4+ Services Total revenue (in millions) $ 21.1 % 41.4 37.5 738.5 $ 24.6 % 40.4 35.0 724.4 $ 28.4 % 40.2 31.4 675.2 159,716 2012 151...

  • Page 78
    ... full-time equivalent) Total average assets (in millions) Total average loans/leases (in millions) Total average deposits (in millions) Net interest margin NCOs NCOs as a % of average loans and leases Return on average common equity 2013 vs. 2012 Retail and Business Banking reported net income...

  • Page 79
    ... million reduction in service charge revenue that resulted from our change in check posting order early in 2013. $10.3 million, or 13%, increase in electronic banking income, primarily due to strong consumer household growth combined with increased consumer debit card activity. x Partially offset...

  • Page 80
    ...(average full-time equivalent) Total average assets (in millions) Total average loans/leases (in millions) Total average deposits (in millions) Net interest margin NCOs NCOs as a % of average loans and leases Return on average common equity 2013 vs. 2012 Regional and Commercial Banking reported net...

  • Page 81
    ... other loan fees, primarily due to increased syndications activity. $1.1 million, or 100%, increase in the sale of Huntington Investment Company related products. Partially offset by: x x $4.1 million, or 10%, decrease in deposit service charge income and other Treasury Management related revenue...

  • Page 82
    ... income taxes Net income Number of employees (average full-time equivalent) Total average assets (in millions) Total average loans/leases (in millions) Total average deposits (in millions) Net interest margin NCOs NCOs as a % of average loans and leases Return on average common equity 2013 vs. 2012...

  • Page 83
    ...due to the securitization and sale totaling $2.5 billion of indirect auto loans during 2012, with no similar transactions occurring in 2013. $8.2 million, or 80%, decrease in operating lease income, primarily due to the continued runoff of that portfolio as we exited that business at the end of 2008...

  • Page 84
    ... taxes Net income Number of employees (average full-time equivalent) Total average assets (in millions) Total average loans/leases (in millions) Total average deposits (in millions) Net interest margin NCOs NCOs as a % of average loans and leases Return on average common equity Mortgage banking...

  • Page 85
    ...income, primarily due to a gain on sale of certain Low Income Housing Tax Credit investments. $1.2 million, or 14%, increase in service charges on deposit accounts, primarily due to increased fees related to several high check volume commercial accounts. The decrease in noninterest expense from the...

  • Page 86
    ... Loans/Leases - 2013 Fourth Quarter vs. 2012 Fourth Quarter (dollar amounts in millions) Average Loans/Leases Commercial and industrial Commercial real estate Total commercial Automobile Home equity Residential mortgage Other consumer Total consumer Total loans/leases Fourth Quarter 2012 2013...

  • Page 87
    ...,144 $ 2012 68,083 61,711 31,388 21,011 17,268 17,415 13,767 12,918 20,690 863 32,537 297,651 Service charges on deposit accounts Mortgage banking income Trust services Electronic banking Insurance income Brokerage income Bank owned life insurance income Capital markets fees Gain on sale of loans...

  • Page 88
    ... continued improvement in the overall loan portfolio relating to NCO activity, as well as in key credit quality metrics, including a 21% decline in NPAs. NCOs Total NCOs for the 2013 fourth quarter were $46.4 million, or an annualized 0.43% of average total loans and leases. NCOs in the year-ago...

  • Page 89
    ... - diluted Cash dividends declared Common stock price, per share High(4) Low(4) Close Average closing price Return on average total assets Return on average common shareholders' equity Return on average tangible common shareholders' equity(5) Efficiency ratio(6) Effective tax rate Margin analysis...

  • Page 90
    ... Tier 1 leverage ratio Tier 1 risk-based capital ratio Total risk-based capital ratio Tier 1 common risk-based capital ratio Tangible common equity / tangible asset ratio(8) Tangible equity / tangible asset ratio(9) Tangible common equity / risk-weighted assets ratio $ September 30, 2013 June 30, 48...

  • Page 91
    ... - diluted Cash dividends declared Common stock price, per share High(4) Low(4) Close Average closing price Return on average total assets Return on average common shareholders' equity Return on average tangible common shareholders' equity(5) Efficiency ratio(6) Effective tax rate (benefit) Margin...

  • Page 92
    ... diluted share calculation because the result would have been higher than basic earnings per common share (anti-dilutive) for the periods. (3) Deferred tax liability related to other intangible assets is calculated assuming a 35% tax rate. (4) High and low stock prices are intra-day quotes obtained...

