Exhibit 99.1
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
FOR THE YEAR ENDED DECEMBER 31, 2000
INDEX
Page
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Audited Financial Statements
Report of Independent Auditors 5
Statements of Net Assets Available for Benefits 6
December 31, 2000 and 1999
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2000 and 1999 7
Notes to Financial Statements 8
Supplemental Schedule
Schedule of Assets Held for Investment Purposes at End of Year 14
4
Report of Independent Auditors
Pension Review Committee of the Board of Directors
Huntington Bancshares Incorporated
We have audited the accompanying statements of net assets available for benefits
of the Huntington Investment and Tax Savings Plan as of December 31, 2000 and
1999, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Huntington
Investment and Tax Savings Plan at December 31, 2000 and 1999, and the changes
in its net assets available for benefits for the years then ended, in conformity
with accounting principles generally accepted in the United States.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule of
assets held for investment purposes at the end of year as of December 31, 2000,
is presented for purposes of additional analysis and is not a required part of
the basic financial statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedule
has been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the financial statements taken as a whole.
s/Ernst & Young LLP
Columbus, Ohio
June 29, 2001
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HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
2000 1999
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ASSETS
Investments, at market value:
Huntington Bancshares Incorporated Common
Stock $189,429,541 $259,894,605
Mutual Funds 68,645,859 53,234,816
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Total Investments 258,075,400 313,129,421
Contributions receivable
From participants -- --
From Huntington Bancshares Incorporated 109,674 --
Participants notes receivable 207,430 304,827
Accrued dividends, interest receivable, and
other assets 2,403,163 2,660,673
Cash and cash equivalents 783,765 2,964,181
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TOTAL ASSETS 261,579,432 319,059,102
LIABILITIES
Investment purchases payable and other liabilities 2,940,727 2,018,888
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $258,638,705 $317,040,214
============ ============
See notes to financial statements.
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HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years Ended December 31,
2000 1999
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ADDITIONS
Investment income:
Cash dividends on Huntington
Bancshares Incorporated Common Stock $ 11,412,990 $ 10,328,583
Interest 373,990 364,989
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11,786,980 10,693,572
Contributions:
Employees 15,417,846 15,652,357
Employer 7,944,093 7,708,056
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23,361,939 23,360,413
Assets of merged plans 9,389,399 --
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Total Additions 44,538,318 34,053,985
DEDUCTIONS
Benefit distributions and other withdrawals 32,371,981 53,984,564
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Total Deductions 32,371,981 53,984,564
Net realized and unrealized depreciation
in market value of investments (70,567,846) (31,261,973)
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Net decrease (58,401,509) (51,192,552)
Net assets available for benefits
at beginning of year 317,040,214 368,232,766
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Net assets available for benefits
at end of year $ 258,638,705 $ 317,040,214
============= =============
See notes to financial statements.
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HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2000
Note 1 - Plan Description and Accounting Policies
The financial statements of the Huntington Bancshares Investment and Tax Savings
Plan (the "Plan") are presented on the accrual basis and are prepared in
conformity with accounting principles generally accepted in the United States,
which 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.
Description of the Plan
The Plan was initially adopted by the Board of Directors of Huntington
Bancshares Incorporated ("Huntington") on September 29, 1977, to be effective
January 1, 1978. On August 19, 1992, the Plan was amended and restated,
effective January 1, 1987, to comply with the Internal Revenue Code of 1986, as
amended. The Plan was again restated October 13, 1994, with a general effective
date of January 1, 1987, to incorporate provisions concerning merged plans. The
Plan was again amended and restated November 19, 1997, effective at April 1,
1998. On December 13, 2000, the Company Stock Fund and Participants who elect to
have all or a portion of their accounts invested in the Company Stock Fund were
designated an Employee Stock Ownership Plan (ESOP). The ESOP forms a portion of
the Plan. The following summary describes the provisions of the Plan in effect
as of the Plan year ending December 31, 2000.
Funding and Vesting
Eligible employees may enroll on the first day of the month following six months
of employment and attainment of age 21. Participants may elect to make pre-tax
matched contributions of up to 15% of their eligible compensation. Huntington
will make a matching contribution equal to 100% on the first 3% of participant
elective deferrals and 50% on the next 2% of participant elective deferrals.
Employee and employer contributions are fully vested at all times. Plan
participants are permitted to direct pre-tax elective deferrals and employer
matching contributions to any combination of twelve investment options,
including Huntington Bancshares Incorporated Common Stock. An active participant
may change or suspend pre-tax elective deferrals pursuant to the terms set forth
in the Plan document.
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Administration
The Plan administrator is Huntington Bancshares Incorporated (Huntington).
Administration of the Plan has been delegated by the Plan administrator to a
committee of employees appointed by the Board of Directors of Huntington.
