EXHIBIT 99.2

HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
March 2004

Table of Contents

         
Reported Basis
        
Consolidated Balance Sheets
     1  
Loans, Leases and Deposits
     2  
Consolidated Quarterly Average Balance Sheets
     3  
Consolidated Quarterly Net Interest Margin Analysis
     4  
Selected Quarterly Income Statement Data
     5  
Quarterly Credit Reserves and Net Charge-Off Analysis
     6  
Quarterly Non-Performing Assets and Past Due Loans and Leases
     7  
Quarterly Stock Summary, Capital, and Other Data
     8  
Quarterly Operating Lease Performance
     9  

Note:

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

 

 

Huntington Bancshares Incorporated
Consolidated Balance Sheets

                                         
                            Change March ‘04 vs. ‘03
    March 31,   December 31   March 31,  
(in thousands)
   2004
   2003
   2003
   Amount
   Percent
Assets
                                        
Cash and due from banks
   $ 841,432     $ 899,689     $ 863,782     $ (22,350 )     (2.6 )%
Federal funds sold and securities purchased under resale agreements
     224,841       96,814       46,456       178,385       N.M.  
Interest bearing deposits in banks
     54,027       33,627       36,117       17,910       49.6  
Trading account securities
     16,410       7,589       22,715       (6,305 )     (27.8 )
Mortgage loans held for sale
     230,417       226,729       513,638       (283,221 )     (55.1 )
Securities available for sale - at fair value
     5,455,138       4,925,232       3,680,260       1,774,878       48.2  
Investment securities - fair value $3,294; $3,937 and $7,075, respectively
     3,209       3,828       6,908       (3,699 )     (53.5 )
Total loans and leases (1)
     21,193,627       21,075,118       18,896,499       2,297,128       12.2  
Less allowance for loan and lease losses
     295,377       299,732       303,636       (8,259 )     (2.7 )
 
    
 		      
 		      
 		      
 		      
 		  
Net loans and leases
     20,898,250       20,775,386       18,592,863       2,305,387       12.4  
 
    
 		      
 		      
 		      
 		      
 		  
Operating lease assets
     1,070,958       1,260,440       1,951,316       (880,358 )     (45.1 )
Bank owned life insurance
     938,156       927,671       895,780       42,376       4.7  
Premises and equipment
     351,073       349,712       340,223       10,850       3.2  
Goodwill and other intangible assets
     216,805       217,009       218,363       (1,558 )     (0.7 )
Customers’ acceptance liability
     7,909       9,553       10,004       (2,095 )     (20.9 )
Accrued income and other assets
     805,455       786,047       726,209       79,246       10.9  
 
    
 		      
 		      
 		      
 		      
 		  
Total Assets
   $ 31,114,080     $ 30,519,326     $ 27,904,634     $ 3,209,446       11.5 %
 
    
 		      
 		      
 		      
 		      
 		  
Liabilities and Shareholders’ Equity
                                        
Total deposits (1)
   $ 18,988,846     $ 18,487,395     $ 17,688,984     $ 1,299,862       7.3 %
Short-term borrowings
     1,076,302       1,452,304       2,149,128       (1,072,826 )     (49.9 )
Bank acceptances outstanding
     7,909       9,553       10,004       (2,095 )     (20.9 )
Federal Home Loan Bank advances
     1,273,000       1,273,000       1,253,000       20,000       1.6  
Subordinated notes
     1,066,705       990,470       633,896       432,809       68.3  
Other long-term debt
     4,478,599       4,544,509       2,473,006       2,005,593       81.1  
Company obligated mandatorily redeemable preferred capital securities of subsidiary trusts holding solely junior subordinated debentures of the parent company (2)
     —       —       300,000       (300,000 )     (100.0 )
Allowance for unfunded loan commitments and letters of credit
     32,089       35,522       33,381       (1,292 )     (3.9 )
Accrued expenses and other liabilities
     1,826,451       1,451,571       1,207,189       619,262       51.3  
 
    
 		      
 		      
 		      
 		      
 		  
Total Liabilities
     28,749,901       28,244,324       25,748,588       3,001,313       11.7  
 
    
 		      
 		      
 		      
 		      
 		  
Shareholders’ equity
                                        
Preferred stock - authorized 6,617,808 shares; none outstanding
     —       —       —       —       —  
Common stock - - without par value; authorized 500,000,000 shares; issued 257,866,255 shares; outstanding 229,410,043; 229,008,088 and 228,641,557 shares, respectively
     2,482,342       2,483,542       2,483,258       (916 )     (0.0 )
Less 28,456,212; 28,858,167 and 29,224,698 treasury shares, respectively
     (541,048 )     (548,576 )     (555,042 )     13,994       (2.5 )
Accumulated other comprehensive income
     21,490       2,678       54,630       (33,140 )     (60.7 )
Retained earnings
     401,395       337,358       173,200       228,195       N.M.  
 
    
 		      
 		      
 		      
 		      
 		  
Total Shareholders’ Equity
     2,364,179       2,275,002       2,156,046       208,133       9.7  
 
    
 		      
 		      
 		      
 		      
 		  
Total Liabilities and Shareholders’ Equity
   $ 31,114,080     $ 30,519,326     $ 27,904,634     $ 3,209,446       11.5 %
 
    
 		      
 		      
 		      
 		      
 		  

(1)   See Page 2 for detail of Loans and Deposits.

