Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

May 15, 2001

Documents

10-Q: Quarterly report pursuant to Section 13 or 15(d)

Published on May 15, 2001


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM 10-Q



QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY PERIOD ENDED March 31, 2001


Commission File Number 0-2525


HUNTINGTON BANCSHARES INCORPORATED



MARYLAND 31-0724920
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)


41 SOUTH HIGH STREET, COLUMBUS, OHIO 43287


Registrant's telephone number (614) 480-8300


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.


Yes X No
====== =====



There were 251,014,008 shares of Registrant's without par value common stock
outstanding on April 30, 2001.





HUNTINGTON BANCSHARES INCORPORATED

INDEX


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets -
March 31, 2001 and 2000 and December 31, 2000 3

Consolidated Statements of Income -
For the three months ended March 31, 2001 and 2000 4

Consolidated Statements of Changes in Shareholders' Equity -
For the three months ended March 31, 2001 and 2000 5

Consolidated Statements of Cash Flows -
For the three months ended March 31, 2001 and 2000 6

Notes to Unaudited Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13

Item 3. Quantitative and Qualitative Disclosures about Market Risk 20


PART II. OTHER INFORMATION

Item 2. Changes in securities and use of proceeds 28

Item 6. Exhibits and Reports on Form 8-K 28-29


2



PART I. FINANCIAL INFORMATION
1. FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS



MARCH 31, DECEMBER 31, MARCH 31,
(in thousands of dollars) 2001 2000 2000
- ------------------------------------------------------------ ------------ ------------ ------------


ASSETS
Cash and due from banks .................................... $ 1,006,809 $ 1,322,700 $ 1,036,442
Interest bearing deposits in banks ......................... 5,011 4,970 6,241
Trading account securities ................................. 70,550 4,723 18,333
Federal funds sold and securities
purchased under resale agreements ..................... 155,738 133,183 16,527
Loans held for sale ........................................ 388,545 155,104 99,354
Securities available for sale - at fair value .............. 3,632,034 4,090,525 4,495,873
Investment securities - fair value $15,586; $16,414;
and $18,121, respectively ............................. 15,358 16,336 18,266
Total Loans (1) ............................................ 20,870,648 20,610,191 20,531,039
Less allowance for loan losses ........................ 301,777 297,880 296,743
------------ ------------ ------------
Net loans .................................................. 20,568,871 20,312,311 20,234,296
------------ ------------ ------------
Bank owned life insurance .................................. 814,502 804,941 774,584
Premises and equipment ..................................... 457,504 454,844 429,793
Customers' acceptance liability ............................ 16,510 17,366 18,676
Accrued income and other assets ............................ 1,309,756 1,282,374 1,259,594
------------ ------------ ------------

TOTAL ASSETS ............................................... $ 28,441,188 $ 28,599,377 $ 28,407,979
============ ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Total Deposits (1) ......................................... $ 19,130,157 $ 19,777,245 $ 19,779,364
Short-term borrowings ...................................... 2,700,351 1,987,759 1,576,745
Bank acceptances outstanding ............................... 16,510 17,366 18,676
Medium-term notes .......................................... 2,084,859 2,467,150 3,139,150
Subordinated notes and other long-term debt ................ 894,937 870,976 845,623
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trusts holding solely
junior subordinated debentures of the Parent Company ..... 300,000 300,000 300,000
Accrued expenses and other liabilities ..................... 909,118 812,834 649,598
------------ ------------ ------------
Total Liabilities ..................................... 26,035,932 26,233,330 26,309,156
------------ ------------ ------------

Shareholders' equity
Preferred stock - authorized 6,617,808 shares;
none issued or outstanding ....................... -- -- --
Common stock - without par value; AUTHORIZED
500,000,000 shares; ISSUED 257,866,255,
257,866,255, and 233,844,820 shares, respectively;
outstanding 251,001,821, 250,859,470, and
221,982,428 shares, respectively ................. 2,491,848 2,493,645 2,284,616
Less 6,864,434, 7,006,765, and 11,862,392
treasury shares, respectively .................... (126,532) (129,432) (283,762)
Accumulated other comprehensive income ................ (4,221) (24,520) (90,559)
Retained earnings ..................................... 44,161 26,354 188,528
------------ ------------ ------------
Total Shareholders' Equity ............................ 2,405,256 2,366,047 2,098,823
------------ ------------ ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................. $ 28,441,188 $ 28,599,377 $ 28,407,979
============ ============ ============



(1) See page 12 for detail of total loans and total deposits.

See notes to unaudited consolidated financial statements.

3


- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME



THREE MONTHS ENDED
MARCH 31,
---------------------------------
(in thousands of dollars, except per share amounts) 2001 2000
- --------------------------------------------------- ------------ ------------


Interest and fee income
Loans ........................................ $ 446,785 $ 439,646
Securities ................................... 63,834 73,151
Other ........................................ 7,356 2,760
------------ ------------
TOTAL INTEREST INCOME .............. 517,975 515,557
------------ ------------
Interest expense
Deposits ..................................... 185,081 182,649
Short-term borrowings ........................ 33,163 24,764
Medium-term notes ............................ 36,663 50,358
Subordinated notes and other long-term debt .. 19,944 17,095
------------ ------------
TOTAL INTEREST EXPENSE ............. 274,851 274,866
------------ ------------

NET INTEREST INCOME ................ 243,124 240,691
Provision for loan losses ......................... 33,464 15,701
------------ ------------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 209,660 224,990
------------ ------------

Total non-interest income (1) ..................... 117,724 125,694
Total non-interest expense (1) .................... 234,090 200,106
------------ ------------

INCOME BEFORE INCOME TAXES ......... 93,294 150,578
Provision for income taxes ........................ 25,428 46,405
------------ ------------

NET INCOME ......................... $ 67,866 $ 104,173
============ ============


PER COMMON SHARE (2)
Net income
Basic ................................... $ 0.27 $ 0.42
Diluted ................................. $ 0.27 $ 0.42

Cash dividends declared ...................... $ 0.20 $ 0.18

AVERAGE COMMON SHARES (2)
Basic ................................... 250,998,380 247,974,250
Diluted ................................. 251,510,172 249,138,955





(1) See page 13 for detail of non-interest income and non-interest expense.

(2) Adjusted for stock dividends and stock splits, as applicable.



See notes to unaudited consolidated financial statements.



4



- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY




- ----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ACCUMULATED
COMMON STOCK TREASURY STOCK OTHER
------------------- -------------------- COMPREHENSIVE RETAINED
SHARES AMOUNT SHARES AMOUNT INCOME (LOSS) EARNINGS TOTAL
- ------------------------------------------------ ------ ----------- ------- ----------- ------------ --------- ----------


Three Months Ended March 31, 2000:
Balance, beginning of period 233,845 $2,284,956 (4,957) ($137,268) ($94,093) $128,761 $2,182,356
Comprehensive Income:
Net income 104,173 104,173
Unrealized net holding gains
on securities available for sale
arising during the period 3,534 3,534
----------
Total comprehensive income 107,707
----------
Cash Dividends declared (44,406) (44,406)
Stock options exercised (340) 17 509 169
Treasury shares purchased (6,952) (147,702) (147,702)
Treasury shares sold to
employee benefit plans 30 699 699
------- ---------- ------- --------- -------- -------- ----------
Balance, end of period 233,845 $2,284,616 (11,862) ($283,762) ($90,559) $188,528 $2,098,823
======= ========== ======= ========= ======== ======== ==========



Three Months Ended March 31, 2001:
Balance, Beginning Of Period 257,866 $2,493,645 (7,007) ($129,432) ($24,520) $ 26,354 $2,366,047
Comprehensive Income:
Net income 67,866 67,866
Change in accounting method for derivatives (9,113) (9,113)
Unrealized net holding gains
on securities available for sale
arising during the period 26,289 26,289
Unrealized gains on derivatives 3,123 3,123
----------
Total comprehensive income 88,165
----------
Cash dividends declared (50,059) (50,059)
Stock options exercised (1,797) 99 2,189 392
Treasury shares sold to
employee benefit plans 44 711 711
------- ---------- ------- --------- -------- -------- ----------
Balance, end of period 257,866 $2,491,848 (6,864) ($126,532) ($ 4,221) $ 44,161 $2,405,256
======= ========== ======= ========= ======== ======== ==========


See notes to unaudited consolidated financial statements.


