Huntington National Bank 2014 Annual Report Download

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2014 Annual Report

Table of contents

  • Page 1
    2014 Annual Report

  • Page 2
    ...; trust services; brokerage services; customized insurance brokerage and service programs; and other financial products and services. The principal markets for these services are Huntington's six-state retail banking franchise: Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky...

  • Page 3
    ... fourth year in a row with a return on average assets of over 1% and a return on average tangible common equity of 12%. These results allowed the Company to return over $500 million of our net income to our investors through an increased dividend and a share repurchase program, while also supporting...

  • Page 4
    ...-term value to our shareholders and meeting the last two long-term goals of an efficiency ratio of 56%-59% and return on tangible common equity of 13%-15%. At Huntington, we believe that "doing the right thing" for our shareholders, colleagues, customers, and communities is the path to developing...

  • Page 5
    ... serving as the Chair of our Executive Committee. He is retiring this year, and I want to thank him for his many years of dedication and advice to Huntington, as well as his personal commitment to the development of our Columbus community. In addition to the personal pride I have for what the...

  • Page 6
    ... 2014 October 1, 2014 January 2, 2015 $0.05 0.05 0.05 0.06 COMMON STOCK PRICE 2014 2013 2012 2011 2010 2009 High Low Close $ 10.74 8.66 10.52 $ 9.73 6.48 9.65 $ 7.25 5.49 6.39 $ 7.70 4.46 5.49 $ 7.40 3.65 6.87 $ 8.00 1.00 3.65 20-YEAR DIVIDEND HISTORY CASH DIVIDENDS DECLARED(1) STOCK...

  • Page 7
    ...registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be...

  • Page 8
    ... 31, 2015, there were 810,025,677 shares of common stock with a par value of $0.01 outstanding. Documents Incorporated By Reference Part III of this Form 10-K incorporates by reference certain information from the registrant's definitive Proxy Statement for the 2015 Annual Shareholders' Meeting. 2

  • Page 9
    ... 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 Risk Compliance Risk Capital Business...

  • Page 10
    ... Protection Act Electronic Fund Transfer Earnings Per Share Economic Value of Equity (see FNMA) Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation Improvement Act of 1991 Federal Housing Administration Federal Home Loan Bank Federal Home Loan Mortgage Corporation Fair Isaac...

  • Page 11
    ... loans (credit quality indicators section of Footnote 3). Regional Banking and The Huntington Private Client Group Real Estate Investment Trust Risk Oversight Committee Special Assets Division Small Business Administration Securities and Exchange Commission Supplemental Executive Retirement Plan...

  • Page 12
    ... to checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans. Other financial services available to consumer and small business customers include investments, insurance, interest rate risk protection, foreign exchange hedging...

  • Page 13
    ... respective asset classes. Capital Markets has two distinct product capabilities: corporate risk management services and institutional sales, trading and underwriting. The Capital Markets Group offers a full suite of risk management tools including commodities, foreign exchange and interest rate...

  • Page 14
    ... target a national client base. The Huntington Private Bank provides high net-worth customers with deposit, lending (including specialized lending options) and other banking services. The Huntington Trust also serves high net-worth customers and delivers wealth management and legacy planning through...

  • Page 15
    ... other banks 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...

  • 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
    ... The Huntington National Bank, conduct annual stress tests for submission in January 2015. 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 and capital adequacy...

  • Page 18
    ... 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 19
    ...1 and Tier 2 risk-based capital. x x The Federal Reserve and the other federal banking regulators require that all intangible assets (net of deferred tax), except originated or purchased MSRs, nonmortgage servicing assets, and purchased credit card relationships intangible assets, be deducted from...

  • Page 20
    ... including payment of a cash dividend or paying any management fee to its holding company, if the depository institution would become under-capitalized after such payment. Under-capitalized institutions are also subject to growth limitations and are required by the appropriate federal banking agency...

  • Page 21
    ... laws and regulations. In order to maintain its status as a financial holding company, a bank holding company's depository subsidiaries must all be both well-capitalized and well-managed, and must meet their Community Reinvestment Act obligations. Financial holding company powers relate to financial...

  • Page 22
    ...equity), receives results of the risk self-assessment process, and routinely engages management in review of key risks. Our credit review executive reports directly to the Risk Oversight Committee. The Technology Committee provides oversight of technology to meet defined standards for risk, security...

  • Page 23
    ... net shares received upon exercise of stock options or release of restricted stock awards (50% for executive officers and 25% for other award recipients), equity deferrals, recoupment provisions, and the right to terminate compensation plans at any time. Management has implemented an Enterprise Risk...

  • Page 24
    .... Market 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...

  • Page 25
    ... the Federal Home Loan Bank of Cincinnati, which provides members access to funding through advances collateralized with mortgage-related assets. We maintain a portfolio of highly-rated, marketable securities that is available as a source of liquidity. Capital markets disruptions can directly impact...

  • Page 26
    ... operational risks could lead to financial loss, 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...

  • Page 27
    ... stock dividends, repurchase common stock, attract cost-effective sources of deposits, or require the retention of higher amounts of low yielding securities. The Federal Reserve administers the annual CCAR, an assessment of the capital adequacy of bank holding companies with consolidated assets...

  • Page 28
    ... affecting our consumer businesses, and any required changes to our business operations resulting from these developments, could result in significant loss of revenue, require remuneration to our customers, trigger fines or penalties, limit the products or services we offer, require us to increase...

  • Page 29
    ... largest banking companies and includes all money center banks and regional banks, including Huntington. An investment of $100 on December 31, 2009, and the reinvestment of all dividends, are assumed. The plotted points represent the closing price on the last trading day of the fiscal year indicated...

  • Page 30
    ... table provides information regarding Huntington's purchases of its Common Stock during the three-month period ended December 31, 2014: 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...

  • Page 31
    ... assets Return on average common shareholders' equity Return on average tangible common shareholders' equity(3), (7) Efficiency ratio(4) Dividend payout ratio Average shareholders' equity to average assets Effective tax rate Tier 1 common risk-based capital ratio (period end)(7), (8) $ $ $ $ 2014...

