HUNTINGTON BANCSHARES INCORPORATED Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U6i1WFcH2hDYMz8M25n5GRa3U5SU7MpcVKMvsuaQCvvkzdgFiAMOq4RmhcA451l5 hrDLReavOwhHhVhbmuJ3nA== 0000950152-05-003463.txt : 20050425 0000950152-05-003463.hdr.sgml : 20050425 20050425114957 ACCESSION NUMBER: 0000950152-05-003463 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050425 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050425 DATE AS OF CHANGE: 20050425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUNTINGTON BANCSHARES INC/MD CENTRAL INDEX KEY: 0000049196 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 310724920 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-02525 FILM NUMBER: 05769185 BUSINESS ADDRESS: STREET 1: HUNTINGTON CTR STREET 2: 41 S HIGH ST HC0632 CITY: COLUMBUS STATE: OH ZIP: 43287 BUSINESS PHONE: 6144808300 MAIL ADDRESS: STREET 1: HUNTINGTON CENTER2 STREET 2: 41 S HIGH ST HC063 CITY: COLUMBUS STATE: OH ZIP: 43287 8-K 1 l13506ae8vk.htm HUNTINGTON BANCSHARES INCORPORATED FORM 8-K HUNTINGTON BANCSHARES INCORPORATED Form 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 25, 2005

HUNTINGTON BANCSHARES INCORPORATED

(Exact name of registrant as specified in its charter)


Maryland	0-2525	31-0724920

(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


		Huntington Center 41 South High Street Columbus, Ohio		43287

		(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (614) 480-8300

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS


	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EX-99.1
EX-99.2

Item 2.02. Results of Operations and Financial Condition.

On April 25, 2005, Huntington Bancshares Incorporated (“Huntington”) issued a news release announcing its earnings for the first quarter ended March 31, 2005, an update on settlement discussions of the Securities Exchange Commission investigation, and reactiviation of a share repurchase program. Also on April 25, 2005, Huntington made a Quarterly Financial Review available on its web site,
www.huntington-ir.com. The information contained in the news release and the Quarterly Financial Review, which are attached as Exhibits 99.1 and 99.2, respectively, to this report, are incorporated herein by reference.

Huntington’s senior management will host an earnings conference call April 25, 2005, at 1:00 p.m. EST. The call may be accessed via a live Internet web cast at www.huntington-ir.com or through a dial-in telephone number at 866-835-8907. Slides will be available at www.huntington-ir.com just prior to 1:00 p.m. EST on April 25, 2005, for review during the call. A replay of the web cast will be archived in the Investor Relations section of Huntington’s web site at www.huntington-ir.com. A telephone replay will be available two hours after the completion of the call through May 9, 2005, at 888-266-2081; conference call ID 678167.

The information contained or incorporated by reference in this Current Report on Form 8-K contains forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. A number of factors, including but not limited to those set forth under the heading “Business Risks” included in Item 1 of Huntington’s Annual Report on
Form 10-K for the year ended December 31, 2004, and other factors described from time to time in Huntington’s other filings with the Securities and Exchange Commission, could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements. All forward-looking statements included in this Current Report on Form 8-K are based on information available at the time of the Report. Huntington assumes no obligation to update any forward-looking statement.

The information contained or incorporated by reference in Item 2.02 of this Form 8-K shall be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

The exhibits referenced below shall be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Exhibit 99.1 — News release of Huntington Bancshares Incorporated, dated April 25, 2005.

Exhibit 99.2 — Quarterly Financial Review, March 2005.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	HUNTINGTON BANCSHARES INCORPORATED

Date: April 25, 2005	By:	/s/ Donald R. Kimble
		Donald R. Kimble Chief Financial Officer and Controller

EXHIBIT INDEX


Exhibit No.		Description

Exhibit 99.1		News release of Huntington Bancshares Incorporated, April 25, 2005.
Exhibit 99.2		Quarterly Financial Review, March 2005.

EX-99.1 2 l13506aexv99w1.htm EX-99.1 EX-99.1

Exhibit 99.1

(HUNTINGTON LOGO)

FOR IMMEDIATE RELEASE
April 25, 2005


Contacts:
Analysts Jay Gould Susan Stuart	(614) 480-4060 (614) 480-3878	Media Jeri Grier-Ball Ron Newman	(614) 480-5413 (614)480-3077

HUNTINGTON BANCSHARES REPORTS 2005 FIRST QUARTER RESULTS;

REAFFIRMS 2005 EARNINGS PER SHARE GUIDANCE OF $1.78-$1.83;
ANNOUNCES UPDATE ON SETTLEMENT DISCUSSIONS OF THE SEC
INVESTIGATION;
ANNOUNCES REACTIVATION OF SHARE REPURCHASE PROGRAM

COLUMBUS, Ohio — Huntington Bancshares Incorporated (NASDAQ: HBAN; www.huntington.com) reported 2005 first quarter earnings of $96.5 million, or $0.41 per common share. This compares with $104.2 million, or $0.45 per common share, in the year-ago quarter and $91.1 million, or $0.39 per common share, in the 2004 fourth quarter.

“First quarter earnings per share performance was slightly below our expectations,” said Thomas E. Hoaglin, chairman, president, and chief executive officer. “We were pleased with loan and deposit growth, our stable net interest margin and expense performance but disappointed with the weakness in fee revenue and a significant commercial loan net charge-off. Nevertheless, there was sufficient progress in a number of key performance indicators that we are comfortable reaffirming our previous guidance for 2005.”

“Loan growth continued to be strong reflecting growth across all regions and loan categories, deposits increased, and we continued to add new customers. Average total loans and leases were 11% higher than in the year-ago quarter. Compared with the 2004 fourth quarter, average total loans and leases grew at a 14% annualized rate, reflecting 15% and 14% annualized growth in average total consumer and total commercial loans, respectively.”

“Average core deposits were 10% higher than a year ago,” he said. “Compared with the fourth quarter, average core deposits increased at a 3% annualized growth rate. A slow down in first quarter core deposit growth is typical due to seasonal factors. However, this quarter’s 3% linked quarter annualized increase compared very favorably to the 2% annualized decrease in the year-earlier quarter. Importantly, the number of our consumer demand deposit households and small business demand deposit relationships both continued their positive growth trends and were 3% and 9% higher than a year ago, respectively. It is particularly encouraging to see the positive results of our improving sales culture.”

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“We were very pleased with the relative stability of the net interest margin,” he continued, “as it declined only one basis point from the fourth quarter after taking into account the 6 basis point positive adjustment to the fourth quarter net interest margin. We now expect some improvement in our net interest margin over the rest of the year from the current quarter’s 3.31% level. This, along with continued loan growth will be key drivers of higher revenue in coming quarters.”

“Certain fee income categories declined from the prior period more than anticipated,” he noted. “Other income declined, reflecting soft equity markets which resulted in lower equity investment gains in the current quarter compared with the fourth quarter. In addition, both commercial and personal service charge income declined consistent with recent industry trends.”

“We continue to be pleased with overall credit quality performance,” he said. “Although net charge-offs were higher in the first quarter due to a single middle market commercial credit charge-off, our non-performing assets declined, as expected, and were only $73.3 million, or 0.30% of total loans and leases and other real estate at quarter-end, the lowest level in many years. Improvement in the economic outlook and a reduction in specific reserves due to charge-offs resulted in a decline in the allowance for loan and lease losses. In spite of this decline, the allowance strengthened in relation to the level of non-performing loans as our NPL coverage ratio increased to 441%, up from 424% at the end of the fourth quarter, and remains among the highest in our peer group.”

“Finally, our capital position continued to strengthen,” he concluded. “At March 31, 2005, our tangible common equity to risk-weighted assets was 7.92%, up from 7.86% at year-end.”

Significant 2005 first quarter performance highlights included:

•   $6.4 million after-tax ($0.03 earnings per share) positive impact on net income reflecting the recognition of the effect of federal tax refunds on income tax expense. These federal tax refunds resulted from the ability to carry back federal tax losses to prior years.

•   $6.4 million pre-tax ($0.02 earnings per share) unfavorable impact to provision expense, relating to a $14.2 million middle market commercial charge-off, net of $7.8 million of allocated reserves.

•   $2.0 million pre-tax ($0.01 earnings per share) unfavorable impact from SEC and regulatory-related expenses.

Highlights compared with 2004 fourth quarter included:

•   4% growth (14% annualized) in average total loans and leases reflecting 4% growth (15% annualized) in consumer loans and 3% growth (14% annualized) in total commercial loans.

•   1% growth (3% annualized) in average total core deposits.

•   3.31% net interest margin, compared with 3.38% that included a 6 basis point positive impact from a funding cost adjustment.

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•   0.47% annualized net charge-offs that included 24 basis points related to a single middle market commercial net charge-off, compared with 0.36%.

•   0.30% period-end non-performing asset (NPA) ratio, down from 0.46%.

•   1.09% period-end allowance for loan and lease losses (ALLL) ratio, down from 1.15%.

•   441% period-end ALLL to non-performing loan (NPL) ratio, up from 424%.

•   7.92% period-end tangible common equity to risk-weighted assets ratio, up from 7.86%.

Items specifically impacting earnings performance comparisons for the current and prior periods are highlighted in the following table.

Significant Items Impacting Earnings Performance Comparisons



Three Months Ended	Impact⁽¹⁾
(In millions, except per share)	Earnings⁽²⁾			EPS
March 31, 2005 — GAAP earnings⁽³⁾	$	125.1		$	0.41
· Federal tax loss carry back		6.4	⁽⁴⁾		0.03
· Single C&I charge-off impact, net of allocated reserves		(6.4	)		(0.02	)
· SEC and regulatory-related expenses		(2.0	)		(0.01	)

December 31, 2004 — GAAP earnings	$	128.3		$	0.39
· SEC-related expenses and accruals		(6.5	)		(0.03	)
· Property lease impairments		(7.8	)		(0.02	)
· Funding cost adjustment		3.7			0.01

March 31, 2004 — GAAP earnings	$	139.1		$	0.45
· Gain on sale of $868 million of auto loans		9.0			0.03
· Mortgage servicing right (MSR) temporary impairment		(10.1	)		(0.03	)
· Investment securities gain on sale		15.1			0.04

(1) Favorable (unfavorable) impact on GAAP earnings

(2) Pre-tax unless otherwise noted

(3) Includes significant items with $0.01 EPS impact or greater

(4) After-tax

Discussion of Performance

Fully taxable equivalent net interest income increased $12.4 million, or 5%, from the year-ago quarter, reflecting the favorable impact of an 8% increase in average earning assets, partially offset by a 5 basis point, or an effective 1%, decline in the net interest margin. The fully taxable equivalent net interest margin decreased to 3.31% from 3.36% in the year-ago quarter. The decline from the year-ago quarter reflected the impact of the strategic repositioning of portfolios to reduce automobile loans and increase the relative proportion of lower-rate, lower-risk,

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residential real estate-related loans.