5



- --------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,
--------------------------------
(in thousands of dollars) 2001 2000
- ----------------------------------------------------------------------------- ----------- -----------


OPERATING ACTIVITIES
Net Income $ 67,866 $ 104,173
Adjustments to reconcile net income to net cash
provided by operating activities
Provision for loan losses 33,464 15,701
Provision for depreciation and amortization 32,136 27,466
Deferred income tax expense 24,255 29,511
Increase in trading account securities (65,827) (10,358)
(Increase) decrease in mortgages held for sale (233,441) 42,369
Securities gains (2,078) (24,763)
Securitization (gains) losses (1,666) 10,208
Decrease (increase) in accrued income receivable 18,476 (13,579)
Net increase in other assets (72,942) (74,973)
Increase in accrued expenses 34,048 2,648
Net increase (decrease) in other liabilities 37,077 (11,798)
----------- -----------
NET CASH (USED FOR) PROVIDED BY OPERATING ACTIVITIES (128,632) 96,605
----------- -----------

INVESTING ACTIVITIES
(Increase) decrease in interest bearing deposits in banks (41) 317
Proceeds from :
Maturities and calls of investment securities 614 490
Maturities and calls of securities available for sale 397,078 50,476
Sales of securities available for sale 483,033 353,777
Purchases of securities available for sale (367,003) --
Proceeds from sales of loans 92,974 484,041
Net loan originations, excluding sales (394,355) (445,251)
Proceeds from sale of premises and equipment 533 1,223
Purchases of premises and equipment (16,612) (4,291)
Proceeds from sales of other real estate 1,892 2,919
----------- -----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 198,113 443,701
----------- -----------

FINANCING ACTIVITIES
Decrease in total deposits (647,339) (13,236)
Increase (decrease) in short-term borrowings 712,592 (545,244)
Proceeds from issuance of long-term debt -- 150,000
Payment of long-term debt (4,000) --
Proceeds from issuance of medium-term notes 300,000 250,000
Payment of medium-term notes (675,000) (365,000)
Dividends paid on common stock (50,173) (45,904)
Repurchases of common stock -- (147,702)
Proceeds from issuance of common stock 1,103 868
----------- -----------
NET CASH USED FOR FINANCING ACTIVITIES (362,817) (716,218)
----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS (293,336) (175,912)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,455,883 1,228,881
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,162,547 $ 1,052,969
=========== ===========






See notes to unaudited consolidated financial statements.


6


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


A. Basis of Presentation

The accompanying unaudited consolidated financial statements reflect
all adjustments consisting of normal recurring accruals, which are, in the
opinion of management, necessary for a fair presentation of the consolidated
financial position, the results of operations, and cash flows for the periods
presented. These unaudited consolidated financial statements have been prepared
according to the rules and regulations of the Securities and Exchange Commission
and, therefore, certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted. The Notes to the Consolidated Financial
Statements appearing in Huntington Bancshares Incorporated's (Huntington) 2000
Annual Report on Form 10-K should be read in conjunction with these interim
financial statements.


B. Reclassifications

Certain amounts in the prior year's financial statements have been
reclassified to conform to the 2001 presentation. These reclassifications had no
effect on net income.

C. Earnings per Share

Basic earnings per share is the amount of earnings for the period
available to each share of common stock outstanding during the reporting period.
Diluted earnings per share is the amount of earnings available to each share of
common stock outstanding during the reporting period adjusted for the potential
issuance of common shares for stock options. The calculation of basic and
diluted earnings per share for each of the periods ended March 31, is as
follows:

Three Months Ended
March 31,
-------------------------
(in thousands, except per share amounts) 2001 2000
-------- --------

Net Income $ 67,866 $104,173
======== ========

Average common shares outstanding 250,998 247,974
Dilutive effect of stock options 512 1,165
-------- --------
Diluted common shares outstanding 251,510 249,139
======== ========

Earnings per share
Basic $ 0.27 $ 0.42
Diluted $ 0.27 $ 0.42

Average common shares outstanding and the dilutive effect of stock options have
been adjusted for subsequent stock dividends and stock splits, as applicable.


7



D. Comprehensive Income

Comprehensive Income includes net income as well as certain items that
are reported directly within a separate component of stockholders' equity that
bypass net income. Currently, Huntington's only components of Other
Comprehensive Income are the unrealized gains (losses) on securities available
for sale and unrealized gains and losses on certain derivatives. The related
before and after tax amounts are as follows:



THREE MONTHS ENDED
MARCH 31,
--------------------------
(in thousands) 2001 2000
-------- --------


Change in accounting method for derivatives:
Unrealized net losses $(14,020) $ --
Related tax benefit 4,907 --
-------- --------
Net (9,113) --
-------- --------

Unrealized holding gains on securities arising during the period:
Unrealized net gains 42,525 30,118
Related tax expense (14,884) (10,487)
-------- --------
Net 27,641 19,631
-------- --------

Unrealized holding gains on derivatives arising during the period:
Unrealized net gains 4,805 --
Related tax expense (1,682) --
-------- --------
Net 3,123 --
-------- --------

Less: Reclassification adjustment for net gains realized during the period:
Realized net gains 2,078 24,763
Related tax expense (726) (8,666)
-------- --------
Net 1,352 16,097
-------- --------

Total Other Comprehensive Income $ 20,299 $ 3,534
======== ========




Accumulated Other Comprehensive Income balances at March 31, 2001 are
as follows:

UNREALIZED UNREALIZED
GAINS (LOSSES) LOSSES ON
ON SECURITIES DERIVATIVES
------------- -----------

Beginning balance $(24,520) $ --
Change in accounting method -- (9,113)
Current-period change 26,289 3,123
-------- -------
Ending balance $ 1,769 $(5,990)
======== =======



8

E. Lines of Business

Listed below is certain financial information regarding Huntington's
2001, 2000 and 1999 results by line of business. For a detailed description of
the individual segments, refer to Huntington's Management's Discussion and
Analysis.



- ----------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 2001
- ----------------------------------------------------------------------------------------------------------------------------
PRIVATE
INCOME STATEMENT RETAIL CORPORATE DEALER FINANCIAL TREASURY/ HUNTINGTON
(IN THOUSANDS OF DOLLARS) BANKING BANKING SALES GROUP OTHER CONSOLIDATED
- ----------------------------------------------------------------------------------------------------------------------------


Net Interest Income (FTE) $131,430 $ 70,443 $ 54,356 $9,892 $(20,995) $ 245,126
Provision for Loan Losses 5,880 11,607 15,977 - - 33,464
Non-Interest income 67,754 12,851 3,773 23,520 9,826 117,724
Non-Interest expense 144,602 31,627 13,661 26,665 17,535 234,090
Income Taxes/FTE Adjustment 17,046 14,021 9,972 2,361 (15,970) 27,430
-------------- ------------ ------------- ------------ ------------- --------------
Net income $ 31,656 $ 26,039 $ 18,519 $4,386 $(12,734) $ 67,866
============== ============ ============= ============ ============= ==============

BALANCE SHEET (in millions of dollars)

Average Identifiable Assets $ 6,887 $ 7,432 $ 7,037 $ 702 $ 6,179 $ 28,237
Average Deposits $ 15,899 $ 2,126 $ 82 $ 637 $ 321 $ 19,065





- ------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------
Private
INCOME STATEMENT RETAIL CORPORATE DEALER FINANCIAL TREASURY/ HUNTINGTON
(IN THOUSANDS OF DOLLARS) BANKING BANKING SALES GROUP OTHER CONSOLIDATED
- ------------------------------------------------------------------------------------------------------------------------------


Net Interest Income (FTE) $130,234 $ 59,981 $ 49,926 $ 7,819 $ (5,112) $ 242,848
Provision for Loan Losses 2,585 4,697 7,962 457 - 15,701
Non-Interest income 67,027 14,550 3,238 16,638 24,241 125,694
Non-Interest expense 139,725 26,032 12,536 13,151 8,662 200,106
Income Taxes/FTE Adjustment 19,233 15,331 11,433 3,797 (1,232) 48,562
------------- ------------- ------------- ----------- -------------- --------------
Net income $35,718 $ 28,471 $ 21,233 $ 7,052 $ 11,699 $ 104,173
============= ============= ============= =========== ============== ==============

BALANCE SHEET (in millions of dollars)

Average Identifiable Assets $ 6,948 $ 6,860 $ 7,100 $ 605 $ 7,440 $ 28,953
Average Deposits $16,481 $ 1,233 $ 67 $ 642 $ 1,368 $ 19,791



Huntington views its operations as five distinct segments. Retail
Banking, Corporate Banking, Dealer Sales, and the Private Financial Group are
the company's major business lines. The fifth segment includes Huntington's
Treasury function and other unallocated assets, liabilities, revenue, and
expense. Line of business results are determined based upon Huntington's
business profitability reporting system, which assigns balance sheet and income
statement items to each of the business segments. The process is designed around
Huntington's organizational and management structure and accordingly, the
results are not necessarily comparable with similar information published by
other financial institutions.



9

F. Derivatives

Huntington adopted Statement of Financial Accounting Standards (SFAS)
No. 133, "Accounting for Derivative Instruments and Hedging Activities", on
January 1, 2001. SFAS No. 133 requires that derivatives be recognized as either
assets or liabilities in the balance sheet at their fair value. The accounting
for gains or losses resulting from changes in fair value depends on the intended
use of the derivative. For derivatives designated as hedges of changes in the
fair value of recognized assets or liabilities, or unrecognized firm
commitments, gains or losses on the derivative are recognized in earnings
together with the offsetting losses or gains on the hedged items. This results
in earnings only being impacted to the extent that the hedge is ineffective in
achieving offsetting changes in fair value. For derivatives used to hedge
changes in cash flows associated with forecasted transactions, gains or losses
on the effective portion of the derivatives are deferred, and reported as
accumulated other comprehensive income (AOCI), a component of shareholders'
equity, until the period in which the hedged transactions affect earnings.
Changes in the fair value of derivative instruments not designated as hedges are
recognized in earnings.