(2)  
In accordance with FIN 46, capital securities issued by Huntington Capital I and II, previously regarded as consolidated subsidiary trusts, are no longer reflected in Huntington’s balance sheet. The related parent company debt to these entities is reported in Subordinated notes. N.M. - Not Meaningful.

    N.M. - Not Meaningful.

Page 1

 

Huntington Bancshares Incorporated
Loans, Leases and Deposits

Loans and Leases (Direct Financing and Operating)

                                                 
(in thousands)   March 31, 2004
   December 31, 2003
   March 31, 2003
By Type
   Balance
   %
   Balance
   %
   Balance
   %
Commercial and industrial
   $ 5,479,963       24.6     $ 5,313,517       23.8     $ 5,749,099       27.6  
Commercial real estate
     4,271,982       19.2       4,172,083       18.7       3,777,095       18.1  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Commercial
     9,751,945       43.8       9,485,600       42.5       9,526,194       45.7  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Consumer
                                                
Automobile loans
     2,267,310       10.2       2,991,642       13.4       2,738,264       13.1  
Automobile leases
     2,065,883       9.3       1,902,170       8.5       1,137,933       5.5  
Home equity
     3,980,111       17.9       3,792,189       17.0       3,285,244       15.8  
Residential mortgage
     2,756,625       12.4       2,530,665       11.3       1,825,449       8.8  
Other loans
     371,753       1.7       372,852       1.7       383,415       1.8  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Consumer
     11,441,682       51.5       11,589,518       51.9       9,370,305       45.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Loans and Direct Financing Leases
     21,193,627       95.2       21,075,118       94.4       18,896,499       90.6  
Operating Lease Assets
     1,070,958       4.8       1,260,440       5.6       1,951,316       9.4  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total
   $ 22,264,585       100.0     $ 22,335,558       100.0     $ 20,847,815       100.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
By Business Segment (2)
                                                
Regional Banking
                                                
Central Ohio
   $ 4,988,334       22.4     $ 4,652,070       20.8     $ 4,018,209       19.3  
Northern Ohio
     2,681,167       12.0       2,578,970       11.5       2,712,655       13.0  
Southern Ohio / Kentucky
     1,703,413       7.7       1,676,930       7.5       1,560,751       7.5  
West Michigan
     2,154,587       9.7       2,076,734       9.3       1,951,808       9.4  
East Michigan
     1,340,679       6.0       1,267,682       5.7       1,213,866       5.8  
West Virginia
     807,729       3.6       801,938       3.6       824,733       4.0  
Indiana
     752,850       3.4       730,620       3.3       692,378       3.3  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Regional Banking
     14,428,759       64.8       13,784,944       61.7       12,974,400       62.3  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Dealer Sales
     6,370,665       28.6       7,058,563       31.6       6,621,403       31.8  
Private Financial Group
     1,322,385       5.9       1,296,412       5.8       1,118,340       5.4  
Treasury / Other
     142,776       0.7       195,639       0.9       133,672       0.5  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Loans and Leases
   $ 22,264,585       100.0     $ 22,335,558       100.0     $ 20,847,815       100.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  

Deposit Liabilities

                                                 
(in thousands)   March 31, 2004
   December 31, 2003
   March 31, 2003
By Type
   Balance
   %
   Balance
   %
   Balance
   %
Demand deposits
                                                
Non-interest bearing
   $ 2,918,380       15.4     $ 2,986,992       16.2     $ 2,950,201       16.7  
Interest bearing
     6,866,174       36.2       6,411,380       34.7       5,870,246       33.2  
Savings deposits
     3,002,295       15.8       2,959,993       16.0       2,981,091       16.9  
Retail certificates of deposit
     2,394,940       12.6       2,461,531       13.3       2,829,942       16.0  
Other domestic time deposits
     607,450       3.2       631,205       3.4       677,695       3.8  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Core Deposits
     15,789,239       83.2       15,451,101       83.6       15,309,175       86.6  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Domestic time deposits of $100,000 or more
     791,320       4.2       789,341       4.3       798,289       4.5  
Brokered time deposits and negotiable CDs
     1,941,963       10.2       1,771,738       9.6       1,223,850       6.9  
Foreign time deposits
     466,324       2.4       475,215       2.5       357,670       2.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Deposits
   $ 18,988,846       100.0     $ 18,487,395       100.0     $ 17,688,984       100.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
By Business Segment (2)
                                                
Regional Banking
                                                
Central Ohio
   $ 4,378,076       23.1     $ 4,183,982       22.6     $ 4,070,733       23.0  
Northern Ohio
     3,516,912       18.5       3,505,457       19.0       3,528,762       19.9  
Southern Ohio / Kentucky
     1,475,667       7.8       1,441,875       7.8       1,337,063       7.6  
West Michigan
     2,609,148       13.7       2,457,296       13.3       2,514,931       14.2  
East Michigan
     2,030,127       10.7       1,988,200       10.8       2,007,732       11.4  
West Virginia
     1,291,645       6.8       1,314,450       7.1       1,325,614       7.5  
Indiana
     637,354       3.4       647,662       3.5       622,570       3.5  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Regional Banking
     15,938,929       84.0       15,538,922       84.1       15,407,405       87.1  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Dealer Sales
     77,095       0.4       77,408       0.4       70,070       0.4  
Private Financial Group
     1,057,424       5.6       1,164,020       6.3       960,056       5.4  
Treasury / Other (1)
     1,915,398       10.0       1,707,045       9.2       1,251,453       7.1  
 
    
 		      
 		      
 		      
 		      
 		      
 		  
Total Deposits
   $ 18,988,846       100.0     $ 18,487,395       100.0     $ 17,688,984       100.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		  

(1)   Comprised largely of brokered deposits and negotiable CDs.

