Available for-Sale and Other Securities

9 Months Ended

Sep. 30, 2011

4. AVAILABLE-FOR-SALE AND OTHER Securities

Listed below are the contractual maturities (under 1 year, 1-5 years, 6-10 years, and over 10 years) of available-for-sale and other securities at September 30, 2011, December 31, 2010, and September 30, 2010:

				September 30, 2011				December 31, 2010				September 30, 2010
				Amortized				Amortized				Amortized
(dollar amounts in thousands)				Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	U.S. Treasury:
		Under 1 year	$	---	$	---	$	---	$	---	$	49,998	$	50,334
		1-5 years		51,939		52,793		52,425		51,781		---		---
		6-10 years		510		528		---		---		---		---
		Over 10 years		---		---		---		---		---		---
	Total U.S. Treasury			52,449		53,321		52,425		51,781		49,998		50,334
	Federal agencies: mortgage-backed securities:
		Under 1 year		---		---		---		---		---		---
		1-5 years		227,117		227,885		---		---		---		---
		6-10 years		406,019		416,966		656,176		664,793		715,725		731,869
		Over 10 years		3,699,665		3,790,395		4,077,655		4,089,611		3,825,377		3,951,671
	Total Federal agencies: mortgage-backed securities			4,332,801		4,435,246		4,733,831		4,754,404		4,541,102		4,683,540
	TLGP securities:
		Under 1 year		105,267		105,537		156,450		157,931		50,148		50,564
		1-5 years		---		---		25,230		25,536		527,581		530,350
		6-10 years		---		---		---		---		---		---
		Over 10 years		---		---		---		---		---		---
	Total TLGP securities			105,267		105,537		181,680		183,467		577,729		580,914
	Other agencies:
		Under 1 year		101,509		102,056		158,273		159,288		114,396		115,200
		1-5 years		1,012,874		1,022,914		1,898,867		1,885,230		1,890,250		1,903,181
		6-10 years		12,138		12,984		13,082		13,359		13,232		13,794
		Over 10 years		---		---		500		499		---		---
	Total other agencies			1,126,521		1,137,954		2,070,722		2,058,376		2,017,878		2,032,175
Total U.S. Government backed agencies				5,617,038		5,732,058		7,038,658		7,048,028		7,186,707		7,346,963
Municipal securities:
	Under 1 year			855		855		---		---		---		---
	1-5 years			182,875		186,856		149,151		148,587		61,488		63,329
	6-10 years			105,874		110,165		124,552		125,656		67,297		70,466
	Over 10 years			112,787		115,513		182,341		181,472		230,485		234,077
Total municipal securities				402,391		413,389		456,044		455,715		359,270		367,872
Private-label CMO:
	Under 1 year			---		---		---		---		---		---
	1-5 years			---		---		---		---		---		---
	6-10 years			12,791		12,883		10,429		10,887		13,004		13,424
	Over 10 years			77,618		66,017		124,080		111,038		282,639		262,800
Total private-label CMO				90,409		78,900		134,509		121,925		295,643		276,224
Asset-backed securities:
	Under 1 year			---		---		19,669		19,694		40,000		40,115
	1-5 years			631,103		635,556		697,001		700,749		657,980		664,940
	6-10 years			165,722		167,483		323,411		323,995		273,246		274,611
	Over 10 years			287,945		153,019		301,326		162,684		349,527		197,958
Total asset-backed securities (1)				1,084,770		956,058		1,341,407		1,207,122		1,320,753		1,177,624
Covered bonds:
	Under 1 year			---		---		---		---		---		---
	1-5 years			698,671		703,630		379,711		367,209		150,391		151,310
	6-10 years			---		---		---		---		---		---
	Over 10 years			---		---		---		---		---		---
Total covered bonds				698,671		703,630		379,711		367,209		150,391		151,310
Corporate debt:
	Under 1 year			---		---		---		---		---		---
	1-5 years			459,098		454,852		329,988		323,389		30,000		30,154
	6-10 years			---		---		---		---		---		---
	Over 10 years			---		---		---		---		---		---
Total corporate debt				459,098		454,852		329,988		323,389		30,000		30,154
Other:
	Under 1 year			750		750		800		802		300		305
	1-5 years			8,216		8,411		7,810		8,009		7,486		7,715
	6-10 years			912		966		1,007		1,037		1,205		1,336
	Over 10 years			---		---		---		---		---		---
	Non-marketable equity securities			310,280		310,280		308,722		308,722		310,142		310,142
	Marketable equity securities			55,039		54,236		53,944		53,286		54,649		53,913
Total other				375,197		374,643		372,283		371,856		373,782		373,411
Total available-for-sale and other securities			$	8,727,574	$	8,713,530	$	10,052,600	$	9,895,244	$	9,716,546	$	9,723,558