Huntington uses derivative instruments to assist in the management of
its interest rate risk. Active interest rate risk management necessitates the
use of various types of off-balance sheet financial instruments, primarily
interest rate swaps. Risk that is created by different indices on products, by
unequal terms to maturity of assets and liabilities, and by products that are
appealing to customers but incompatible with current risk limits can be
eliminated or decreased in a cost efficient manner by utilizing interest rate
swaps. Often, the swap strategy has enabled Huntington to lower the overall cost
of raising wholesale funds. Similarly, financial futures, interest rate caps and
floors, options, and forward rate agreements are used to control financial risk
effectively. Off-balance sheet instruments are often preferable to similar cash
instruments because, though performing identically, they require less capital
while preserving access to the marketplace.

Fair Value Hedges: These derivative instruments consist generally of
interest rate swaps. The interest rate swaps effectively modify Huntington's
exposure to interest rate risk by converting fixed liabilities, primarily time
deposits, medium-term notes, and long-term debt, to a floating rate. These
interest rate swaps involve the receipt of fixed rate amounts in exchange for
floating rate interest payments over the life of the agreements without an
exchange of the underlying notional amounts.

As the changes in fair value of the hedged items substantially offset
the changes in fair value of the derivatives, no material impact to earnings was
recognized at the time of adoption of SFAS No. 133 or for the three months ended
March 31, 2001.

Cash Flow Hedges: These derivative instruments also consist primarily
of interest rate swaps. The swaps were entered into to reduce the impact of
interest rate changes on future net interest income. The swaps generally convert
floating rate medium-term notes and loans to a fixed rate basis with maturities
up to May 2004.

Upon the adoption of SFAS No. 133, Huntington recorded a reduction in
AOCI of $9.1 million. For the three months ended March 31, 2001, Huntington
recorded an increase in AOCI of $3.1 million. During the next twelve months,
Huntington expects to reclassify $8.5 million of net losses on derivative
instruments from AOCI to earnings due to the payment of variable interest
payments on floating rate medium term notes and the receipt of variable interest
payments on floating rate loans.


10


- --------------------------------------------------------------------------------
Financial Review




- ---------------------------------------------------------------------------------------------------------------------
LOAN PORTFOLIO COMPOSITION
- ---------------------------------------------------------------------------------------------------------------------

MARCH 31, December 31, March 31,
(in thousands of dollars) 2001 2000 2000
- --------------------------------------------------------- ----------- ----------- -----------


Commercial (unearned income $1,343; $1,538; $2,221) $ 6,729,992 $ 6,633,985 $ 6,452,675
Real Estate
Construction 1,282,328 1,318,899 1,242,882
Commercial 2,316,934 2,253,477 2,149,523
Consumer
Loans (unearned income $3,927; $4,150; $5,305) 6,439,727 6,388,036 6,373,627
Leases (unearned income $516,706; $515,445; $450,198) 3,141,815 3,069,210 2,856,468
Residential Mortgage 959,852 946,584 1,455,864
----------- ----------- -----------

TOTAL LOANS $20,870,648 $20,610,191 $20,531,039
=========== =========== ===========







- -----------------------------------------------------------------------------------------------------------------------------------
DEPOSIT COMPOSITION
- -----------------------------------------------------------------------------------------------------------------------------------

MARCH 31, December 31, March 31,
(in thousands of dollars) 2001 2000 2000
- ----------------------------- ----------- ----------- -----------


Demand deposits
Non-interest bearing $ 3,256,604 $ 3,480,876 $ 3,441,780
Interest bearing 4,688,109 4,645,127 4,143,771
Savings deposits 3,607,404 3,527,796 3,748,170
Certificates of deposit
Less than $100,000 5,802,502 5,938,486 5,620,068
$100,000 or more 1,446,310 1,520,547 1,703,851
----------- ----------- -----------
TOTAL CORE DEPOSITS 18,800,929 19,112,832 18,657,640
----------- ----------- -----------
Other domestic time deposits 136,147 256,106 731,771
Foreign time deposits 193,081 408,307 389,953
----------- ----------- -----------

TOTAL DEPOSITS $19,130,157 $19,777,245 $19,779,364
=========== =========== ===========



11


- --------------------------------------------------------------------------------
Financial Review





- ----------------------------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST INCOME
- ----------------------------------------------------------------------------------------------------

THREE MONTHS ENDED
MARCH 31,
------------------------- PERCENT
(in thousands of dollars) 2001 2000 CHANGE
- ------------------------------------------------- -------- -------- ------


Service charges on deposit accounts $ 38,907 $ 41,660 (6.6)%
Brokerage and insurance 18,768 15,284 22.8
Trust services 14,314 12,863 11.3
Electronic banking fees 11,098 9,849 12.7
Mortgage banking 10,031 8,515 17.8
Bank Owned Life Insurance income 9,560 9,186 4.1
Other 12,968 3,574 262.8
-------- --------

TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 115,646 100,931 14.6
-------- --------
Securities gains 2,078 24,763 N.M.
-------- --------

TOTAL NON-INTEREST INCOME $117,724 $125,694 (6.3)%
======== ========






- -------------------------------------------------------------------------------------------------------
ANALYSIS OF NON-INTEREST EXPENSE
- -------------------------------------------------------------------------------------------------------

THREE MONTHS ENDED
MARCH 31,
------------------------- PERCENT
(in thousands of dollars) 2001 2000 CHANGE
- ------------------------------------------ -------- -------- ------


Personnel and related costs $117,662 $102,344 15.0%
Equipment 19,972 19,412 2.9
Net occupancy 19,780 19,135 3.4
Outside data processing and other services 16,654 15,002 11.0
Amortization of intangible assets 10,576 9,196 15.0
Marketing 9,939 7,993 24.4
Telecommunications 7,125 6,749 5.6
Printing and supplies 5,059 4,617 9.6
Legal and other professional services 4,969 4,500 10.4
Franchise and other taxes 2,120 2,438 (13.0)
Other 20,234 8,720 132.0
-------- --------

TOTAL NON-INTEREST EXPENSE $234,090 $200,106 17.0%
======== =======




N.M. - Not Meaningful

12


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


INTRODUCTION

Huntington is a multi-state financial holding company headquartered in
Columbus, Ohio. Its subsidiaries are engaged in full-service commercial and
consumer banking, mortgage banking, lease financing, trust services, discount
brokerage services, underwriting credit life and disability insurance, issuing
commercial paper guaranteed by Huntington, and selling other insurance and
financial products and services. Huntington's subsidiaries operate domestically
in offices located in Ohio, Michigan, Florida, West Virginia, Indiana, and
Kentucky. Huntington has a foreign office in each of the Cayman Islands and Hong
Kong.

FORWARD-LOOKING STATEMENTS

Management's discussion and analysis of financial condition and results
of operations contains forward-looking statements about Huntington, including
descriptions of products or services, plans, or objectives of its management for
future operations, and forecasts of its revenues, earnings, or other measures of
economic performance. Forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts.

By their nature, forward-looking statements are subject to numerous
assumptions, risks, and uncertainties. A number of factors--many of which are
beyond Huntington's control--could cause actual conditions, events, or results
to differ significantly from those described in the forward-looking statements.
These factors include, but are not limited to, changes in business and economic
conditions; movements in interest rates; competitive pressures on product
pricing and services; success and timing of business strategies; successful
integration of acquired businesses; the nature, extent, and timing of
governmental actions and reforms; and extended disruption of vital
infrastructure.

Forward-looking statements speak only as of the date they are made.
Huntington does not update forward-looking statements to reflect circumstances
or events that occur after the date the forward-looking statements are made or
to reflect the occurrence of unanticipated events, such as further market
deterioration that adversely affects credit quality, vehicle lease residual
values, and/or other asset values.

The management of Huntington encourages readers of this Form 10-Q to
understand forward-looking statements to be strategic objectives rather than
absolute targets of future performance. The following discussion and analysis of
the financial performance of Huntington for the first quarter of 2001 should be
read in conjunction with the financial statements, notes, and other information
contained in this document.

OVERVIEW

Huntington reported net income of $67.9 million, or $.27 per share, for
the first quarter of 2001 compared with $104.2 million, or $.42 per share, for
the same period last year. Return on average assets (ROA) was .97% and return on
average equity (ROE) was 11.53% for the quarter versus 1.45% and 18.99%,
respectively, in the first quarter a year ago. Huntington's "cash basis"



13

earnings per share (which excludes the effect of goodwill amortization) was $.30
for the quarter just ended, compared with $.44 per share in the same period last
year. Cash basis ROA and ROE, which are computed using cash basis earnings as a
percentage of average tangible assets and average tangible equity, were 1.11%
and 12.86% for the first quarter of 2001, respectively.