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

Page 2

 

Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets

                                                         
    Average Balances
    
(in millions)
   2004
   2003
   Change March ‘04 vs. ‘03
Fully Tax Equivalent Basis
   First
   Fourth
   Third
   Second
   First
   Amount
   Percent
Assets
                                                        
Interest bearing deposits in banks
   $ 79     $ 83     $ 90     $ 45     $ 37     $ 42       N.M. %
Trading account securities
     16       11       11       23       12       4       33.3  
Federal funds sold and securities purchased under resale agreements
     92       117       103       69       57       35       61.4  
Mortgages held for sale
     207       295       898       602       459       (252 )     (54.9 )
Securities:
                                                        
Taxable
     4,646       4,093       3,646       3,385       3,016       1,630       54.0  
Tax exempt
     437       424       358       291       289       148       51.2  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total Securities
     5,083       4,517       4,004       3,676       3,305       1,778       53.8  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Loans and Leases:
                                                        
Commercial and industrial
     5,365       5,382       5,380       5,626       5,623       (258 )     (4.6 )
Real Estate
                                                        
Construction
     1,322       1,297       1,258       1,239       1,187       135       11.4  
Commercial
     2,876       2,830       2,744       2,621       2,565       311       12.1  
Consumer
                                                        
Automobile loans
     3,041       3,529       3,594       2,830       3,079       (38 )     (1.2 )
Automobile leases
     1,988       1,802       1,590       1,306       1,006       982       97.6  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Automobile loans and leases
     5,029       5,331       5,184       4,136       4,085       944       23.1  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Home equity
     3,880       3,678       3,503       3,359       3,238       642       19.8  
Residential mortgage
     2,674       2,501       2,075       1,887       1,832       842       46.0  
Other loans
     356       387       367       379       389       (33 )     (8.5 )
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total Consumer
     11,939       11,897       11,129       9,761       9,544       2,395       25.1  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total Loans and Leases
     21,502       21,406       20,511       19,247       18,919       2,583       13.7  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Allowance for loan and lease losses
     313       350       330       304       337       (24 )     (7.1 )
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Net loans and leases
     21,189       21,056       20,181       18,943       18,582       2,607       14.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total earning assets
     26,979       26,429       25,617       23,662       22,789       4,190       18.4  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Operating lease assets
     1,166       1,355       1,565       1,802       2,076       (910 )     (43.8 )
Cash and due from banks
     740       766       747       735       740       0       —  
Intangible assets
     217       217       218       218       218       (1 )     (0.5 )
All other assets
     2,046       2,005       2,067       1,985       1,950       96       4.9  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total Assets
   $ 30,835     $ 30,422     $ 29,884     $ 28,098     $ 27,436     $ 3,399       12.4 %
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Liabilities and Shareholders’ Equity
                                                        
Core deposits
                                                        
Non-interest bearing deposits
   $ 3,017     $ 3,131     $ 3,218     $ 3,046     $ 2,958     $ 59       2.0 %
Interest bearing demand deposits
     6,609       6,466       6,558       6,100       5,597       1,012       18.1  
Savings deposits
     2,819       2,824       2,808       2,804       2,771       48       1.7  
Retail certificates of deposit
     2,399       2,492       2,561       2,798       2,963       (564 )     (19.0 )
Other domestic time deposits
     637       631       656       673       682       (45 )     (6.6 )
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total core deposits
     15,481       15,544       15,801       15,421       14,971       510       3.4  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Domestic time deposits of $100,000 or more
     788       828       803       808       769       19       2.5  
Brokered time deposits and negotiable CDs
     1,907       1,851       1,421       1,241       1,155       752       65.1  
Foreign time deposits
     549       522       536       426       514       35       6.8  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total deposits
     18,725       18,745       18,561       17,896       17,409       1,316       7.6  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Short-term borrowings
     1,603       1,433       1,393       1,635       1,947       (344 )     (17.7 )
Federal Home Loan Bank advances
     1,273       1,273       1,273       1,267       1,216       57       4.7  
Subordinated notes and other long-term debt, including preferred capital securities
     5,557       5,432       5,197       4,010       3,570       1,987       55.7  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total interest bearing liabilities
     24,141       23,752       23,206       21,762       21,184       2,957       14.0  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
All other liabilities
     1,399       1,311       1,221       1,139       1,128       271       24.0  
Shareholders’ equity
     2,278       2,228       2,239       2,151       2,166       112       5.2  
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  
Total Liabilities and Shareholders’ Equity
   $ 30,835     $ 30,422     $ 29,884     $ 28,098     $ 27,436     $ 3,399       12.4 %
 
    
 		      
 		      
 		      
 		      
 		      
 		      
 		  

Page 3

 

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis

                                         
    Average Rates (3)
(in millions)
   2004
   2003
Fully Tax Equivalent Basis (1)
   First
   Fourth
   Third
   Second
   First
Assets
                                        
Interest bearing deposits in banks
     0.71 %     0.60 %     0.51 %     1.58 %     1.61 %
Trading account securities
     3.98       2.39       4.70       4.15       4.63  
Federal funds sold and securities purchased under resale agreements
     1.41       1.30       1.92       2.19       2.14  
Mortgages held for sale
     5.33       5.31       5.16       5.42       5.56  
Securities:
                                        
Taxable
     4.06       4.24       4.23       4.58       5.15  
Tax exempt
     6.88       6.91       6.93       6.91       6.86  
 
