Huntington National Bank 2014 Annual Report Download - page 69

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Liquidity Coverage Ratio
On October 24, 2013, the U.S. banking regulators jointly issued a proposal that would implement a quantitative liquidity
requirement consistent with the Liquidity Coverage Ratio (LCR) standard established by the Basel Committee on Banking
Supervision. The LCR is designed to promote the short-term resilience of the liquidity risk profile of banks to which it applies.
On September 3, 2014, the U.S. banking regulators adopted a final LCR for internationally active banking organizations,
generally those with $250 billion or more in total assets, and a Modified LCR rule for banking organizations, similar to Huntington,
with $50 billion or more in total assets that are not internationally active banking organizations. The Modified LCR requires
Huntington to maintain High Quality Liquid Assets (HQLA) to meet its net cash outflows over a prospective 30 calendar-day period,
which takes into account the potential impact of idiosyncratic and market-wide shocks. The Modified LCR transition period begins on
January 1, 2016, with Huntington required to maintain HQLA equal to 90 percent of the stated requirement. The ratio increases to
100 percent on January 1, 2017. Huntington expects to be compliant with the Modified LCR requirement within the transition periods
established in the Modified LCR rule.
At December 31, 2014, we believe the Bank had sufficient liquidity to meet its cash flow obligations for the foreseeable future.
Table 27 - Maturity Schedule of Commercial Loans
December 31, 2014
One Year One to After Percent
(dollar amounts in millions) or Less Five Years Five Years Total total
Commercial and industrial $4,988 $10,258 $3,787 $19,033 78 %
Commercial real estate - construction 163 590 122 875 4
Commercial real estate - commercial 1,184 2,516 622 4,322 18
Total $6,335 $13,364 $4,531 $24,230 100 %
Variable-interest rates $5,748 $10,528 $2,589 $18,865 78 %
Fixed-interest rates 587 2,836 1,942 5,365 22
Total $6,335 $13,364 $4,531 $24,230 100 %
Percent of total 26 % 55 % 19 % 100 %
At December 31, 2014, AFS securities, with a fair value of $3.6 billion, were pledged to secure public and trust deposits, interest
rate swap agreements, U.S. Treasury demand notes, and securities sold under repurchase agreements.
Parent Company Liquidity
The parent company’s funding requirements consist primarily of dividends to shareholders, debt service, income taxes, operating
expenses, funding of nonbank subsidiaries, repurchases of our stock, and acquisitions. The parent company obtains funding to meet
obligations from dividends and interest received from the Bank, interest and dividends received from direct subsidiaries, net taxes
collected from subsidiaries included in the federal consolidated tax return, fees for services provided to subsidiaries, and the issuance
of debt securities.
At December 31, 2014 and December 31, 2013, the parent company had $0.7 billion and $1.0 billion, respectively, in cash and
cash equivalents.
On January 21, 2015, the board of directors declared a quarterly common stock cash dividend of $0.06 per common share. The
dividend is payable on April 1, 2015, to shareholders of record on March 18, 2015. Based on the current quarterly dividend of $0.06
per common share, cash demands required for common stock dividends are estimated to be approximately $48.7 million per quarter.
On January 21, 2015, the board of directors declared a quarterly Series A and Series B Preferred Stock dividend payable on April 15,
2015 to shareholders of record on April 1, 2015. Based on the current dividend, cash demands required for Series A Preferred Stock
are estimated to be approximately $7.7 million per quarter. Cash demands required for Series B Preferred Stock are expected to be
approximately $0.3 million per quarter.
During 2014, the Bank paid dividends of $244.0 million to the holding company. We anticipate that the Bank will declare
additional dividends to the holding company in the first quarter of 2015. To help meet any additional liquidity needs, we have an
open-ended, automatic shelf registration statement filed and effective with the SEC, which permits us to issue an unspecified amount
of debt or equity securities.