Total assets at March 31, 2001, were $28.4 billion, down slightly from
the end of 2000. This trend reflects a decline in loan growth and a $459 million
reduction in investment securities during the quarter as Huntington continued to
sell low margin investment securities as part of its balance sheet repositioning
efforts.

Managed total loans, which include securitized loans, increased at an
annualized rate of 6% during the first quarter versus 11% in the fourth quarter
of 2000 and 8% in the first quarter of last year. The recent slowdown in the
United States economy had a significant adverse impact on consumer loan growth,
particularly in automobile lending and leasing. Indirect automobile loan and
lease balances were unchanged from a quarter ago compared with annualized growth
of 16% in the fourth quarter of 2000. Direct consumer loan growth declined from
18% in the fourth quarter of 2000 to 8% in the recent quarter. Within the direct
category, home equity loan growth remained strong at 14% although it was
negatively impacted by strong demand for first mortgage refinancing. Commercial
and commercial real estate loan growth accelerated during the first quarter,
from a 6% annualized rate in the fourth quarter of last year to 8% in the first
quarter of 2001.

Core deposits totaled $18.6 billion during the first quarter, up
slightly from $18.4 billion in the same period last year. When combined with
other core funding sources, core deposits provide 80% of Huntington's funding
needs.

LINES OF BUSINESS

Retail Banking, Corporate Banking, Dealer Sales, and the Private
Financial Group are the company's major business lines. A fifth segment includes
the impact of Huntington's Treasury function and other unallocated assets,
liabilities, revenue, and expense. Line of business results are determined based
upon Huntington's business profitability reporting system which assigns balance
sheet and income statement items to each of the business segments. This process
is designed around Huntington's organizational and management structure and,
accordingly, the results are not necessarily comparable with similar information
published by other financial institutions. Below is a brief description of each
line of business and a discussion of the business segment results, which can be
found in Note E to the unaudited consolidated financial statements.

RETAIL BANKING

Retail Banking provides products and services to retail and business
banking customers. This business unit's products include home equity loans,
first mortgage loans, installment loans, business loans, personal and business
deposit products, as well as investment and insurance services. These products
and services are offered through Huntington's traditional banking network,
in-store branches, Direct Bank, and Web Bank.

Retail Banking net income totaled $31.7 million for the first quarter
of 2001 versus $35.7 million for the same period last year. Although total
revenue was level with the year ago quarter, mortgage banking income improved
23% benefiting from the lower interest rate environment



14

and electronic banking income increased 12%. These increases were offset by
lower service charges as new lower fee deposit products were introduced to
improve deposit retention rates. The provision for loan losses increased $3.3
million reflecting the recent increase in charge-offs experienced by Huntington
and the banking industry in general. The $4.9 million increase in non-interest
expense reflects the acquisition of Empire Banc Corporation (Empire) in June of
2000 and higher commissions. The Retail segment contributed 47% of Huntington's
net income for the quarter and comprised 30% of its total loan portfolio and 89%
of its core deposits.

CORPORATE BANKING

Customers in this segment represent the middle-market and large
corporate banking relationships which use a variety of banking products and
services including, but not limited to, commercial loans, international trade,
and cash management. Huntington's capital markets division also provides
alternative financing solutions for larger business clients, including privately
placed debt, syndicated commercial lending, and the sale of interest rate
protection products.

Corporate Banking reported net income of $26.0 million compared with
$28.5 million for the first quarter of 2000. Revenues increased 12% as loan
growth drove higher net interest income. Offsetting the revenue growth was a
$6.9 million increase in the provision for loan losses due to higher charge-offs
and a $5.6 million increase in non-interest expense. Corporate Banking
contributed 38% of Huntington's net income for the quarter and comprised 36% of
its total loan portfolio and 11% of its core deposits.

DEALER SALES

Dealer Sales product offerings pertain to the automobile lending sector
and include floor plan financing, as well as indirect consumer loans and leases.
The consumer activities comprise the vast majority of the business and involve
the financing of vehicles purchased or leased by individuals through
dealerships.

Dealer Sales net income declined to $18.5 million compared with $21.2
million in last year's first quarter as improved net interest income was offset
by higher loan loss provision. The $4.4 million increase in net interest income
reflects improved loan and lease spreads versus a year ago as funding costs fell
faster than loan and lease rates in the recent declining rate environment. The
increase in the provision for loan losses reflects higher net charge-offs of
1.13% versus .80% in the first quarter of 2000. Premium expense of $1.5 million
related to the purchase of residual value insurance contributed to the increase
in non-interest expense. This insurance is discussed in more detail in the
"Non-interest Expense" section of this report. Dealer Sales contributed 27% of
Huntington's net income for the quarter and comprised 31% of its outstanding
loans.

PRIVATE FINANCIAL GROUP

Huntington's Private Financial Group (PFG) provides an array of
products and services designed to meet the needs of Huntington's higher wealth
banking customers. Revenue is derived through the sale of personal trust, asset
management, investment advisory, insurance, and deposit



15

and loan products and services. PFG provides customers with "one-stop shopping"
for all their financial needs.

PFG reported net income of $4.4 million versus $7.1 million in the
comparable period last year. Strong fixed annuity sales and improved trust
income contributed to the $6.9 million increase in non-interest income.
Additionally, insurance income grew $4.7 million from last year's first quarter
reflecting the impact of the acquisition of J. Rolfe Davis Insurance Agency,
Inc. (JRD), in August of 2000. Related increases in sales commissions
contributed to higher non-interest expense in addition to the impact of JRD.
Non-interest expense for this segment also includes a $4.2 million reimbursement
for a loss incurred by a Huntington sponsored mutual fund. The loss is described
in the "Non-Interest Expense" section of this report. This segment represented
6% of Huntington's quarterly net income and 3% of total loans.

TREASURY / OTHER

Huntington uses a match-funded transfer pricing system to allocate
interest income and interest expense to its business segments. This approach
consolidates the interest rate risk management of Huntington into its Treasury
Group. As part of its overall interest rate risk and liquidity management
strategy, the Treasury Group administers an investment portfolio of
approximately $3.6 billion. Revenue and expense associated with these activities
remain within the Treasury Group. Additionally, the Treasury/Other segment
absorbs unassigned assets, liabilities, equity, revenue, and expense that cannot
be directly assigned or allocated to one of Huntington's lines of business.
Amortization expense of intangible assets is also a significant component of
Treasury/Other.

This segment reported a net loss of $12.7 million for the quarter.
Lower net interest income reflects the balance sheet repositioning mentioned
earlier. As more fully discussed later, the sensitivity of net interest income
to changing interest rates is down from previous periods, consistent with
Huntington's goal of a more stable revenue base. Non-interest income includes
securities gains of $2.1 million versus $24.7 million in last year's first
quarter. The 2000 gains included gains of $32.2 million related to the sale of a
portion of Huntington's investment in S1 Corporation common stock, offset by
losses from the sale of lower yielding investment securities. The first quarter
2000 results also included a $10.2 million loss on automobile securitizations.

RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income for the three months ended March 31, 2001, was
$243.1 million, up $2.4 million from the first quarter of last year and at its
highest level since the fourth quarter of 1999. Compared with the immediately
preceding quarter, net interest income increased $10.1 million, as the net
interest margin expanded twenty-three basis points to 3.93%. Huntington was
slightly liability sensitive at the end of last year and accordingly benefited
from the 150 basis point decline in short-term interest rates during the first
quarter. These rate changes accounted for $9.1 million of the increase in net
interest income and thirteen basis points of the improvement in the margin
versus the fourth quarter of 2000. Additionally, the aforementioned sale of low
margin investment securities contributed another thirteen basis points to the
margin in the quarter. Huntington's interest rate risk position is further
discussed in the "Interest Rate Risk Management" section of this report.



16

PROVISION FOR LOAN LOSSES

The provision for loan losses is the charge to pre-tax earnings
necessary to maintain the allowance for loan losses (ALL) at a level adequate to
absorb management's estimate of inherent losses in the loan portfolio. The
provision for loan losses was $33.5 million for the first quarter, up from $15.7
million in the same period of 2000 primarily due to increased net charge-offs.
Annualized net charge-offs for the current quarter increased to .55% from .35%
for the first quarter of 2000 reflecting the negative impact of weakening
economic conditions over the past twelve months on Huntington's loan customers.
Net charge-offs are expected to be above the first quarter levels in the second
quarter of 2001.