    
 		      
 		      
 		      
 		      
 		  
Total Securities
     4.30       4.49       4.47       4.77       5.30  
 
    
 		      
 		      
 		      
 		      
 		  
Loans and Leases: (2)
                                        
Commercial and industrial
     4.49       4.82       4.84       5.26       5.40  
Real Estate
                                        
Construction
     3.68       4.24       4.17       4.07       4.06  
Commercial
     4.70       4.99       5.22       5.28       5.60  
Consumer
                                        
Automobile loans
     6.93       6.90       7.19       7.74       7.85  
Automobile leases
     4.94       4.98       4.99       4.69       6.04  
 
    
 		      
 		      
 		      
 		      
 		  
Automobile loans and leases
     6.14       6.25       6.51       6.78       7.40  
 
    
 		      
 		      
 		      
 		      
 		  
Home equity
     4.82       4.87       5.09       5.02       5.17  
Residential mortgage
     5.44       5.20       5.32       5.76       5.95  
Other loans
     7.24       7.19       7.38       7.22       6.60  
 
    
 		      
 		      
 		      
 		      
 		  
Total Consumer
     5.52       5.64       5.87       5.99       6.33  
 
    
 		      
 		      
 		      
 		      
 		  
Total Loans and Leases
     5.04       5.26       5.41       5.56       5.82  
 
    
 		      
 		      
 		      
 		      
 		  
Total earning assets
     4.89 %     5.11 %     5.23 %     5.42 %     5.72 %
 
    
 		      
 		      
 		      
 		      
 		  
Liabilities and Shareholders’ Equity
                                        
Core deposits
                                        
Non-interest bearing deposits
                                       
Interest bearing demand deposits
     0.88 %     0.91 %     1.04 %     1.39 %     1.43 %
Savings deposits
     0.94       1.22       1.35       1.55       1.85  
Retail certificates of deposit
     3.47       3.54       3.51       3.75       3.87  
Other domestic time deposits
     3.48       3.69       3.89       3.85       4.00  
 
    
 		      
 		      
 		      
 		      
 		  
Total core deposits
     1.53       1.65       1.76       2.09       2.27  
 
    
 		      
 		      
 		      
 		      
 		  
Domestic time deposits of $100,000 or more
     2.14       2.37       2.32       2.55       2.76  
Brokered time deposits and negotiable CDs
     1.51       1.52       1.63       1.79       1.98  
Foreign time deposits
     0.72       0.75       0.85       1.03       1.06  
 
    
 		      
 		      
 		      
 		      
 		  
Total deposits
     1.53       1.64       1.75       2.06       2.23  
 
    
 		      
 		      
 		      
 		      
 		  
Short-term borrowings
     0.83       0.78       0.85       1.06       1.16  
Federal Home Loan Bank advances
     2.50       2.24       1.81       1.76       1.84  
Subordinated notes and other long-term debt, including preferred capital securities
     2.33       2.63       2.78       2.85       3.12  
 
    
 		      
 		      
 		      
 		      
 		  
Total interest bearing liabilities
     1.71 %     1.85 %     1.93 %     2.11 %     2.26 %
 
    
 		      
 		      
 		      
 		      
 		  
Net interest rate spread
     3.18 %     3.26 %     3.30 %     3.31 %     3.46 %
Impact of non-interest bearing funds on margin
     0.18       0.16       0.16       0.16       0.17  
 
    
 		      
 		      
 		      
 		      
 		  
Net Interest Margin
     3.36 %     3.42 %     3.46 %     3.47 %     3.63 %
 
    
 		      
 		      
 		      
 		      
 		  

(1)   Fully tax equivalent yields are calculated assuming a 35% tax rate. See page 5 for the fully taxable equivalent adjustment.

(2)   Individual loan and lease components include applicable non-deferrable fees.

(3)   Loan and lease and deposit average rates include impact of applicable derivatives.

Page 4

 

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data

                                         
    2004
   2003
(in thousands, except per share amounts)
   First
   Fourth
   Third
   Second
   First
Total Interest Income
   $ 325,931     $ 335,097     $ 333,320     $ 317,325     $ 320,014  
Total Interest Expense
     103,246       110,782       112,849       114,884       118,255  
 
    
 		      
 		      
 		      
 		      
 		  
Net Interest Income
   $ 222,685     $ 224,315     $ 220,471     $ 202,441     $ 201,759  
Provision for credit losses
     25,596       26,341       51,615       49,193       36,844  
 
    
 		      
 		      
 		      
 		      
 		  
Net Interest Income After Provision for Credit Losses
     197,089       197,974       168,856       153,248       164,915  
 
    
 		      
 		      
 		      
 		      
 		  
Operating lease income
     88,867       105,307       117,624       128,574       138,193  
Service charges on deposit accounts
     41,837       44,763       42,294       40,914       39,869  
Trust services
     16,323       15,793       15,365       15,580       14,911  
Brokerage and insurance income
     15,197       14,344       13,807       14,196       15,497  
Mortgage banking
     (4,296 )     9,677       30,193       7,185       11,125  
Bank Owned Life Insurance income
     10,485       10,410       10,438       11,043       11,137  
Other service charges and fees
     9,513       9,237       10,499       11,372       10,338  
Gain on sales of automobile loans
     9,004       16,288       —       13,496       10,255  
Gain on sale of branch offices
     —       —       13,112       —       —  
Securities gains (losses)
     15,090       1,280       (4,107 )     6,887       1,198  
Other
     25,619       19,411       23,543       27,704       20,401  
 