  • Page 93
    ... timing of our business strategies, including market acceptance of any new products or services implementing our "Fair Play" banking philosophy; (6) changes in accounting policies and principles and the accuracy of our assumptions and estimates used to prepare our financial statements; (7) extended...

  • Page 94
    .... For our annual impairment testing conducted during 2013, we identified four reporting units with goodwill: Retail and Business Banking, Regional and Commercial Banking, Wealth Advisors, Government Finance, and Home Lending (WGH), and Insurance. Auto Finance and Commercial Real Estate was not...

  • Page 95
    ... ratios. Long-term growth rates were estimated to assist in determining the terminal values. The discount rates were estimated based on the Capital Asset Pricing Model, which considered the risk-free interest rate (20-year Treasury Bonds), market-risk premium, equity-risk premium, and a company...

  • Page 96
    ...at cost on the trade date and are reported at fair value. Mutual funds are valued at quoted Net Asset Value. Our common stock is traded on a national securities exchange and is valued at the last reported sales price. The discount rate and expected return on plan assets used to determine the benefit...

  • Page 97
    ...and the net receivable balance is reported as a component of accrued income and other assets in our consolidated balance sheet; (2) our deferred federal and state income tax and related valuation accounts, reported as a component of accrued income and other assets, represents the estimated impact of...

  • Page 98
    ... of "Market Risk" in Item 7 (MD&A), which is incorporated by reference into this item. Item 8: Financial Statements and Supplementary Data Information required by this item is set forth in the Report of Independent Registered Public Accounting Firm, Consolidated Financial Statements and Notes...

  • Page 99
    ...indep pendent register red public acco ounting firm, as a stated in thei ir report appear ring on the nex xt page. hen D. Steinour r - Chairman, President, P and Chief Executiv ve Officer Steph d S. Anderson - Executive Vice V President and a Interim Ch hief Financial O Officer David uary 14, 2014...

  • Page 100
    ... ial reporting on a timely basis. Also, projec ture periods are a subject to the risk that the t controls may m become i inadequate be ecause of chan nges in conditions, or that to fut the d degree of com mpliance with the policies or o procedures may deterior rate. In ou ur opinion, the e Company...

  • Page 101
    ...ted financial statements s pre esent fairly, in n all material l respects, the e financial pos sition of Hunt tington Bancs shares Incorpo orated and su ubsidiaries as of December 31, 2013 and d 2012, and th he results of t their opera ations and the eir cash flows s for each of the t three years in...

  • Page 102
    ...-bearing Deposits in foreign offices Deposits Short-term borrowings Federal Home Loan Bank advances Other long-term debt Subordinated notes Accrued expenses and other liabilities Total liabilities Shareholders' equity Preferred stock - authorized 6,617,808 shares; Series A, 8.50% fixed rate, non...

  • Page 103
    ... per share amounts) Interest and fee income: Loans and leases Available-for-sale and other securities Taxable Tax-exempt Held-to-maturity securities Other Total interest income Interest expense Deposits Short-term borrowings Federal Home Loan Bank advances Subordinated notes and other long-term debt...

  • Page 104
    Huntington Bancshares Incorporated Consolidated Statements of Comprehensive Income Year Ended December 31, 2012 $ 641,022 $ (dollar amounts in thousands) 2013 $ 638,741 2011 542,613 Net income Other comprehensive income, net of tax: Unrealized gains on available-for-sale and other securities: ...

  • Page 105
    ... (loss) Repurchases of common stock Cash dividends declared: Common ($0.19 per share) Preferred Series A ($85.00 per share) Preferred Series B ($33.14 per share) Recognition of the fair value of share-based compensation Other share-based compensation activity Other Balance, end of year 363 $ 362,507...

  • Page 106
    ... of the fair value of share-based compensation Other share-based compensation activity Other Balance, end of year 363 $ 362,507 35 $ 23,785 1,848 844,105 $ 18 8,441 $ (114) (666) (150,817)$ (348) (92) (1,917,933)$ (1,292)$ (10,921)$ See Notes to Consolidated Financial Statements 100

  • Page 107
    ... Repurchase of warrants convertible to common stock Cash dividends declared: Common ($0.10 per share) Preferred Series A ($85.00 per share) Recognition of the fair value of share-based compensation Other share-based compensation activity Other Balance, end of year 363 $ 362,507 1,390 35 $ 23,785...

