Huntington National Bank 2013 Annual Report Download - page 189

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appealed the order denying substantive consolidation to the BAP, which appeal was held in abeyance pending decision by the Sixth
Circuit on the appeal of the BAP’s 2010 order. On August 30, 2013, the Sixth Circuit affirmed the BAP’s 2010 decision dismissing
the original appeal. The Bank filed a status report with the BAP on the second appeal and the trustees moved to dismiss the second
appeal on the ground that the Bankruptcy Court’s orders denying substantive consolidation were still not final orders. The BAP
granted the trustees’ motion in an Order dated December 23, 2013.
On January 17, 2012, the Company was named a defendant in a putative class action filed on behalf of all 88 counties in Ohio
against MERSCORP, Inc. and numerous other financial institutions that participate in the mortgage electronic registration system
(MERS). The complaint alleges that recording of mortgages and assignments thereof is mandatory under Ohio law and seeks a
declaratory judgment that the defendants are required to record every mortgage and assignment on real property located in Ohio and
pay the attendant statutory recording fees. The complaint also seeks damages, attorneys' fees and costs. Although Huntington has not
been named as a defendant in the other cases, similar litigation has been initiated against MERSCORP, Inc. and other financial
institutions in other jurisdictions throughout the country.
Commitments Under Operating Lease Obligations
At December 31, 2013, Huntington and its subsidiaries were obligated under noncancelable leases for land, buildings, and
equipment. Many of these leases contain renewal options and certain leases provide options to purchase the leased property during or
at the expiration of the lease period at specified prices. Some leases contain escalation clauses calling for rentals to be adjusted for
increased real estate taxes and other operating expenses or proportionately adjusted for increases in the consumer or other price
indices.
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, 2013, were as follows: $48.9 million in 2014, $47.1 million in 2015, $43.1 million in 2016,
$40.0 million in 2017, $37.1 million in 2018, and $189.0 million thereafter. At December 31, 2013, total minimum lease payments
have not been reduced by minimum sublease rentals of $10.1 million due in the future under noncancelable subleases. At December
31, 2013, the future minimum sublease rental payments that Huntington expects to receive were as follows: $4.7 million in 2014, $3.0
million in 2015, $1.2 million in 2016, $0.5 million in 2017, $0.3 million in 2018, and $0.4 million thereafter. The rental expense for
all operating leases was $55.3 million, $54.7 million, and $53.5 million for 2013, 2012, and 2011, 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, 2013, 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) 2013 2012 2013 2012 2013 2012
Huntington Bancshares Incorporated
Amount $ 6,099,629 $ 5,741,410 $ 7,239,035 $ 6,928,339 $ 6,099,629 $ 5,741,410
Ratio 12.28 % 12.02 % 14.57 % 14.50 % 10.67 % 10.36 %
The Huntington National Bank
Amount $ 5,682,067 $ 5,003,247 $ 6,520,190 $ 6,093,620 $ 5,682,067 $ 5,003,247
Ratio 11.45 % 10.49 % 13.14 % 12.78 % 9.97 % 9.05 %