  • Page 32
    ... may calculate these financial measures differently. In accordance with applicable regulatory reporting guidance, we are not required to retrospectively update historical filings for newly adopted accounting principles. Therefore, Tier 1 capital, Tier 1 common equity, and risk-weighted assets have...

  • Page 33
    ...banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, insurance service programs, and other financial products and services. Our 715 branches are located in Ohio, Michigan, Pennsylvania, Indiana, West Virginia...

  • Page 34
    ... classified loans did increase $95.1 million, or 7%, from prior year. The tangible common equity to tangible assets ratio at December 31, 2014, was 8.17%, down 65 basis points from a year ago. Our Tier 1 common risk-based capital ratio at year end was 10.23%, down from 10.90% at the end of 2013. The...

  • Page 35
    ...invested in small business and commercial specialty lending verticals. We have added new products, such as our consumer and commercial credit cards and our new business and consumer checking accounts. These represent just a handful of the investments we have made. Our 2014 earnings reflected results...

  • Page 36
    ... charges on deposit accounts Trust services Electronic banking Mortgage banking income Brokerage income Insurance income Bank owned life insurance income Capital markets fees Gain on sale of loans Securities gains (losses) Other income Total noninterest income Personnel costs Outside data processing...

  • Page 37
    ... in personnel costs. This resulted in a positive impact of $0.03 per common share in 2013. State deferred tax asset valuation allowance adjustment. During 2012, a valuation allowance of $21.3 million (net of tax) was released for the portion of the deferred tax asset and state net operating loss...

  • Page 38
    ... the annual average outstanding diluted common shares. (3) After-tax. (2) Net Interest Income / Average Balance Sheet Our primary source of revenue is net interest income, which is the difference between interest income from earning assets (primarily loans, securities, and direct financing leases...

  • Page 39
    ...63.8) Fully-taxable equivalent basis(2) (dollar amounts in millions) Loans and leases Investment securities Other earning assets Total interest income from earning assets Deposits Short-term borrowings Long-term debt Total interest expense of interest-bearing liabilities Net interest income $ 163...

  • Page 40
    ... lease losses Net loans and leases Total earning assets Cash and due from banks Intangible assets All other assets Total assets Liabilities and Shareholders' Equity Deposits: Demand deposits - noninterest-bearing Demand deposits - interest-bearing Total demand deposits Money market deposits Savings...

  • Page 41
    ... 2014 0.12 % 3.94 2013 0.15 % 3.63 2012 0.21 % 3.38 2014 $ 103 12,728 $ 2013 102 $ 18,905 Assets Interest-bearing deposits in banks Loans held for sale Securities: Available-for-sale and other securities: Taxable Tax-exempt Total available-for-sale and other securities Trading account securities...

  • Page 42
    ...in trade finance in support of our middle market and corporate customers. $0.4 billion, or 8%, increase in average Residential mortgage loans as a result of the Camco Financial acquisition and a decrease in the rate of payoffs due to lower levels of refinancing. Average noninterest bearing deposits...

  • Page 43
    ... loan securitizations completed in 2012. While there was minimal impact on the full-year average balance sheet, $1.9 billion of net investment securities were purchased during the 2013 fourth quarter. Our investment securities portfolio is evaluated under established asset/liability management...

  • Page 44
    ... in thousands) Service charges on deposit accounts Trust services Electronic banking Mortgage banking income Brokerage income Insurance income Bank owned life insurance income Capital markets fees Gain on sale of loans Securities gains (losses) Other income Total noninterest income $ 2014 273,741...

  • Page 45
    ... balance sheet. $40.0 million, or 69%, decrease in gain on sale of loans as no auto loan securitizations occurred in 2013 compared to $2.3 billion of auto loan securitizations in 2012. $4.4 million, or 91%, decrease in securities gains as the prior year had certain securities designated as available...

  • Page 46
    ... costs Outside data processing and other services Net occupancy Equipment Professional services Marketing Deposit and other insurance expense Amortization of intangibles Gain on early extinguishment of debt Other expense Total noninterest expense Number of employees (average full-time equivalent...

  • Page 47
    ...expense related to branch consolidation and severance expenses. This was partially offset by the $33.9 million one-time, non-cash gain related to the pension curtailment. $9.3 million, or 5%, increase in outside data processing as we continue to invest in technology supporting our products, services...

  • Page 48
    ... 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 49
    ... debt service requirement. These loans are made to finance properties such as apartment buildings, office and industrial buildings, and retail shopping centers, and are repaid through cash flows related to the operation, sale, or refinance of the property. Construction CRE - Construction CRE loans...

  • Page 50
    ...state representing more than 6%. Applications are underwritten utilizing an automated underwriting system that applies consistent policies and processes across the portfolio. Home equity - Home equity lending includes both home equity loans and lines-of-credit. This type of lending, which is secured...

  • Page 51
    ... capital. C&I lending by NAICS categories, specific limits for CRE primary project types, loans secured by residential real estate, shared national credit exposure, and designated high risk loan definitions represent examples of specifically tracked components of our concentration management process...

  • Page 52
    ... Notes to Consolidated Financial Statements) are managed by our Special Assets Department (SAD). The SAD group is a specialized group of credit professionals that handle the day-to-day management of workouts, commercial recoveries, and problem loan sales. Its responsibilities include developing and...

  • Page 53
    ...our disciplined strategy and operational processes significantly mitigate these risks. We have continued to consistently execute our value proposition and take advantage of available market opportunities. Importantly, we have maintained our high credit quality standards while expanding the portfolio...

  • Page 54
    ...portfolio (loans and lines-of-credit) consists of both first-lien and junior-lien mortgage loans with underwriting criteria based on minimum credit scores, debt-to-income ratios, and LTV ratios. We offer closed-end home equity loans which are generally fixed-rate with principal and interest payments...

  • Page 55
    ... two credit relationships, and home equity as a result of lower partial charge-offs due the housing market recovery from the lows in 2010-2011. NCOs decreased 34% compared to the prior year, as a result of declines in the CRE, home equity and residential portfolios. Total criticized loans continued...