  • Page 108
    ... sales of other real estate Purchases of loans and leases Other, net Net cash provided by (used for) investing activities Financing activities Increase (decrease) in deposits Increase (decrease) in short-term borrowings Maturity/redemption of subordinated notes Proceeds from Federal Home Loan Bank...

  • Page 109
    ... paid Income taxes paid (refunded) Non-cash activities: Loans transferred to available-for-sale securities Loans transferred to portfolio from held-for-sale Transfer of securities to held-to-maturity from available-for-sale Loans transferred to held-for-sale from portfolio Dividends accrued, paid...

  • Page 110
    ... commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services. Huntington's banking offices are located...

  • Page 111
    .... Huntington assesses whether OTTI has occurred when the fair value of a debt security is less than the amortized cost basis at the balance sheet date. Management reviews the amount of unrealized loss, the length of time the security has been in an unrealized loss position, the credit rating history...

  • Page 112
    ... of loans between loan ratings over time and a combination of long-term average loss experience of our own portfolio and external industry data using a 24-month emergence period. In the case of more homogeneous portfolios, such as automobile loans, home equity loans, and residential mortgage loans...

  • Page 113
    ... current financial statements, industry, management capabilities, and other qualitative measures. For all classes within the consumer loan portfolio, the determination of a borrower's ability to make the required principal and interest payments is based on multiple factors, including number of days...

  • Page 114
    ... with loan and lease sales are determined when the related loans or leases are sold to either a securitization trust or third party. For loan or lease sales with servicing retained, a servicing asset is recorded at fair value for the right to service the loans sold. Derivative Financial Instruments...

  • Page 115
    ... its mortgage loans held for sale. Mortgage loan sale commitments and the related interest rate lock commitments are carried at fair value on the Consolidated Balance Sheets with changes in fair value reflected in mortgage banking income. Huntington also uses certain derivative financial instruments...

  • Page 116
    ... repurchase agreements, public deposits, loan notes, derivative financial instruments, short-term borrowings and long-term borrowings. Assets that have been pledged as collateral, including those that can be sold or repledged by the secured party, continue to be reported on our Consolidated Balance...

  • Page 117
    ... on mortgage loans are included in mortgage banking income. At the time of initial capitalization, MSRs may be grouped into servicing classes based on the availability of market inputs used in determining fair value and the method used for managing the risks of the servicing assets. MSR assets are...

  • Page 118
    ... of business, we may enter into transactions with various related parties. These transactions occur at prevailing market rates and terms and include funding arrangements, transfers of financial assets, administrative and operational support, and other miscellaneous services. 2. ACCOUNTING STANDARDS...

  • Page 119
    ... 2012. The amendments did not have a material impact on Huntington's Consolidated Financial Statements. ASU 2013-11- Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The ASU requires...

  • Page 120
    ... 615 (dollar amounts in thousands) Commercial and industrial: Lease payments receivable Estimated residual value of leased assets Gross investment in commercial lease financing receivables Net deferred origination costs Unearned income Total net investment in commercial lease financing receivables...

  • Page 121
    ...the agreement, loans were transferred to Huntington and recorded at fair value in accordance with applicable accounting guidance, ASC 805. The fair values for the loans were estimated using discounted cash flow analyses using interest rates currently being offered for loans with similar terms (Level...

  • Page 122
    ... NALs by loan class for the years ended December 31, 2013 and 2012 (1):  December 31, (dollar amounts in thousands) Commercial and industrial: Owner occupied Other commercial and industrial Total commercial and industrial Commercial real estate: Retail properties Multi family Office Industrial and...

  • Page 123
    ... Total commercial and industrial $ Commercial real estate: Retail properties $ Multi family Office Industrial and warehouse Purchased credit-impaired Other commercial real estate Total commercial real estate $ Automobile Home equity: Secured by first-lien Secured by junior-lien Total home equity...

  • Page 124
    ... home equity portfolio and relates to junior-lien loans that meet the regulatory guidance.  The following table presents ALLL and AULC activity by portfolio segment for the years ended December 31, 2013, 2012, and 2011: Commercial Commercial and Industrial Real Estate Automobile (dollar amounts...

  • Page 125
    ... in thousands) Year ended December 31, 2012: ALLL balance, beginning of period $ Loan charge-offs Recoveries of loans previously charged-off Provision for loan and lease losses Allowance for loans sold or transferred to loans held for sale ALLL balance, end of period $ AULC balance, beginning of...