Compared with the 2004 fourth quarter, fully taxable equivalent net interest income decreased $3.9 million, or 2%, reflecting a 7 basis point decrease in the net interest margin to 3.31% from 3.38% in the 2004 fourth quarter, partially offset by the favorable impact of a 2% increase in average earning assets. As previously disclosed, the 2004 fourth quarter net interest margin reflected a favorable 6 basis point impact from a $3.7 million funding cost adjustment.

Average total loans and leases increased $2.4 billion, or 11%, from the 2004 first quarter due primarily to a $1.5 billion, or 13%, increase in average consumer loans. Contributing to the consumer loan growth were a $1.2 billion, or 47%, increase in average residential mortgages and a $0.8 billion, or 20%, increase in average home equity loans.

Average total automobile loans declined $1.0 billion, or 34%, from the year-ago quarter reflecting the sale of $1.5 billion of automobile loans over this 12-month period as part of a strategy of reducing automobile loan and lease exposure as a percent of total credit exposure. Partially offsetting the decline in automobile loans was growth in direct financing leases due to the migration from operating lease assets, which have not been originated since April 2002. Average direct financing leases increased $0.5 billion, or 24%, from the year-ago quarter.

Average total commercial loans were $10.4 billion, up $0.9 billion, or 9%, from the year-ago quarter. This increase reflected a $0.4 billion, or 12%, increase in middle market commercial real estate loans and a $0.3 billion, or 6%, increase in middle market commercial and industrial loans. Average small business loans, which include both commercial and industrial and commercial real estate loans, increased $0.2 billion, or 11%, reflecting continued success in meeting the needs of this targeted segment.

Compared with the 2004 fourth quarter, average total loans and leases in the 2005 first quarter increased $0.8 billion, or 4%. Average total consumer loans accounted for slightly more than half of this increase as they increased $0.5 billion, or 4%, reflecting a $0.2 billion, or 6%, increase in residential mortgages and a $0.1 billion, or 2%, increase in average home equity loans. These sequential quarterly growth rates for both residential mortgages and home equity loans have generally trended lower over the last four quarters due to interest rates trending upward. In addition, average automobile loans and leases increased $0.2 billion, or 4%, due to growth in automobile loans and, to a slightly lesser degree, growth in direct financing leases. Automobile loan production increased 20% from the 2004 fourth quarter, which had been the lowest production quarter in recent history, but was 25% below the year-ago quarter production. The lower overall automobile loan production reflected continued aggressive competition in this sector. Average total commercial loans increased $0.4 billion, or 3%, led by a $0.2 billion, or 5%, increase in middle market commercial and industrial loans, reflecting the continued growth in attracting targeted commercial clients, as well as higher utilization rates. Average middle market commercial real estate loans increased 3%, while small business loans increased 2%.

Average investment securities declined $0.7 billion, or 15%, from the year-ago quarter but increased $0.1 billion, or 2%, from the 2004 fourth quarter.

Average total core deposits in the first quarter were $17.0 billion, up $1.6 billion, or 10%, from the year-ago quarter, reflecting a $1.3 billion, or 20%, increase in average interest bearing demand deposit accounts, and a $0.3 billion, or 10%, increase in non-interest bearing deposits. Reflecting typical seasonal factors, average total core deposits increased $0.1 billion, or 1%,

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from the fourth quarter with interest bearing demand deposits, increasing $0.3 billion, or 3%, and non-interest bearing deposits decreasing $0.1 billion, or 3%. This linked quarter performance was better than in the comparable 2004 first quarter period when average total core deposits declined slightly.

Non-interest income decreased $59.6 million, or 26%, from the year-ago quarter. Comparisons with prior-period results were heavily influenced by the decline in operating leases and related operating lease income. Since all automobile leases originated since April 2002 are direct financing leases, the decline in operating leases and related income is expected to continue such that the impact of operating lease income trends on total non-interest income trends is expected to be diminished meaningfully by year-end 2005. Reflecting the run-off of the operating lease portfolio, operating lease income declined $42.1 million, or 47%, from the 2004 first quarter.

Excluding operating lease income, non-interest income decreased $17.5 million, or 13%, from the year-ago quarter with the primary drivers being:

•   $14.1 million decline in investment securities gains with the current quarter reflecting only $1.0 million of such gains, compared with $15.1 million of such gains in the 2004 first quarter.

•   $9.0 million gain on sale of automobile loans in the year-ago quarter, with no such gains in the current quarter.

•   $8.2 million, or 32%, decline in other income primarily due to higher MSR hedge-related trading losses, lower investment banking income, and lower equity investment gains.

•   $2.4 million, or 6%, decline in service charges on deposit accounts with declines in commercial service charges and consumer service charges equally contributing to the decrease. Lower commercial service charges reflected a combination of lower activity and a preference by commercial customers to pay for services with higher compensating balances rather than fees as interest rates increase. The decline in consumer service charges primarily reflected lower personal NSF and overdraft service charges.

•   $2.2 million, or 14%, decline in brokerage and insurance income due to lower annuity sales.

Partially offset by:

• $16.4 million increase in mortgage banking income primarily reflecting a $3.8 million mortgage servicing rights (MSR) temporary impairment recovery in the current quarter compared with a $10.1 million MSR temporary impairment in the year-ago quarter and higher net secondary marketing income.

• $1.9 million, or 11%, increase in trust services due to higher personal trust and mutual fund fees.

Compared with the 2004 fourth quarter, non-interest income declined $14.9 million, or 8%. This comparison was also heavily influenced by the decline in operating lease income for the reasons noted above. Reflecting the run-off of the operating lease portfolio, operating lease income declined $8.4 million, or 15%, from the 2004 fourth quarter. Excluding operating lease

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income, non-interest income decreased $6.5 million, or 5%, from the 2004 fourth quarter with the primary drivers being:

•   $6.5 million, or 27%, decrease in other income primarily reflecting lower equity investment gains and lower investment banking income.

•   $2.3 million, or 6%, decrease in service charges on deposit accounts primarily reflecting seasonally lower personal NSF and overdraft service charges.

•   $1.1 million decline in investment securities gains with the current quarter reflecting only $1.0 million of such gains, compared with $2.1 million of such gains in the 2004 fourth quarter.

Partially offset by:

• $3.2 million, or 37%, increase in mortgage banking income reflecting a $3.8 million MSR temporary impairment recovery in the current quarter.

• $0.9 million, or 5%, increase in trust income reflecting a 12% increase in Huntington Fund fees and 5% increase in personal trust income, partially offset by a 34% seasonal decline in corporate trust fees from the fourth quarter. The 2005 first quarter represented the sixth consecutive quarterly increase in trust income. Trust assets increased 2 percent from the end of last year.

Non-interest expense decreased $27.4 million, or 10%, from the year-ago quarter. Comparisons with prior-period results were influenced by the decline in operating lease expense as the operating lease portfolio continues to run-off (see above operating lease income discussion). Operating lease expense declined $32.8 million, or 46%, from the 2004 first quarter. Excluding operating lease expense, non-interest expense increased $5.4 million, or 3%, from the year-ago quarter reflecting:

•   $2.5 million, or 15%, increase in net occupancy expense primarily reflecting a loss, caused by a refinancing penalty of a real estate partnership minority interest, as well as lower rental income.

•   $2.4 million, or 2%, increase in personnel costs due to higher salary and incentive plan expenses, partially offset by lower sales commissions.

•   $2.2 million, or 30%, increase in professional services expenses primarily reflecting SEC- and regulatory-related expenses.

Partially offset by:

• $1.4 million, or 18%, decline in marketing expense.

Compared with the 2004 fourth quarter, non-interest expense decreased $22.7 million, or 8%. Comparisons with prior-period results were also heavily influenced by the decline in operating lease expense. Operating lease expense declined $10.4 million, or 21%, from the 2004 fourth quarter. Excluding operating lease expense, non-interest expense decreased $12.4 million, or 5%, from the prior quarter reflecting:

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• $8.1 million, or 31%, decrease in other expense as the fourth quarter included a $5.5 million SEC-related accrual.

• $6.8 million, or 26%, decrease in net occupancy as the 2004 fourth quarter included $7.8 million in property lease impairment and write-down on vacated facilities.

Partially offset by:

• $1.2 million, or 1%, increase in personnel costs due to higher 2004 incentive plan expenses, partially offset by lower sales commissions.

The company’s effective tax rate was 22.8% in 2005 first quarter, down from 25.1% in the year-ago quarter, and from 29.0% in the 2004 fourth quarter. The 2005 first quarter effective tax rate included the after-tax positive impact on net income due to a federal tax loss carry back, tax exempt income, bank owned life insurance, asset securitization activities, and general business credits from investment in low income housing and historic property partnerships. The lower effective tax rate is expected to impact each quarter of 2005. In 2006, the effective tax rate is anticipated to increase to a more typical rate slightly below 30%.

Credit Quality

Total net charge-offs for the 2005 first quarter were $28.3 million, or an annualized 0.47% of average total loans and leases. This was comparable to $28.6 million, or 0.53%, in the year-ago quarter but represented an increase from $20.9 million, or an annualized 0.36% of average total loans and leases in the 2004 fourth quarter. The current quarter included a single $14.2 million middle market commercial charge-off related to a commercial leasing company with significant exposure to a service provider that declared bankruptcy. The 0.47% net charge-off ratio for average total loans and leases in the first quarter included 24 basis points related to this single credit.