  • Page 56
    ... % 197 221 % 202 199 % 182 187 % 172 166 % 153 Other nonperforming assets includes certain impaired investment securities. This ratio is calculated as nonperforming assets divided by the sum of loans and leases, impaired loans held for sale, net other real estate owned, and other nonperforming...

  • Page 57
    ... represent accruing purchased impaired loans related to the FDIC-assisted Fidelity Bank and Camco Financial acquisition. Under the applicable accounting guidance (ASC 310-30), the loans were recorded at fair value upon acquisition and remain in accruing status. TDR Loans (This section should be...

  • Page 58
    ... manage the portfolio and work with our borrowers. Any granted change in terms or conditions that are not readily available in the market for that borrower, requires the designation as a TDR. There are no provisions for the removal of the TDR designation based on payment activity for consumer loans...

  • Page 59
    .... The ALLL represents the estimate of losses inherent in the loan portfolio at the reported date. Additions to the ALLL result from recording provision expense for loan losses or increased risk levels resulting from loan risk-rating downgrades, while reductions reflect charge-offs (net of recoveries...

  • Page 60
    ... Related Statistics Year Ended December 31, 2013 2012 2011 769,075 $ 964,828 $ 1,249,008 $ (dollar amounts in thousands) Allowance for loan and lease losses, beginning of year Loan and lease charge-offs Commercial: Commercial and industrial Commercial real estate: Construction Commercial Commercial...

  • Page 61
    ... December 31, 2013. Management believes the decline in the ratio is appropriate given the continued improvement in the risk profile of our loan portfolio. Further, the continued focus on early identification of loans with changes in credit metrics and proactive action plans for these loans, combined...

  • Page 62
    ...-offs Net charge-offs ratio: (1) Commercial: Commercial and industrial Commercial real estate: Construction Commercial Commercial real estate Total commercial Consumer: Automobile Home equity Residential mortgage Other consumer Total consumer Net charge-offs as a % of average loans 2014 2013 2012...

  • Page 63
    ... a small number of credit relationships. Market Risk Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur market risk in the normal course of business through exposures to market interest rates, foreign exchange rates, equity prices, and credit...

  • Page 64
    ... of money market accounts balances into CDs thereby shifting deposits from a variable rate to a fixed rate. Table 21 - Economic Value of Equity at Risk Economic Value of Equity at Risk (%) Basis point change scenario Board policy limits December 31, 2014 December 31, 2013 -25 ---0.6 % 0.6 % +100...

  • Page 65
    ... value and are subject to fair value accounting. We have price risk from trading securities, securities owned by our broker-dealer subsidiaries, foreign exchange positions, equity investments, investments in securities backed by mortgage loans, and marketable equity securities held by our insurance...

  • Page 66
    ... tables: Table 22 - Available-for-sale and other securities Portfolio Summary at Fair Value (dollar amounts in thousands) U.S. Treasury, Federal agency, and other agency securities Other Total available-for-sale and other securities Duration in years (1) 2014 At December 31, 2013 2012 $ 5,679,696...

  • Page 67
    ... average yields were calculated using amortized cost on a fully-taxable equivalent basis, assuming a 35% tax rate. (2) Consists of FHLB and FRB restricted stock holding carried at par. (3) Consists of certain mutual fund and equity security holdings. Investment securities portfolio The expected...

  • Page 68
    ... brokered deposits and negotiable CDs as well as other domestic time deposits of $100,000 or more and brokered deposits and negotiable CDs at December 31, 2014. Demand deposit overdrafts that have been reclassified as loan balances were $18.7 million and $19.3 million at December 31, 2014 and 2013...

  • Page 69
    ... to secure public and trust deposits, interest rate swap agreements, U.S. Treasury demand notes, and securities sold under repurchase agreements. Parent Company Liquidity The parent company's funding requirements consist primarily of dividends to shareholders, debt service, income taxes, operating...

  • Page 70
    .... See Note 20 for more information. COMMITMENTS TO SELL LOANS Activity relating to our mortgage origination activity supports the hedging of the mortgage pricing commitments to customers and the secondary sale to third parties. At December 31, 2014 and December 31, 2013, we had commitments to sell...

  • Page 71
    ... laws, rules, and regulations, and to improve the oversight of our operational risk. For example, we actively and continuously monitor cyber-attacks such as attempts related to online deception and loss of sensitive customer data. We evaluate internal systems, processes and controls to mitigate loss...

  • Page 72
    ... applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations including, but not limited to, anti-money laundering and customer privacy. Additionally, colleagues engaged in lending activities receive training for laws and regulations related...

  • Page 73
    ...may calculate these financial measures differently. (3)In accordance with applicable regulatory reporting guidance, we are not required to retrospectively update historical filings for newly adopted accounting principles. Therefore, Tier 1 capital, Tier 1 common equity, and risk-weighted assets have...

  • Page 74
    ... accordance with applicable regulatory reporting guidance, we are not required to retrospectively update historical filings for newly adopted accounting principles. Therefore, regulatory capital data has not been updated for the adoption of ASU 2014-01. The decreases in the capital ratios were due...

  • Page 75
    ... 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...

  • Page 76
    ...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). Net Income by Business Segment...

  • Page 77
    ... relationships, (2) the number of services penetration per commercial relationship, and (3) the revenue generated. Commercial relationships include relationships from all business segments. The growth in the number of commercial relationships is a result of both new sales of checking accounts...

  • Page 78
    ...presents commercial relationship OCR metrics: Table 35 - Commercial Relationship OCR Cross-sell Report Year ended December 31, 2014 Commercial Relationships (1) Product Penetration by Number of Services (2) 1 Service 2-3 Services 4+ Services Total revenue (in millions) (1) Checking account required...

  • Page 79
    ... 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 $ $ $ $ 2014...

  • Page 80
    ... in personnel costs. $7.1 million, or 46%, reduction in deposit and other insurance. $1.5 million, or 3%, reduction in marketing, primarily due to reduced direct mail advertising. 2013 vs. 2012 Retail and Business Banking reported net income of $129.0 million in 2013, compared with a net income of...