NON-INTEREST INCOME

Non-interest income, excluding securities gains, increased 15% to
$115.6 million for the recent three months compared with $100.9 million for the
same period a year ago. The first quarter 2000 results included a $10.2 million
loss from automobile loan securitizations as Huntington securitized lower-coupon
loans as part of its balance sheet repositioning. Excluding securitizations,
non-interest income increased 3% from last year's first quarter. All categories
were up versus last year except for service charges, which declined 7%
reflecting the introduction of new lower fee deposit products successfully
designed to improve deposit retention rates. Categories showing improvement from
a year ago were led by brokerage and insurance income, up 23% on strong fixed
annuity sales and reflecting the acquisition of JRD. Additionally, mortgage
banking income grew 18% due to strong mortgage loan demand in the recent
declining interest rate environment, and electronic banking income increased 13%
as a result of higher customer usage of Huntington's check card product.

NON-INTEREST EXPENSE

Non-interest expense totaled $234.1 million in the first quarter versus
$200.1 million in the first three months of 2000. Personnel and related costs
accounted for $15.3 million of the increase primarily due to increased
commission expense consistent with the growth in fee income and the impact of
acquisitions completed last year. Other factors contributing to the increase in
non-interest expense included a $4.2 million loss related to Pacific Gas &
Electric (PG&E) commercial paper, $1.5 million of premium expense related to the
purchase of automobile lease residual value insurance, and $1.7 million in
expenses incurred in conjunction with the installation of Customer Relationship
Management software.

The $4.2 million PG&E loss relates to activities in The Huntington
National Bank's Money Market Mutual Fund (the Fund). The Fund owned $30 million
of PG&E commercial paper at the end of last year. During the first quarter, $15
million of the paper was sold with a $4.2 million loss incurred. Although the
Fund could have absorbed the loss and still maintained the net asset value at
$1.00 per share, Huntington reimbursed the Fund for the $4.2 million loss. The
remaining paper is being held by Huntington at a cost basis of $15 million with
a view to holding the paper until the economic and political ramifications of
PG&E's April Chapter 11 bankruptcy filing become known. The $15 million of paper
was put on non-accrual status during the second quarter of 2001.


17
The $1.5 million premium expense reflects Huntington's decision, late
in 2000, to insure the residual risk inherent in its $3.1 billion automobile
lease portfolio. Accordingly, in the first quarter of 2001, Huntington purchased
two residual value insurance policies, one for the existing portfolio, as of
October 2000 and one for all new leases originated after that date. The
insurance carrier is AA rated by Standard & Poor's and A+/XV by A.M. Best. Both
policies cover the difference between the contractual residual value and the
market value of the car at the end of the lease term, as evidenced by Black Book
valuations. Both policies provide first dollar loss coverage, and the policy on
the existing portfolio has a cap on insured losses of $120 million. Insured
losses on new originations from October 2000 to March 1, 2002 have a cap of $50
million. Huntington remains liable for full term leases where the sales price is
less than Black Book value for the amount of the difference between Black Book
value and the sales price and has a $25 million reserve available to cover this
risk.

INTEREST RATE RISK MANAGEMENT

Huntington seeks to achieve consistent growth in net interest income
and net income while managing volatility arising from shifts in interest rates.
The Asset and Liability Management Committee (ALCO) oversees financial risk
management, establishing broad policies and specific operating limits that
govern a variety of financial risks inherent in Huntington's operations,
including interest rate, liquidity, counterparty, settlement, and market risks.
On and off-balance sheet strategies and tactics are reviewed and monitored
regularly by ALCO to ensure consistency with approved risk tolerances.

Interest rate risk management is a dynamic process, encompassing
business flows onto the balance sheet, wholesale investment and funding, and the
changing market and business environment. Effective management of interest rate
risk begins with appropriately diversified investments and funding sources. To
accomplish its overall balance sheet objectives, Huntington regularly accesses a
variety of global markets--money, bond, futures, and options--as well as
numerous trading exchanges. In addition, dealers in over-the-counter financial
instruments provide availability of interest rate swaps as needed.

Measurement and monitoring of interest rate risk is an ongoing process.
A key element in this process is Huntington's estimation of the amount that net
interest income will change over a twelve to twenty-four month period given a
gradual and directional shift in interest rates. The income simulation model
used by Huntington captures all assets, liabilities, and off-balance sheet
financial instruments, accounting for significant variables that are believed to
be affected by interest rates. These include prepayment speeds on mortgages and
consumer installment loans, cash flows of loans and deposits, principal
amortization on revolving credit instruments, and balance sheet growth
assumptions. The model also captures embedded options, e.g. interest rate
caps/floors or call options, and accounts for changes in rate relationships, as
various rate indices lead or lag changes in market rates. While these
assumptions are inherently uncertain, management assigns probabilities and,
therefore, believes at any point in time that the model provides a reasonably
accurate estimate of Huntington's interest rate risk exposure. Management
reporting of this information is regularly shared with the Board of Directors.

The results of Huntington's recent sensitivity analysis indicated that
net interest income would increase .8% if rates declined 100 basis points from
March 31, 2001 levels and would drop 1.0% if rates rose 100 basis points. If
rates declined 200 basis points, Huntington would benefit 1.8%. If rates
increased 200 basis points, net interest income would be expected to decline
2.0%, which is a meaningful reduction compared to year-end 2000 sensitivity of
3.0% to a 200 basis point increase. The decline in sensitivity during the recent
quarter was primarily due to the previously mentioned sale of low margin fixed
rate investment securities. These sales were part of management's effort to
reduce sensitivity to interest rate changes and to stabilize Huntington's
revenue base.


18


CREDIT RISK

Huntington's exposure to credit risk is managed through the use of
consistent underwriting standards that emphasize "in-market" lending while
avoiding highly leveraged transactions as well as excessive industry and other
concentrations. The credit administration function employs extensive risk
management techniques, including forecasting, to ensure that loans adhere to
corporate policy and problem loans are promptly identified. These procedures
provide executive management with the information necessary to implement policy
adjustments where necessary, and take corrective actions on a proactive basis.

Non-performing assets (NPAs) consist of loans that are no longer
accruing interest, loans that have been renegotiated based upon financial
difficulties of the borrower, and real estate acquired through foreclosure.
Commercial and real estate loans are placed on non-accrual status and stop
accruing interest when collection of principal or interest is in doubt or
generally when the loan is 90 days past due. When interest accruals are
suspended, accrued interest income is reversed with current year accruals
charged to earnings and prior year amounts generally charged off as a credit
loss. Consumer loans are not placed on non-accrual status; rather they are
charged off in accordance with regulatory statutes, which is generally no more
than 120 days. A charge-off may be delayed in circumstances when collateral is
repossessed and anticipated to be sold at a future date.

Total NPAs were $124.9 million at March 31, 2001, compared with $105.4
million at December 31, 2000, and $92.2 million a year ago. As of the same
dates, NPAs as a percent of total loans and other real estate were .60%, .51%,
and .45%. As expected, NPAs have increased in 2001 as deteriorating economic
conditions adversely impacted corporate borrowers. Recent increases in NPAs were
seen from the construction, transportation, and manufacturing industries. The
recent economic slowdown has adversly impacted the construction and
transportation industries, with the latter hurt also by rising energy costs.
Huntington expects further increases through the second quarter of 2001.
Loans past due ninety days or more but continuing to accrue interest increased
to $102.7 million at March 31, 2001, versus $60.26 million last year.

The ALL is maintained at a level considered appropriate by management,
based on its estimate of losses inherent in the loan portfolio. The procedures
employed by Huntington to evaluate the adequacy of the ALL include an analysis
of specific credits and the application of relevant reserve factors that
represent relative risk (based on portfolio trends, current and historic loss
experience, and prevailing economic conditions) to specific portfolio segments.
Specific reserves are established on larger, impaired commercial and industrial
and commercial real estate credits and are based on discounted cash flow models
using the loan's initial effective rate or the fair value of the collateral for
collateral-dependent loans. Allocated reserves include management's assessment
of portfolio performance, internal controls, impacts from mergers and
acquisitions, and other pertinent risk factors. For analytical purposes, the ALL
has been allocated to various portfolio segments. However, the total ALL, less
the portion attributable to reserves as prescribed under provisions of SFAS No.
114, is available to absorb losses from any segment of the portfolio.
Unallocated reserves are based on levels of criticized/classified assets,
delinquencies in the accruing loan portfolios, and the level of nonperforming
loans. Total unallocated reserves were 11% at March 31, 2001, versus 19% one
year ago.



19

The ALL reserve ratio was 1.45% at both the recent quarter end and the
end of the first quarter last year. As of March 31, 2001, the ALL covered
non-performing loans approximately 2.7 times and when combined with the
allowance for other real estate owned, was 239% of total nonperforming assets.

CAPITAL

Huntington places significant emphasis on the maintenance of strong
capital, which promotes investor confidence, provides access to the national
markets under favorable terms, and enhances business growth and acquisition
opportunities. Huntington also recognizes the importance of managing capital and
continually strives to maintain an appropriate balance between capital adequacy
and returns to shareholders. Capital is managed at each subsidiary based upon
the respective risks and growth opportunities, as well as regulatory
requirements. Huntington's average equity to average assets increased to 8.46%
in the recent quarter from 7.62% in the same three months of last year.
Excluding unrealized losses on securities available for sale and derivatives,
tangible equity to assets was 6.01% at quarter end versus 5.49% a year ago.