(1) Amounts at September 30, 2011, December 31, 2010, and September 30, 2010 include automobile asset backed securities with a fair value of $189 million, $509 million and $564 million, respectively, which meet the eligibility requirements for the Term Asset-Backed Securities Loan Facility, or "TALF," administered by the Federal Reserve Bank of New York.

Other securities at September 30, 2011, December 31, 2010, and September 30, 2010 include $165.6 million of stock issued by the FHLB of Cincinnati, $29.3 million, $37.4 million, and $45.7 million, respectively, of stock issued by the FHLB of Indianapolis, and $115.4 million, $105.7 million and $98.9 million, respectively, of Federal Reserve Bank stock. Other securities also include corporate debt and marketable equity securities. Non-marketable equity securities are valued at amortized cost. At September 30, 2011, December 31, 2010, and September 30, 2010, Huntington did not have any material equity positions in FNMA or FHLMC.

The following tables provide amortized cost, fair value, and gross unrealized gains and losses recognized in accumulated other comprehensive income by investment category at September 30, 2011, December 31, 2010, and September 30, 2010.

					Unrealized
			Amortized		Gross		Gross		Fair
(dollar amounts in thousands)			Cost		Gains		Losses		Value
September 30, 2011
U.S. Treasury		$	52,449	$	872	$	---	$	53,321
Federal agencies:
	Mortgage-backed securities		4,332,801		104,884		(2,439)		4,435,246
	TLGP securities		105,267		270		---		105,537
	Other agencies		1,126,521		11,505		(72)		1,137,954
Total U.S. Government
	backed securities		5,617,038		117,531		(2,511)		5,732,058
Municipal securities			402,391		11,023		(25)		413,389
Private-label CMO			90,409		745		(12,254)		78,900
Asset-backed securities			1,084,770		6,306		(135,018)		956,058
Covered bonds			698,671		8,203		(3,244)		703,630
Corporate debt			459,098		347		(4,593)		454,852
Other securities			375,197		448		(1,002)		374,643
Total available-for-sale and other securities		$	8,727,574	$	144,603	$	(158,647)	$	8,713,530

					Unrealized
			Amortized		Gross		Gross		Fair
(dollar amounts in thousands)			Cost		Gains		Losses		Value
December 31, 2010
U.S. Treasury		$	52,425	$	---	$	(644)	$	51,781
Federal agencies:
	Mortgage-backed securities		4,733,831		71,901		(51,328)		4,754,404
	TLGP securities		181,680		1,787		---		183,467
	Other agencies		2,070,722		4,874		(17,220)		2,058,376
Total U.S. Government
	backed securities		7,038,658		78,562		(69,192)		7,048,028
Municipal securities			456,044		6,154		(6,483)		455,715
Private-label CMO			134,509		1,236		(13,820)		121,925
Asset-backed securities			1,341,407		6,563		(140,848)		1,207,122
Covered bonds			379,711		---		(12,502)		367,209
Corporate debt			329,988		24		(6,623)		323,389
Other securities			372,283		364		(791)		371,856
Total available-for-sale and other securities		$	10,052,600	$	92,903	$	(250,259)	$	9,895,244