  • Page 81
    ... 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 $ $ $ $ 2014...

  • Page 82
    ... in deposit and other insurance expense. Partially offset by: x $6.6 million, or 100%, increase in noninterest expense associated with the asset based lending portfolio, which was transferred from the AFCRE segment retroactive to the beginning of 2014. 2013 vs. 2012 Commercial Banking reported net...

  • Page 83
    ... decrease in fee income associated with the asset based lending portfolio which was transferred to the Commercial Banking segment, as well as decreases in market related gains associated with certain loans and investments carried at fair value, operating lease related income and servicing income on...

  • Page 84
    ...the asset based lending portfolio which was transferred to the Commercial Banking segment retroactive to the beginning of 2014. $1.5 million, or 29%, decrease in professional services, primarily due to costs associated with the asset based lending portfolio in 2013. 2013 vs. 2012 AFCRE reported net...

  • Page 85
    ...for Regional Banking and The Huntington Private Client Group Change from 2013 (dollar amounts in thousands unless otherwise noted) Net interest income Provision (reduction in allowance) for credit losses Noninterest income Noninterest expense Provision for income taxes Net income Number of employees...

  • Page 86
    ... in deposit and other insurance expense. Partially offset by: x $2.5 million, or 66%, increase in professional services expense, primarily due to increased consulting fees. 2013 vs. 2012 RBHPCG reported net income of $39.5 million in 2013, compared with a net income of $16.9 million in 2012. The...

  • Page 87
    ... Net income (loss) 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 88
    ...%, decrease in deposit and other insurance expense. Partially offset by: x $4.3 million, or 29%, increase in outside data processing and other services, primarily due to spending on loan promotions. 2013 vs. 2012 Home Lending reported net income of $2.7 million in 2013, compared with net income of...

  • Page 89
    ... 10 basis point reduction in funding costs. Table 42 - Average Earning Assets - 2014 Fourth Quarter vs. 2013 Fourth Quarter (dollar amounts in millions) Average Loans/Leases Commercial and industrial Commercial real estate Total commercial Automobile Home equity Residential mortgage Other consumer...

  • Page 90
    ...increase in average C&I loans and leases, primarily reflecting growth in trade finance in support of our middle market and corporate customers. $0.4 billion, or 8%, increase in average Residential mortgage loans as a result of the Camco Financial acquisition and a decrease in the rate of payoffs due...

  • Page 91
    ... charges on deposit accounts Trust services Electronic banking Mortgage banking income Brokerage income Insurance income Bank owned life insurance income Capital markets fees Gain on sale of loans Securities gains (losses) Other income Total noninterest income $ $ Noninterest income for the 2014...

  • Page 92
    ... in thousands) Personnel costs Outside data processing and other services Net occupancy Equipment Professional services Marketing Deposit and other insurance expense Amortization of intangibles Other expense Total noninterest expense Number of employees (average full-time equivalent) Impacts of...

  • Page 93
    ... 31, 2014 and December 31, 2013, there was no disallowed deferred tax asset for regulatory capital purposes. Credit Quality Credit quality performance in the 2014 fourth quarter reflected continued improvement in the overall loan portfolio relating to NCO activity, as well as in key credit quality...

  • Page 94
    ... Net income - 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...

  • Page 95
    ...-based capital ratio(10) Total risk-based capital ratio(10) Tier 1 common risk-based capital ratio(11) Tangible common equity / tangible asset ratio(8) Tangible equity / tangible asset ratio(9) Tangible common equity / risk-weighted assets ratio $ 54,479 9.74 % 11.50 13.56 10.23 8.17 8.76 9.86 2014...

  • Page 96
    ... - basic Net income - 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...

  • Page 97
    ...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 from NASDAQ. (5) Net income...

  • Page 98
    ... 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 99
    ... at fair value inherently result in a higher degree of financial statement volatility. Assets measured at fair value include mortgage loans held for sale, available-for-sale and trading securities, certain securitized automobile loans, derivatives, and certain securitization trust notes payable...

  • Page 100
    ... and market discount rates. The determination of fair value for commercial loans takes into account factors such as the location and appraised value of the related collateral, as well as the estimated cash flows from realization of the collateral. Mortgage Servicing Rights Retained rights to service...

  • Page 101
    ... be material to our financial position and / or results of operations. (See Note 15 of the Notes to Consolidated Financial Statements.) Deferred Tax Assets At December 31, 2014, we had a net federal deferred tax asset of $72.1 million and a net state deferred tax asset of $45.3 million. A valuation...

  • Page 102
    ... 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 103
    ... Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States. Huntington's Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2014. In making this assessment, Management used the...

  • Page 104
    ...Shareholders of Huntington Bancshares Incorporated Columbus, Ohio We have audited the internal control over financial reporting of Huntington Bancshares Incorporated and subsidiaries (the "Company") as of December 31, 2014, based on criteria established in Internal Control-Integrated Framework (2013...

  • Page 105
    ... Columbus, Ohio We have audited the accompanying consolidated balance sheets of Huntington Bancshares Incorporated and subsidiaries (the "Company") as of December 31, 2014 and 2013, and the related consolidated statements of income, comprehensive income, changes in shareholders' equity, and cash...

  • Page 106
    ...Consolidated Balance Sheets December 31, (dollar amounts in thousands, except number of shares) Assets Cash and due from banks Interest-bearing deposits in banks Trading account securities Loans held for sale (includes $354,888 and $278,928 respectively, measured at fair value)(1) Available-for-sale...

  • Page 107
    ... Service charges on deposit accounts Trust services Electronic banking Mortgage banking income Brokerage income Insurance income Bank owned life insurance income Capital markets fees Gain on sale of loans Net gains on sales of securities Impairment losses recognized in earnings on available-for-sale...

