Huntington National Bank 2013 Annual Report Download - page 74

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Share Repurchases
From time to time the board of directors authorizes the Company to repurchase shares of our common stock. Although we
announce when the board of directors authorizes share repurchases, we do not give any public notice before we repurchase our shares.
Future stock repurchases may be private or open-market repurchases, including block transactions, accelerated or delayed block
transactions, forward transactions, and similar transactions. Various factors determine the amount and timing of our share
repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and acquisitions,
market conditions (including the trading price of our stock), and regulatory and legal considerations, including the FRB’s response to
our capital plan.
Our board of directors has authorized a share repurchase program consistent with our capital plan of the potential repurchase of
up to $227.0 million of common stock. During 2013, we repurchased 16.7 million common shares at a weighted average share price
of $7.46. Huntington has the ability to repurchase up to $136 million of additional shares of common stock through the first quarter of
2014. We intend to continue disciplined repurchase activity consistent with our annual capital plan, our capital return objectives, and
market conditions.
BUSINESS SEGMENT DISCUSSION
Overview
We have four major business segments: Retail and Business Banking; Regional 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
performance from a business segment perspective, it should be read in conjunction with the Discussion of Results of Operations, Note
25 of the Notes to Consolidated Financial Statements, and other sections for a full understanding of our consolidated financial
performance.
Business segment results are determined based upon our management reporting system, which assigns balance sheet and income
statement items to each of the business segments. The process is designed around our organizational and management structure and,
accordingly, the results derived are not necessarily comparable with similar information published by other financial institutions.
Revenue Sharing
Revenue is recorded in the business segment responsible for the related product or service. Fee sharing is recorded to allocate
portions of such revenue to other business segments involved in selling to, or providing service to, customers. Results of operations
for the business segments reflect these fee sharing allocations.
Expense Allocation
The management accounting process that develops the business segment reporting utilizes various estimates and allocation
methodologies to measure the performance of the business segments. Expenses are allocated to business segments using a two-phase
approach. The first phase consists of measuring and assigning unit costs (activity-based costs) to activities related to product
origination and servicing. These activity-based costs are then extended, based on volumes, with the resulting amount allocated to
business segments that own the related products. The second phase consists of the allocation of overhead costs to all four business
segments from Treasury / Other. We utilize a full-allocation methodology, where all Treasury / Other expenses, except those related
to our insurance business, reported Significant Items (except for the goodwill impairment), and a small amount of other residual
unallocated expenses, are allocated to the four business segments.
Funds Transfer Pricing (FTP)
We use an active and centralized FTP methodology to attribute appropriate income to the business segments. The intent of the
FTP methodology is to transfer interest rate risk from the business segments by providing matched duration funding of assets and
liabilities. The result is to centralize the financial impact, management, and reporting of interest rate risk in the Treasury / Other
function where it can be centrally monitored and managed. The Treasury / Other function charges (credits) an internal cost of funds
for assets held in (or pays for funding provided by) each business segment. The FTP rate is based on prevailing market interest rates
for comparable duration assets (or liabilities).