Total commercial net charge-offs in the first quarter were $16.2 million, or an annualized 0.62%, up from $7.6 million, or an annualized 0.32%, in the year-ago quarter. As noted above, the current quarter included a $14.2 million middle market commercial charge-off, which represented 54 basis points of the 0.62% total commercial net charge-off ratio. Total commercial net charge-offs in the 2004 fourth quarter were $5.2 million, or an annualized 0.21%.

Total consumer net charge-offs in the current quarter were $12.1 million, or an annualized 0.36% of related loans. This compared with $21.0 million, or 0.70%, in the year-ago quarter with the decline from the year-ago quarter heavily influenced by lower automobile loan and lease net charge-offs. Total automobile loan and lease net charge-offs in the 2005 first quarter were $6.2 million, or an annualized 0.56% of related loans and leases, down significantly from $16.6 million, or an annualized 1.32%, in the year-ago quarter. The year-ago quarter included 37 basis points from a one-time $4.7 million cumulative adjustment.

Compared with the 2004 fourth quarter, first quarter total consumer net charge-offs decreased $3.7 million, primarily reflecting a $1.4 million decrease in home equity loan net charge-offs and a $1.3 million decrease in automobile loan and lease net charge-offs. Current quarter home equity loan net charge-offs were an annualized 0.35% of related loans, down from 0.48% in the fourth quarter, with automobile loan and lease net charge-offs of 0.56% declining from 0.70%.

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NPAs were $73.3 million at March 31, 2005, and represented only 0.30% of related assets, down $18.4 million from $91.7 million, or 0.43%, at the end of the year-ago quarter and down $35.3 million from $108.6 million, or 0.46%, at December 31, 2004. The decrease from the prior quarter reflected the expected first quarter sale of $35.7 million of other real estate owned (OREO) properties related to the previously disclosed workout of a trouble mezzanine financing relationship. Residential real estate and home equity NPAs, which historically have demonstrated less potential for subsequent losses, comprised 41% of total NPAs.

Non-performing loans and leases (NPLs), which exclude OREO, were $59.9 million at March 31, 2005, down 22% from $77.1 million a year earlier and down 6% from the end of the fourth quarter. Expressed as a percent of total loans and leases, NPLs were only 0.25% at March 31, 2005, down from 0.36% at March 31, 2004, and 0.27% at December 31, 2004.

The over 90-day delinquent, but still accruing, ratio was 0.21% at March 31, 2005, down from 0.28% a year ago, and little changed from 0.23% at December 31, 2004.

Allowances for Credit Losses (ACL)

The company maintains two reserves, both of which are available to absorb possible credit losses: the allowance for loan and lease losses (ALLL) and the allowance for unfunded loan commitments (AULC). When summed together, these reserves constitute the total allowances for credit losses (ACL).

The March 31, 2005, ALLL was $264.4 million, down from $295.4 million a year earlier and $271.2 million at December 31, 2004. Expressed as a percent of period-end loans and leases, the ALLL ratio at March 31, 2005, was 1.09%, down from 1.39% a year ago and 1.15% at December 31, 2004. These declines reflected the improvement in the economic outlook, the change in the mix of the loan portfolio to lower-risk residential mortgages and home equity loans, and the reduction of specific reserves related to improved or resolved individual problem commercial credits. The table below shows the change in the ALLL ratio from the 2004 first quarter and 2004 fourth quarter.

Components of ALLL as percent of total loans and leases:


										1Q05 change from
	1Q05			4Q04			1Q04			4Q04			1Q04
Transaction reserve		0.81	%		0.78	%		0.91	%		0.03	%		(0.10	)%
Economic reserve		0.27			0.32			0.38			(0.05	)		(0.11	)
Specific reserve		0.01			0.05			0.10			(0.04	)		(0.09	)

Total ALLL		1.09	%		1.15	%		1.39	%		(0.06	)%		(0.30	)%

The ALLL as a percent of NPAs was 361% at March 31, 2005, up from 322% a year ago, and 250% at December 31, 2004.

The March 31, 2005, AULC was $31.6 million, down slightly from $32.1 million at the end of the year-ago quarter, and down from $33.2 million at December 31, 2004.

On a combined basis, the ACL as a percent of total loans and leases was 1.22% at March 31, 2005, compared with 1.55% a year earlier and 1.29% at the end of last quarter. Similarly, the ACL as a percent of NPAs was 404% at March 31, 2005, up from 357% a year earlier and 280%

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at December 31, 2004.

The provision for credit losses in the 2005 first quarter was $19.9 million, a $5.7 million reduction from the year-ago quarter, but a $7.2 million increase from the 2004 fourth quarter. The reduction in provision expense from the year-ago quarter reflected overall improved portfolio quality performance and a stronger economic outlook, only partially offset by provision expense related to loan growth. The increase in provision expense from the fourth quarter primarily reflected an increase in the transaction reserve, due to loan growth, and higher net charge-offs net of allocated reserves, related to the middle market commercial charge-off noted above. This increase was partially offset by improvement in the economic outlook.

Capital

At March 31, 2005, the tangible equity to assets ratio was 7.42%, up from 6.97% a year ago, and 7.18% at December 31, 2004. At March 31, 2005, the tangible equity to risk-weighted assets ratio was 7.92%, up from 7.60% at the end of the year-ago quarter, and 7.86% at December 31, 2004. The increase in the tangible equity to risk-weighted assets ratio reflected primarily the positive impact resulting from reducing the overall risk profile of earning assets throughout this period, most notably a less risky loan portfolio mix.

2005 Outlook

“When earnings guidance is given, it is the company’s practice to do so on a GAAP basis, unless otherwise noted,” Hoaglin said. “Such guidance includes the expected results of all significant forecasted activities, but typically excludes unusual or one-time items until such time as the full impact becomes known.”

“We expect our earnings for the remainder of 2005 to increase sequentially over the next three quarters from the level reported in the first quarter resulting from good earning asset growth, an improving net interest margin, growth in selected fee income categories, stable to improving credit quality, and flat expenses excluding operating lease expense.”

“Reflecting these factors,” he said, “we confirm our earlier earnings per share guidance of $1.78 — $1.83 for 2005.”

The company noted that this guidance excludes any impact of future SEC-related expenses and any share repurchases. Earnings guidance also excludes any impact from the implementation of FAS 123R (expensing of stock options). In the 2005 first quarter, new guidance was issued by the SEC that provides the option to postpone adoption of FAS 123R until January 1, 2006. Consequently, the company did not adopt FAS 123R in the 2005 first quarter and now anticipates adopting this standard in 2006.

To the extent the impacts of these items become known, they will be disclosed and reflected in future earnings guidance. In addition, the company has departed slightly from providing this guidance on a strictly GAAP basis solely to exclude any future benefit from the first quarter federal tax loss carry back discussed above as this impacts only 2005 performance, and because offsetting impacts may occur later in the year from possible balance sheet restructurings and/or expense initiatives currently under review.

-9-

Management Appointments

During the 2005 first quarter, two new management team members were added. Melinda Ackerman, formerly head of human resources with American Electric Power (AEP), joined Huntington as executive vice president and human resources director. Mahesh Sankaran, formerly treasurer with Compass Bancshares Inc., joined the company as executive vice president and treasurer. Both Ackerman and Sankaran report directly to Hoaglin and are members of the Management Committee. In addition, Jerry Kelsheimer was appointed president of the Northern Ohio region where, prior to this appointment, he served as executive vice president and Northern Ohio regional commercial manager.

Proposed Settlement of SEC Formal Investigation

Huntington also announced that it has proposed a settlement to the staff of the Securities and Exchange Commission (“Commission”) regarding the resolution of its previously announced formal investigation into certain financial accounting matters relating to fiscal years 2002 and earlier and certain related disclosure matters, and that the staff has agreed to recommend the proposed settlement offer to the Commission. The proposed settlement, which is subject to approval by the SEC, is expected to involve the entry of an order requiring Huntington; its chief executive officer, Thomas E. Hoaglin; its former vice chairman and chief financial officer, Michael J. McMennamin; and its former controller, John Van Fleet, to comply with various provisions of the Securities Exchange Act of 1934 and the Securities Act of 1933. The proposed settlement would call for the payment of a $7.5 million civil money penalty by the company, which, if approved, would be distributed pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. This civil money penalty would have no current period financial impact on Huntington’s results, as reserves for this amount were established and expensed prior to December 31, 2004. The proposed settlement would also require the disgorgement of $360,000 by Hoaglin in respect of his previously paid 2002 annual bonus, and disgorgement of previously paid bonuses and prejudgment interest for McMennamin and Van Fleet of $265,215 and $26,660, respectively. In addition, Hoaglin, McMennamin, and Van Fleet would pay civil money penalties of $50,000; $75,000; and $25,000; respectively. The proposed settlement would also impose certain other relief with respect to McMennamin and Van Fleet.

The resolution of the SEC investigation is separate and distinct from the formal banking regulatory written agreements announced March 1, 2005 with the Federal Reserve Bank of Cleveland and the Office of the Comptroller of the Currency, which remain in effect until terminated by the banking regulators. The company believes it continues to make progress in working towards a comprehensive resolution of all of the issues outlined in its regulatory agreements.

Commenting on behalf of the Board of Directors, Don M. Casto, chairman of the Executive Committee said, “The Board of Directors at Huntington have reviewed all actions taken to date by Huntington in its efforts to address fully the concerns of the SEC and our banking regulators and are pleased with the work being done. We reiterate our support for Mr. Hoaglin and the management team as the company moves forward to implement best practices in all areas underlying these actions.”

Hoaglin stated, “From the beginning of the formal investigation in 2003, we stated our commitment to reach an appropriate resolution of these matters. We are committed to meeting the highest standards in our accounting, corporate governance, internal audit, and financial

-10-

reporting policies and practices. We believe we can achieve these goals while remaining focused on excelling in our efforts to grow our businesses and serve our customers.”