					Unrealized
			Amortized		Gross		Gross		Fair
(dollar amounts in thousands)			Cost		Gains		Losses		Value
September 30, 2010
U.S. Treasury		$	49,998	$	336	$	---	$	50,334
Federal agencies:
	Mortgage-backed securities		4,541,102		142,537		(99)		4,683,540
	TLGP securities		577,729		3,185		---		580,914
	Other agencies		2,017,878		14,420		(123)		2,032,175
Total U.S. Government
	backed securities		7,186,707		160,478		(222)		7,346,963
Municipal securities			359,270		8,776		(174)		367,872
Private-label CMO			295,643		1,177		(20,596)		276,224
Asset-backed securities			1,320,753		8,928		(152,057)		1,177,624
Covered bonds			150,391		929		(10)		151,310
Corporate debt			30,000		154		---		30,154
Other securities			373,782		439		(810)		373,411
Total available-for-sale and other securities		$	9,716,546	$	180,881	$	(173,869)	$	9,723,558

The following tables provide detail on investment securities with unrealized losses aggregated by investment category and length of time the individual securities have been in a continuous loss position, at September 30, 2011, December 31, 2010, and September 30, 2010.

			Less than 12 Months				Over 12 Months				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollar amounts in thousands )			Value		Losses		Value		Losses		Value		Losses
September 30, 2011
U.S. Treasury		$	---	$	---	$	---	$	---	$	---	$	---
Federal agencies:
	Mortgage-backed securities		386,727		(2,439)		---		---		386,727		(2,439)
	TLGP securities		---		---		---		---		---		---
	Other agencies		151,404		(67)		1,902		(5)		153,306		(72)
Total U.S. Government
	backed securities		538,131		(2,506)		1,902		(5)		540,033		(2,511)
Municipal securities			3,508		(6)		3,801		(19)		7,309		(25)
Private-label CMO			13,309		(86)		53,934		(12,168)		67,243		(12,254)
Asset-backed securities			92,200		(93)		143,709		(134,925)		235,909		(135,018)
Covered bonds			214,939		(3,244)		---		---		214,939		(3,244)
Corporate debt			394,000		(4,593)		---		---		394,000		(4,593)
Other securities			2,208		(118)		2,118		(884)		4,326		(1,002)

Total temporarily impaired securities		$	1,258,295	$	(10,646)	$	205,464	$	(148,001)	$	1,463,759	$	(158,647)

			Less than 12 Months				Over 12 Months				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollar amounts in thousands )			Value		Losses		Value		Losses		Value		Losses
December 31, 2010
U.S. Treasury		$	51,781	$	(644)	$	---	$	---	$	51,781	$	(644)
Federal agencies:
	Mortgage-backed securities		1,424,431		(51,328)		---		---		1,424,431		(51,328)
	TLGP securities		---		---		---		---		---		---
	Other agencies		1,217,074		(17,134)		4,771		(86)		1,221,845		(17,220)
Total U.S. Government
	backed securities		2,693,286		(69,106)		4,771		(86)		2,698,057		(69,192)
Municipal securities			201,370		(6,363)		3,700		(120)		205,070		(6,483)
Private-label CMO			---		---		85,617		(13,820)		85,617		(13,820)
Asset-backed securities			214,983		(2,129)		146,866		(138,719)		361,849		(140,848)
Covered bonds			367,209		(12,502)		---		---		367,209		(12,502)
Corporate debt			288,660		(6,623)		---		---		288,660		(6,623)
Other securities			---		---		41,218		(791)		41,218		(791)

Total temporarily impaired securities		$	3,765,508	$	(96,723)	$	282,172	$	(153,536)	$	4,047,680	$	(250,259)

			Less than 12 Months				Over 12 Months				Total
			Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollar amounts in thousands )			Value		Losses		Value		Losses		Value		Losses
September 30, 2010
U.S. Treasury		$	---	$	---	$	---	$	---	$	---	$	---
Federal agencies:
	Mortgage-backed securities		49,491		(99)		---		---		49,491		(99)
	TLGP securities		---		---		---		---		---		---
	Other agencies		249,879		(121)		502		(2)		250,381		(123)
Total U.S. Government
	backed securities		299,370		(220)		502		(2)		299,872		(222)
Municipal securities			23,621		(168)		3,814		(6)		27,435		(174)
Private-label CMO			---		---		172,450		(20,596)		172,450		(20,596)
Asset-backed securities			79,753		(391)		179,729		(151,666)		259,482		(152,057)
Covered bonds			25,335		(10)		---		---		25,335		(10)
Corporate debt			---		---		---		---		---		---
Other securities			39,164		(635)		459		(175)		39,623		(810)

