Huntington National Bank 2012 Annual Report Download - page 69

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The overall objective of liquidity risk management is to ensure that we can obtain cost-effective funding to meet current and
future obligations, and can maintain sufficient levels of on-hand liquidity, under both normal business as usual and unanticipated
stressed circumstances. The ALCO was appointed by our ROC to oversee liquidity risk management and the establishment of
liquidity risk policies and limits. Contingency funding plans are in place, which measure forecasted sources and uses of funds under
various scenarios in order to prepare for unexpected liquidity shortages. Liquidity risk is reviewed monthly for the Bank and the
parent company, as well as its subsidiaries. In addition, liquidity working groups meet regularly to identify and monitor liquidity
positions, provide policy guidance, review funding strategies, and oversee the adherence to, and maintenance of, the contingency
funding plans.
Available-for-sale and other securities portfolio
(This section should be read in conjunction with the Critical Accounting Policies and Use of Significant Estimates discussion, and
Note 4 of the Notes to Consolidated Financial Statements.)
Our investment securities portfolio is evaluated under established asset/liability management objectives. Changing market
conditions could affect the profitability of the portfolio, as well as the level of interest rate risk exposure.
Our available-for-sale and other securities portfolio is comprised of various financial instruments. At December 31, 2012, our
available-for-sale and other securities portfolio totaled $7.6 billion, a decrease of $0.5 billion from 2011. The duration of the portfolio
decreased by 0.2 years to 2.9 years.
The composition and maturity of the portfolio is presented on the following two tables:
Table 25 - Available-for-sale and other securities Portfolio Summary at Fair Value
At December 31,
(dollar amounts in thousands) 2012 2011 2010
U.S. Government backed agencies $ 4,676,607 $ 5,253,640 $ 7,048,028
Other 2,889,568 2,824,374 2,847,216
Total available-for-sale and other securities $ 7,566,175 $ 8,078,014 $ 9,895,244
Duration in years (1) 2.9 3.1 3.0
(1) The average duration assumes a market driven prepayment rate on securities subject to prepayment.
Table 26 - Available-for-sale and other securities Portfolio Composition and Maturity
At December 31, 2012
Amortized
(dollar amounts in thousands) Cost Fair Value Yield (1)
U.S. Treasury:
Under 1 year $ --- $ --- ---%
1-5 years 51,111 51,770 1.02
6-10 years 508 539 1.94
Over 10 years 1 2 ---
Total U.S. Treasury 51,620 52,311 1.03
Federal agencies: mortgage-backed securities
Under 1 year 1 1 3.64
1-5 years 182,722 185,792 1.88
6-10 years 503,045 521,068 2.44
Over 10 years 3,464,196 3,557,809 2.42
Total Federal agencies: mortgage-backed securities 4,149,964 4,264,670 2.40
Other agencies:
Under 1 year 4,934 5,017 2.70
1-5 years 304,769 314,149 1.56
6-10 years 39,143 40,460 2.24
Over 10 years --- --- ---
Total other Federal agencies 348,846 359,626 1.65
Total U.S. Government backed agencies 4,550,430 4,676,607 2.32
Municipal securities:
Under 1 year 466 466 2.30
1-5 years 173,300 177,593 2.75