Reactivates Share Repurchase Program

As of March 31, 2005, the company had unused authority to repurchase up to 7.5 million common shares under an April 27, 2004, share repurchase authorization. Huntington today announced that it intends to reactivate its share repurchase program upon approval by the Commission of the proposed settlement offer to resolve the formal investigation. It expects to repurchase these shares from time-to-time in the open market or through privately negotiated transactions depending on market conditions.

Conference Call / Webcast Information

Huntington’s senior management will host an earnings conference call today at 1:00 p.m. (Eastern Time). The call may be accessed via a live Internet webcast at huntington-ir.com or through a dial-in telephone number at 866-835-8907. Slides will be available at huntington-ir.com just prior to 1:00 p.m. (Eastern Time) today for review during the call. A replay of the webcast will be archived in the Investor Relations section of Huntington’s web site huntington-ir.com. A telephone replay will be available two hours after the completion of the call through May 9, 2005 at 888-266-2081; conference ID 678167.

Forward-looking Statement

This press release contains certain forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. A number of factors, including but not limited to those set forth under the heading “Business Risks” included in Item 1 of Huntington’s Annual Report on Form 10-K for the year ended December 31, 2004, and other factors described from time to time in Huntington’s other filings with the Securities and Exchange Commission, could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements. All forward-looking statements included in this news release are based on information available at the time of the release. Huntington assumes no obligation to update any forward-looking statement.

Basis of Presentation

Use of Non-GAAP Financial Measures

This earnings release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding Huntington’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the Quarterly Financial Review supplement to this earnings release, which can be found on Huntington’s website at huntington-ir.com.

Annualized data

Certain returns, yields, performance ratios, or quarterly growth rates are “annualized” in this presentation to represent an annual time period. This is done for analytical and decision-making purposes to better discern underlying performance trends when compared to full-year or year-over-year amounts. For example, loan growth rates are most often expressed in terms of an annual rate like 8%. As such, a 2% growth rate for a quarter would represent an annualized 8% growth rate.

Fully taxable equivalent interest income and net interest margin

Income from tax-exempt earnings assets is increased by an amount equivalent to the taxes that would have been paid if this income had been taxable at statutory rates. This adjustment puts all earning assets, most notably tax-exempt municipal securities and certain lease assets, on a common basis that facilitates comparison of results to results of competitors.

Earnings per share equivalent data

Significant one-time income or expense items may be expressed on a per common share basis. This is done for analytical and decision-making purposes to better discern underlying trends in total corporate earnings per share performance excluding the impact of such items.

-11-

Investors may also find this information helpful in their evaluation of the company’s financial performance against published earnings per share mean estimate amounts, which typically exclude the impact of significant one-time items. Earnings per share equivalents are usually calculated by applying a 35% effective tax rate to a pre-tax amount to derive an after-tax amount, which is divided by the average shares outstanding during the respective reporting period. Occasionally, when the item involves special tax treatment, the after-tax amount is separately disclosed, with this then being the amount used to calculate the earnings per share equivalent.

NM or nm

Percent changes of 100% or more are shown as “nm” or “not meaningful”. Such large percent changes typically reflect the impact of one-time items within the measured periods. Since the primary purpose of showing a percent change is for discerning underlying performance trends, such large percent changes are “not meaningful” for this purpose.

About Huntington

Huntington Bancshares Incorporated is a $32 billion regional bank holding company headquartered in Columbus, Ohio. Through its affiliated companies, Huntington has more than 139 years of serving the financial needs of its customers. Huntington provides innovative retail and commercial financial products and services through more than 300 regional banking offices in Indiana, Kentucky, Michigan, Ohio and West Virginia. Huntington also offers retail and commercial financial services online at huntington.com; through its technologically advanced, 24-hour telephone bank; and through its network of approximately 700 ATMs. Selected financial service activities are also conducted in other states including: Dealer Sales offices in Florida, Georgia, Tennessee, Pennsylvania, and Arizona; Private Financial Group offices in Florida; and Mortgage Banking offices in Florida, Maryland, and New Jersey. International banking services are made available through the headquarters office in Columbus and an office located in the Cayman Islands and an office located in Hong Kong.

###

-12-

HUNTINGTON BANCSHARES INCORPORATED Quarterly Key Statistics (Unaudited)


	2005			2004						Percent Change

(in thousands of dollars, except per share amounts)	First			Fourth			First			4Q04			1Q04


Net interest income	$	235,198		$	239,068		$	222,685			(1.6)	%		5.6	%
Provision for loan and lease losses		19,874			12,654			25,596			57.1			(22.4	)
Non-interest income		168,050			182,940			227,639			(8.1	)		(26.2	)
Non-interest expense		258,277			281,014			285,654			(8.1	)		(9.6	)

Income before income taxes		125,097			128,340			139,074			(2.5	)		(10.1	)
Provision for income taxes		28,578			37,201			34,901			(23.2	)		(18.1	)

Net Income	$	96,519		$	91,139		$	104,173			5.9	%		(7.3)	%


Net income per common share — diluted	$	0.41		$	0.39		$	0.45			5.1			(8.9	)
Cash dividends declared per common share		0.200			0.200			0.175			—			14.3
Book value per common share at end of period		11.16			10.96			10.31			1.9			8.3

Average common shares — basic		231,824			231,147			229,227			0.3			1.1
Average common shares — diluted		235,053			235,502			232,915			(0.2	)		0.9
Return on average assets		1.20	%		1.13	%		1.36	%

Return on average shareholders’ equity		15.5			14.6			18.4
Net interest margin⁽¹⁾		3.31			3.38			3.36
Efficiency ratio ⁽²⁾		63.7			66.4			65.1
Effective tax rate		22.8			29.0			25.1

Average loans and leases	$	23,856,482		$	23,032,173		$	21,502,390			3.6	%		10.9	%
Average loans and leases — linked quarter annualized growth rate.		14.3	%		15.1	%		1.8	%
Average earning assets		29,128,027			28,506,464			26,978,873			2.2			8.0
Average core deposits⁽³⁾		17,043,436			16,908,269			15,481,110			0.8			10.1
Average core deposits — linked quarter annualized growth rate ⁽³⁾		3.2	%		9.7	%		(1.6)	%
Average total assets	$	32,581,040		$	32,060,518		$	30,835,373			1.6			5.7
Average shareholders’ equity		2,527,168			2,481,373			2,278,400			1.8			10.9

Total assets at end of period	$	32,182,599		$	32,565,497		$	31,039,080			(1.2	)		3.7
Total shareholders’ equity at end of period		2,589,773			2,537,638			2,364,179			2.1			9.5

Net charge-offs (NCOs)	$	28,272		$	20,913		$	28,627			35.2			(1.2	)
NCOs as a % of average loans and leases		0.47	%		0.36	%		0.53	%
Non-performing loans and leases (NPLs)	$	59,893		$	63,962		$	77,127			(6.4	)		(22.3	)
Non-performing assets (NPAs)		73,303			108,568			91,694			(32.5	)		(20.1	)
NPAs as a % of total loans and leases and other real estate (OREO)		0.30	%		0.46	%		0.43	%
Allowance for loan and lease losses (ALLL) as a % of total loans and leases at the end of period		1.09			1.15			1.39
ALLL plus allowance for unfunded loan commitments and letters of credit as a % of total loans and leases at the end of period		1.22			1.29			1.55
ALLL as a % of NPLs		441			424			383
ALLL as a % of NPAs		361			250			322

Tier 1 risk-based capital ratio ⁽⁴⁾		9.17			9.08			8.74
Total risk-based capital ratio ⁽⁴⁾		12.50			12.48			12.13
Tier 1 leverage ratio ⁽⁴⁾		8.48			8.42			8.07
Average equity / assets		7.76			7.74			7.39
Tangible equity / assets ⁽⁵⁾		7.42			7.18			6.97

N.M., not a meaningful value.

⁽¹⁾ On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.

⁽²⁾ Non-interest expense less amortization of intangibles ($0.2 million for all periods above) divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).

⁽³⁾ Includes non-interest bearing and interest bearing demand deposits, savings deposits, retail CDs and other domestic time deposits.

⁽⁴⁾ Estimated at March 31, 2005.

⁽⁵⁾ At end of period. Tangible equity (total equity less intangible assets) divided by tangible assets (total assets less intangible assets).

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EX-99.2 3 l13506aexv99w2.htm EX-99.2 EX-99.2

Exhibit 99.2

HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
March 2005

Table of Contents


Consolidated Balance Sheets			1

Credit Exposure Composition			2

Deposit Composition			3

Consolidated Quarterly Average Balance Sheets			4

Consolidated Quarterly Net Interest Margin Analysis			5

Selected Quarterly Income Statement Data			6

Quarterly Credit Reserves			7

Quarterly Net Charge-Off Analysis			8

Quarterly Non-Performing Assets and Past Due Loans and Leases			9

Quarterly Stock Summary, Capital, and Other Data			10

Quarterly Operating Lease Performance			11

Note:
The preparation of financial statements in conformity with accounting principals generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current year’s presentation.

