These actions include: $350 million Discretionary Equity Issuance Program, $75 million estimated to result from the after-tax gain on a cash tender for three series of Huntington trust preferred securities, $250 million of combined impact from other potential actions, including liability management initiatives, exchange of other capital instruments, adoption of new accounting standards, and other management initiatives.
Most of these actions are targeted to be completed during the second quarter of 2009.
Stephen D. Steinour, Chairman, President, and CEO, said: “We believe today’s actions should fully achieve our capital objectives and strengthen our capital to the point where we can weather even a severe economic environment, while better positioning us to eventually repay our $1.4 billion of TARP capital. We continue to expect an environment of economic and market uncertainty for the foreseeable future.”
In our determination, we used the government’s disclosed SCAP credit loss assumptions for our regional peers included in the stress tests and applied them to Huntington. Our internal analysis indicates that the additional $675 million of capital resulting from the credit actions announced today should provide a sufficient cushion to absorb a two-year cumulative credit loss rate in excess of 9%. This cumulative loss rate is significantly above our internal expectations and is also above that assumed by the government for most of our stress-tested regional peers, he added.