  • Page 126
    ...asset quality for the portfolio, as other risk characteristics mitigate any increased level of risk associated with the FICO score distribution. The following table presents each loan and lease class by credit quality indicator for the years ended December 31, 2013 and 2012: December 31, 2013 Credit...

  • Page 127
    ...Purchased impaired Other commercial and industrial Total commercial and industrial Commercial real estate: Retail properties Multi family Office Industrial and warehouse Purchased impaired Other commercial real estate Total commercial real estate Pass $ December 31, 2012 Credit Risk Profile by UCS...

  • Page 128
    ... attributable to loans by portfolio segment individually and collectively evaluated for impairment and the related loan and lease balance for the years ended December 31, 2013, and 2012 (1): Commercial Commercial Residential and Industrial Real Estate Automobile Home Equity Mortgage Other Consumer...

  • Page 129
    ... 27,254 $ 705,630 769,075 Loans and Leases at December 31, 2012: (dollar amounts in thousands) Portion of ending balance: Attributable to purchased credit-impaired loans Individually evaluated for impairment Collectively evaluated for impairment Total loans evaluated for impairment $ 54,472 $ 119...

  • Page 130
    ... 31, 2013 and 2012 (1), (2): (dollar amounts in thousands) With no related allowance recorded: Commercial and industrial: Owner occupied Purchased credit-impaired Other commercial and industrial Total commercial and industrial Commercial real estate: Retail properties Multi family Office Industrial...

  • Page 131
    ... Total commercial and industrial Commercial real estate: (4) Retail properties Multi family Office Industrial and warehouse Purchased credit-impaired Other commercial real estate Total commercial real estate Automobile Home equity: Secured by first-lien Secured by junior-lien Total home equity...

  • Page 132
    ...31, 2012 Unpaid Ending Principal Related Balance Balance (5) Allowance With no related allowance recorded: Commercial and Industrial: Owner occupied Purchased credit-impaired Other commercial and industrial Total commercial and industrial Commercial real estate: Retail properties Multi family Office...

  • Page 133
    ... real estate: (4) Retail properties Multi family Office Industrial and warehouse Other commercial real estate Total commercial real estate Automobile Home equity loans and lines-ofcredit: Secured by first-lien Secured by junior-lien Total home equity Residential mortgage: Residential mortgage Total...

  • Page 134
    ...the different loan types: Commercial loan TDRs - Commercial accruing TDRs often result from loans receiving a concession with terms that are not considered a market transaction to Huntington. The TDR remains in accruing status as long as the customer is less than 90-days past due on payments per the...

  • Page 135
    ...decrease as a result of payments made in connection with the modification. Commercial loan TDRs - In instances where the bank substantiates that it will collect its outstanding balance in full, the note is considered for return to accrual status upon the borrower sustaining sufficient cash flows for...

  • Page 136
    ... for the years ended December 31, 2013 and 2012: New Troubled Debt Restructurings During The Year Ended(1) December 31, 2012 December 31, 2013 Post-modification Outstanding Post-modification Number of Ending Financial effects Number of Outstanding Financial effects Contracts Balance of modification...

  • Page 137
    ... commercial real estate Automobile:(3) Interest rate reduction Amortization or maturity date change Chapter 7 bankruptcy Other Total Automobile Residential mortgage:(3) Interest rate reduction Amortization or maturity date change Chapter 7 bankruptcy Other Total Residential mortgage First-lien home...

  • Page 138
    ...- Multi family CRE - Office: Interest rate reduction Amortization or maturity date change Other Total CRE - Office CRE - Industrial and Warehouse: Interest rate reduction Amortization or maturity date change Other Total CRE - Industrial and Warehouse CRE - Other commercial real estate: Interest rate...

  • Page 139
    ...when collection of principal or interest is in doubt.  Pledged Loans and Leases The Bank has access to the Federal Reserve's discount window and advances from the FHLB - Cincinnati. At December 31, 2013, these borrowings and advances are secured by $19.8 billion of loans. 4. AVAILABLE-FOR-SALE AND...

  • Page 140
    ...of direct purchase municipal instruments were reclassified from C&I loans to available-for-sale securities. (2) Amounts at December 31, 2012 include securities backed by automobile loans with a fair value of $3 million which meet the eligibility requirements for the Term Asset-Backed Securities Loan...