Risk-based capital guidelines established by the Federal Reserve Board
set minimum capital requirements and require institutions to calculate
risk-based capital ratios by assigning risk weightings to assets and off-balance
sheet items, such as interest rate swaps, loan commitments, and securitizations.
These guidelines further define "well-capitalized" levels for Tier 1, total
capital, and leverage ratio purposes at 6%, 10%, and 5%, respectively. At the
recent quarter-end, Huntington's Tier 1 risk-based capital ratio was 7.20%,
total risk-based capital ratio was 10.33%, and the leverage ratio was 7.13%.
Huntington's bank subsidiary also had regulatory capital ratios in excess of the
levels established for well-capitalized institutions.

During the second quarter of 2000, Huntington's Board of Directors
authorized the purchase of an additional 11 million shares under Huntington's
common stock repurchase program. Repurchased shares are being reserved for
reissue in connection with Huntington's dividend reinvestment and employee
benefit plans as well as for stock dividends, acquisitions, and other corporate
purposes. During 2000, Huntington repurchased approximately 8.8 million shares
of its common stock through open market and privately negotiated transactions.
Approximately 7.2 million of these shares were reissued in connection with the
acquisitions of Empire and JRD. As of March 31, 2001, approximately 15.3 million
shares remained available under the authorization. Huntington is continuing to
review its capital management strategy and has not repurchased any shares since
September 30, 2000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures for the current period are
found on pages 18 and 19 of this report, which includes changes in market risk
exposures from disclosures presented in Huntington's Annual Report on Form 10-K
for the year ended December 31, 2000.



20


- --------------------------------------------------------------------------------
CONSOLIDATED FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)





FOR THE THREE MONTHS ENDED MARCH 31, 2001 2000 % Change
- -------------------------------------------- -------- -------- --------


NET INCOME ................................. $ 67,866 $104,173 (34.9)%

PER COMMON SHARE AMOUNTS(1)
Net income
Basic ............................ $ 0.27 $ 0.42 (35.7)
Diluted .......................... $ 0.27 $ 0.42 (35.7)

Cash dividends declared ............... $ 0.20 $ 0.18 11.1

AVERAGE COMMON SHARES OUTSTANDING-DILUTED(1) 251,510 249,139 1.0


KEY RATIOS
Return on:
Average total assets .................. 0.97% 1.45% (33.1)
Average shareholders' equity .......... 11.53% 18.99% (39.3)

Efficiency ratio ........................... 61.95% 53.93% 14.9

Average equity/average assets .............. 8.46% 7.62% 11.0
Net interest margin ........................ 3.93% 3.78% 4.0


TANGIBLE OR "CASH BASIS" RATIOS(2)
Net Income Per Common Share -- Diluted(1) .. $ 0.30 $ 0.44 (31.8)

Return on:
Average total assets .................. 1.11% 1.57% (29.3)
Average shareholders' equity .......... 12.86% 20.17% (36.2)




(1) Adjusted for stock dividends and stock splits, as applicable.

(2) Tangible or "Cash Basis" net income excludes amortization of goodwill and
other intangibles. Related asset amounts excluded from total assets and
shareholders' equity.



21

- --------------------------------------------------------------------------------
FINANCIAL REVIEW




SECURITIES AVAILABLE FOR SALE - AMORTIZED COST & FAIR VALUES BY MATURITY AT MARCH 31, 2001 AND DECEMBER 31, 2000
- -----------------------------------------------------------------------------------------------------------------------
(in thousands of dollars) MARCH 31, 2001 DECEMBER 31, 2000
- -----------------------------------------------------------------------------------------------------------------------
AMORTIZED Amortized
COST FAIR VALUE Cost Fair Value
- -----------------------------------------------------------------------------------------------------------------------

U.S. Treasury
Under 1 year ....................... $ 2,048 $ 2,072 $ 1,455 $ 1,466
1-5 years .......................... 2,006 2,140 2,007 2,110
6-10 years ......................... 6,411 7,382 6,407 6,706
Over 10 years ...................... 413 439 413 446
---------- ---------- ---------- ----------
Total ........................... 10,878 12,033 10,282 10,728
---------- ---------- ---------- ----------
Federal agencies
Mortgage-backed securities
6-10 years ......................... 21,765 22,291 22,757 22,987
Over 10 years ...................... 1,328,446 1,338,174 1,515,883 1,508,914
---------- ---------- ---------- ----------
Total ........................... 1,350,211 1,360,465 1,538,640 1,531,901
---------- ---------- ---------- ----------
Other agencies
Under 1 year ....................... -- -- 20,000 19,913
1-5 years .......................... 875,818 880,597 1,029,073 1,017,230
6-10 years ......................... 78,164 78,453 146,376 144,313
Over 10 years ...................... 515,764 518,547 566,760 559,946
---------- ---------- ---------- ----------
Total ........................... 1,469,746 1,477,597 1,762,209 1,741,402
---------- ---------- ---------- ----------
Total U.S. Treasury and Federal
---------- ---------- ---------- ----------
Agencies ........................ 2,830,835 2,850,095 3,311,131 3,284,031
---------- ---------- ---------- ----------
Other
Under 1 year ....................... 20,711 20,694 21,098 20,826
1-5 years .......................... 218,538 220,735 215,978 217,453
6-10 years ......................... 84,792 84,484 88,872 87,415
Over 10 years ...................... 402,488 387,078 403,730 388,731
Marketable equity securities ....... 71,924 68,948 87,674 92,069
---------- ---------- ---------- ----------
Total ........................... 798,453 781,939 817,352 806,494
---------- ---------- ---------- ----------
Total Securities Available for Sale ..... $3,629,288 $3,632,034 $4,128,483 $4,090,525
========== ========== ========== ==========





22


- --------------------------------------------------------------------------------
FINANCIAL REVIEW




- ----------------------------------------------------------------------------------------------------------------------------------
LOAN LOSS EXPERIENCE
- ----------------------------------------------------------------------------------------------------------------------------------

2001 2000
--------- ------------------------------------------------------------
(in thousands of dollars) I Q IV Q III Q II Q I Q
- ------------------------------------------------ --------- --------- --------- --------- ---------


ALLOWANCE FOR LOAN LOSSES, BEGINNING OF PERIOD.. $ 297,880 $ 294,686 $ 296,891 $ 296,743 $ 299,309
Allowance of assets acquired/other ............. -- -- -- 7,900 --
Loan losses .................................... (35,649) (32,929) (29,499) (22,810) (25,607)
Recoveries of loans previously charged off ..... 7,556 7,431 5,705 7,280 7,340
Allowance of securitized loans ................. (1,474) (3,856) (4,807) (8,056) 0
Provision for loan losses ...................... 33,464 32,548 26,396 15,834 15,701
--------- --------- --------- --------- ---------

ALLOWANCE FOR LOAN LOSSES END OF PERIOD ........ $ 301,777 $ 297,880 $ 294,686 $ 296,891 $ 296,743
========= ========= ========= ========= =========

AS A % OF AVERAGE TOTAL LOANS
Net loan losses--annualized .................. 0.55% 0.50% 0.46% 0.30% 0.35%
Provision for loan losses--annualized ........ 0.66% 0.63% 0.51% 0.31% 0.30%
Allowance for loan losses as a % of total loans. 1.45% 1.45% 1.45% 1.45% 1.45%
Net loan loss coverage (1) ..................... 4.51X 5.48x 6.05x 9.68x 9.10x



(1) Income before taxes and the provision for loan losses to net loan losses.