  • Page 108
    ... Consolidated Statements of Comprehensive Income Year Ended December 31, 2013 $ 641,282 $ (dollar amounts in thousands) 2014 $ 632,392 2012 631,290 Net income Other comprehensive income, net of tax: Unrealized gains on available-for-sale and other securities: Non-credit-related impairment...

  • Page 109
    ...stock Cash dividends declared: Common ($0.21 per share) Preferred Series A ($85.00 per share) Preferred Series B ($29.33 per share) Shares issued pursuant to acquisition Shares sold to HIP Recognition of the fair value of share-based compensation Other share-based compensation activity Other Balance...

  • Page 110
    ...) Repurchase 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 (1,929,644) $ 5,778...

  • Page 111
    ... 2012 Balance, beginning of year Net income Other comprehensive income (loss) Repurchase of common stock Cash dividends declared: Common ($0.16 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...

  • Page 112
    ...sale securities Loans transferred to portfolio from held-for-sale Transfer of loans to OREO Transfer of securities to held-to-maturity from available-for-sale Loans transferred to held-for-sale from portfolio Dividends accrued, paid in subsequent quarter 106 2014 $ Year Ended December 31, 2013 2012...

  • Page 113
    ...financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services. Huntington's banking offices are located in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Select financial services...

  • Page 114
    ...Federal Home Loan Bank stock and Federal Reserve Bank stock. These securities are accounted for at cost, evaluated for impairment, and included in available-for-sale and other securities. Loans and Leases - Loans and direct financing leases for which Huntington has the intent and ability to hold for...

  • Page 115
    ... mortgage loans held for sale to facilitate hedging of the loans. Fair value is determined based on collateral value and prevailing market prices for loans with similar characteristics. Nonmortgage loans held for sale are measured on an aggregate asset basis. Allowance for Credit Losses - Huntington...

  • Page 116
    ... Chapter 7 bankruptcy filings will result in a chargeoff to estimated collateral value, less anticipated selling costs. C&I and CRE loans are either charged-off or written down to net realizable value at 90-days past due. Automobile loans and other consumer loans are charged-off at 120-days past due...

  • Page 117
    ... transfer results in a true sale by law. We have historically securitized certain automobile receivables. Gains and losses on the loans and leases sold and servicing rights associated with loan and lease sales are determined when the related loans or leases are sold to either a securitization trust...

  • Page 118
    ... mortgage loan interest rate lock commitments and 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...

  • Page 119
    ...losses resulting from the sale of collateral are recognized in noninterest expense at the date of sale. Collateral - We pledge assets as collateral as required for various transactions including security repurchase agreements, public deposits, loan notes, derivative financial instruments, short-term...

  • Page 120
    ...Servicing revenues 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...

  • Page 121
    ... market rates and terms and include funding arrangements, transfers of financial assets, administrative and operational support, and other miscellaneous services. 2. ACCOUNTING STANDARDS UPDATE ASU 2013-11- Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating...

  • Page 122
    ... for annual periods beginning after December 15, 2014, and for interim periods beginning after March 15, 2015. Management is currently assessing the impact to Huntington's Consolidated Financial Statements. ASU 2014-12- Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments...

  • Page 123
    ... into classes. Direct Financing Leases Huntington's loan and lease portfolio includes lease financing receivables consisting of direct financing leases on equipment, which are included in C&I loans. Net investments in lease financing receivables by category at December 31, 2014 and 2013 were as...

  • Page 124
    ... estimates over the life of the loan can result. The following table reflects the contractually required payments receivable, cash flows expected to be collected, and fair value of the credit impaired Camco Financial loans at acquisition date: March 1, 2014 14,363 (11,234) 3,129 (143) 2,986 (dollar...

  • Page 125
    ... 18,482 $ ----205,334 --- $ --7,592 --345,039 109,723 368,101 436,031 Home Equity Residential Mortgage Other Consumer Automobile Total Portfolio loans sold or transferred to loans held for sale during the: Year ended December 31, 2014 352,062 8,447 Year ended December 31, 2013 225,930 4,767 119

  • Page 126
    ... million in 2014, 2013, and 2012, respectively. The following table presents an aging analysis of loans and leases, including past due loans and leases, by loan class for the years ended December 31, 2014 and 2013 (1): December 31, 2014 (dollar amounts in thousands) Past Due 30-59 days 60-89 days 90...

  • Page 127
    ... 31, 2013 (dollar amounts in thousands) Past Due 30-59 days 60-89 days 90 or more days 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 128
    ... the 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, 2014, 2013, and 2012: Commercial Commercial and Industrial Real Estate Automobile (dollar amounts...

  • Page 129
    ..., end of period $ (dollar amounts 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...

  • Page 130
    ...one of those characteristics that are closely monitored in the overall credit risk management processes. The following table presents each loan and lease class by credit quality indicator for the years ended December 31, 2014 and 2013: December 31, 2014 Credit Risk Profile by UCS classification OLEM...

  • Page 131
    ...129 380,011 $ Automobile Home equity: Secured by first-lien Secured by junior-lien Total home equity Residential mortgage: Residential mortgage Purchased impaired Total residential mortgage Other consumer: Other consumer Purchased impaired Total other consumer loans $ Credit Risk Profile by FICO...

  • Page 132
    ... and collectively evaluated for impairment and the related loan and lease balance for the years ended December 31, 2014, and 2013 (1): (dollar amounts in thousands) ALLL at December 31, 2014: Portion of ALLL balance: Attributable to purchased credit-impaired loans Attributable to loans individually...

  • Page 133
    ...present by class the ending, unpaid principal balance, and the related ALLL, along with the average balance and interest income recognized only for loans and leases individually evaluated for impairment and purchased credit-impaired loans for the years ended December 31, 2014 and 2013 (1), (2): 127

  • Page 134
    ... 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 December 31, 2014 Unpaid Ending Principal Related Balance Balance (5) Allowance Year Ended...

  • Page 135
    ...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 Residential mortgage: Residential mortgage...

  • Page 136
    ... 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 Residential mortgage: Residential mortgage Purchased credit-impaired...

