Huntington Bancshares Incorporated Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Business segments are based on segment leadership structure, which reflects how segment performance is monitored and assessed. We 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. A Treasury / Other function includes, along with technology and operations, other unallocated assets, liabilities, revenue, and expense. All periods presented have been reclassified to conform to the current period classification. During 2014, we realigned our business segments to drive our ongoing growth and leverage the knowledge of our highly experienced team. Amounts relating to the realignment are disclosed in the table below.

A rollforward of goodwill by business segment for the years ended December 31, 2015 and 2014, is presented in the table below:



	Retail &
	Business		Commercial							Home			Treasury/			Huntington
(dollar amounts in thousands)	Banking		Banking		AFCRE		RBHPCG			Lending			Other			Consolidated
Balance, January 1, 2014	$	286,824	$	22,108	$	—	$	93,012		$	—		$	42,324		$	444,268
Goodwill acquired during the period	81,273		—		—		—			—			—			81,273
Adjustments	—		37,486		—		(3,000		)	3,000			(37,486		)	—
Impairment	—		—		—		—			(3,000		)	—			(3,000		)
Balance, December 31, 2014	368,097		59,594		—		90,012			—			4,838			522,541
Goodwill acquired during the period	—		155,828		—		—			—			—			155,828
Adjustments	—		—		—		(1,500		)	—			—			(1,500		)
Impairment	—		—		—		—			—			—			—
Balance, December 31, 2015	$	368,097	$	215,422	$	—	$	88,512		$	—		$	4,838		$	676,869

On March 31, 2015, Huntington completed its acquisition of Macquarie Equipment Finance, which was re-branded Huntington Technology Finance. As part of the transaction, Huntington recorded $156 million of goodwill and $8 million of other intangible assets. For additional information on the acquisition, see Note 23 Business Combinations.

During 2015, Huntington adjusted the goodwill in the RBHPCG segment related to a sale of HASI and HAA. The amount was adjusted based on relative fair value methodology.

In 2014, Huntington completed an acquisition of 24 Bank of America branches in Michigan and recorded $17 million of goodwill. The remaining $64 million of goodwill acquired during 2014 was the result of the Camco Financial acquisition, which was also completed in 2014.

Goodwill is not amortized but is evaluated for impairment on an annual basis at October 1 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. As a result of the 2014 first quarter reorganization in our reported business segments, goodwill was reallocated among the business segments. Immediately following the reallocation, impairment of $3 million was recorded in the Home Lending reporting segment. No impairment was recorded in 2015 or 2013.

Also in 2014, we moved our insurance brokerage business from Treasury / Other to Commercial Banking to align with a change in management responsibilities. Amounts relating to the realignment are disclosed in the table above.

At December 31, 2015 and 2014, Huntington’s other intangible assets consisted of the following:



(dollar amounts in thousands)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
December 31, 2015
Core deposit intangible	$	400,058	$	(384,606	)	$	15,452
Customer relationship	116,094		(76,656		)	39,438
Other	25,164		(25,076		)	88
Total other intangible assets	$	541,316	$	(486,338	)	$	54,978
December 31, 2014
Core deposit intangible	$	400,058	$	(366,907	)	$	33,151
Customer relationship	107,920		(66,534		)	41,386
Other	25,164		(25,030		)	134
Total other intangible assets	$	533,142	$	(458,471	)	$	74,671

The estimated amortization expense of other intangible assets for the next five years is as follows:



(dollar amounts in thousands)	Amortization Expense
2016	$	14,290
2017	12,908
2018	11,135
2019	9,825
2020	3,076

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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