  • Page 141
    ...1,630 551,154 $ At December 31, 2013, the carrying value of investment securities pledged to secure public and trust deposits, trading account liabilities, U.S. Treasury demand notes, and security repurchase agreements totaled $2.6 billion. There were no securities of a single issuer, which are not...

  • Page 142
    ... $ (1) Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency. Negative changes to the above credit ratings would generally result in an increase of our risk-weighted assets, and a reduction to our regulatory capital ratios. The fair values of the...

  • Page 143
    ...trust-preferred securities and subordinated debt securities issued by banks, bank holding companies, and insurance companies. A full cash flow analysis is used to estimate fair values and assess impairment for each security within this portfolio. A third party pricing specialist with direct industry...

  • Page 144
    ... sales Credit losses not previously recognized Additional credit losses Balance, end of year $ $ As of December 31, 2013, Management has evaluated all other investment securities with unrealized losses and all nonmarketable securities for impairment and concluded no additional OTTI is required...

  • Page 145
    (dollar amounts in thousands) December 31, 2013 Amortized Fair Cost Value $ December 31, 2012 Amortized Cost Fair Value Federal agencies: mortgage-backed securities: Under 1 year 1-5 years 6-10 years Over 10 years Total Federal agencies: mortgage-backed securities Other agencies: Under 1 year 1-5...

  • Page 146
    ... no OTTI is required. 6. LOAN SALES AND SECURITIZATIONS Residential Mortgage Portfolio The following table summarizes activity relating to residential mortgage loans sold with servicing retained for the years ended December 31, 2013, 2012, and 2011: Year Ended December 31, 2012 2011 2013 3,954,762...

  • Page 147
    ...not trade in an active, open market with readily observable prices. While sales of MSRs occur, the precise terms and conditions are typically not readily available. Therefore, the fair value of MSRs is estimated using a discounted future cash flow model. The model considers portfolio characteristics...

  • Page 148
    ... automobile loans and receives annual servicing fees and other ancillary fees on the outstanding loan balances. Automobile loan servicing rights are accounted for using the amortization method. A servicing asset is established at fair value at the time of the sale using a discounted future cash flow...

  • Page 149
    ...sold SBA loans and receives annual servicing fees on the outstanding loan balances. SBA loan servicing rights are accounted for using the amortization method. A servicing asset is established at fair value at the time of the sale using a discounted future cash flow model. The servicing asset is then...

  • Page 150
    ...) Constant prepayment rate (annualized) Discount rate Servicing income, net of amortization of capitalized servicing assets, amounted to $6.3 million, $5.7 million, and $4.9 million in 2013, 2012, and 2011, respectively. The unpaid principal balance of SBA loans serviced for third parties was $885...

  • Page 151
    ...Short-term borrowings at December 31, 2013 and 2012 were comprised of the following: At December 31, 2012 2013 575,899 548,605 $ 13,915 3,538 589,814 552,143 $ (dollar amounts in thousands) Federal funds purchased and securities sold under agreements to repurchase Other borrowings Total short-term...

  • Page 152
    ... agreements to repurchase Other short-term borrowings Weighted average interest rate during the year Federal Funds purchased and securities sold under agreements to repurchase Other short-term borrowings 10. FEDERAL HOME LOAN BANK ADVANCES $ Huntington's advances from the Federal Home Loan Bank...

  • Page 153
    ... of Huntington or any consolidated affiliates. The transfer did not meet the sale requirement of ASC 860 and therefore has been reflected as a secured financing on the Consolidated Financial Statements of Huntington. On July 2, 2013, the Federal Reserve Board voted to adopt final capital rules to...

  • Page 154
    ...are net of unamortized discounts and adjustments related to hedging with derivative financial instruments. The derivative instruments, principally interest rate swaps, are used to match the funding rates on certain assets to hedge the interest rate values of certain fixed-rate debt by converting the...

  • Page 155
    ... the year Amortization of net actuarial loss and prior service cost included in income Net change in pension and post-retirement obligations Total other comprehensive income (loss) Pretax 19,215 90,318 (4,769) 104,764 344 (5,476) 14,992 9,516 (105,527) 27,013 (78,514) 2012 Tax (expense) Benefit...

  • Page 156
    ... derivatives used in cash flow hedging relationships Net actuarial gains (losses) arising during the year Amortization of net actuarial loss and prior service cost included in income Net change in pension and post-retirement obligations Total other comprehensive (loss) income Activity in accumulated...