Employee and Employer contributions to participants' accounts in the Plan are
invested pursuant to the participants' investment direction elections on file at
the time the contributions are allocated to the participants' accounts. Plan
assets are held in mutual funds or Huntington Bancshares Incorporated Common
Stock by the trust division of The Huntington National Bank (the "Plan
Trustee"), a wholly-owned subsidiary of Huntington. The Plan Trustee purchases
and sells shares of these mutual funds or Huntington Common Stock on the open
market at market prices. Additionally, the Plan Trustee may directly purchase
from, and sell to, Huntington at market prices shares of Huntington Common
Stock.
Trustee and most administrative fees are paid from the general assets of
Huntington. However, participants are charged a nominal amount for
administration of the Plan.
Distributions and Withdrawals
Distributions from the Plan are paid in cash. A participant may request that the
portion of his or her account that is invested in the Huntington Bancshares
Incorporated Common Stock Fund be distributed in shares of Huntington Common
Stock with cash paid in lieu of any fractional shares. Distributions and
withdrawals are reported at market value.
Participants are permitted to take distributions and withdrawals from their
accounts in the Plan under the circumstances set forth in the Plan document.
Generally, participants may request withdrawal of funds in their account
attributable to: (i) rollover contributions; (ii) after-tax contributions; and
(iii) pre-April 1, 1998 Employer contributions that have been in the
participants' accounts for at least 24 months. Employee pre-tax elective
deferrals and post April 1, 1998, Employer matching contributions are subject to
special withdrawal rules and generally may not be withdrawn from the Plan prior
to a participant's death, disability, termination of employment, or attainment
of age 59 1/2. Certain distributions of Employee pre-tax deferrals may be made,
however, in the event a participant requests a distribution due to financial
hardship as defined by the Plan. Participants should refer to the Summary Plan
Description for a complete summary of the Plan provisions. Participants may
withdraw up to 100% of their account balances in the Plan for any reason after
they have reached age 59 1/2.
Dividends with respect to Huntington Common Stock are distributed in cash to
Plan participants.
Dividends and Interest Income
Dividends are recognized as of the record date. Interest is recorded on an
accrual basis when earned.
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Investments
As of December 31, 2000, the separate investment options offered by the Plan are
as follows:
Huntington Bancshares Incorporated Common Stock Fund: This fund is invested
primarily in Huntington Bancshares Incorporated Common Stock. A small percentage
of this fund (usually 1% or less) is invested in a money market fund to maintain
liquidity for Plan distributions and participant fund reallocations. Unit values
are assigned to participants.
Huntington Money Market Fund: This fund seeks to provide safety of principal and
interest, a reasonable rate of interest income, little or no fluctuation of
principal, and liquidity. Investments typically include short-term debt
securities, including commercial paper, certificates of deposit, bankers
acceptances and government securities.
Bond Fund of America: This fund seeks to provide as high a level of current
income as is consistent with the preservation of capital by investing primarily
in bonds. The fund invests substantially all of its assets in marketable
corporate debt securities, U.S. government securities, mortgage-related
securities, other asset-backed securities and cash or money market instruments.
Normally, at least 65% of the fund assets will be invested in bonds.
Vanguard Wellington Fund: This fund seeks to conserve capital and to provide
moderate long-term growth and moderate income by investing in stocks, bonds and
money market instruments. The fund invests 60% to 70% of its assets in
dividend-paying stocks of large and medium sized companies. The remaining 30% to
40% of assets are invested in high-quality longer-term corporate bonds, with
some investment in Treasury, government agency and mortgage backed bonds.
Huntington Income-Equity Trust Fund: This fund seeks to achieve current income
and moderate appreciation of both capital and income by investing in
income-producing securities, such as stocks of companies having the potential to
pay attractive dividends.
Vanguard S&P Index 500 Fund: This fund seeks to mirror, as closely as possible,
the performance of the Standard and Poor's 500 Composite Stock Price Index,
which emphasizes stocks of large U.S. companies. Accordingly, the fund invests
in stocks which are included in the Standard and Poor's 500 Composite Stock
Price Index.
MFS Massachusetts Investors Fund: This fund seeks to provide current income and
long-term growth of capital and income. Investments include stocks and other
equity securities of companies emphasizing above average growth potential.
Neuberger & Berman Partners Trust Fund: This fund is designed to achieve
long-term capital growth by investing in common stocks of established medium to
large capitalized companies.
Franklin Small Cap Growth Fund: This fund seeks long-term growth of capital by
investing in common stocks of smaller capitalization companies.
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EuroPacific Growth Fund: This fund seeks long-term growth of capital by
investing in securities of companies domiciled outside of the United States,
usually located in Europe and the Pacific Basin. However, the fund may invest in
securities of developing countries as well.
