Exhibit 99.2

HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
March 2005


Table of Contents

         
Consolidated Balance Sheets
    1  
 
       
Credit Exposure Composition
    2  
 
       
Deposit Composition
    3  
 
       
Consolidated Quarterly Average Balance Sheets
    4  
 
       
Consolidated Quarterly Net Interest Margin Analysis
    5  
 
       
Selected Quarterly Income Statement Data
    6  
 
       
Quarterly Credit Reserves
    7  
 
       
Quarterly Net Charge-Off Analysis
    8  
 
       
Quarterly Non-Performing Assets and Past Due Loans and Leases
    9  
 
       
Quarterly Stock Summary, Capital, and Other Data
    10  
 
       
Quarterly Operating Lease Performance
    11  

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

 


 

Huntington Bancshares Incorporated
Consolidated Balance Sheets

                                           
                              Change
March '05 vs '04
 
2005             2004        
(in thousands of dollars, except per share amounts) March 31,     December 31,     March 31,       Amount     Percent  
    (Unaudited)             (Unaudited)                    
Assets
                                         
Cash and due from banks
  $ 914,699     $ 877,320     $ 766,432       $ 148,267       19.3 %
Federal funds sold and securities
purchased under resale agreements
    144,980       628,040       224,841         (79,861 )     (35.5 )
Interest bearing deposits in banks
    29,551       22,398       54,027         (24,476 )     (45.3 )
Trading account securities
    100,135       309,630       16,410         83,725       N.M.  
Loans held for sale
    252,932       223,469       230,417         22,515       9.8  
Investment securities
    4,052,875       4,238,945       5,458,347         (1,405,472 )     (25.7 )
Loans and leases (1)
    24,206,465       23,560,277       21,193,627         3,012,838       14.2  
Allowance for loan and lease losses
    (264,390 )     (271,211 )     (295,377 )       30,987       (10.5 )
           
Net loans and leases
    23,942,075       23,289,066       20,898,250         3,043,825       14.6  
           
Operating lease assets
    466,550       587,310       1,070,958         (604,408 )     (56.4 )
Bank owned life insurance
    973,164       963,059       938,156         35,008       3.7  
Premises and equipment
    354,979       355,115       351,073         3,906       1.1  
Goodwill and other intangible assets
    217,780       215,807       216,805         975       0.4  
Customers’ acceptance liability
    7,194       11,299       7,909         (715 )     (9.0 )
Accrued income and other assets
    725,685       844,039       805,455         (79,770 )     (9.9 )
           
Total Assets
  $ 32,182,599     $ 32,565,497     $ 31,039,080       $ 1,143,519       3.7 %
           
 
                                         
Liabilities and Shareholders’ Equity
                                         
Liabilities
                                         
Deposits (2)
  $ 21,770,973     $ 20,768,161     $ 18,988,846       $ 2,782,127       14.7 %
Short-term borrowings
    1,033,496       1,207,233       1,076,302         (42,806 )     (4.0 )
Federal Home Loan Bank advances
    903,871       1,271,088       1,273,000         (369,129 )     (29.0 )
Other long-term debt
    3,138,626       4,016,004       4,478,599         (1,339,973 )     (29.9 )
Subordinated notes
    1,025,612       1,039,793       1,066,705         (41,093 )     (3.9 )
Allowance for unfunded loan commitments and
letters of credit
    31,610       33,187       32,089         (479 )     (1.5 )
Bank acceptances outstanding
    7,194       11,299       7,909         (715 )     (9.0 )
Deferred federal income tax liability
    781,152       783,628       687,820         93,332       13.6  
Accrued expenses and other liabilities
    900,292       897,466       1,063,631         (163,339 )     (15.4 )
           
Total Liabilities
    29,592,826       30,027,859       28,674,901         917,925       3.2  
           
Shareholders’ equity
                                         
Preferred stock — authorized 6,617,808 shares;
none outstanding
                               
Common stock — without par value; authorized
500,000,000 shares; issued 257,866,255
shares; outstanding 232,002,213; 231,605,281
and 229,410,043 shares, respectively.
    2,484,832       2,484,204       2,482,342         2,490       0.1  
Less 25,864,042; 26,260,974 and 28,456,212
treasury shares, respectively
    (490,139 )     (499,259 )     (541,048 )       50,909       (9.4 )
Accumulated other comprehensive income (loss)
    (18,686 )     (10,903 )     21,490         (40,176 )     N.M.  
Retained earnings
    613,766       563,596       401,395         212,371       52.9  
           
Total Shareholders’ Equity
    2,589,773       2,537,638       2,364,179         225,594       9.5  
           
