Huntington National Bank 2011 Annual Report Download - page 91

We can also obtain funding through other methods including: (1) purchasing federal funds, (2) selling
securities under repurchase agreements, (3) selling or maturity of investment securities, (4) selling or
securitization of loans, (5) selling of national market certificates of deposit, (6) the relatively shorter-term
structure of our commercial loans (see tables below) and automobile loans, and (7) issuing of common and
preferred stock.
At December 31, 2011, we believe the Bank had sufficient liquidity to meet its cash flow obligations for the
foreseeable future.
Table 32 — Maturity Schedule of Commercial Loans
December 31, 2011
One Year
or Less
One to
Five Years
After
Five Years Total
Percent of
total
(dollar amounts in millions)
Commercial and industrial ...................... $4,867 $ 7,798 $2,034 $14,699 71%
Commercial real estate — construction ............ 278 269 33 580 3
Commercial real estate — commercial ............ 1,971 2,651 624 5,246 26
Total ......................................... $7,116 $10,718 $2,691 $20,525 100%
Variable-interest rates ......................... $6,717 $ 8,972 $1,997 $17,686 86%
Fixed-interest rates ............................ 399 1,746 694 2,839 14
Total ......................................... $7,116 $10,718 $2,691 $20,525 100%
Percent of total ................................ 35% 52% 13% 100%
At December 31, 2011, the fair value of our portfolio of investment securities was $8.1 billion, of which
$3.6 billion was pledged to secure public and trust deposits, interest rate swap agreements, U.S. Treasury demand
notes, and securities sold under repurchase agreements. The composition and maturity of these securities were
presented in Table 27.
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 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.
As a result of bank capital standards arising from the Dodd-Frank Act, beginning in 2013 trust preferred
securities will eventually cease to be considered Tier 1 risk-based capital. The Exchange Offer described below
was intended to improve our Tier 1 risk-based capital in anticipation of these regulations by replacing a portion
of our trust preferred securities with preferred stock, which we believe will qualify as additional Tier 1 risk-based
capital.
During the 2011 fourth quarter, Huntington issued $35.5 million par value Floating Rate Series B
Non-Cumulative Perpetual Preferred Stock in exchange for $35.5 million of (1) Huntington Capital I Floating
Rate Capital Securities, (2) Huntington Capital II Floating Rate Capital Securities, (3) Sky Financial Capital
Trust III Floating Rate Capital Securities and (4) Sky Financial Capital Trust IV Floating Rate Capital Securities.
Huntington will pay dividends on the Series B Preferred Stock at a floating rate equal to three-month LIBOR
plus a spread of 2.70%.
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