T. Rowe Price Mid Cap Growth Fund: This fund seeks long-term capital
appreciation by investing in stocks of established medium and large capitalized
companies which show the potential for above-average earnings growth.
Janus Enterprise Fund: This fund is designed to achieve long-term capital growth
by investing in securities of medium-sized companies domiciled inside and
outside the United States.
Participant Notes Receivable
In conjunction with the merger of First Michigan Bank Corporation into
Huntington, the First Michigan Bank Corporation Cash Option Plan (the "First
Michigan Plan") merged into the Plan effective as of April 1, 1998. The loan
fund represents the transfer of the outstanding participant loan balances in the
First Michigan Plan to the Plan. Additionally, the loan fund represents the
transfer of outstanding participant loan balances to the Plan on October 1, 2000
resulting from the merger with Empire Banc Corporation (the "Empire Plan").
While the Plan does not allow participants to take loans against their account
balances, participants with outstanding loans in the First Michigan Plan and
the Empire Plan at the time of its merger into the Plan are permitted to repay
outstanding loans. Each loan, by its terms, must be repaid within 5 years,
unless it is a loan for a participant's principal residence. The loans bear
interest at a market rate fixed at the date of origination. Principal and
interest is paid by participants through payroll deductions authorized by the
participant currently employed by Huntington. Individuals previously under the
First Michigan Plan terminated from employment repay principal and interest on
an installment basis. Individuals with loans previously under the Empire Plan
are required to repay the loans at time of termination.
Note 2 - Cash and Cash Equivalents
Cash and cash equivalents primarily represent funds temporarily invested in the
Huntington Money Market Fund to provide liquidity for fund reallocations and
distributions from the Huntington Bancshares Incorporated Common Stock Fund.
Note 3 - Federal Income Taxes
The Plan has received a determination letter from the Internal Revenue Service
dated April 19, 2000, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
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Note 4 - Investments
The following individual investments represent 5 percent or more of the fair
value of assets available for benefits as of December 31:
2000 1999
------------ ------------
Huntington Bancshares Incorporated
Common Stock Fund $189,429,541 $259,894,605
Vanguard S&P Index 500 Fund 19,629,273 17,405,955
The Plan's investments (including investments purchased, sold and held during
the year) appreciated (depreciated) in carrying value for the years ended
December 31, as follows:
2000 1999
------------ ------------
Common Stock $(64,863,147) $(35,858,322)
Equity Mutual Funds (5,664,019) 4,756,736
Fixed Income Mutual Fund (40,680) (160,387)
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$(70,567,846) $(31,261,973)
============ ============
Note 5 - Plan Mergers
During 2000, approximately $9.4 million was transferred to the Plan as a result
of the previous acquisition of Empire Banc Corporation, Traverse City, Michigan.
Note 6 - Terminated Participants
Included in net assets available for benefits are amounts allocated to
individuals who have withdrawn from the Plan. Amounts allocated to these
participants were $679,651 and $512,312 at December 31, 2000 and 1999,
respectively.
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Note 7 - Party-In-Interest Transactions
The Plan held the following party-in-interest investments (at fair value) at
December 31:
2000 1999
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Huntington Bancshares Incorporated
Common Stock Fund $189,429,541 $259,894,605
Huntington Money Market Fund 7,341,091 9,267,965
Huntington Income-Equity Trust Fund 1,547,402 1,470,021
Costs and expenses incurred in administering the Plan paid by Huntington,
including brokerage commissions and fees in connection with each purchase of
securities, totaled $886,976, and $878,690 for 2000 and 1999, respectively.
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Supplemental Schedule 27(a)
HUNTINGTON INVESTMENT AND TAX SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
December 31, 2000
EIN: 31-0724920
Plan Number: 002
Description of Current
Issuer Investment Value
- ----------------------------------------- ------------------- ------------
Huntington Bancshares
Incorporated Common Stock* 11,702,211 shares $189,429,541
Huntington Money Market Fund* 7,341,091 units 7,341,091
Bond Fund of America 249,890 units 3,170,012
Vanguard Wellington Fund 374,143 units 10,552,183
Huntington Income-Equity Trust Fund* 43,857 units 1,547,402
Vanguard S&P Index 500 Fund 160,092 units 19,629,273
MFS Massachusetts Investors Fund 374,045 units 7,500,900
Neuberger & Berman Trust Fund 273,217 units 4,619,977
Franklin Small Cap Growth I Fund 156,938 units 6,174,168
EuroPacific Growth Fund 115,734 units 3,629,325
T. Rowe Price Mid-Cap Growth Fund 62,295 units 2,482,258
Janus Enterprise Fund 50,815 units 2,796,936
Participant loans 6.00% to 10.00% 207,430
* Indicates party-in-interest to the Plan
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