Total temporarily impaired securities		$	467,243	$	(1,424)	$	356,954	$	(172,445)	$	824,197	$	(173,869)

The following table is a summary of realized securities gains and losses for the three-month and nine-month periods ended September 30, 2011 and 2010:

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
(dollar amounts in thousands)			2011		2010		2011		2010
	Gross gains on sales of securities	$	174	$	7,930	$	16,532	$	22,811
	Gross (losses) on sales of securities		(160)		(5,509)		(10,624)		(10,980)
Net gain on sales of securities			14		2,421		5,908		11,831
Other-than-temporary impairment recorded			(1,364)		(2,717)		(5,711)		(12,002)
Total securities gain (loss)		$	(1,350)	$	(296)	$	197	$	(171)

Alt-A Mortgage-Backed, Pooled-Trust-Preferred, and Private-Label CMO Securities

Our three highest risk segments of our investment portfolio are the Alt-A mortgage-backed, pooled-trust-preferred, and private-label CMO portfolios. The Alt-A mortgage-backed securities and pooled-trust-preferred securities are in the asset-backed securities portfolio. The performance of the underlying securities in each of these segments continued to reflect the economic environment. Each of these securities in these three segments is subjected to a rigorous review of its projected cash flows. These reviews are supported with analysis from independent third parties.

The following table presents the credit ratings for our Alt-A mortgage-backed, pooled-trust-preferred, and private label CMO securities as of September 30, 2011:

Credit Ratings of Selected Investment Securities (1)
(dollar amounts in thousands)							Average Credit Rating of Fair Value Amount
			Amortized
			Cost		Fair Value		AAA		AA +/-		A +/-		BBB +/-		<BBB-
	Private-label CMO securities	$	90,409	$	78,900	$	1,698	$	---	$	24,068	$	7,758	$	45,376
	Alt-A mortgage-backed securities		59,534		51,578		---		24,446		9,310		---		17,822
	Pooled-trust-preferred securities		228,411		101,441		---		---		25,373		---		76,068
Total at September 30, 2011		$	378,354	$	231,919	$	1,698	$	24,446	$	58,751	$	7,758	$	139,266
Total at December 31, 2010		$	435,835	$	284,608	$	41,238	$	33,880	$	29,691	$	15,145	$	164,654

(1)	Credit ratings reflect the lowest current rating assigned by a nationally recognized credit rating agency.

Negative changes to the above credit ratings would generally result in an increase of our risk-weighted assets, and a reduction to our regulatory capital ratios.

The following table summarizes the relevant characteristics of our pooled-trust-preferred securities portfolio at September 30, 2011. Each security is part of a pool of issuers and supports a more senior tranche of securities except for the I-Pre TSL II, MM Comm II and MM Comm III securities which are the most senior class.

Trust Preferred Securities Data
September 30, 2011
(dollar amounts in thousands)												Actual
												Deferrals		Expected
												and		Defaults
											# of Issuers	Defaults		as a % of
										Lowest	Currently	as a % of		Remaining
				Amortized		Fair		Unrealized		Credit	Performing/	Original		Performing		Excess
Deal Name		Par Value		Cost		Value		Loss		Rating (2)	Remaining (3)	Collateral		Collateral		Subordination (4)
Alesco II (1)		$	41,646	$	31,540	$	9,570	$	(21,970)	C	31/37	14	%	17	%	---	%
Alesco IV (1)			20,964		8,243		354		(7,889)	C	31/42	17		27		---
ICONS			20,000		20,000		12,530		(7,470)	BB	26/27	3		18		53
I-Pre TSL II			36,657		36,559		25,373		(11,186)	A	27/28	3		11		74
MM Comm II			20,970		20,041		19,712		(329)	BB	4/7	5		2		17
MM Comm III			11,081		10,587		7,597		(2,990)	CC	6/11	7		10		22
Pre TSL IX (1)			5,000		3,955		1,272		(2,683)	C	33/48	27		22		---
Pre TSL X (1)			17,774		9,915		3,036		(6,879)	C	33/53	42		37		---
Pre TSL XI (1)			25,426		22,667		6,669		(15,998)	C	44/64	27		21		---
Pre TSL XIII (1)			28,207		22,702		6,943		(15,759)	C	44/64	31		21		---
Reg Diversified (1)			25,500		7,296		303		(6,993)	D	23/44	46		28		---
Soloso (1)			12,500		3,906		506		(3,400)	C	43/67	27		20		---
Tropic III			31,000		31,000		7,576		(23,424)	CC	23/44	42		36		20
Total		$	296,725	$	228,411	$	101,441	$	(126,970)