    
 		      
 		      
 		      
 		      
 		  
Total Non-Interest Income
     227,639       246,510       272,768       276,951       272,924  
 
    
 		      
 		      
 		      
 		      
 		  
Personnel costs
     121,624       115,762       113,170       105,242       113,089  
Operating lease expense
     70,710       85,609       93,134       102,939       111,588  
Outside data processing and other services
     18,462       15,957       17,478       16,104       16,579  
Equipment
     16,086       16,840       16,328       16,341       16,412  
Net occupancy
     16,763       14,925       15,570       15,377       16,609  
Professional services
     7,299       12,175       11,116       9,872       9,285  
Marketing
     7,839       6,895       5,515       8,454       6,626  
Telecommunications
     5,194       5,272       5,612       5,394       5,701  
Loss on early extinguishment of debt
     —       15,250       —       —       —  
Printing and supplies
     3,016       3,417       3,658       2,253       3,681  
Amortization of intangibles
     204       204       204       204       204  
Restructuring reserve releases
     —       (351 )     —       (5,315 )     (1,000 )
Other
     18,457       25,510       18,397       20,168       16,705  
 
    
 		      
 		      
 		      
 		      
 		  
Total Non-Interest Expense
     285,654       317,465       300,182       297,033       315,479  
 
    
 		      
 		      
 		      
 		      
 		  
Income Before Income Taxes
     139,074       127,019       141,442       133,166       122,360  
Income taxes
     34,901       33,758       37,230       36,676       30,630  
 
    
 		      
 		      
 		      
 		      
 		  
Income before cumulative effect of change in accounting principle
     104,173       93,261       104,212       96,490       91,730  
Cumulative effect of change in accounting principle, net of tax (1)
     —       —       (13,330 )     —       —  
 
    
 		      
 		      
 		      
 		      
 		  
Net Income
   $ 104,173     $ 93,261     $ 90,882     $ 96,490     $ 91,730  
 
    
 		      
 		      
 		      
 		      
 		  
Average common shares - diluted
     232,915       231,986       230,966       230,572       232,805  
Per Common Share
                                        
Income before cumulative effect of change in accounting principle - Diluted
   $ 0.45     $ 0.40     $ 0.45     $ 0.42     $ 0.39  
Net Income - Diluted
   $ 0.45     $ 0.40     $ 0.39     $ 0.42     $ 0.39  
Cash Dividends Declared
   $ 0.175     $ 0.175     $ 0.175     $ 0.16     $ 0.16  
Return on:
                                        
Average total assets (2)
     1.36 %     1.22 %     1.38 %     1.38 %     1.36 %
Average total shareholders’ equity (2)
     18.4 %     16.6 %     18.5 %     18.0 %     17.2 %
Net interest margin (3)
     3.36 %     3.42 %     3.46 %     3.47 %     3.63 %
Efficiency ratio (4)
     65.1 %     67.1 %     60.0 %     62.5 %     66.3 %
Effective tax rate
     25.1 %     26.6 %     26.3 %     27.5 %     25.0 %
Revenue - Fully Taxable Equivalent (FTE)
                                        
Net Interest Income
   $ 222,685     $ 224,315     $ 220,471     $ 202,441     $ 201,759  
Tax Equivalent Adjustment (3)
     3,023       2,954       2,558       2,076       2,096  
 
    
 		      
 		      
 		      
 		      
 		  
Net Interest Income
     225,708       227,269       223,029       204,517       203,855  
Non-Interest Income
     227,639       246,510       272,768       276,951       272,924  
 
    
 		      
 		      
 		      
 		      
 		  
Total Revenue
   $ 453,347     $ 473,779     $ 495,797     $ 481,468     $ 476,779  
 
    
 		      
 		      
 		      
 		      
 		  
Total Revenue Excluding Securities Gains (Losses)
   $ 438,257     $ 472,499     $ 499,904     $ 474,581     $ 475,581  
 
    
 		      
 		      
 		      
 		      
 		  

     

[Additional columns below]

[Continued from above table, first column(s) repeated]

                                 
    1Q04 vs 4Q03
   1Q04 vs 1Q03
(in thousands, except per share amounts)
   $ Chg
   % Chg
   $ Chg
   % Chg
Total Interest Income
   $ (9,166 )     (2.7 %)   $ 5,917       1.8 %
Total Interest Expense
     (7,536 )     (6.8 %)     (15,009 )     (12.7 %)
 
    
 		      
 		      
 		      
 		  
Net Interest Income
     (1,630 )     (0.7 %)     20,926       10.4 %
Provision for credit losses
     (745 )     (2.8 %)     (11,248 )     (30.5 %)
 
    
 		      
 		      
 		      
 		  
Net Interest Income After Provision for Credit Losses
     (885 )     (0.4 %)     32,174       19.5 %
 
    
 		      
 		      
 		      
 		  
Operating lease income
     (16,440 )     (15.6 %)     (49,326 )     (35.7 %)
Service charges on deposit accounts
     (2,926 )     (6.5 %)     1,968       4.9 %
Trust services
     530       3.4 %     1,412       9.5 %
Brokerage and insurance income
     853       5.9 %     (300 )     (1.9 %)
Mortgage banking
     (13,973 )     N.M.       (15,421 )     N.M.  
Bank Owned Life Insurance income
     75       0.7 %     (652 )     (5.9 %)
Other service charges and fees
     276       3.0 %     (825 )     (8.0 %)
Gain on sales of automobile loans
     (7,284 )     (44.7 %)     (1,251 )     (12.2 %)
Gain on sale of branch offices
     —       N.M.       —       N.M.  
Securities gains (losses)
     13,810       N.M.       13,892       N.M.  
Other
     6,208       32.0 %     5,218       25.6 %
 