  • Page 137
    ...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 138
    ... with the non-TDR calculation as the reserve is measured based on the estimation of the discounted expected cash flows or collateral value, less anticipated selling costs, on the modified loan in accordance with ASC 310-10. The resulting TDR ALLL calculation often results in a higher ALLL amount...

  • Page 139
    ... During The Year Ended(1) December 31, 2014 December 31, 2013 Post-modification Outstanding Post-modification Number of Ending Financial effects Number of Outstanding Financial effects Balance of modification(2) Contracts Balance of modification(2) Contracts (dollar amounts in thousands...

  • Page 140
    ... Other commercial 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 equity...

  • Page 141
    ... charge-offs as a result of a restructuring are not significant. Any loan within any portfolio or class is considered as payment redefaulted at 90-days past due. The following table presents TDRs that have redefaulted within one year of modification during the years ended December 31, 2014 and 2013...

  • Page 142
    ... payment redefault prior to the guidelines noted above 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, 2014, these borrowings and advances are secured...

  • Page 143
    ... 1 year 1 - 5 years 6 - 10 years Over 10 years Other securities: Nonmarketable equity securities Marketable equity securities Total available-for-sale and other securities Fair Value 262,752 1,697,234 1,433,303 3,577,502 320,991 16,971 7,308,753 $ Other securities at December 31, 2014 and 2013...

  • Page 144
    ... Gross (losses) on sales of securities Net gain (loss) on sales of securities Collateralized Debt Obligations and Private-Label CMO Securities $ $ 2014 17,729 $ (175) 17,554 $ 2013 2,932 $ (712) 2,220 $ 2012 8,612 (2,224) 6,388 Our highest risk segments of our investment portfolio are the CDO...

  • Page 145
    ... months or longer. (3) For purposes of comparability, the lowest credit rating expressed is equivalent to Fitch ratings even where the lowest rating is based on another nationally recognized credit rating agency. (4) Includes both banks and/or insurance companies. (5) Excess subordination percentage...

  • Page 146
    ... high market discount rate and the expectation that the majority of the cash flows will not be received until near the final maturity of the security (the final maturities range from 2032 to 2035). On December 10, 2013, the Federal Reserve, the OCC, the FDIC, the CFTC and the SEC issued final rules...

  • Page 147
    ... method. During 2013, Huntington transferred $292.2 million of federal agencies, mortgage-backed securities and other agency securities from the available-for-sale securities portfolio to the held-to-maturity securities portfolio. At the time of the transfer, no unrealized net gains were recognized...

  • Page 148
    ...year, 1-5 years, 6-10 years, and over 10 years) of held-to-maturity securities at December 31, 2014 and 2013: December 31, 2014 Amortized Fair Cost Value $ December 31, 2013 Amortized Cost Fair Value (dollar amounts in thousands) Federal agencies: mortgage-backed securities: Under 1 year 1-5 years...

  • Page 149
    ... 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, 2014, 2013, and 2012: Year Ended December 31, 2014 2013 2012 2,330,060...

  • Page 150
    ...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 151
    ... 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 152
    ...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 153
    ... and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate (AFCRE), Regional Banking and The Huntington Private Client Group (RBHPCG), and Home Lending. A Treasury / Other function includes technology and operations, other unallocated assets, liabilities, revenue, and...

  • Page 154
    ...538 2,397,101 $ 2,352,143 $ 2014 82,296 $ 11,556 2013 78,601 $ 12,542 2012 76,170 11,519 (dollar amounts in thousands) Federal funds purchased and securities sold under agreements to repurchase Federal Home Loan Bank advances Other borrowings Total short-term borrowings Other borrowings consist of...

  • Page 155
    ... Federal Funds purchased and securities sold under agreements to repurchase Federal Home Loan Bank advances Other short-term borrowings 10. LONG-TERM DEBT Huntington's long-term debt consisted of the following: $ (dollar amounts in thousands) At December 31, 2014 2013 The Parent Company: Senior...

  • Page 156
    ... bank note issuances mature on August 2, 2016 and have a fixed coupon rate of 1.35%. Both senior note issuances may be redeemed one month prior to their maturity date at 100% of principal plus accrued and unpaid interest. On July 2, 2013, the Federal Reserve Board voted to adopt final capital rules...

  • Page 157
    ... are as follows: dollar amounts in thousands 2015 $ --- $ --- 2016 --- $ --- 2017 --- $ --- 2018 400,000 $ --- 2019 --- $ --- Thereafter --- $ 618,049 Total 400,000 618,049 The Parent Company: Senior notes Subordinated notes The Bank: Senior notes Subordinated notes FHLB Advances Other Total...

  • Page 158
    ...(97,404) $ 34,212 2012 Tax (expense) Benefit $ (63,192) (dollar amounts in thousands) Pretax After-tax Noncredit-related impairment recoveries (losses) on debt securities not expected to be sold Unrealized holding gains (losses) on available-for-sale debt securities arising during the period...

  • Page 159
    ... 31, 2014 includes $0.8 million of net unrealized gains on securities transferred from the available-for-sale securities portfolio to the held-to-maturity securities portfolio in prior years. The net unrealized gains will be recognized in earnings over the remaining life of the security using the...

  • Page 160
    ...000 per share (the Series B Preferred Stock) and, in certain cases, an additional amount of cash consideration, in exchange for $35.5 million of (1) Huntington Capital I Floating Rate Capital Securities, (2) Huntington Capital II Floating Rate Capital Securities, (3) Sky Financial Capital Trust III...

  • Page 161
    ...-BASED COMPENSATION Huntington sponsors nonqualified and incentive share based compensation plans. These plans provide for the granting of stock options and other awards to officers, directors, and other employees. Compensation costs are included in personnel costs on the Consolidated Statements...

  • Page 162
    ...expense and related tax benefit for the three years ended December 31, 2014, 2013, and 2012: (dollar amounts in thousands) Share-based compensation expense Tax benefit 2014 43,666 14,779 2013 37,007 12,472 2012 27,873 9,298 $ $ $ Huntington's stock option activity and related information for the...

  • Page 163
    ... Ohio, 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, 2014, Huntington had gross unrecognized tax benefits of $1.2 million in income tax liability related to tax...