  • Page 157
    ... and fee income - loans and leases Interest and fee income - investment securities Noninterest expense - other expense Total before tax Tax (expense) benefit Net of tax Amortization of defined benefit pension and post-retirement items: Actuarial gains (losses) $ (22,293) Prior service costs 3,454...

  • Page 158
    ... with our annual capital plan, our capital return objectives, and market conditions. 15. EARNINGS PER SHARE Basic earnings per share is the amount of earnings (adjusted for dividends declared on preferred stock) available to each share of common stock outstanding during the reporting period. Diluted...

  • Page 159
    ... In 2012, shareholders approved the Huntington Bancshares Incorporated 2012 Long-Term Incentive Plan (the Plan) which authorized 51 million shares for future grants. The Plan is the only active plan under which Huntington is currently granting share based options and awards. At December 31, 2013, 24...

  • Page 160
    ...and related tax benefit for the three years ended December 31, 2013, 2012, and 2011: (dollar amounts in thousands) Share-based compensation expense Tax benefit $ 2013 37,007 12,472 $ 2012 27,873 9,298 $ 2011 19,666 6,708 Huntington's stock option activity and related information for the year...

  • Page 161
    ... market price of Huntington's common stock on the grant date. The following table summarizes the status of Huntington's restricted stock units and performance share awards as of December 31, 2013, and activity for the year ended December 31, 2013: WeightedAverage Grant Date Fair Value Per Share...

  • Page 162
    ... financial position. Various state and other jurisdictions remain open to examination, including Kentucky, Indiana, Michigan, Pennsylvania, West Virginia and Illinois. Huntington accounts for uncertainties in income taxes in accordance with ASC 740, Income Taxes. At December 31, 2013, Huntington...

  • Page 163
    ... value adjustments Tax credit carryforward Accrued expense/prepaid Market discount Partnership investments Purchase accounting adjustments Other Total deferred tax assets Deferred tax liabilities: Lease financing Loan origination costs Mortgage servicing rights Operating assets Purchase accounting...

  • Page 164
    ... rate Rate of compensation increase Weighted-average assumptions used to determine net periodic benefit cost Discount rate (1) Expected return on plan assets Rate of compensation increase N/A - Not Applicable 4.89 % N.A. 4.15 7.63 4.50 3.83 % 4.50 4.57 8.00 4.50 Post-Retirement Benefits 2012 2013...

  • Page 165
    ...the December 31, 2013 and 2012 measurement dates: Pension Benefits (dollar amounts in thousands) Fair value of plan assets at beginning of measurement year Changes due to: Actual return on plan assets Employer contributions Settlements Benefits paid Total changes Fair value of plan assets at end of...

  • Page 166
    ..., 2013 and 2012, The Huntington National Bank, as trustee, held all Plan assets. The Plan assets consisted of investments in a variety of corporate and government fixed income investments, Huntington mutual funds and Huntington common stock as follows: Fair Value (dollar amounts in thousands) 2013...

  • Page 167
    ...470 (dollar amounts in thousands) 2014 2015 2016 2017 2018 2019 through 2022 $ Although not required, Huntington may choose to make a cash contribution to the Plan up to the maximum deductible limit in the 2013 plan year. Anticipated contributions for 2014 to the post-retirement benefit plan are...

  • Page 168
    ...periodic benefit costs Balance, end of year 2011 Tax (expense) Pretax Benefit After-tax $ (202,292) $ 70,803 $ (131,489) (104,146) 28,077 (6,811) (5) $ (285,177) $ 36,451 (9,827) 2,384 (67,695) 18,250 (4,427) 2 (3) 99,813 $ (185,364) Huntington has a defined contribution plan that is available to...

  • Page 169
    ...) in active markets for identical securities that Huntington has the ability to access at the measurement date. 1% of the positions in these portfolios are Level 1, and consist of U.S. Treasury securities and money market mutual funds. When quoted market prices are not available, fair values are...

  • Page 170
    ... CDO securities and subordinated debt securities issued by banks, bank holding companies, and insurance companies. A full cash flow analysis is used to estimate fair values and assess impairment for each security within this portfolio. We engage a third party pricing specialist with direct industry...

  • Page 171
    ...: Other agencies Municipal securities Private-label CMO Asset-backed securities Covered bonds Corporate debt Other securities Automobile loans MSRs Derivative assets Liabilities Derivative liabilities Short-term borrowings 22,787 --- 124,123 1,089 676 --- (18,312) --- 129,274 1,089 Balance at...