    
 		      
 		      
 		      
 		  
Total Non-Interest Income
     (18,871 )     (7.7 %)     (45,285 )     (16.6 %)
 
    
 		      
 		      
 		      
 		  
Personnel costs
     5,862       5.1 %     8,535       7.5 %
Operating lease expense
     (14,899 )     (17.4 %)     (40,878 )     (36.6 %)
Outside data processing and other services
     2,505       15.7 %     1,883       11.4 %
Equipment
     (754 )     (4.5 %)     (326 )     (2.0 %)
Net occupancy
     1,838       12.3 %     154       0.9 %
Professional services
     (4,876 )     (40.0 %)     (1,986 )     (21.4 %)
Marketing
     944       13.7 %     1,213       18.3 %
Telecommunications
     (78 )     (1.5 %)     (507 )     (8.9 %)
Loss on early extinguishment of debt
     (15,250 )     (100.0 %)     —       N.M.  
Printing and supplies
     (401 )     (11.7 %)     (665 )     (18.1 %)
Amortization of intangibles
     —       0.0 %     —       0.0 %
Restructuring reserve releases
     351       (100.0 %)     1,000       (100.0 %)
Other
     (7,053 )     (27.6 %)     1,752       10.5 %
 
    
 		      
 		      
 		      
 		  
Total Non-Interest Expense
     (31,811 )     (10.0 %)     (29,825 )     (9.5 %)
 
    
 		      
 		      
 		      
 		  
Income Before Income Taxes
     12,055       9.5 %     16,714       13.7 %
Income taxes
     1,143       3.4 %     4,271       13.9 %
 
    
 		      
 		      
 		      
 		  
Income before cumulative effect of change in accounting principle
     10,912       11.7 %     12,443       13.6 %
Cumulative effect of change in accounting principle, net of tax (1)
     —       N.M.       —       N.M.  
 
    
 		      
 		      
 		      
 		  
Net Income
   $ 10,912       11.7 %   $ 12,443       13.6 %
 
    
 		      
 		      
 		      
 		  
Average common shares - diluted
     929       0.4 %     110       0.0 %
Per Common Share
                                
Income before cumulative effect of change in accounting principle - Diluted
   $ 0.05       12.5 %   $ 0.06       15.4 %
Net Income - Diluted
   $ 0.05       12.5 %   $ 0.06       15.4 %
Cash Dividends Declared
   $ —       0.0 %   $ 0.02       9.4 %
Return on:
                                
Average total assets (2)
     0.14 %     11.7 %     0.00 %     0.0 %
Average total shareholders’ equity (2)
     1.78 %     10.7 %     1.21 %     7.1 %
Net interest margin (3)
     (0.06 %)     (1.8 %)     (0.27 %)     (7.4 %)
Efficiency ratio (4)
     (2.01 %)     (3.0 %)     (1.16 %)     (1.7 %)
Effective tax rate
     (1.48 %)     (5.6 %)     0.06 %     0.3 %
Revenue - Fully Taxable Equivalent (FTE)
                                
Net Interest Income
   $ (1,630 )     (0.7 %)   $ 20,926       10.4 %
Tax Equivalent Adjustment (3)
     69       2.3 %     927       44.2 %
 
    
 		      
 		      
 		      
 		  
Net Interest Income
     (1,561 )     (0.7 %)     21,853       10.7 %
Non-Interest Income
     (18,871 )     (7.7 %)     (45,285 )     (16.6 %)
 
    
 		      
 		      
 		      
 		  
Total Revenue
     (20,432 )     (4.3 %)     (23,432 )     (4.9 %)
 
    
 		      
 		      
 		      
 		  
Total Revenue Excluding Securities Gains (Losses)
   $ (34,242 )     (7.2 %)   $ (37,324 )     (7.8 %)
 
    
 		      
 		      
 		      
 		  

(1)   Due to the adoption of FASB Interpretation No. 46 for variable interest entities.

(2)   Based on income before cumulative effect of change in accounting principle, net of tax.

(3)   Calculated assuming a 35% tax rate.

(4)   Non-interest expense less amortization of intangible assets divided by the sum of fully taxable equivalent net interest income and non-interest income excluding securities gains (losses).
 
N.M. - Not Meaningful.

Page 5

 

Huntington Bancshares Incorporated
Quarterly Credit Reserves and Net Charge-off Analysis

                                         
    2004
   2003
(in thousands)
   First
   Fourth
   Third
   Second
   First
Allowance for Loan and Leases Losses, Beginning of Period
   $ 299,732     $ 336,398     $ 307,667     $ 303,636     $ 324,827  
Loan and lease losses
     (37,167 )     (68,023 )     (43,261 )     (49,985 )     (40,265 )
Recoveries of loans previously charged off
     8,540       12,880       10,487       8,929       7,429  
 
    
 		      
 		      
 		      
 		      
 		  
Net loan and lease losses
     (28,627 )     (55,143 )     (32,774 )     (41,056 )     (32,836 )
 
    
 		      
 		      
 		      
 		      
 		  
Provision for credit losses
     25,596       26,341       51,615       49,193       36,844  
Net change in allowance for unfunded loan commitments and letters of credit
     3,433       (1,785 )     (457 )     101       (21,560 )
Allowance of assets sold and securitized(1)
     (4,757 )     (6,079 )     10,347       (4,207 )     (3,639 )
 
