Huntington National Bank 2014 Annual Report Download - page 196

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Under the agreement, Huntington acquired approximately $559.4 million of loans and $557.4 million of deposits. Assets
acquired and liabilities assumed were recorded at fair value. The fair values for loans were estimated using discounted cash flow
analyses using interest 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 with similar maturities (Level 3). As part of the acquisition, Huntington
recorded $64.2 million of goodwill, all of which is nondeductible for tax purposes.
Pro forma results have not been disclosed, as those amounts are not significant to the audited consolidated financial statements.
24. SEGMENT REPORTING
Our business segments are based on our internally-aligned segment leadership structure, which is how we monitor results and
assess performance. During the 2014 first quarter, we reorganized our business segments to drive our ongoing growth and leverage
the knowledge of our highly experienced team. We now have five major business segments: Retail and Business Banking,
Commercial Banking, Automobile Finance and Commercial Real Estate (AFCRE), Regional Banking and The Huntington Private
Client Group (RBHPCG), and Home Lending. The Treasury / Other function includes our technology and operations, other
unallocated assets, liabilities, revenue, and expense. All periods presented have been reclassified to conform to the current period
classification.
Retail and Business Banking: The Retail and Business Banking segment provides a wide array of financial products and services to
consumer and small business customers including but not limited 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, and treasury management.
Huntington serves customers primarily through our network of branches in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and
Kentucky. In addition to our extensive branch network, customers can access Huntington through online banking, mobile banking,
telephone banking, and ATMs.
Huntington has established a “Fair Play” banking philosophy and built a reputation for meeting the banking needs of consumers
in a manner which makes them feel supported and appreciated. Huntington believes customers are recognizing this and other efforts as
key differentiators and it is earning us more customers, deeper relationships and the J.D. Power retail service excellence award for
2013 and 2014.
Business Banking is a dynamic and growing part of our business and we are committed to being the bank of choice for small
businesses in our markets. Business Banking is defined as companies with revenues under $20 million and consists of approximately
160,000 businesses. Huntington continues to develop products and services that are designed specifically to meet the needs of small
business. Huntington continues to look for ways to help companies find solutions to their financing needs and is the number one SBA
lender in the country. We have also won the J.D. Power award for small business service excellence in 2012 and 2014.
Commercial Banking: Through a relationship banking model, this segment provides a wide array of products and services to the
middle market, large corporate, and government public sector customers located primarily within our geographic footprint. The
segment is divided into seven business units: middle market, large corporate, specialty banking, asset finance, capital markets,
treasury management, and insurance. During the 2014 third quarter, we moved our insurance brokerage business from Treasury /
Other to Commercial Banking to align with a change in management responsibilities. During the 2014 fourth quarter, we moved the
Asset Based Lending group back into the commercial division, and combined management with equipment finance and public capital
to form the Asset Finance division.
Middle Market Banking primarily focuses on providing banking solutions to companies with annual revenues of $20 million to
$250 million. Through a relationship management approach, various products, capabilities and solutions are seamlessly orchestrated in
a client centric way.
Corporate Banking works with larger, often more complex companies with revenues greater than $250 million. These entities,
many of which are publically traded, require a different and customized approach to their banking needs.
Specialty Banking offers tailored products and services to select industries that have a foothold in the Midwest. Each banking
team is comprised of industry experts with a dynamic understanding of the market and industry. Many of these industries are
experiencing tremendous change, which creates opportunities for Huntington to leverage our expertise and help clients navigate, adapt
and succeed.
Asset Finance division is a combination of our Equipment Finance, Public Capital, Asset Based Lending, and Lender Finance
divisions that focus on providing financing solutions against these respective asset classes.