  • Page 172
    ... 2 in the fair value hierarchy. (3) During 2012, Huntington transferred $0.5 million of federal agencies: other agencies securities from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. These securities are valued at amortized cost and no longer classified...

  • Page 173
    ... in earnings Included in OCI Sales Repayments Settlements Balance, end of year $ Level 3 Fair Value Measurements Year ended December 31, 2012 Available-for-sale securities AssetDerivative Municipal Private backed Automobile MSRs instruments securities label CMO securities loans 65,001 $ (169)$ 95...

  • Page 174
    ... in earnings: Mortgage banking income (loss) Securities gains (losses) Interest and fee income Noninterest income Total $ (dollar amounts in thousands) MSRs $ (29,799)$ ------(29,799)$ Level 3 Fair Value Measurements Year ended December 31, 2012 Available-for-sale securities AssetDerivative...

  • Page 175
    ...instrument specific credit risk for the years ended December 31, 2013, 2012 and 2011: Net gains (losses) from fair value changes Year ended December 31, 2012 2011 2013 $ (12,711) (360) --$ (dollar amounts in thousands) Assets Mortgage loans held for sale Automobile loans Liabilities Securitization...

  • Page 176
    Other real estate owned properties are included in accrued income and other assets and valued based on appraisals and third party price opinions, less estimated selling costs. During the year ended December 31, 2013, Huntington recorded $27.7 million of OREO assets at fair value and recognized gains...

  • Page 177
    ...,552 1,808,558 1,342,890 1,073,116 (dollar amounts in thousands) Financial Assets Loans held for sale Held-to-maturity securities Net loans and direct financing leases Financial liabilities Deposits Short-term borrowings Federal Home Loan Bank advances Other long-term debt Subordinated notes 171

  • Page 178
    ... Net loans and direct financing leases Financial liabilities Deposits Short-term borrowings Other long-term debt Subordinated notes The short-term nature of certain assets and liabilities result in their carrying value approximating fair value. These include trading account securities, customers...

  • Page 179
    ... with: Loans Deposits Subordinated notes Other long-term debt Total notional value at December 31, 2013 $ $ The following table presents additional information about the interest rate swaps and caps used in Huntington's asset and liability management activities at December 31, 2013: Average...

  • Page 180
    ...of interest rate swaps hedging other long-term debt (2) 114 2,493 (5,716) Change in fair value of hedged other long-term debt (2) (114) (2,493) 6,843 (1) Effective portion of the hedging relationship is recognized in Interest expense - deposits in the Consolidated Statements of Income. Any resulting...

  • Page 181
    ...Derivatives in cash flow hedging relationships Interest rate contracts Loans Derivatives used in trading activities $ 878 $ (179) $ 98 Various derivative financial instruments are offered to enable customers to meet their financing and investing objectives and for their risk management purposes...

  • Page 182
    ...17.4 million, respectively. The credit risk associated with interest rate swaps is calculated after considering master netting agreements with broker-dealers and banks. At December 31, 2013, Huntington pledged $113.7 million of investment securities and cash collateral to counterparties, while other...

  • Page 183
    ... Trust Trusts December 31, 2013 79,153 $ 151,171 (711) 150,460 485 230,098 262 262 $ --- $ 262 262 $ Total Assets: Cash Loans and leases Allowance for loan and lease losses Net loans and leases Accrued income and other assets Total assets Liabilities: Other long-term debt Accrued interest and...

  • Page 184
    ...December 31, 2012 91,113 $ 356,162 (2,671) 353,491 1,353 445,957 $ 2,086 $ 1 2,087 288 288 $ --- $ 288 288 $ Total Assets: Cash Loans and leases Allowance for loan and lease losses Net loans and leases Accrued income and other assets Total assets Liabilities: Other long-term debt Accrued interest...

  • Page 185
    ... Balance Sheet as subordinated notes. The trust securities are the obligations of the trusts, and as such, are not consolidated within Huntington's Consolidated Financial Statements. A list of trust-preferred securities outstanding at December 31, 2013 follows: Principal amount of Investment...

  • Page 186
    ... cash requirements. The interest rate risk arising from these financial instruments is insignificant as a result of their predominantly short-term, variable-rate nature. Standby letters-of-credit are conditional commitments issued to guarantee the performance of a borrower to a third party. These...

