Huntington National Bank 2014 Annual Report Download - page 70

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With the exception of the items discussed above, the parent company does not have any significant cash demands. It is our policy
to keep operating cash on hand at the parent company to satisfy cash demands for at least the next 18 months. Considering the factors
discussed above, and other analyses that we have performed, we believe the parent company has sufficient liquidity to meet its cash
flow obligations for the foreseeable future.
Off-Balance Sheet Arrangements
In the normal course of business, we enter into various off-balance sheet arrangements. These arrangements include interest rate
swaps, financial guarantees contained in standby letters-of-credit issued by the Bank, and commitments by the Bank to sell mortgage
loans.
INTEREST RATE SWAPS
Balance sheet hedging activity is arranged to receive hedge accounting treatment and is classified as either fair value or cash flow
hedges. Fair value hedges are purchased to convert deposits and subordinated and other long-term debt from fixed-rate obligations to
floating rate. Cash flow hedges are also used to convert floating rate loans made to customers into fixed rate loans. See Note 18 for
more information.
STANDBY LETTERS-OF-CREDIT
Standby letters-of-credit are conditional commitments issued to guarantee the performance of a customer to a third party. These
guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing,
and similar transactions. Most of these arrangements mature within two years and are expected to expire without being drawn upon.
Standby letters-of-credit are included in the determination of the amount of risk-based capital that the parent company and the Bank
are required to hold. Through our credit process, we monitor the credit risks of outstanding standby letters-of-credit. When it is
probable that a standby letter-of-credit will be drawn and not repaid in full, a loss is recognized in the provision for credit losses. See
Note 20 for more information.
COMMITMENTS TO SELL LOANS
Activity relating to our mortgage origination activity supports the hedging of the mortgage pricing commitments to customers and
the secondary sale to third parties. At December 31, 2014 and December 31, 2013, we had commitments to sell residential real estate
loans of $545.0 million and $452.6 million, respectively. These contracts mature in less than one year.
We do not believe that off-balance sheet arrangements will have a material impact on our liquidity or capital resources.
Table 28 - Contractual Obligations (1)
December 31, 2014
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 $ 45,069 $ --- $ --- $ ---
$ 45,069
Certificates of deposit and other time deposits 4,630 1,803 98 132 6,663
Short-term borrowings 2,397 --- --- ---
2,397
Long-term debt --- 2,453 1,126 757 4,336
Operating lease obligations 51 92 79 237
459
Purchase commitments 76 107 14 5
202
(1) Amounts do not include associated interest payments.