    
 		      
 		      
 		      
 		      
 		  
Allowance for Loan and Lease Losses, End of Period
   $ 295,377     $ 299,732     $ 336,398     $ 307,667     $ 303,636  
 
    
 		      
 		      
 		      
 		      
 		  
Allowance for Unfunded Loan Commitments and Letters of Credit, Beginning of Period
   $ 35,522     $ 33,737     $ 33,280     $ 33,381     $ 11,821  
Net change
     (3,433 )     1,785       457       (101 )     21,560  
 
    
 		      
 		      
 		      
 		      
 		  
Allowance for Unfunded Loan Commitments and Letters of Credit, End of Period
   $ 32,089     $ 35,522     $ 33,737     $ 33,280     $ 33,381  
 
    
 		      
 		      
 		      
 		      
 		  
Allowance for loan and lease losses as a % of:
                                        
Total loans and leases
     1.39 %     1.42 %     1.59 %     1.61 %     1.61 %
Non-performing loans and leases
     383 %     397 %     276 %     256 %     240 %
Non-performing assets
     322 %     343 %     245 %     230 %     216 %
Allowance for loan and lease losses plus allowance for unfunded loan commitments and letters of credit as a % of:
                                        
Total loans and leases
     1.55 %     1.59 %     1.75 %     1.79 %     1.78 %
Non-performing loans and leases
     425 %     444 %     304 %     284 %     266 %
Non-performing assets
     357 %     384 %     270 %     255 %     239 %
Net Charge-offs by Loan and Lease Type
                                        
Commercial and industrial
   $ 5,956     $ 31,186     $ 12,222     $ 26,546     $ 14,904  
Commercial real estate
     1,637       5,743       3,621       607       546  
 
    
 		      
 		      
 		      
 		      
 		  
Total commercial
     7,593       36,929       15,843       27,153       15,450  
 
    
 		      
 		      
 		      
 		      
 		  
Consumer
                                        
Automobile loans
     13,422       11,346       10,773       7,524       10,623  
Automobile leases
     3,159       1,936       1,450       1,422       920  
 
    
 		      
 		      
 		      
 		      
 		  
Automobile loans and leases
     16,581       13,282       12,223       8,946       11,543  
 
    
 		      
 		      
 		      
 		      
 		  
Home equity
     3,116       3,464       3,416       3,671       4,053  
Residential mortgage
     316       174       246       267       145  
Other loans
     1,021       1,294       1,046       1,019       1,645  
 
    
 		      
 		      
 		      
 		      
 		  
Total consumer
     21,034       18,214       16,931       13,903       17,386  
 
    
 		      
 		      
 		      
 		      
 		  
Total Net Charge-offs
   $ 28,627     $ 55,143     $ 32,774     $ 41,056     $ 32,836  
 
    
 		      
 		      
 		      
 		      
 		  
Net Charge-offs - Annualized Percentages
                                        
Commercial and industrial
     0.44 %     2.32 %     0.91 %     1.89 %     1.06 %
Commercial real estate
     0.16       0.56       0.36       0.06       0.06  
 
    
 		      
 		      
 		      
 		      
 		  
Total commercial
     0.32       1.55       0.68       1.14       0.66  
 
    
 		      
 		      
 		      
 		      
 		  
Consumer
                                        
Automobile loans
     1.77       1.29       1.20       1.06       1.38  
Automobile leases
     0.64       0.43       0.36       0.44       0.37  
 
    
 		      
 		      
 		      
 		      
 		  
Automobile loans and leases
     1.32       1.00       0.94       0.87       1.13  
 
    
 		      
 		      
 		      
 		      
 		  
Home equity
     0.32       0.38       0.39       0.44       0.50  
Residential mortgage
     0.05       0.03       0.05       0.06       0.03  
Other loans
     1.15       1.34       1.14       1.08       1.69  
 
    
 		      
 		      
 		      
 		      
 		  
Total consumer
     0.70       0.61       0.61       0.57       0.73  
 
    
 		      
 		      
 		      
 		      
 		  
Net Charge-offs as a % of Average Loans
     0.53 %     1.03 %     0.64 %     0.85 %     0.69 %
 
    
 		      
 		      
 		      
 		      
 		  

(1) The third quarter 2003 includes the reserve for loan losses associated with automobile loans contained in one of Huntington’s securitization trusts consolidated as a result of the adoption of FASB Interpretation No. 46 on July 1, 2003.

Page 6

 

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

                                         
            2003
(in thousands)
   First
   Fourth
   Third
   Second
   First
Non-accrual loans and leases:
                                        
Commercial and industrial
   $ 45,056     $ 43,387     $ 82,413     $ 86,021     $ 94,754  
Commercial real estate
     20,019       22,399       30,545       22,398       22,585  
Residential mortgage
     12,052       9,695       8,923       11,735       9,302  
 
    
 		      
 		      
 		      
 		      
 		  
Total Non-Performing Loans and Leases
     77,127       75,481       121,881       120,154       126,641  
Other real estate, net
     14,567       11,905       15,196       13,568       14,084  
 
    
 		      
 		      
 		      
 		      
 		  
Total Non-Performing Assets
   $ 91,694     $ 87,386     $ 137,077     $ 133,722     $ 140,725  
 
    
 		      
 		      
 		      
 		      
 		  
