Huntington National Bank 2013 Annual Report Download - page 180

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174
Asset derivatives included in accrued income and other assets
December 31,
(dollar amounts in thousands) 2013 2012
Interest rate contracts designated as hedging instruments $ 49,998 $ 169,222
Interest rate contracts not designated as hedging instruments 169,047 296,295
Foreign exchange contracts not designated as hedging instruments 28,499 5,605
Commodity contracts not designated as hedging instruments 4,278 ---
Total contracts $ 251,822 $ 471,122
Liability derivatives included in accrued expenses and other liabilities
December 31,
(dollar amounts in thousands) 2013 2012
Interest rate contracts designated as hedging instruments $ 25,321 $ ---
Interest rate contracts not designated as hedging instruments 99,247 228,757
Foreign exchange contracts not designated as hedging instruments 18,909 4,655
Commodity contracts not designated as hedging instruments 3,838 ---
Total contracts $ 147,315 $ 233,412
The changes in fair value of the fair value hedges are, to the extent that the hedging relationship is effective, recorded through
earnings and offset against changes in the fair value of the hedged item.
The following table presents the change in fair value for derivatives designated as fair value hedges as well as the offsetting
change in fair value on the hedged item:
Year ended December 31,
(dollar amounts in thousands) 2013 2012 2011
Interest rate contracts
Change in fair value of interest rate swaps hedging deposits (1) $ (4,006) $ (2,526) $ 801
Change in fair value of hedged deposits (1) 4,003 2,601 (1,050)
Change in fair value of interest rate swaps hedging subordinated notes (2) (44,699) 1,432 45,480
Change in fair value of hedged subordinated notes (2) 44,699 (1,432) (45,480)
Change in fair value of interest rate swaps hedging other long-term debt (2) (5,716) 114 2,493
Change in fair value of hedged other long-term debt (2) 6,843 (114) (2,493)
(1) Effective portion of the hedging relationship is recognized in Interest expense - deposits in the Consolidated Statements of
Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income in the Consolidated
Statements of Income.
(2) Effective portion of the hedging relationship is recognized in Interest expense - subordinated notes and other-long-term debt in the
Consolidated Statements of Income. Any resulting ineffective portion of the hedging relationship is recognized in noninterest income
in the Consolidated Statements of Income.
To the extent these derivatives are effective in offsetting the variability of the hedged cash flows, changes in the derivatives’ fair
value will not be included in current earnings but are reported as a component of OCI in the Consolidated Statements of Shareholders’
Equity. These changes in fair value will be included in earnings of future periods when earnings are also affected by the changes in the
hedged cash flows. To the extent these derivatives are not effective, changes in their fair values are immediately included in
noninterest income.