(1)	Security was determined to have OTTI. As such, the book value is net of recorded credit impairment.
(2)	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.
(3)	Includes both banks and/or insurance companies.
(4)	Excess subordination percentage represents the additional defaults in excess of both current and projected defaults that the CDO can absorb before the bond experiences credit impairment. Excess subordinated percentage is calculated by (a) determining what percentage of defaults a deal can experience before the bond has credit impairment, and (b) subtracting from this default breakage percentage both total current and expected future default percentages.

Security Impairment

Huntington evaluates its available-for-sale securities portfolio on a quarterly basis for indicators of OTTI. Huntington assesses whether OTTI has occurred when the fair value of a debt security is less than the amortized cost basis at period-end. Management reviews the amount of unrealized loss, the length of time the security has been in an unrealized loss position, the credit rating history, market trends of similar security classes, time remaining to maturity, and the source of both interest and principal payments to identify securities which could potentially be impaired. OTTI is considered to have occurred; (1) if Huntington intends to sell the security; (2) if it is more likely than not Huntington will be required to sell the security before recovery of its amortized cost basis; or (3) the present value of the expected cash flows is not sufficient to recover all contractually required principal and interest payments.

For securities that Huntington does not expect to sell or it is not more likely than not to be required to sell, the OTTI is separated into credit and noncredit components. A discounted cash flow analysis, which includes evaluating the timing of the expected cash flows, is completed for all debt securities subject to credit impairment. The measurement of the credit loss component is equal to the difference between the debt security's cost basis and the present value of its expected future cash flows discounted at the security's effective yield. The credit-related OTTI, represented by the expected loss in principal, is recognized in noninterest income. The remaining difference between the security's fair value and the present value of future expected cash flows is due to factors that are not credit-related and, therefore, are recognized in OCI. Huntington believes that it will fully collect the carrying value of securities on which noncredit-related impairment has been recognized in OCI. Noncredit-related OTTI results from other factors, including increased liquidity spreads and extension of the security. For securities which Huntington does expect to sell, or if it is more likely than not Huntington will be required to sell the security before recovery of its amortized cost basis, all OTTI is recognized in earnings. Presentation of OTTI is made in the Condensed Consolidated Statements of Income on a gross basis with a reduction for the amount of OTTI recognized in OCI. Once an OTTI is recorded, when future cash flows can be reasonably estimated, future cash flows are re-allocated between interest and principal cash flows to provide for a level-yield on the security.

Huntington applied the related OTTI guidance on the debt security types listed below.

Alt-A mortgage-backed and private-label CMO securities are collateralized by first-lien residential mortgage loans. The securities are valued by a third party specialist using a discounted cash flow approach and proprietary pricing model. The model uses inputs such as estimated prepayment speeds, losses, recoveries, default rates that are implied by the underlying performance of collateral in the structure or similar structures, discount rates that are implied by market prices for similar securities, collateral structure types, and house price depreciation / appreciation rates that are based upon macroeconomic forecasts.

Pooled-trust-preferred securities are CDOs backed by a pool of debt securities issued by financial institutions. The collateral generally consists of trust-preferred securities and subordinated debt securities issued by banks, bank holding companies, and insurance companies. A full cash flow analysis is used to estimate fair values and assess impairment for each security within this portfolio. We engaged a third party specialist with direct industry experience in pooled-trust-preferred securities valuations to provide assistance in estimating the fair value and expected cash flows for each security in this portfolio. Relying on cash flows is necessary because there was a lack of observable transactions in the market and many of the original sponsors or dealers for these securities are no longer able to provide a fair value that is compliant with ASC 820.

