Huntington National Bank 2009 Annual Report Download - page 105

dividend to our shareholders. While our overall capital and liquidit
y
positions are stron
g
, extreme economi
c
market deterioration and the chan
g
in
g
re
g
ulator
y
environment drove the difficult but prudent decision t
o
reduce the dividend durin
g
the 2009 first quarter to
$
0.01 per common share. This proactive measure
contributed to
g
rowth in capital and the stren
g
thenin
g
of our balance sheet. Table 65 provides additional detai
l
re
g
ar
di
n
g
quarter
ly di
v
id
en
d
s
d
ec
l
are
d
per common s
h
are
.
Durin
g
2008, we issued an a
gg
re
g
ate $569 million of Series A Non-cumulative Perpetual Convertible
Pre
f
erre
d
Stoc
k
.T
h
e Ser
i
es A Pre
f
erre
d
Stoc
k
w
ill
pay, as
d
ec
l
are
db
y our
b
oar
d
o
fdi
rectors,
di
v
id
en
d
s
in
cash at a rate of 8.
5
0% per annum, pa
y
able quarterl
y
(
see Note 1
6
o
f
the Notes to Consolidated Financia
l
S
tatements
).
Dur
i
n
g
t
h
e 2009
fi
rst an
d
secon
d
quarters, we entere
di
nto a
g
reements w
i
t
h
var
i
ous
i
nst
i
tut
i
ona
l
investors exchan
g
in
g
shares of our common stock for shares of the Series A Preferred Stock held b
y
the
m
(
se
e
“Capital/Capital Ade
q
uacy” discussion
)
. In the a
gg
re
g
ate, these exchan
g
es are anticipated to reduce our total
di
v
id
en
d
cas
h
requ
i
rements (common, Ser
i
es A Pre
f
erre
d
Stoc
k
,an
d
Ser
i
es B Pre
f
erre
d
Stoc
k
)
by
an est
i
mate
d
$
4.0 million per quarter. Considerin
g
these exchan
g
es and the current dividend, cash demands required fo
r
Series A Preferred Stock are estimated to be approximatel
y
$7.7 million per quarter
.
A
lso durin
g
2008, we received
$
1.4 billion of equit
y
capital b
y
issuin
g
1.4 million shares of Series
B
Pre
f
erre
d
Stoc
k
to t
h
e U.S. Department o
f
Treasur
y
as a resu
l
to
f
our part
i
c
i
pat
i
on
i
nt
h
e TARP vo
l
untar
y
CPP. The Series B Preferred Stock will pa
y
cumulative dividends at a rate of 5% per
y
ear for the first five
y
ears and 9% per
y
ear thereafter, resultin
g
in quarterl
y
cash demands of approximatel
y
$18 million throu
gh
2
012
,
and
$
32 million thereafte
r
(see Note 1
6
o
f
the Notes to the Consolidated Financial Statements
f
or
add
itiona
l
in
f
ormation regar
d
ing t
h
e Series B Pre
f
erre
d
Stoc
k
issuance)
.
Based on a re
g
ulator
y
dividend limitation, the Bank could not have declared and paid a dividend to the
parent compan
y
at Decem
b
er 31, 2009, w
i
t
h
out re
g
u
l
ator
y
approva
l
.We
d
o not ant
i
c
i
pate t
h
at t
h
e Ban
k
w
ill
request re
g
u
l
ator
y
approva
l
to pa
ydi
v
id
en
d
s
i
nt
h
e near
f
uture as we cont
i
nue to
b
u
ild
Ban
k
re
g
u
l
ator
y
cap
i
ta
l
a
b
ove our a
l
rea
dy
“we
ll
-cap
i
ta
li
ze
d
”
l
eve
l
.To
h
e
l
p meet an
y
a
ddi
t
i
ona
lli
qu
idi
t
y
nee
d
s, we
h
ave an open
-
ended, automatic shelf re
g
istration statement filed and effective with the SEC, which permits us to issue an
unspec
ifi
e
d
amount o
fd
e
b
t or equ
i
t
y
secur
i
t
i
es.
With the exception of the common and preferred dividends previousl
y
discussed, the parent compan
y
does not have an
y
si
g
nificant cash demands. There are no maturities of parent compan
y
obli
g
ations until 2013,
when a debt maturit
y
of
$
50 million is pa
y
able.
C
onsiderin
g
the factors discussed above, and other anal
y
ses that we have performed, we believe th
e
parent compan
y
has sufficient liquidit
y
to meet its cash flow obli
g
ations for the foreseeable future
.
Credit Ratin
g
s
C
re
di
t rat
i
n
g
s prov
id
e
dby
t
h
et
h
ree ma
j
or cre
di
t rat
i
n
g
a
g
enc
i
es are an
i
mportant component o
f
ou
r
li
qu
idi
t
y
pro
fil
e. Amon
g
ot
h
er
f
actors, t
h
e cre
di
t rat
i
n
g
s are
b
ase
d
on
fi
nanc
i
a
l
stren
g
t
h
, cre
di
t qua
li
t
y
an
d
concentrations in the loan portfolio, the level and volatilit
y
of earnin
g
s, capital adequac
y
, the qualit
y
o
f
mana
g
ement, the liquidit
y
of the balance sheet, the availabilit
y
of a si
g
nificant base of core deposits, and ou
r
a
bili
t
y
to access a
b
roa
d
arra
y
o
f
w
h
o
l
esa
l
e
f
un
di
n
g
sources. A
d
verse c
h
an
g
es
i
nt
h
ese
f
actors cou
ld
resu
l
t
i
n
a
ne
g
at
i
ve c
h
an
g
e
i
n cre
di
t rat
i
n
g
san
di
mpact our a
bili
t
y
to ra
i
se
f
un
d
s at a reasona
bl
e cost
i
nt
h
e cap
i
ta
l
markets. In addition, certain financial on- and off-balance sheet arran
g
ements contain credit ratin
g
tri
gg
ers that
could increase fundin
g
needs if a ne
g
ative ratin
g
chan
g
e occurs. Other arran
g
ements that could be impacted b
y
cre
di
t rat
i
n
g
c
h
an
g
es
i
nc
l
u
d
e,
b
ut are not
li
m
i
te
d
to,
l
etter o
f
cre
di
t comm
i
tments
f
or mar
k
eta
bl
e secur
i
t
i
es
,
i
nterest rate swap co
ll
atera
l
a
g
reements, an
d
certa
i
n asset secur
i
t
i
zat
i
on transact
i
ons conta
i
n cre
di
t rat
i
n
g
prov
i
s
i
ons or cou
ld
ot
h
erw
i
se
b
e
i
mpacte
dby
cre
di
t rat
i
n
g
c
h
an
g
es.
97