Huntington Bancshares Incorporated
Consolidated Balance Sheets


											Change March '05 vs '04
2005					2004						Change March '05 vs '04
(in thousands of dollars, except per share amounts)	March 31,				December 31,			March 31,			Amount			Percent
		*(Unaudited)*						(Unaudited)
Assets
Cash and due from banks		$	914,699		$	877,320		$	766,432		$	148,267			19.3	%
Federal funds sold and securities purchased under resale agreements			144,980			628,040			224,841			(79,861	)		(35.5	)
Interest bearing deposits in banks			29,551			22,398			54,027			(24,476	)		(45.3	)
Trading account securities			100,135			309,630			16,410			83,725			N.M.
Loans held for sale			252,932			223,469			230,417			22,515			9.8
Investment securities			4,052,875			4,238,945			5,458,347			(1,405,472	)		(25.7	)
Loans and leases ⁽¹⁾			24,206,465			23,560,277			21,193,627			3,012,838			14.2
Allowance for loan and lease losses			(264,390	)		(271,211	)		(295,377	)		30,987			(10.5	)

Net loans and leases			23,942,075			23,289,066			20,898,250			3,043,825			14.6

Operating lease assets			466,550			587,310			1,070,958			(604,408	)		(56.4	)
Bank owned life insurance			973,164			963,059			938,156			35,008			3.7
Premises and equipment			354,979			355,115			351,073			3,906			1.1
Goodwill and other intangible assets			217,780			215,807			216,805			975			0.4
Customers’ acceptance liability			7,194			11,299			7,909			(715	)		(9.0	)
Accrued income and other assets			725,685			844,039			805,455			(79,770	)		(9.9	)

Total Assets		$	32,182,599		$	32,565,497		$	31,039,080		$	1,143,519			3.7	%


Liabilities and Shareholders’ Equity
Liabilities
Deposits ⁽²⁾		$	21,770,973		$	20,768,161		$	18,988,846		$	2,782,127			14.7	%
Short-term borrowings			1,033,496			1,207,233			1,076,302			(42,806	)		(4.0	)
Federal Home Loan Bank advances			903,871			1,271,088			1,273,000			(369,129	)		(29.0	)
Other long-term debt			3,138,626			4,016,004			4,478,599			(1,339,973	)		(29.9	)
Subordinated notes			1,025,612			1,039,793			1,066,705			(41,093	)		(3.9	)
Allowance for unfunded loan commitments and letters of credit			31,610			33,187			32,089			(479	)		(1.5	)
Bank acceptances outstanding			7,194			11,299			7,909			(715	)		(9.0	)
Deferred federal income tax liability			781,152			783,628			687,820			93,332			13.6
Accrued expenses and other liabilities			900,292			897,466			1,063,631			(163,339	)		(15.4	)

Total Liabilities			29,592,826			30,027,859			28,674,901			917,925			3.2

Shareholders’ equity
Preferred stock — authorized 6,617,808 shares; none outstanding			—			—			—			—			—
Common stock — without par value; authorized 500,000,000 shares; issued 257,866,255 shares; outstanding 232,002,213; 231,605,281 and 229,410,043 shares, respectively.			2,484,832			2,484,204			2,482,342			2,490			0.1
Less 25,864,042; 26,260,974 and 28,456,212 treasury shares, respectively			(490,139	)		(499,259	)		(541,048	)		50,909			(9.4	)
Accumulated other comprehensive income (loss)			(18,686	)		(10,903	)		21,490			(40,176	)		N.M.
Retained earnings			613,766			563,596			401,395			212,371			52.9

Total Shareholders’ Equity			2,589,773			2,537,638			2,364,179			225,594			9.5

Total Liabilities and Shareholders’ Equity		$	32,182,599		$	32,565,497		$	31,039,080		$	1,143,519			3.7	%

N.M., not a meaningful value.
⁽¹⁾ See Page 2 for detail of Loans and Leases.
⁽²⁾ See Page 3 for detail of Deposits.

Huntington Bancshares Incorporated
Credit Exposure Composition


													Change
2005					2004								March '05 vs '04
(in thousands of dollars)	March 31,				December 31,				March 31,				Amount			Percent
	*(Unaudited)*								(Unaudited)
By Type
Commercial:
Middle market commercial and industrial	$	4,824,403	19.6	%	$	4,660,141	19.3	%	$	4,545,930	20.4	%	$	278,473			6.1	%
Construction		1,647,999	6.7			1,592,125	6.6			1,282,420	5.8			365,579			28.5
Commercial		1,913,849	7.8			1,881,835	7.8			1,934,777	8.7			(20,928	)		(1.1	)

Middle market commercial real estate		3,561,848	14.5			3,473,960	14.4			3,217,197	14.5			344,651			10.7

Small business commercial and industrial and commercial real estate		2,204,278	8.9			2,168,877	8.9			1,988,818	8.9			215,460			10.8

Total commercial		10,590,529	43.0			10,302,978	42.6			9,751,945	43.8			838,584			8.6

Consumer:
Automobile loans		2,066,264	8.4			1,948,667	8.1			2,267,310	10.2			(201,046	)		(8.9	)
Automobile leases		2,476,098	10.0			2,443,455	10.1			2,065,883	9.3			410,215			19.9
Home equity		4,594,586	18.6			4,554,540	18.9			3,920,882	17.6			673,704			17.2
Residential mortgage		3,995,769	16.2			3,829,234	15.9			2,756,625	12.4			1,239,144			45.0
Other loans		483,219	1.9			481,403	2.0			430,982	1.8			52,237			12.1

Total consumer		13,615,936	55.1			13,257,299	55.0			11,441,682	51.3			2,174,254			19.0

Total loans and direct financing leases	$	24,206,465	98.1		$	23,560,277	97.6		$	21,193,627	95.1		$	3,012,838			14.2


Operating lease assets		466,550	1.9			587,310	2.4			1,070,958	4.8			(604,408	)		(56.4	)
Securitized loans		—	—			—	—			27,573	0.1			(27,573	)		N.M.

Total credit exposure	$	24,673,015	100.0	%	$	24,147,587	100.0	%	$	22,292,158	100.0	%	$	2,380,857			10.7	%

Total automobile exposure ⁽¹⁾	$	5,008,912	20.3	%	$	4,979,432	20.6	%	$	5,431,724	24.4	%	$	(422,812	)		(7.8)	%


By Business Segment ⁽²⁾
Regional banking:
Central Ohio	$	6,410,873	26.0	%	$	6,239,021	25.8	%	$	4,986,411	22.4	%	$	1,424,462			28.6	%
Northern Ohio		2,910,071	11.8			2,857,746	11.8			2,682,743	12.0			227,328			8.5
Southern Ohio / Kentucky		2,023,243	8.2			1,895,180	7.8			1,703,006	7.6			320,237			18.8
West Michigan		2,335,578	9.5			2,271,682	9.4			2,154,994	9.7			180,584			8.4
East Michigan		1,475,868	6.0			1,430,169	5.9			1,340,679	6.0			135,189			10.1
West Virginia		887,239	3.6			882,016	3.7			809,714	3.6			77,525			9.6
Indiana		997,052	4.0			961,700	4.0			752,850	3.4			244,202			32.4

Regional banking		17,039,924	69.1			16,537,514	68.4			14,430,397	64.7			2,609,527			18.1
Dealer Sales		5,955,634	24.1			5,920,270	24.5			6,396,727	28.7			(441,093	)		(6.9	)
Private Financial Group		1,496,408	6.1			1,487,800	6.2			1,322,259	5.9			174,149			13.2
Treasury / Other		181,049	0.7			202,003	0.9			142,775	0.7			38,274			26.8

Total credit exposure	$	24,673,015	100.0	%	$	24,147,587	100.0	%	$	22,292,158	100.0	%	$	2,380,857			10.7	%

⁽¹⁾ Sum of automobile loans and leases, operating lease assets, and securitized loans.

⁽²⁾ Prior period amounts have been reclassified to conform to the current period business segment structure.

Huntington Bancshares Incorporated
Deposit Composition


													Change
2005					2004								March '05 vs '04
(in thousands of dollars)	March 31,				December 31,				March 31,				Amount			Percent
	*(Unaudited)*								(Unaudited)

By Type
Non-interest bearing demand deposits	$	3,186,187	14.6	%	$	3,392,123	16.3	%	$	2,918,380	15.4	%	$	267,807			9.2	%
Interest bearing demand deposits		7,848,458	36.1			7,786,377	37.5			6,866,174	36.2			982,284			14.3
Savings and other domestic time deposits		3,460,633	15.9			3,502,552	16.9			3,609,745	19.0			(149,112	)		(4.1	)
Retail certificates of deposit		2,555,241	11.7			2,466,965	11.9			2,394,940	12.6			160,301			6.7


Total core deposits		17,050,519	78.3			17,148,017	82.6			15,789,239	83.2			1,261,280			8.0
Domestic time deposits of $100,000 or more		1,311,495	6.0			1,081,660	5.2			791,320	4.2			520,175			65.7
Brokered time deposits and negotiable CDs		3,007,124	13.8			2,097,537	10.1			1,941,963	10.2			1,065,161			54.8
Foreign time deposits		401,835	1.9			440,947	2.1			466,324	2.4			(64,489	)		(13.8	)

Total deposits	$	21,770,973	100.0	%	$	20,768,161	100.0	%	$	18,988,846	100.0	%	$	2,782,127			14.7	%


Total core deposits:
Commercial	$	5,218,482	30.6	%	$	5,293,666	30.9	%	$	4,611,258	29.2	%	$	607,224			13.2	%
Personal		11,832,037	69.4			11,854,351	69.1			11,177,981	70.8			654,056			5.9

Total core deposits	$	17,050,519	100.0	%	$	17,148,017	100.0	%	$	15,789,239	100.0	%	$	1,261,280			8.0	%


By Business Segment ⁽¹⁾
Regional banking:
Central Ohio	$	4,748,903	21.8	%	$	4,705,721	22.7	%	$	4,389,011	23.1	%	$	359,892			8.2	%
Northern Ohio		3,929,993	18.1			4,068,385	19.6			3,508,376	18.5			421,617			12.0
Southern Ohio / Kentucky		1,774,229	8.1			1,742,353	8.4			1,475,506	7.8			298,723			20.2
West Michigan		2,685,054	12.3			2,643,510	12.7			2,608,967	13.7			76,087			2.9
East Michigan		2,298,679	10.6			2,222,191	10.7			2,025,914	10.7			272,765			13.5
West Virginia		1,368,763	6.3			1,375,151	6.6			1,291,913	6.8			76,850			5.9
Indiana		717,877	3.3			663,927	3.2			637,090	3.4			80,787			12.7

Regional banking		17,523,498	80.5			17,421,238	83.9			15,936,777	84.0			1,586,721			10.0
Dealer Sales		69,046	0.3			74,969	0.4			76,031	0.4			(6,985	)		(9.2	)
Private Financial Group		1,139,139	5.2			1,176,303	5.7			1,060,639	5.6			78,500			7.4
Treasury / Other⁽²⁾		3,039,290	14.0			2,095,651	10.0			1,915,399	10.0			1,123,891			58.7


Total deposits	$	21,770,973	100.0	%	$	20,768,161	100.0	%	$	18,988,846	100.0	%	$	2,782,127			14.7	%

⁽¹⁾ Prior period amounts have been reclassified to conform to the current period business segment structure.
⁽²⁾ Comprised largely of brokered deposits and negotiable CDs.

Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)


	Average Balances															Change
Fully Taxable Equivalent basis	2005			2004												1Q05 vs 1Q04
(in millions of dollars)	First			Fourth			Third			Second			First			Amount			Percent

Assets
Interest bearing deposits in banks	$	53		$	60		$	55		$	69		$	79		$	(26	)		(32.9	)%
Trading account securities		200			228			148			28			16			184			N.M.
Federal funds sold and securities purchased under resale agreements		475			695			318			168			92			383			N.M.
Loans held for sale		203			229			283			254			207			(4	)		(1.9	)
Investment securities:
Taxable		3,932			3,858			4,340			4,861			4,646			(714	)		(15.4	)
Tax-exempt		409			404			398			410			437			(28	)		(6.4	)

Total investment securities		4,341			4,262			4,738			5,271			5,083			(742	)		(14.6	)
Loans and leases:
Commercial:
Middle market commercial and industrial		4,710			4,503			4,298			4,555			4,440			270			6.1
Construction		1,642			1,577			1,514			1,272			1,276			366			28.7
Commercial		1,883			1,852			1,913			1,919			1,873			10			0.5

Middle market commercial real estate		3,525			3,429			3,427			3,191			3,149			376			11.9
Small business commercial and industrial and commercial real estate		2,183			2,136			2,081			2,018			1,974			209			10.6

Total commercial		10,418			10,068			9,806			9,764			9,563			855			8.9

Consumer:
Automobile loans		2,008			1,913			1,857			2,337			3,041			(1,033	)		(34.0	)
Automobile leases		2,461			2,388			2,250			2,139			1,988			473			23.8

Automobile loans and leases		4,469			4,301			4,107			4,476			5,029			(560	)		(11.1	)
Home equity		4,570			4,489			4,337			4,107			3,810			760			19.9
Residential mortgage		3,919			3,695			3,484			2,986			2,674			1,245			46.6
Other loans		480			479			461			434			426			54			12.7

Total consumer		13,438			12,964			12,389			12,003			11,939			1,499			12.6

Total loans and leases		23,856			23,032			22,195			21,767			21,502			2,354			10.9
Allowance for loan and lease losses		(282	)		(283	)		(288	)		(310	)		(313	)		31			9.9

Net loans and leases		23,574			22,749			21,907			21,457			21,189			2,385			11.3

Total earning assets		29,128			28,506			27,737			27,557			26,979			2,149			8.0

Operating lease assets		529			648			800			977			1,166			(637	)		(54.6	)
Cash and due from banks		909			880			928			772			740			169			22.8
Intangible assets		218			216			216			216			217			1			0.5
All other assets		2,079			2,094			2,066			2,101			2,046			33			1.6

Total Assets	$	32,581		$	32,061		$	31,459		$	31,313		$	30,835		$	1,746			5.7	%


Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing demand deposits	$	3,314		$	3,401		$	3,276		$	3,223		$	3,017		$	297			9.8	%
Interest bearing demand deposits		7,925			7,658			7,384			7,168			6,609			1,316			19.9
Savings and other domestic time deposits		3,309			3,395			3,436			3,439			3,456			(147	)		(4.3	)
Retail certificates of deposit		2,496			2,454			2,414			2,400			2,399			97			4.0

Total core deposits		17,044			16,908			16,510			16,230			15,481			1,563			10.1
Domestic time deposits of $100,000 or more		1,249			990			886			795			788			461			58.5
Brokered time deposits and negotiable CDs		2,728			1,948			1,755			1,737			1,907			821			43.1
Foreign time deposits		442			465			476			542			549			(107	)		(19.5	)

Total deposits		21,463			20,311			19,627			19,304			18,725			2,738			14.6
Short-term borrowings		1,179			1,302			1,342			1,396			1,603			(424	)		(26.5	)
Federal Home Loan Bank advances		1,196			1,270			1,270			1,270			1,273			(77	)		(6.0	)
Subordinated notes and other long-term debt		4,517			5,099			5,244			5,623			5,557			(1,040	)		(18.7	)

Total interest bearing liabilities		25,041			24,581			24,207			24,370			24,141			900			3.7

All other liabilities		1,699			1,598			1,564			1,397			1,399			300			21.4
Shareholders’ equity		2,527			2,481			2,412			2,323			2,278			249			10.9

Total Liabilities and Shareholders’ Equity	$	32,581		$	32,061		$	31,459		$	31,313		$	30,835		$	1,746			5.7	%

N.M., not a meaningful value.

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)


	Average Rates⁽²⁾
2005				2004
Fully Taxable Equivalent basis ⁽¹⁾	First			Fourth			Third			Second			First

Assets
Interest bearing deposits in banks		1.88	%		1.61	%		0.91	%		1.05	%		0.71	%
Trading account securities		4.14			4.15			4.44			3.02			3.98
Federal funds sold and securities purchased under resale agreements		2.36			1.99			1.53			1.21			1.41
Loans held for sale		5.55			5.69			5.25			5.17			5.33
Investment securities:
Taxable		3.87			3.77			3.83			3.83			4.06
Tax-exempt		6.73			6.89			7.06			7.07			6.88

Total investment securities		4.14			4.07			4.10			4.09			4.30
Loans and leases:
Commercial:
Middle market commercial and industrial		5.02			4.80			4.46			4.05			4.33
Construction		5.13			4.65			4.13			3.73			3.68
Commercial		5.15			4.80			4.45			4.20			4.31

Middle market commercial real estate		5.14			4.73			4.31			4.02			4.05
Small business commercial and industrial and commercial real estate		5.81			5.67			5.45			5.33			5.46

Total commercial		5.23			4.96			4.62			4.30			4.47

Consumer:
Automobile loans		6.83			7.31			7.65			7.20			6.93
Automobile leases		4.92			5.00			5.02			5.06			4.94

Automobile loans and leases		5.78			6.02			6.21			6.17			6.14
Home equity		5.60			5.30			4.84			4.75			4.69
Residential mortgage		5.55			5.53			5.48			5.40			5.51
Other loans		6.42			6.87			6.54			6.21			5.83

Total consumer		5.67			5.66			5.54			5.49			5.52

Total loans and leases		5.48			5.34			5.12			4.95			5.04

Total earning assets		5.21	%		5.05	%		4.89	%		4.76	%		4.89	%


Liabilities and Shareholders’ Equity
Deposits:
Non-interest bearing demand deposits		—	%		—	%		—	%		—	%		—	%
Interest bearing demand deposits		1.45			1.21			1.06			0.94			0.88
Savings and other domestic time deposits		1.27			1.26			1.24			1.23			1.41
Retail certificates of deposit		3.43			3.38			3.32			3.27			3.47

Total core deposits		1.76			1.62			1.52			1.45			1.53
Domestic time deposits of $100,000 or more		2.92			2.51			2.40			2.37			2.14
Brokered time deposits and negotiable CDs		2.80			2.26			1.84			1.57			1.51
Foreign time deposits		1.41			0.98			0.83			0.76			0.72

Total deposits		1.99			1.73			1.58			1.48			1.53
Short-term borrowings		1.66			1.17			0.92			0.80			0.83
Federal Home Loan Bank advances		2.90			2.68			2.60			2.52			2.50
Subordinated notes and other long-term debt		3.39			2.67			2.62			2.24			2.33

Total interest bearing liabilities		2.27	%		1.94	%		1.82	%		1.66	%		1.71	%


Net interest rate spread		2.94	%		3.11	%		3.07	%		3.10	%		3.18	%
Impact of non-interest bearing funds on margin		0.37			0.27			0.23			0.19			0.18

Net interest margin		3.31	%		3.38	%		3.30	%		3.29	%		3.36	%

⁽¹⁾Fully taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 6 for the FTE adjustment.
⁽²⁾Loan, lease, and deposit average rates include impact of applicable derivatives and non-deferrable fees.

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data
(Unaudited)


2005				2004												1Q05 vs 1Q04
(in thousands of dollars, except per share amounts)	First			Fourth			Third			Second			First			Amount			Percent

Interest income	$	376,105		$	359,215		$	338,002		$	324,167		$	325,931		$	50,174			15.4	%
Interest expense		140,907			120,147			110,944			101,604			103,246			37,661			36.5

Net interest income		235,198			239,068			227,058			222,563			222,685			12,513			5.6
Provision for credit losses		19,874			12,654			11,785			5,027			25,596			(5,722	)		(22.4	)

Net interest income after provision for credit losses		215,324			226,414			215,273			217,536			197,089			18,235			9.3

Operating lease income		46,732			55,106			64,412			78,706			88,867			(42,135	)		(47.4	)
Service charges on deposit accounts		39,418			41,747			43,935			43,596			41,837			(2,419	)		(5.8	)
Trust services		18,196			17,315			17,064			16,708			16,323			1,873			11.5
Brokerage and insurance income		13,026			12,879			13,200			13,523			15,197			(2,171	)		(14.3	)
Bank owned life insurance income		10,104			10,484			10,019			11,309			10,485			(381	)		(3.6	)
Other service charges and fees		10,159			10,617			10,799			10,645			9,513			646			6.8
Mortgage banking		12,061			8,822			4,448			23,322			(4,296	)		16,357			N.M.
Securities gains (losses)		957			2,100			7,803			(9,230	)		15,090			(14,133	)		(93.7	)
Gain on sales of automobile loans		—			—			312			4,890			9,004			(9,004	)		N.M.
Other income		17,397			23,870			17,899			24,659			25,619			(8,222	)		(32.1	)

Total non-interest income		168,050			182,940			189,891			218,128			227,639			(59,589	)		(26.2	)