- ---------------------------------------------------------------------------------------------------------------------------------
NON-PERFORMING ASSETS AND PAST DUE LOANS
- ---------------------------------------------------------------------------------------------------------------------------------

2001 2000
-------- --------------------------------------------------------
(in thousands of dollars) I Q IV Q III Q II Q I Q
- ------------------------------------------------ -------- -------- ------- ------- -------


Non-accrual loans:
Commercial .................................. $ 62,716 $ 55,804 $44,918 $45,138 $44,404
Real Estate
Construction ............................. 6,735 8,687 7,973 8,736 7,696
Commercial ............................... 28,158 18,015 13,722 12,714 13,991
Residential .............................. 11,949 10,174 8,588 11,548 10,892
-------- -------- ------- ------- -------
Total Nonaccrual Loans ......................... 109,558 92,680 75,201 78,136 76,983
Renegotiated loans ............................. 1,297 1,304 1,311 1,317 1,324
-------- -------- ------- ------- -------

TOTAL NON-PERFORMING LOANS ..................... 110,855 93,984 76,512 79,453 78,307
Other real estate, net ......................... 14,031 11,413 11,982 15,670 13,904
-------- -------- ------- ------- -------

TOTAL NON-PERFORMING ASSETS .................... $124,886 $105,397 $88,494 $95,123 $92,211
======== ======== ======= ======= =======

NON-PERFORMING LOANS AS A
% OF TOTAL LOANS ............................. 0.53% 0.46% 0.38% 0.39% 0.38%
NON-PERFORMING ASSETS AS A
% OF TOTAL LOANS AND OTHER REAL ESTATE........ 0.60% 0.51% 0.44% 0.46% 0.45%
ALLOWANCE FOR LOAN LOSES AS A % OF
NON-PERFORMING LOANS ......................... 272.23% 316.95% 385.15% 373.67% 378.95%
ALLOWANCE FOR LOAN LOSSES AND OTHER REAL
ESTATE AS A % OF NON-PERFORMING ASSETS........ 239.42% 279.16% 326.77% 306.89% 316.30%

ACCRUING LOANS PAST DUE 90 DAYS OR MORE......... $102,658 $ 80,306 $80,290 $62,775 $60,156
======== ======== ======= ======= =======




23

- -------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES (QUARTERLY DATA)



Fully Tax Equivalent Basis (1) 1ST QUARTER 2001 4th Quarter 2000
--------------------- ----------------------
AVERAGE YIELD/ Average Yield/
(in millions of dollars) BALANCE RATE Balance Rate
- ------------------------------------------------------------------- ------- -------- --------- --------


ASSETS
Interest bearing deposits in banks ................................ $ 5 5.05% $ 5 5.50%
Trading account securities ........................................ 48 5.52 17 6.56
Federal funds sold and securities purchased under resale agreements 164 5.78 85 6.53
Loans held for sale ............................................... 240 7.19 129 7.74
Securities:
Taxable ..................................................... 3,606 6.72 4,410 6.31
Tax exempt .................................................. 248 7.55 264 7.53
------- --------
Total Securities ....................................... 3,854 6.77 4,674 6.38
------- --------
Loans:
Commercial ................................................... 6,678 8.19 6,543 8.65
Real Estate
Construction ............................................ 1,263 8.31 1,306 8.87
Commercial .............................................. 2,324 8.40 2,227 8.64
Consumer
Loans .................................................. 6,397 8.95 6,425 8.90
Leases ................................................. 3,082 6.90 3,049 6.92
Residential Mortgage ................................... 960 7.91 940 7.94
------- --------
Total Consumer ......................................... 10,439 8.25 10,414 8.24
------- --------
Total Loans ....................................................... 20,704 8.25 20,490 8.45
------- --------
Allowance for loan losses ......................................... 307 302
------- --------
Net loans (2) ..................................................... 20,397 8.87 20,188 8.96
------- --------
Total earning assets .............................................. 25,015 8.39% 25,400 8.47%
------- --------
Cash and due from banks ........................................... 950 960
All other assets .................................................. 2,579 2,597
------- --------
TOTAL ASSETS ...................................................... $28,237 $ 28,655
======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Core deposits
Non-interest bearing deposits ................................ $ 3,211 $ 3,308
Interest bearing demand deposits ............................. 4,597 % 4,496 3.62%
Savings deposits ............................................. 3,505 3.29 3,498 4.28
Certificates of deposit ...................................... 7,318 3.85 7,522 6.07
------- --------
Total core deposits ..................................... 18,631 6.01 18,824 4.96
------- --------
Other domestic time deposits ...................................... 167 3.89 365 6.68
Foreign time deposits ............................................. 267 6.37 322 6.37
------- --------
Total deposits ............................................... 19,065 5.45 19,511 5.02
------- --------
Short-term borrowings ............................................. 2,504 3.94 2,133 6.00
Medium-term notes ................................................. 2,240 5.37 2,665 6.85
Subordinated notes and other long-term debt, ...................... 6.64
including preferred capital securities ......................... 1,171 1,171 7.42
------- --------
Total interest bearing liabilities ........................... 21,769 6.81% 22,172 5.46%
------- --------
All other liabilities ............................................. 869 5.12 822
Shareholders' equity .............................................. 2,388 2,353
------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........................ $28,237 $ 28,655
======= ========

Net interest rate spread .......................................... 3.27% 3.01%
Impact of non-interest bearing funds on margin .................... 0.66% 0.69%
NET INTEREST MARGIN ............................................... 3.93% 3.70%



- --------------

(1) Fully tax equivalent yields are calculated assuming a 35% tax rate.

(2) Net loan rate includes loan fees, whereas individual loan components above
are shown exclusive of fees.



24


- --------------------------------------------------------------------------------
CONSOLIDATED AVERAGE BALANCES AND INTEREST RATES (QUARTERLY DATA)



3rd Quarter 2000 2nd Quarter 2000 1st Quarter 2000
----------------- ---------------- ----------------
Average Yield/ Average Yield/ Average Yield/
Balance Rate Balance Rate Balance Rate
------- ------ ------- ------ ------- ------


$ 5 6.13% $ 6 5.13% $ 6 3.69%
11 6.54 18 8.67 14 6.26
136 6.43 105 6.10 23 6.11
99 8.51 99 8.11 109 7.59

4,273 6.33 4,067 6.20 4,515 6.14
270 7.57 276 7.63 282 7.68
---------- --------- ---------
4,543 6.40 4,343 6.29 4,797 6.23
---------- --------- ---------

6,454 8.74 6,439 8.65 6,345 8.31

1,283 8.88 1,254 8.72 1,238 8.38
2,193 8.60 2,172 8.51 2,156 8.35

6,392 8.82 6,530 8.38 6,837 8.29
2,976 6.79 2,895 6.71 2,773 6.65
1,325 7.64 1,473 7.62 1,449 7.54
---------- --------- ---------
10,693 8.11 10,898 7.83 11,059 7.78
---------- --------- ---------
20,623 8.41 20,763 8.21 20,798 8.04
---------- --------- ---------
302 302 306
---------- --------- ---------
20,321 8.90 20,461 8.69 20,492 8.52
---------- --------- ---------
25,417 8.43% 25,334 8.27% 25,747 8.08%
---------- --------- ---------
968 1,046 1,058
2,615 2,496 2,454
---------- --------- ---------
$ 28,698 $ 28,574 $ 28,953
========== ========= =========


$ 3,425 $ 3,485 $ 3,466
4,385 3.47% 4,228 3.32% 4,053 2.97%
3,528 4.14 3,583 4.21 3,645 3.80
7,450 5.94 7,247 5.64 7,271 5.44
---------- --------- ---------
18,788 4.82 18,543 4.65 18,435 4.37
---------- --------- ---------
433 6.55 506 6.28 707 6.10
561 6.63 626 6.66 649 5.65
---------- --------- ---------
19,782 4.93 19,675 4.78 19,791 4.50
---------- --------- ---------
2,014 6.12 1,761 5.77 1,954 5.10
2,592 6.81 3,042 6.46 3,283 6.18

1,171 7.39 1,148 7.08 1,004 6.82
---------- --------- ---------
22,134 5.39% 22,141 5.21% 22,566 4.90%
---------- --------- ---------
787 743 715
2,352 2,205 2,206
---------- --------- ---------
$ 28,698 $ 28,574 $ 28,953
========== ========= =========

3.04% 3.06% 3.18%
0.70% 0.66% 0.60%
3.74% 3.72% 3.78%





25


- -------------------------------------------------------------------------------
SELECTED QUARTERLY INCOME STATEMENT DATA




2001 2000
-------- ---------------------------------------------------------
(in thousands of dollars, except per share amounts) I Q IV Q III Q II Q I Q
- -------------------------------------------------- -------- -------- -------- -------- --------


