Huntington National Bank 2013 Annual Report Download - page 70

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We do not believe that off-balance sheet arrangements will have a material impact on our liquidity or capital resources.
Table 29 - Contractual Obligations (1)
December 31, 2013
One Year 1 to 3 3 to 5 More than
(dollar amounts in millions) or Less Years Years 5 Years Total
Deposits without a stated maturity $ 40,839 $ --- $ --- $ --- $ 40,839
Certificates of deposit and other time deposits 4,674 1,643 228 123 6,668
FHLB advances 1,800 --- 1 7 1,808
Short-term borrowings 552 --- --- --- 552
Other long-term debt --- 850 435 65 1,350
Subordinated notes 125 108 231 637 1,101
Operating lease obligations 49 90 77 189 405
Purchase commitments 114 131 43 5 293
(1) Amounts do not include associated interest payments.
Operational Risk
As with all companies, we are subject to operational risk. Operational risk is the risk of loss due to human error; inadequate or
failed internal systems and controls; violations of, or noncompliance with, laws, rules, regulations, prescribed practices, or ethical
standards; and external influences such as market conditions, fraudulent activities, disasters, and security risks. We continuously
strive to strengthen our system of internal controls to ensure compliance with laws, rules, and regulations, and to improve the
oversight of our operational risk. For example, we actively and continuously monitor cyber-attacks such as attempts related to eFraud
and loss of sensitive customer data. We evaluate internal systems, processes and controls to mitigate loss from cyber-attacks and, to
date, have not experienced any material losses.
To mitigate operational risks, we have established a senior management Operational Risk Committee and a senior management
Legal, Regulatory, and Compliance Committee. The responsibilities of these committees, among other duties, include establishing
and maintaining management information systems to monitor material risks and to identify potential concerns, risks, or trends that
may have a significant impact and ensuring that recommendations are developed to address the identified issues. Both of these
committees report any significant findings and recommendations to the Risk Management Committee. Additionally, potential
concerns may be escalated to our ROC, as appropriate.
The goal of this framework is to implement effective operational risk techniques and strategies, minimize operational and fraud
losses, and enhance our overall performance.
Representation and Warranty Reserve
We primarily conduct our mortgage loan sale and securitization activity with FNMA and FHLMC. In connection with these and
other securitization transactions, we make certain representations and warranties that the loans meet certain criteria, such as collateral
type and underwriting standards. We may be required to repurchase individual loans and / or indemnify these organizations against
losses due to a loan not meeting the established criteria. As part of the consumer portfolio review that was initiated during the 2013
third quarter (see Consumer Credit section for description), we continue to evaluate representation and warranty exposure of loans
sold with servicing retained associated with borrowers who filed bankruptcy. We have a reserve for such losses and exposure, which
is included in accrued expenses and other liabilities. The reserves are estimated based on historical and expected repurchase activity,
average loss rates, and current economic trends. The level of mortgage loan repurchase losses depends upon economic factors,
investor demand strategies and other external conditions containing a level of uncertainty and risk that may change over the life of the
underlying loans. We currently do not have sufficient information to estimate the range of reasonably possible loss related to
representation and warranty exposure.