  • Page 164
    ... bank owned life insurance income General business credits State deferred tax asset valuation allowance adjustment, net Capital loss Affordable housing investment amortization, net of tax benefits State income taxes, net Other Provision for income taxes $ Year Ended December 31, 2014 2013 2012...

  • Page 165
    ... Fair value adjustments Accrued expense/prepaid Tax credit carryforward Partnership investments Purchase accounting adjustments Market discount Other Total deferred tax assets Deferred tax liabilities: Lease financing Loan origination costs Operating assets Mortgage servicing rights Securities...

  • Page 166
    ... have at least 10 years of vesting service under this plan. For any employee retiring on or after January 1, 1993, post-retirement healthcare benefits are based upon the employee's number of months of service and are limited to the actual cost of coverage. Life insurance benefits are a percentage of...

  • Page 167
    ...161 Post-Retirement Benefits 2014 2013 2012 $ --- $ 856 ----(1,609) (571) ----(1,324) $ --- $ 862 ----(1,353) (600) ----(1,091) $ --1,350 ----(1,353) (332) ----(335) (dollar amounts in thousands) Service cost Interest cost Expected return on plan assets Amortization of transition asset Amortization...

  • Page 168
    ...31, 2014 and 2013, 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) Cash...

  • Page 169
    ... not required, Huntington may choose to make a cash contribution to the Plan up to the maximum deductible limit in the 2014 plan year. Anticipated contributions for 2015 to the post-retirement benefit plan are $1.4 million. The assumed healthcare cost trend rate has an effect on the amounts reported...

  • Page 170
    ... is available to eligible employees. Through December 31, 2012, Huntington matched participant contributions, up to the first 3% of base pay contributed to the Plan. Half of the employee contribution was matched on the 4th and 5th percent of base pay contributed to the Plan. Starting January 1, 2013...

  • Page 171
    ... Securities accounted for at fair value include both the available-for-sale and trading portfolios. Huntington uses prices obtained from third party pricing services and recent trades to determine the fair value of securities. AFS and trading securities are classified as Level 1 using quoted market...

  • Page 172
    ...traded securities while other interest rates are developed internally based on similar asset-backed security transactions in the market. During the first quarter of 2014 Huntington cancelled the 2009 and 2006 Automobile Trust. Huntington continues to report the associated automobile loan receivables...

  • Page 173
    ... 31, 2014 354,888 40,027 --2,857 5,098 34,236 42,191 5,452 5,322,701 351,543 1,868,569 41,926 955,998 486,176 20,746 9,053,111 10,590 22,786 352,642 (dollar amounts in thousands) Assets Loans held for sale Loans held for investment Trading account securities: Federal agencies: Mortgage-backed...

  • Page 174
    ...the same counterparties. (2) During 2013, Huntington transferred $292.2 million of federal agencies: mortgage-backed 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 within...

  • Page 175
    ... Included in OCI Other (1) Sales Repayments Settlements Balance, end of year $ Level 3 Fair Value Measurements Year ended December 31, 2013 Available-for-sale securities AssetDerivative Municipal Private backed Automobile MSRs instruments securities label CMO securities loans 35,202 $ 12,702...

  • Page 176
    ... ended December 31, 2014, 2013, and 2012: Level 3 Fair Value Measurements Year ended December 31, 2014 Available-for-sale securities AssetDerivative Municipal Private backed instruments securities label CMO securities 3,047 $ ------3,047 36 --36 $ --- $ 170 56 --226 $ (dollar amounts in thousands...

  • Page 177
    ...specific credit risk for the years ended December 31, 2014, 2013 and 2012: Net gains (losses) from fair value changes Year ended December 31, 2012 2014 2013 $ (1,978) (918) --$ (dollar amounts in thousands) Assets Mortgage loans held for sale Automobile loans Liabilities Securitization trust notes...

  • Page 178
    ... interest rate swap rates Net costs to service 4,064 704 1,417,593 30,464 Consensus Pricing (dollar amounts in thousands) MSRs Range (Weighted Average) 7% - 26% (16%) 228 - 900 (546) $21 - $79 ($40) Derivative assets Derivative liabilities Municipal securities Private-label CMO Net market price...

  • Page 179
    ..., prepayment rates increase when market interest rates decline and decrease when market interest rates rise and higher prepayment rates generally result in lower fair values for MSR assets, Private-label CMO securities, Asset-backed securities, and Automobile loans. Credit loss estimates, such...

  • Page 180
    ...,274 (dollar amounts in thousands) Financial Assets: Cash and short-term assets Trading account securities Loans held for sale Available-for-sale and other securities Held-to-maturity securities Net loans and direct financing leases Derivatives Financial Liabilities: Deposits Short-term borrowings...

  • Page 181
    ...an estimate of expected losses and the credit risk associated in the loan and lease portfolio. The valuation of the loan portfolio reflected discounts that Huntington believed are consistent with transactions occurring in the market place. Deposits Demand deposits, savings accounts, and money market...

  • Page 182
    ... the years ended December 31, 2014, 2013, and 2012, respectively. In connection with the sale of Huntington's Class B Visa£ shares, Huntington entered into a swap agreement with the purchaser of the shares. The swap agreement adjusts for dilution in the conversion ratio of Class B shares resulting...

  • Page 183
    ... portion) (pre-tax) 2014 2013 2012 Interest rate contracts Loans Investment securities Subordinated notes Total $ Interest and fee income - loans and 9,192 $ (56,056) $ (2,866) leases $ Interest and fee income ----(703) investment securities Interest expense - subordinated ------- notes and...

  • Page 184
    ... collateral and master netting agreements with these counterparties, and routinely exchange cash and high quality securities collateral with these counterparties. Huntington enters into transactions with customers to meet their financing, investing, payment and risk management needs. These types...

  • Page 185
    ... the derivative assets and liabilities used in mortgage banking activities: At December 31, 2014 2013 $ 4,064 $ 35 4,099 (259) (3,760) (4,019) $ 80 $ 3,066 3,997 7,063 (231) (40) (271) 6,792 (dollar amounts in thousands) Derivative assets: Interest rate lock agreements Forward trades and options...