Personnel costs		123,981			122,738			121,729			119,715			121,624			2,357			1.9
Operating lease expense		37,948			48,320			54,885			62,563			70,710			(32,762	)		(46.3	)
Net occupancy		19,242			26,082			16,838			16,258			16,763			2,479			14.8
Outside data processing and other services		18,770			18,563			17,527			17,563			18,462			308			1.7
Equipment		15,863			15,733			15,295			16,228			16,086			(223	)		(1.4	)
Professional services		9,459			9,522			12,219			7,836			7,299			2,160			29.6
Marketing		6,454			5,581			5,000			8,069			7,839			(1,385	)		(17.7	)
Telecommunications		4,882			4,596			5,359			4,638			5,194			(312	)		(6.0	)
Printing and supplies		3,094			3,148			3,201			3,098			3,016			78			2.6
Amortization of intangibles		204			205			204			204			204			—			—
Restructuring reserve releases		—			—			(1,151	)		—			—			—			—
Other expense		18,380			26,526			22,317			25,981			18,457			(77	)		(0.4	)

Total non-interest expense		258,277			281,014			273,423			282,153			285,654			(27,377	)		(9.6	)

Income before income taxes		125,097			128,340			131,741			153,511			139,074			(13,977	)		(10.1	)
Provision for income taxes		28,578			37,201			38,255			43,384			34,901			(6,323	)		(18.1	)

Net income	$	96,519		$	91,139		$	93,486		$	110,127		$	104,173		$	(7,654	)		(7.3)	%


Average common shares — diluted		235,053			235,502			234,348			232,659			232,915			2,138			0.9	%

Per common share
Net income — diluted	$	0.41		$	0.39		$	0.40		$	0.47		$	0.45		$	(0.04	)		(8.9	)
Cash dividends declared		0.200			0.200			0.200			0.175			0.175			0.025			14.3
Return on average total assets		1.20	%		1.13	%		1.18	%		1.41	%		1.36	%		(0.16)	%		(11.8	)
Return on average total shareholders’ equity		15.5			14.6			15.4			19.1			18.4			(2.9	)		(15.8	)
Net interest margin ⁽¹⁾		3.31			3.38			3.30			3.29			3.36			(0.05	)		(1.5	)
Efficiency ratio ⁽²⁾		63.7			66.4			66.3			62.3			65.1			(1.4	)		(2.2	)
Effective tax rate		22.8			29.0			29.0			28.3			25.1			(2.3	)		(9.2	)

Revenue — fully taxable equivalent (FTE)
Net interest income	$	235,198		$	239,068		$	227,058		$	222,563		$	222,685		$	12,513			5.6
FTE adjustment ⁽¹⁾		2,861			2,847			2,864			2,919			3,023			(162	)		(5.4	)

Net interest income		238,059			241,915			229,922			225,482			225,708			12,351			5.5
Non-interest income		168,050			182,940			189,891			218,128			227,639			(59,589	)		(26.2	)

Total revenue	$	406,109		$	424,855		$	419,813		$	443,610		$	453,347		$	(47,238	)		(10.4)	%

N.M., not a meaningful value.

⁽¹⁾ On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.

⁽²⁾ Non-interest expense less amortization of intangibles divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)


2005				2004
(in thousands of dollars)	First			Fourth			Third			Second			First

Allowance for loan and leases losses, beginning of period	$	271,211		$	282,650		$	286,935		$	295,377		$	299,732

Loan and lease losses		(37,213	)		(31,737	)		(26,366	)		(30,845	)		(37,167	)
Recoveries of loans previously charged off		8,941			10,824			9,886			18,330			8,540

Net loan and lease losses		(28,272	)		(20,913	)		(16,480	)		(12,515	)		(28,627	)

Provision for loan and lease losses		21,451			9,474			12,971			5,923			29,029
Allowance of assets sold and securitized		—			—			(776	)		(1,850	)		(4,757	)

Allowance for loan and lease losses, end of period	$	264,390		$	271,211		$	282,650		$	286,935		$	295,377


Allowance for unfunded loan commitments and letters of credit, beginning of period	$	33,187		$	30,007		$	31,193		$	32,089		$	35,522

Provision for unfunded loan commitments and letters of credit losses		(1,577	)		3,180			(1,186	)		(896	)		(3,433	)

Allowance for unfunded loan commitments and letters of credit, end of period	$	31,610		$	33,187		$	30,007		$	31,193		$	32,089


Total allowances for credit losses	$	296,000		$	304,398		$	312,657		$	318,128		$	327,466


Allowance for loan and lease losses (ALLL) as % of:
Transaction reserve		0.81			0.78			0.84			0.86			0.91
Economic reserve		0.27			0.32			0.33			0.36			0.38
Specific reserve		0.01			0.05			0.08			0.10			0.10

Total loans and leases		1.09	%		1.15	%		1.25	%		1.32	%		1.39	%

Non-performing loans and leases (NPLs)		441			424			417			464			383
Non-performing assets (NPAs)		361			250			351			384			322

Total allowances for credit losses (ACL) as % of:
Total loans and leases		1.22	%		1.29	%		1.38	%		1.46	%		1.55	%
Non-performing loans and leases		494			476			461			515			425
Non-performing assets		404			280			389			426			357

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)


2005				2004

(in thousands of dollars)	First			Fourth			Third			Second			First


Net charge-offs by loan and lease type:
Commercial:
Middle market commercial and industrial	$	14,092		$	1,239		$	(102	)	$	(3,642	)	$	4,425
Construction		(51	)		704			(19	)		276			1,504
Commercial		(152	)		1,834			1,490			2,222			(40	)


Middle market commercial real estate		(203	)		2,538			1,471			2,498			1,464


Small business commercial and industrial and commercial real estate		2,283			1,386			1,195			1,281			1,704


Total commercial		16,172			5,163			2,564			137			7,593


Consumer:
Automobile loans		3,216			4,406			5,142			5,604			13,422
Automobile leases		3,014			3,104			2,415			2,159			3,159


Automobile loans and leases		6,230			7,510			7,557			7,763			16,581
Home equity		3,963			5,346			4,259			2,569			2,900
Residential mortgage		439			608			534			302			316
Other loans		1,468			2,286			1,566			1,744			1,237


Total consumer		12,100			15,750			13,916			12,378			21,034



Total net charge-offs	$	28,272		$	20,913		$	16,480		$	12,515		$	28,627



Net charge-offs — annualized percentages:
Commercial:
Middle market commercial and industrial		1.20	%		0.11	%		(0.01)	%		(0.32)	%		0.40	%
Construction		(0.01	)		0.18			(0.01	)		0.09			0.47
Commercial		(0.03	)		0.40			0.31			0.46			(0.01	)

Middle market commercial real estate		(0.02	)		0.30			0.17			0.31			0.19


Small business commercial and industrial and commercial real estate		0.42			0.26			0.23			0.25			0.35


Total commercial		0.62			0.21			0.10			0.01			0.32


Consumer:
Automobile loans		0.64			0.92			1.11			0.96			1.77
Automobile leases		0.49			0.52			0.43			0.40			0.64


Automobile loans and leases		0.56			0.70			0.74			0.69			1.32
Home equity		0.35			0.48			0.39			0.25			0.30
Residential mortgage		0.04			0.07			0.06			0.04			0.05
Other loans		1.22			1.91			1.36			1.62			1.17


Total consumer		0.36			0.49			0.45			0.41			0.70


Net charge-offs as a % of average loans		0.47	%		0.36	%		0.30	%		0.23	%		0.53	%

Huntington Bancshares Incorporated
Quarterly Non-Performing Assets and Past Due Loans and Leases
(Unaudited)


2005				2004

(in thousands of dollars)	March 31,			December 31,			September 30,			June 30,			March 31,


Non-accrual loans and leases:
Middle market commercial and industrial	$	16,993		$	24,179		$	20,098		$	24,336		$	36,854
Middle market commercial real estate		6,682			4,582			14,717			11,122			16,097
Small business commercial and industrial and commercial real estate		16,387			14,601			12,087			12,368			12,124
Residential mortgage		12,498			13,545			13,197			13,952			12,052
Home equity ⁽¹⁾		7,333			7,055			7,685			—			—


Total non-performing loans and leases		59,893			63,962			67,784			61,778			77,127
Other real estate, net:
Residential		10,571			8,762			8,840			8,851			9,132
Commercial⁽²⁾		2,839			35,844			3,852			4,067			5,435


Total other real estate, net		13,410			44,606			12,692			12,918			14,567


Total non-performing assets	$	73,303		$	108,568		$	80,476		$	74,696		$	91,694



Non-performing loans and leases as a % of total loans and leases		0.25	%		0.27	%		0.30	%		0.28	%		0.36	%

Non-performing assets as a % of total loans and leases and other real estate		0.30			0.46			0.36			0.34			0.43

Accruing loans and leases past due 90 days or more⁽¹⁾	$	50,086		$	54,283		$	53,456		$	51,490		$	59,697

Accruing loans and leases past due 90 days or more as a percent of total loans and leases		0.21	%		0.23	%		0.24	%		0.24	%		0.28	%


2005				2004

(in thousands of dollars)	March 31,			December 31,			September 30,			June 30,			March 31,


Non-performing assets, beginning of period	$	108,568		$	80,476		$	74,696		$	91,694		$	87,386
New non-performing assets ^{(1) (2)}		33,607			61,684			22,740			25,727			27,208
Returns to accruing status		(3,838	)		(2,248	)		—			(1,493	)		(54	)
Loan and lease losses		(17,281	)		(8,578	)		(5,424	)		(12,872	)		(10,463	)
Payments		(10,404	)		(8,829	)		(10,202	)		(13,571	)		(10,717	)
Sales		(37,349	)		(13,937	)		(1,334	)		(14,789	)		(1,666	)


Non-performing assets, end of period	$	73,303		$	108,568		$	80,476		$	74,696		$	91,694

⁽¹⁾ As of September 30, 2004, the Company adopted a policy, consistent with its policy for residential mortgage loans, of placing home equity loans and lines on nonaccrual status when they become greater than 180 days past due. In prior quarters, these balances were included in “Accruing loans and leases past due 90 days or more.”