Non-performing loans and leases as a % of total loans and leases
     0.36 %     0.36 %     0.58 %     0.63 %     0.67 %
Non-performing assets as a % of total loans and leases and other real estate
     0.43 %     0.41 %     0.65 %     0.70 %     0.74 %
Accruing loans and leases past due 90 days or more
   $ 59,697     $ 55,913     $ 66,060     $ 55,287     $ 57,241  
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.28 %     0.27 %     0.31 %     0.29 %     0.30 %
                                         
            2003
(in thousands)
   First
   Fourth
   Third
   Second
   First
Non-Performing Assets, Beginning of Period
   $ 87,386     $ 137,077     $ 133,722     $ 140,725     $ 136,723  
New non-performing assets
     27,208       38,367       52,213       83,104       48,359  
Returns to accruing status
     (54 )     (454 )     (319 )     (9,866 )     (5,993 )
Loan and lease losses
     (10,463 )     (39,657 )     (22,090 )     (30,204 )     (17,954 )
Payments
     (10,717 )     (22,710 )     (18,905 )     (26,831 )     (15,440 )
Sales
     (1,666 )     (25,237 )     (7,544 )     (23,206 )     (4,970 )
 
    
 		      
 		      
 		      
 		      
 		  
Non-Performing Assets, End of Period
   $ 91,694     $ 87,386     $ 137,077     $ 133,722     $ 140,725  
 
    
 		      
 		      
 		      
 		      
 		  

Page 7

 

Huntington Bancshares Incorporated
Quarterly Stock Summary, Capital, and Other Data

Quarterly Common Stock Summary

                                         
    2004
   2003
    First
   Fourth
   Third
   Second
   First
Common Stock Price
                                        
High(1)
   $ 23.780     $ 22.550     $ 20.890     $ 21.540     $ 19.800  
Low(1)
     21.000       19.850       19.220       18.030       17.780  
Close
     22.030       22.500       19.850       19.510       18.590  
Average Closing Price
     22.501       21.584       20.199       19.790       18.876  
Dividends
                                        
Cash dividends declared on common stock
   $ 0.175     $ 0.175     $ 0.175     $ 0.16     $ 0.16  
Common shares outstanding (000s)
                                        
Average — Basic
     229,227       228,902       228,715       228,633       231,355  
Average — Diluted
     232,915       231,986       230,966       230,572       232,805  
Ending
     229,410       229,008       228,870       228,660       228,642  
Book value per share
   $ 10.31     $ 9.93     $ 9.79     $ 9.63     $ 9.43  
Common Share Repurchase Program (000s)
                                        
Number of Shares Repurchased
     —       —       —       —       4,300  

(1) High and low stock prices are intra-day quotes obtained from NASDAQ.

Capital Data - End of Period

                                         
    2004
   2003
(in millions)
   First
   Fourth
   Third
   Second
   First
Total Risk-Adjusted Assets(2)
   $ 28,236     $ 28,164     $ 27,949     $ 27,456     $ 27,337  
Tier 1 Risk-Based Capital Ratio(3)
     8.75 %     8.53 %     8.40 %     8.35 %     8.16 %
Total Risk-Based Capital Ratio(2)
     12.67 %     11.95 %     11.19 %     11.16 %     11.04 %
Tier 1 Leverage Ratio(2)
     8.08 %     7.98 %     7.94 %     8.25 %     8.22 %
Tangible Equity / Asset Ratio
     6.95 %     6.79 %     6.77 %     7.06 %     7.00 %
Tangible Equity / Risk-Weighted Assets Ratio(2)
     7.61 %     7.30 %     7.24 %     7.23 %     7.09 %

Other Data - End of Period

                                         
    2004
   2003
    First
   Fourth
   Third
   Second
   First
Number of employees (full-time equivalent)
     7,915       7,983       7,906       7,986       8,134  
Number of domestic full-service banking offices(3)
     337       338       337       341       342  

Page 8

 

Huntington Bancshares Incorporated
Quarterly Operating Lease Performance

                                         
    2004
   2003
    First
   Fourth
   Third
   Second
   First
Balance Sheet (in millions)
                                        
Average operating lease assets outstanding
   $ 1,166     $ 1,355     $ 1,565     $ 1,802     $ 2,076  
 
    
 		      
 		      
 		      
 		      
 		  
Income Statement (in thousands)
                                        
Net rental income
   $ 86,318     $ 98,223     $ 109,645     $ 120,502     $ 130,274  
Fees
     742       5,204       5,372       5,414       5,633  
Recoveries - early terminations
     1,807       1,880       2,607       2,658       2,286  
 
    
 		      
 		      
 		      
 		      
 		  
Total Operating Lease Income
     88,867       105,307       117,624       128,574       138,193  
 
    
 		      
 		      
 		      
 		      
 		  
Depreciation and residual losses at termination
     63,823       76,768       83,112       91,387       99,283  
Losses - early terminations
     6,887       8,841       10,022       11,552       12,305  
 
    
 		      
 		      
 		      
 		      
 		  
Total Operating Lease Expense
     70,710       85,609       93,134       102,939       111,588  
 
    
 		      
 		      
 		      
 		      
 		  
Net Earnings Contribution
   $ 18,157     $ 19,698     $ 24,490     $ 25,635     $ 26,605  
 
    
 		      
 		      
 		      
 		      
 		  
Earnings ratios(1)
                                        
Net rental income
     29.6 %     29.0 %     28.0 %     26.7 %     25.1 %
Depreciation and residual losses at termination
     21.9 %     22.7 %     21.2 %     20.3 %     19.1 %

Definition of terms:

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

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

Page 9