  • Page 187
    ...of-credit issued by the Bank that support securities that were issued by customers and remarketed by The Huntington Investment Company, the Company's broker-dealer subsidiary. Huntington uses an internal loan grading system to assess an estimate of loss on its loan and lease portfolio. The same loan...

  • Page 188
    ... the checks and the deposits, totaling approximately $73.0 million. The Bankruptcy Court ruled the Bank may be entitled to a credit of approximately $4.0 million for the Cyberco trustee's recoveries in preference actions filed against third parties that received payments from Cyberco within 90 days...

  • Page 189
    ... 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...

  • Page 190
    ... 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...

  • Page 191
    ... in Shareholders' Equity. Statements of Income (dollar amounts in thousands) $ $ $ $ $ $ Year Ended December 31, 2012 2011 2013 Income Dividends from Non-bank subsidiaries Interest from The Huntington National Bank Non-bank subsidiaries Other Total income Expense Personnel costs Interest...

  • Page 192
    ... to checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans and leases. Other financial services available to consumer and small business customers include investments, insurance services, interest rate risk protection products...

  • Page 193
    ...equipment leasing, international services, capital markets services such as interest rate risk protection products, foreign exchange hedging and sales, trading of securities, mezzanine investment capabilities, and employee benefit programs (insurance, 401(k)). The Commercial Banking team specializes...

  • Page 194
    ...26. BUSINESS COMBINATIONS On October 10, 2013, Huntington announced the signing of a definitive agreement to acquire Camco Financial, the parent company of Cambridge Ohio-based Advantage Bank, in a cash and stock transaction valued at approximately $97 million. As of June 30, 2013, Camco operated 22...

  • Page 195
    ... rates currently being offered for loans with similar terms (Level 3). This value was reduced by an estimate of probable losses and the credit risk associated with the loans. The fair values of deposits were estimated by discounting cash flows using interest rates currently being offered on deposits...

  • Page 196
    ... 120 days of the close of our 2013 fiscal year. Portions of our 2014 Proxy Statement, including the sections we refer to in this report, are incorporated by reference into this report. Item 10: Directors, Executive Officers and Corporate Governance Information required by this item is set forth...

  • Page 197
    ... of independent registered public accounting firm and consolidated financial statements appearing in Item 8. (2) Huntington is not filing separate financial statement schedules, because of the absence of conditions under which they are required or because the required information is included in...

  • Page 198
    ... Chairman, President, Chief Executive Officer, and Director (Principal Executive Officer) By: /s/ David S. Anderson David S. Anderson Executive Vice President Interim Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act...

  • Page 199
    ... filed by us with the SEC are also available at our Internet web site. The address of the site is http://www.huntington.com. Except as specifically incorporated by reference into this Annual Report on Form 10-K, information on those web sites is not part of this report. You also should be able...

  • Page 200
    ...Grant Agreement for Executive Officers Pursuant to Huntington's 2012 Long-Term Incentive Plan. Ratio of Earnings to Fixed Charges. Ratio of Earnings to Fixed Charges and Preferred Dividends. Code of Business Conduct and Ethics dated January 14, 2003 and revised on January 15, 2013 and Financial Code...

  • Page 201
    ... - Chief Executive Officer. Section 1350 Certification - Chief Financial Officer. ** The following material from Huntington's Form 10-K Report for the year ended December 31, 2013, formatted in XBRL: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Income, (3), Consolidated Statements...

  • Page 202
    ..., President and Chief Executive Officer, Lancaster Colony Corporation Joined Board: 1999 Peter J. Kight(3)(7) Senior Advisor, Comvest Partners Joined Board: 2012 COMMITTEES (1) Audit (2) Community Development (3) Compensation (4) Executive (5) Nominating and Corporate Governance (6) Risk Oversight...

  • Page 203
    ...(1) (2) CUSTOMER CONTACTS Corporate Headquarters (614) 480-8300 Customer Service Center (800) 480-BANK (2265) Business Direct (800) 480-2001 Auto Loan & Lease (800) 445-8460 The Huntington Investment Company Mortgage Direct (800) 562-6871 Huntington Wealth Advisors (800) 544-8347 Insurance Services...

  • Page 204
    ® Member FDIC. and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington Welcome.TM is a service mark of Huntington Bancshares Incorporated. © 2014 Huntington Bancshares Incorporated. 03014AR