⁽²⁾ At December 31, 2004, other real estate owned included $35.7 million of properties that relate to the work-out of $5.9 million of mezzanine loans. These properties were subject to $29.8 million of non-recourse debt to another financial institution. Both properties were sold in the first quarter of 2005.

Huntington Bancshares Incorporated
Quarterly Stock Summary, Capital, and Other Data
(Unaudited)

Quarterly common stock summary


2005			2004
(in thousands of dollars, except per share amounts)	First		Fourth		Third		Second		First

Common stock price, per share
High ⁽¹⁾	$	24.780	$	25.380	$	25.150	$	23.120	$	23.780
Low⁽¹⁾		22.150		23.110		22.700		20.890		21.000
Close		23.900		24.740		24.910		22.980		22.030
Average closing price		23.216		24.241		24.105		22.050		22.501

Dividends, per share
Cash dividends declared on common stock	$	0.200	$	0.200	$	0.200	$	0.175	$	0.175

Common shares outstanding
Average — basic		231,824		231,147		229,848		229,429		229,227
Average — diluted		235,053		235,502		234,348		232,659		232,915
Ending		232,002		231,605		230,153		229,476		229,410
Book value per share	$	11.16	$	10.96	$	10.69	$	10.40	$	10.31

Common share repurchase program
Number of shares repurchased		—		—		—		—		—

Capital adequacy


2005				2004
(in thousands of dollars)	March 31,			December 31,			September 30,			June 30,			March 31,

Total risk-adjusted assets⁽²⁾	$	29,947,075		$	29,542,401		$	28,679,142		$	28,415,519		$	28,247,258

Tier 1 leverage ratio⁽²⁾		8.48	%		8.42	%		8.36	%		8.20	%		8.07	%
Tier 1 risk-based capital ratio⁽²⁾		9.17			9.08			9.10			8.98			8.74
Total risk-based capital ratio⁽²⁾		12.50			12.48			12.53			12.56			12.13

Tangible equity / asset ratio		7.42			7.18			7.11			6.95			6.97
Tangible equity / risk-weighted assets ratio⁽²⁾		7.92			7.86			7.83			7.64			7.60
Average equity / average assets		7.76			7.74			7.67			7.42			7.39

Other data
Number of employees (full-time equivalent)		7,813			7,812			7,906			8,045			7,915
Number of domestic full-service banking offices⁽³⁾		343			342			341			341			337

⁽¹⁾ High and low stock prices are intra-day quotes obtained from NASDAQ.
⁽²⁾ First quarter 2005 figures are estimated.
⁽³⁾ Includes three Private Financial Group offices in Florida.

Huntington Bancshares Incorporated
Quarterly Operating Lease Performance
(Unaudited)


2005				2004												1Q05 vs 1Q04
(in thousands of dollars)	First			Fourth			Third			Second			First			Amount			Percent

Balance Sheet:
Average operating lease assets outstanding	$	529,245		$	647,970		$	800,145		$	976,626		$	1,166,146		$	(636,901	)		(54.6)	%


Income Statement:
Net rental income	$	43,554		$	51,016		$	60,267		$	72,402		$	83,517		$	(39,963	)		(47.9)	%
Fees		1,857			2,111			2,965			4,838			3,543			(1,686	)		(47.6	)
Recoveries — early terminations		1,321			1,979			1,180			1,466			1,807			(486	)		(26.9	)

Total operating lease income		46,732			55,106			64,412			78,706			88,867			(42,135	)		(47.4	)


Depreciation and residual losses at termination		34,703			45,293			49,917			57,412			63,823			(29,120	)		(45.6	)
Losses — early terminations		3,245			3,027			4,968			5,151			6,887			(3,642	)		(52.9	)

Total operating lease expense		37,948			48,320			54,885			62,563			70,710			(32,762	)		(46.3	)

Net earnings contribution	$	8,784		$	6,786		$	9,527		$	16,143		$	18,157		$	(9,373	)		(51.6)	%


Earnings ratios ⁽¹⁾
Net rental income		32.9	%		31.5	%		30.1	%		29.7	%		28.6	%		4.3	%		15.0	%
Depreciation and residual losses at termination		26.2			28.0			25.0			23.5			21.9			4.3			19.6

Definition of term(s):

Net rental income includes the lease payments earned on the equipment and vehicles that Huntington leases to its customers under operating leases. Fees include late fees, early payment fees and other non-origination fees. Recoveries represent payments received on a cash basis subsequent to a customer’s default on an operating lease and a recognition of an impairment loss on the lease. Depreciation represents the periodic depreciation of equipment and vehicles to their residual value owned by Huntington under operating leases and any accelerated depreciation where Huntington expects to receive less than the residual value from the sale of the vehicle and from insurance proceeds at the end of the lease term. Losses represent impairments recognized on equipment and vehicles where the lessee has defaulted on the operating lease.

⁽¹⁾ As a percent of average operating lease assets, quarterly and year-to-date amounts annualized.

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	•	$6.4 million after-tax ($0.03 earnings per share) positive impact on net income reflecting the recognition of the effect of federal tax refunds on income tax expense. These federal tax refunds resulted from the ability to carry back federal tax losses to prior years.

	•	$6.4 million pre-tax ($0.02 earnings per share) unfavorable impact to provision expense, relating to a $14.2 million middle market commercial charge-off, net of $7.8 million of allocated reserves.

	•	$2.0 million pre-tax ($0.01 earnings per share) unfavorable impact from SEC and regulatory-related expenses.

	•	4% growth (14% annualized) in average total loans and leases reflecting 4% growth (15% annualized) in consumer loans and 3% growth (14% annualized) in total commercial loans.

	•	1% growth (3% annualized) in average total core deposits.

	•	3.31% net interest margin, compared with 3.38% that included a 6 basis point positive impact from a funding cost adjustment.

	•	0.47% annualized net charge-offs that included 24 basis points related to a single middle market commercial net charge-off, compared with 0.36%.

	•	0.30% period-end non-performing asset (NPA) ratio, down from 0.46%.

	•	1.09% period-end allowance for loan and lease losses (ALLL) ratio, down from 1.15%.

	•	441% period-end ALLL to non-performing loan (NPL) ratio, up from 424%.

	•	7.92% period-end tangible common equity to risk-weighted assets ratio, up from 7.86%.

(1)		Favorable (unfavorable) impact on GAAP earnings

(2)		Pre-tax unless otherwise noted

(3)		Includes significant items with $0.01 EPS impact or greater

(4)		After-tax

	•	$14.1 million decline in investment securities gains with the current quarter reflecting only $1.0 million of such gains, compared with $15.1 million of such gains in the 2004 first quarter.

	•	$9.0 million gain on sale of automobile loans in the year-ago quarter, with no such gains in the current quarter.

	•	$8.2 million, or 32%, decline in other income primarily due to higher MSR hedge-related trading losses, lower investment banking income, and lower equity investment gains.

	•	$2.4 million, or 6%, decline in service charges on deposit accounts with declines in commercial service charges and consumer service charges equally contributing to the decrease. Lower commercial service charges reflected a combination of lower activity and a preference by commercial customers to pay for services with higher compensating balances rather than fees as interest rates increase. The decline in consumer service charges primarily reflected lower personal NSF and overdraft service charges.

	•	$2.2 million, or 14%, decline in brokerage and insurance income due to lower annuity sales.

	•	$16.4 million increase in mortgage banking income primarily reflecting a $3.8 million mortgage servicing rights (MSR) temporary impairment recovery in the current quarter compared with a $10.1 million MSR temporary impairment in the year-ago quarter and higher net secondary marketing income.

	•	$1.9 million, or 11%, increase in trust services due to higher personal trust and mutual fund fees.

	•	$6.5 million, or 27%, decrease in other income primarily reflecting lower equity investment gains and lower investment banking income.

	•	$2.3 million, or 6%, decrease in service charges on deposit accounts primarily reflecting seasonally lower personal NSF and overdraft service charges.

	•	$1.1 million decline in investment securities gains with the current quarter reflecting only $1.0 million of such gains, compared with $2.1 million of such gains in the 2004 fourth quarter.

	•	$3.2 million, or 37%, increase in mortgage banking income reflecting a $3.8 million MSR temporary impairment recovery in the current quarter.

	•	$0.9 million, or 5%, increase in trust income reflecting a 12% increase in Huntington Fund fees and 5% increase in personal trust income, partially offset by a 34% seasonal decline in corporate trust fees from the fourth quarter. The 2005 first quarter represented the sixth consecutive quarterly increase in trust income. Trust assets increased 2 percent from the end of last year.

	•	$2.5 million, or 15%, increase in net occupancy expense primarily reflecting a loss, caused by a refinancing penalty of a real estate partnership minority interest, as well as lower rental income.

	•	$2.4 million, or 2%, increase in personnel costs due to higher salary and incentive plan expenses, partially offset by lower sales commissions.

	•	$2.2 million, or 30%, increase in professional services expenses primarily reflecting SEC- and regulatory-related expenses.

	•	$8.1 million, or 31%, decrease in other expense as the fourth quarter included a $5.5 million SEC-related accrual.

	•	$6.8 million, or 26%, decrease in net occupancy as the 2004 fourth quarter included $7.8 million in property lease impairment and write-down on vacated facilities.

⁽¹⁾		On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
⁽²⁾		Non-interest expense less amortization of intangibles ($0.2 million for all periods above) divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).
⁽³⁾		Includes non-interest bearing and interest bearing demand deposits, savings deposits, retail CDs and other domestic time deposits.
⁽⁴⁾		Estimated at March 31, 2005.
⁽⁵⁾		At end of period. Tangible equity (total equity less intangible assets) divided by tangible assets (total assets less intangible assets).

⁽¹⁾	As of September 30, 2004, the Company adopted a policy, consistent with its policy for residential mortgage loans, of placing home equity loans and lines on nonaccrual status when they become greater than 180 days past due. In prior quarters, these balances were included in “Accruing loans and leases past due 90 days or more.”
⁽²⁾	At December 31, 2004, other real estate owned included $35.7 million of properties that relate to the work-out of $5.9 million of mezzanine loans. These properties were subject to $29.8 million of non-recourse debt to another financial institution. Both properties were sold in the first quarter of 2005.