TOTAL INTEREST INCOME ............................ $517,975 $537,661 $535,791 $519,496 $515,557
TOTAL INTEREST EXPENSE ........................... 274,851 304,595 299,922 286,690 274,866
-------- -------- -------- -------- --------
NET INTEREST INCOME .............................. 243,124 233,066 235,869 232,806 240,691
Provision for loan losses ........................ 33,464 32,548 26,396 15,834 15,701
-------- -------- -------- -------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES ...................... 209,660 200,518 209,473 216,972 224,990
-------- -------- -------- -------- --------
Service charges on deposit accounts .............. 38,907 39,248 39,722 40,097 41,660
Brokerage and insurance income ................... 18,768 17,078 15,564 13,945 15,284
Trust services ................................... 14,314 14,404 13,181 13,165 12,863
Electronic banking fees .......................... 11,098 11,546 11,238 11,250 9,849
Mortgage banking ................................. 10,031 11,976 9,412 8,122 8,515
Bank Owned Life Insurance income ................. 9,560 11,086 9,786 9,486 9,186
Other ............................................ 12,968 24,366 11,370 19,485 3,574
-------- -------- -------- -------- --------
TOTAL NON-INTEREST INCOME BEFORE SECURITIES GAINS 115,646 129,704 110,273 115,550 100,931
Securities gains ................................. 2,078 845 11,379 114 24,763
-------- -------- -------- -------- --------
TOTAL NON-INTEREST INCOME ........................ 117,724 130,549 121,652 115,664 125,694
-------- -------- -------- -------- --------
Personnel and related costs ...................... 117,662 105,810 109,463 104,133 102,344
Equipment ........................................ 19,972 20,811 18,983 18,863 19,412
Net occupancy .................................... 19,780 18,614 19,520 18,613 19,135
Outside data processing and other services ....... 16,654 16,142 15,531 15,336 15,002
Amortization of intangible assets ................ 10,576 10,494 10,311 9,206 9,196
Marketing ........................................ 9,939 10,592 8,557 7,742 7,993
Telecommunications ............................... 7,125 6,524 6,480 6,472 6,749
Printing and supplies ............................ 5,059 5,212 4,849 4,956 4,617
Legal and other professional services ............ 4,969 6,785 4,719 4,815 4,500
Franchise and other taxes ........................ 2,120 3,163 2,841 2,635 2,438
Other ............................................ 20,234 19,703 12,331 5,305 8,720
-------- -------- -------- -------- --------
TOTAL NON-INTEREST EXPENSE BEFORE
SPECIAL CHARGES ............................... 234,090 223,850 213,585 198,076 200,106
-------- -------- -------- -------- --------
Special charge ................................... -- -- 50,000 -- --
-------- -------- -------- -------- --------
TOTAL NON-INTEREST EXPENSES ...................... 234,090 223,850 263,585 198,076 200,106
-------- -------- -------- -------- --------
INCOME BEFORE INCOME TAXES ....................... 93,294 107,217 67,540 134,560 150,578
Provision for income taxes ....................... 25,428 30,995 17,010 37,039 46,405
-------- -------- -------- -------- --------

NET INCOME ....................................... $ 67,866 $ 76,222 $ 50,530 $ 97,521 $104,173
======== ======== ======== ======== ========

PER COMMON SHARE (1)
Net income
Diluted ..................................... $ 0.27 $ 0.30 $ 0.20 $ 0.40 $ 0.42
Diluted - Cash Basis ........................ $ 0.30 $ 0.33 $ 0.23 $ 0.42 $ 0.44
Cash Dividends Declared ......................... $ 0.20 $ 0.20 $ 0.20 $ 0.18 $ 0.18

FULLY TAX EQUIVALENT MARGIN:
Net Interest Income .............................. $243,124 $233,066 $235,869 $232,806 $240,691
Tax Equivalent Adjustment (2) .................... 2,002 2,057 2,022 2,074 2,157
-------- -------- -------- -------- --------
Tax Equivalent Net Interest Income ............... $245,126 $235,123 $237,891 $234,880 $242,848
======== ======== ======== ======== ========



(1) Adjusted for stock dividends and stock splits, as applicable.

(2) Calculated assuming a 35% tax rate.



26

- -------------------------------------------------------------------------------
STOCK SUMMARY, KEY RATIOS AND STATISTICS, AND REGULATORY CAPITAL DATA





- ----------------------------------------------------------------------------------------------------------------
QUARTERLY COMMON STOCK SUMMARY (1)
- ----------------------------------------------------------------------------------------------------------------
2001 2000
---------- ----------------------------------------------------
I Q IV Q III Q II Q I Q
---------- ---------- ---------- ---------- ----------


High .................................... $ 18.000 $ 16.375 $ 18.813 $ 21.307 $ 21.818
Low ..................................... 12.625 12.516 14.375 14.091 16.136
Close ................................... 14.250 16.188 14.688 14.375 20.341
Cash dividends declared.................. $ 0.20 $ 0.20 $ 0.20 $ 0.18 $ 0.18



Note: Stock price quotations were obtained from Nasdaq.




- ------------------------------------------------------------------------------------------------------------------
KEY RATIOS AND STATISTICS
- ------------------------------------------------------------------------------------------------------------------
MARGIN ANALYSIS - AS A % 2001 2000
---------- --------------------------------------------------
OF AVERAGE EARNING ASSETS (2) I Q IV Q III Q II Q I Q
- ----------------------------------------- ---------- ---------- --------- ---------- ---------


Interest Income ......................... 8.39% 8.47% 8.43% 8.27% 8.08%
Interest Expense ........................ 4.46% 4.77% 4.69% 4.55% 4.30%
----- ----- ----- ----- -----
Net Interest Margin ................ 3.93% 3.70% 3.74% 3.72% 3.78%
===== ===== ===== ===== =====

RETURN ON
Average total assets .................... 0.97% 1.06% 1.15% 1.37% 1.45%
Average total assets - cash basis ....... 1.11% 1.19% 1.29% 1.49% 1.57%

Average shareholders' equity ............ 11.53% 12.89% 14.04% 17.79% 18.99%
Average shareholders' equity - cash basis 12.86% 14.20% 15.33% 18.97% 20.17%

Efficiency Ratio ........................ 61.95% 58.48% 58.38% 53.90% 53.93%

Effective tax rate ...................... 27.26% 28.91% 25.19% 27.53% 30.82%






- ----------------------------------------------------------------------------------------------------------------
REGULATORY CAPITAL DATA
- ----------------------------------------------------------------------------------------------------------------
2001 2000
---------- --------------------------------------------------
(in millions of dollars) I Q IV Q III Q II Q I Q
- ---------------------------------------------- ---------- ---------- --------- ---------- ---------


Total Risk-Adjusted Assets .............. $ 27,230 $ 26,880 $ 26,370 $ 25,900 $ 25,251

Tier 1 Risk-Based Capital Ratio.......... 7.20% 7.19% 7.20% 7.40% 7.23%
Total Risk-Based Capital Ratio........... 10.33% 10.46% 10.64% 10.90% 10.90%
Tier 1 Leverage Ratio ................... 7.13% 6.93% 6.80% 6.89% 6.45%
Tangible Equity/Asset Ratio ............. 6.01% 5.87% 5.73% 5.78% 5.49%




(1) Adjusted for stock dividends and stock splits, as applicable.
(2) Presented on a fully tax equivalent basis assuming a 35% tax rate.

27


PART II. OTHER INFORMATION


In accordance with the instructions to Part II, the other specified items in
this part have been omitted because they are not applicable or the information
has been previously reported.

Item 2. Changes in securities and use of proceeds

(c) Unregistered shares

In conjunction with Deferred Compensation Agreements
associated with the January 6, 1998, acquisition by
Huntington of Pollock and Pollock, an insurance
agency headquartered in Cleveland, Ohio ("Pollock"),
Huntington issued 43,920 unregistered shares of
Huntington common stock, without par value, to five
shareholders of Pollock and Pollock on February 1,
2001. This is in addition to the shares of common
stock previously issued to these shareholders in
prior periods in connection with the acquisition. The
issuance of shares in this transaction was deemed to
be exempt from registration under the Securities Act
of 1933, as amended, in reliance on Section 4(2)
since this was a transaction by an issuer not
involving a public offering.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

4. Instruments defining the Rights of Security
Holders:

Reference is made to Articles Fifth, Eighth
and Tenth of Articles of Restatement of
Charter, as amended and supplemented,
previously filed as exhibit 3(i) to annual
report on form 10-K for the year ended
December 31, 1993 and exhibit 3(i)(c) to
quarterly report on form 10-Q for the
quarter ended March 31, 1998, and
incorporated herein by reference. Also,
reference is made to Rights Plan, dated
February 22, 1990, previously filed as
Exhibit 1 to Registration Statement on Form
8-A, and incorporated herein by reference
and to Amendment No. 1 to the Rights
Agreement, dated as of August 16, 1995,
previously filed as Exhibit 4(b) to Form 8-K
filed with the Securities and Exchange
Commission on August 28, 1995, and
incorporated herein by reference.
Instruments defining the rights of holders
of long-term debt will be furnished to the
Securities and Exchange Commission upon
request.

10. Material contracts:

(q)* First Amendment to The Huntington Bancshares
Incorporated Deferred Compensation Plan and
Trust for Huntington Bancshares Incorporated
Directors.


28

(r)* 2001 Stock and Long-Term Incentive
Plan for Huntington Bancshares Incorporated.

99. Earnings to Fixed Charges

(b) Reports on Form 8-K

1. A report on Form 8-K, dated January 18,
2001, was filed under report item numbers 5
and 7, concerning the election of Thomas E.
Hoaglin as President and Chief Executive
Officer of Huntington Bancshares
Incorporated.

2. A report on Form 8-K, dated January 18,
2001, was filed under report item numbers 5
and 7, concerning Huntington's results of
operations for the fourth quarter and year
ended December 31, 2000.


- ------------

* Denotes management contracts or compensatory plan or arrangement.


29


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 thereunto duly authorized.



Huntington Bancshares Incorporated
----------------------------------
(Registrant)




Date: May 15, 2001 /s/ Richard A. Cheap
-------------------------------
Richard A. Cheap
General Counsel and Secretary




Date: May 15, 2001 /s/ Michael J. McMennamin
-------------------------
Michael J. McMennamin
Vice Chairman, Chief Financial Officer and
Treasurer (Principal Financial Officer)