  • Page 186
    ...to trading assets with a fair value of $3.0 million and no trading liabilities. Net trading gains (losses) related to MSR hedging for the years ended December 31, 2014, 2013, and 2012, were $7.1 million, $(25.0) million, and $31.3 million, respectively. These amounts are included in mortgage banking...

  • Page 187
    ...the servicing asset. TOWER HILL SECURITIES, INC. In 2010, we transferred approximately $92.1 million of municipal securities, $86.0 million in Huntington Preferred Capital, Inc. (Real Estate Investment Trust) Class E Preferred Stock and cash of $6.1 million to Tower Hill Securities, Inc. in exchange...

  • Page 188
    ... to pay dividends on its common stock will be restricted. Periodic cash payments and payments upon liquidation or redemption with respect to trust securities are guaranteed by Huntington to the extent of funds held by the trusts. The guarantee ranks subordinate and junior in right of payment to...

  • Page 189
    ...tax credit investments Less: amortization Net affordable housing tax credit investments Unfunded commitments The following table presents other information relating to Huntington's affordable housing tax credit investments for the years ended December 31, 2014 and 2013. Year Ended December 31, 2014...

  • Page 190
    ... Investment Company, the Company's broker-dealer subsidiary. Huntington uses an internal grading system to assess an estimate of loss on its loan and lease portfolio. This same loan grading system is used to monitor credit risk associated with standby letters-of-credit. Under this risk rating...

  • Page 191
    ... the Bank's commercial lending, depository, and equipment leasing relationships with Cyberco Holdings, Inc. (Cyberco), based in Grand Rapids, Michigan. In November 2004, the Federal Bureau of Investigation and the Internal Revenue Service raided Cyberco's facilities and Cyberco's operations ceased...

  • Page 192
    ... 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...

  • Page 193
    ... 2014, the Bank paid dividends of $224 million to the holding company. Also, there are statutory and regulatory limitations on the ability of national banks to pay dividends or make other capital distributions. The amount available for dividend payments to the parent company by Huntington National...

  • Page 194
    ...parent company financial statements, which include transactions with subsidiaries, are as follows: Balance Sheets (dollar amounts in thousands) Assets Cash and cash equivalents Due from The Huntington National Bank Due from non-bank subsidiaries Investment in The Huntington National Bank Investment...

  • Page 195
    ...for) financing activities Change in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental disclosure: Interest paid 23. BUSINESS COMBINATIONS BANK OF AMERICA BRANCH ACQUISITION $ $ $ 2014 Year Ended December 31, 2013 2012 641...

  • Page 196
    ... to checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, and small business loans. Other financial services available to consumer and small business customers include investments, insurance, interest rate risk protection, foreign exchange hedging...

  • Page 197
    ... a national client base. The Huntington Private Bank provides high net-worth customers with deposit, lending (including specialized lending options) and banking services. The Huntington Trust also serves high net-worth customers and delivers wealth management and legacy planning through investment...

  • Page 198
    ... loans. Home Lending supports the origination and servicing of mortgage loans across all segments. Listed below is certain financial information reconciled to Huntington's December 31, 2014, December 31, 2013, and December 31, 2012, reported results by business segment: Retail & Business Banking...

  • Page 199
    ... the quarterly results of operations, for the years ended December 31, 2014 and 2013: 2014 (dollar amounts in thousands, except per share data) Interest income Interest expense Net interest income Provision for credit losses Noninterest income Noninterest expense Income before income taxes Provision...

  • Page 200
    ...9B: Other Information Not applicable. PART III We refer in Part III of this report to relevant sections of our 2015 Proxy Statement for the 2015 annual meeting of shareholders, which will be filed with the SEC pursuant to Regulation 14A within 120 days of the close of our 2014 fiscal year. Portions...

  • Page 201
    ...: (1) The report 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...

  • Page 202
    ... Chief Financial Officer (Principal Financial Officer) By: /s/ David S. Anderson David S. Anderson Executive Vice President, Controller (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on...

  • Page 203
    ... 1, 2014 * Form of Employment Agreement between Stephen D. Steinour and Huntington Bancshares Incorporated effective December 1, 2012. 10.6 10.7 10.8 10.9 Definitive Proxy Statement for the 2011 Annual Meeting of Shareholders Annual Report on Form 10K for the year ended December 31, 2013. Post...

  • Page 204
    .... Code of Business Conduct and Ethics dated January 14, 2003 and revised on January 15, 2013 and Financial Code of Ethics for Chief Executive Officer and Senior Financial Officers, adopted January 18, 2003 and revised on October 15, 2014, are available on our website at https://www.huntington.com/us...

  • Page 205
    ... from Huntington's Form 10-K Report for the year ended December 31, 2014, formatted in XBRL: (1) Consolidated Balance Sheets, (2) Consolidated Statements of Income, (3), Consolidated Statements of Comprehensive Income, (4) Consolidated Statements of Changes in Shareholders' Equity, (5) Consolidated...

  • Page 206
    ... (1) Audit (2) Community Development (3) Compensation (4) Executive (5) Nominating and Corporate Governance (6) Risk Oversight (7) Technology Eddie R. Munson(1) Retired Managing Partner, KPMG LLP, Detroit Office Joined Board: 2014 Richard W. Neu(1)(2) Chairman, MCG Capital Corporation Joined Board...

  • Page 207
    ... should contact: Investor Relations Huntington Bancshares Incorporated Huntington Center, HC0935 41 South High Street Columbus, OH 43287 [email protected] (614) 480-5676 CREDIT RATINGS(1) The Huntington National Bank Senior Unsecured Notes Subordinated Notes Outlook Fitch...

  • Page 208
    ... Huntington Center 41 South High Street Columbus, Ohio 43287 (614) 480-8300 huntington.com Member FDIC. ® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. Huntington Welcome.TM is a service mark of Huntington Bancshares Incorporated. © 2015 Huntington...