For the three-month and nine-month periods ended September 30, 2011 and 2010, the following tables summarize by debt security type, total OTTI losses, unrealized OTTI losses included in OCI, and OTTI recognized in the Unaudited Condensed Consolidated Statements of Income for securities evaluated for impairment as described above.

		Three Months Ended September 30,
			Alt-A		Pooled-		Private-
(dollar amounts in thousands)		Mortgage-backed		trust-preferred		label CMO			Total
2011
Total OTTI recoveries (losses) (unrealized and realized)		$	(339)	$	(4,497)	$	(890)	$	(5,726)
	Unrealized OTTI (recoveries) losses recognized in OCI		208		4,293		(139)		4,362
Net impairment losses recognized in earnings		$	(131)	$	(204)	$	(1,029)	$	(1,364)

2010
Total OTTI recoveries (losses) (unrealized and realized)		$	1,112	$	18,877	$	7,786	$	27,775
	Unrealized OTTI (recoveries) losses recognized in OCI		(1,472)		(19,075)		(9,945)		(30,492)
Net impairment losses recognized in earnings		$	(360)	$	(198)	$	(2,159)	$	(2,717)


		Nine Months Ended September 30,
			Alt-A		Pooled-		Private-
(dollar amounts in thousands)		Mortgage-backed		trust-preferred		label CMO			Total
2011
Total OTTI (losses) recoveries (unrealized and realized)		$	597	$	2,334	$	2,437	$	5,368
	Unrealized OTTI losses (recoveries) recognized in OCI		(958)		(5,744)		(4,377)		(11,079)
Net impairment losses recognized in earnings		$	(361)	$	(3,410)	$	(1,940)	$	(5,711)

2010
Total OTTI (losses) recoveries (unrealized and realized)		$	(3,065)	$	21,229	$	6,404	$	24,568
	Unrealized OTTI losses (recoveries) recognized in OCI		1,503		(24,643)		(13,430)		(36,570)
Net impairment losses recognized in earnings		$	(1,562)	$	(3,414)	$	(7,026)	$	(12,002)

The following table rolls forward the unrealized OTTI recognized in OCI on debt securities held by Huntington for the three-month and nine-month periods ended September 30, 2011 and 2010:

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(dollar amounts in thousands)			2011		2010		2011		2010
Balance, beginning of period		$	85,397	$	118,330	$	100,838	$	124,408
	Reductions from sales of securities with credit impairment		---		(9,223)		(1,053)		(9,223)
	Noncredit impairment on securities not previously considered credit impaired		---		675		---		9,584
	Change due to improvement in expected cash flows		(425)		(27,997)		(16,466)		(45,657)
	Additional noncredit impairment on securities with previous credit impairment		4,787		6,053		6,440		8,726
Balance, end of period		$	89,759	$	87,838	$	89,759	$	87,838

The following table rolls forward the OTTI recognized in earnings on debt securities held by Huntington for the three-month and nine-month periods ended September 30, 2011 and 2010 as follows.

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(dollar amounts in thousands)			2011		2010		2011		2010
Balance, beginning of period		$	54,402	$	58,612	$	54,536	$	53,801
	Reductions from sales		---		(7,845)		(4,481)		(12,319)
	Credit losses not previously recognized		26		99		26		1,656
	Additional credit losses		1,338		2,618		5,685		10,346
Balance, end of period		$	55,766	$	53,484	$	55,766	$	53,484

The fair values of these assets have been impacted by various market conditions. The unrealized losses were primarily the result of wider liquidity spreads on asset-backed securities and increased market volatility on nonagency mortgage and asset-backed securities that are collateralized by certain mortgage loans. In addition, the expected average lives of the asset-backed securities backed by trust-preferred securities have been extended, due to changes in the expectations of when the underlying securities would be repaid. The contractual terms and / or cash flows of the investments do not permit the issuer to settle the securities at a price less than the amortized cost. Huntington does not intend to sell, nor does it believe it will be required to sell these securities until the fair value is recovered, which may be maturity and, therefore, does not consider them to be other-than-temporarily impaired at September 30, 2011.

As of September 30, 2011, Management has evaluated all other investment securities with unrealized losses and all non-marketable securities for impairment and concluded no additional OTTI is required.