Total Liabilities and Shareholders’ Equity
  $ 32,182,599     $ 32,565,497     $ 31,039,080       $ 1,143,519       3.7 %
           

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

1


 

Huntington Bancshares Incorporated
Credit Exposure Composition

                                                                   
                                                      Change
 
2005                    2004       March '05 vs '04  
(in thousands of dollars) March 31,     December 31,     March 31,       Amount     Percent  
    (Unaudited)                             (Unaudited)                            
By Type
                                                                 
Commercial:
                                                                 
Middle market commercial and industrial
  $ 4,824,403       19.6 %   $ 4,660,141       19.3 %   $ 4,545,930       20.4 %     $ 278,473       6.1 %
Construction
    1,647,999       6.7       1,592,125       6.6       1,282,420       5.8         365,579       28.5  
Commercial
    1,913,849       7.8       1,881,835       7.8       1,934,777       8.7         (20,928 )     (1.1 )
           
Middle market commercial real estate
    3,561,848       14.5       3,473,960       14.4       3,217,197       14.5         344,651       10.7  
           
Small business commercial and industrial
and commercial real estate
    2,204,278       8.9       2,168,877       8.9       1,988,818       8.9         215,460       10.8  
           
Total commercial
    10,590,529       43.0       10,302,978       42.6       9,751,945       43.8         838,584       8.6  
           
Consumer:
                                                                 
Automobile loans
    2,066,264       8.4       1,948,667       8.1       2,267,310       10.2         (201,046 )     (8.9 )
Automobile leases
    2,476,098       10.0       2,443,455       10.1       2,065,883       9.3         410,215       19.9  
Home equity
    4,594,586       18.6       4,554,540       18.9       3,920,882       17.6         673,704       17.2  
Residential mortgage
    3,995,769       16.2       3,829,234       15.9       2,756,625       12.4         1,239,144       45.0  
Other loans
    483,219       1.9       481,403       2.0       430,982       1.8         52,237       12.1  
           
Total consumer
    13,615,936       55.1       13,257,299       55.0       11,441,682       51.3         2,174,254       19.0  
           
Total loans and direct financing leases
  $ 24,206,465       98.1     $ 23,560,277       97.6     $ 21,193,627       95.1       $ 3,012,838       14.2  
           
 
                                                                 
Operating lease assets
    466,550       1.9       587,310       2.4       1,070,958       4.8         (604,408 )     (56.4 )
Securitized loans
                            27,573       0.1         (27,573 )     N.M.  
           
Total credit exposure
  $ 24,673,015       100.0 %   $ 24,147,587       100.0 %   $ 22,292,158       100.0 %     $ 2,380,857       10.7 %
           
Total automobile exposure (1)
  $ 5,008,912       20.3 %   $ 4,979,432       20.6 %   $ 5,431,724       24.4 %     $ (422,812 )     (7.8) %
           
 
                                                                 
By Business Segment (2)
                                                                 
Regional banking:
                                                                 
Central Ohio
  $ 6,410,873       26.0 %   $ 6,239,021       25.8 %   $ 4,986,411       22.4 %     $ 1,424,462       28.6 %
Northern Ohio
    2,910,071       11.8       2,857,746       11.8       2,682,743       12.0         227,328       8.5  
Southern Ohio / Kentucky
    2,023,243       8.2       1,895,180       7.8       1,703,006       7.6         320,237       18.8  
West Michigan
    2,335,578       9.5       2,271,682       9.4       2,154,994       9.7         180,584       8.4  
East Michigan
    1,475,868       6.0       1,430,169       5.9       1,340,679       6.0         135,189       10.1  
West Virginia
    887,239       3.6       882,016       3.7       809,714       3.6         77,525       9.6  
Indiana
    997,052       4.0       961,700       4.0       752,850       3.4         244,202       32.4  
           
Regional banking
    17,039,924       69.1       16,537,514       68.4       14,430,397       64.7         2,609,527       18.1  
Dealer Sales
    5,955,634       24.1       5,920,270       24.5       6,396,727       28.7         (441,093 )     (6.9 )
Private Financial Group
    1,496,408       6.1       1,487,800       6.2       1,322,259       5.9         174,149       13.2  
Treasury / Other
    181,049       0.7       202,003       0.9       142,775       0.7         38,274       26.8  
           
Total credit exposure
  $ 24,673,015       100.0 %   $ 24,147,587       100.0 %   $ 22,292,158       100.0 %     $ 2,380,857       10.7 %
           

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

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

2


 

Huntington Bancshares Incorporated
Deposit Composition

                                                                   
                                                      Change
 
2005                 2004       March '05 vs '04  
(in thousands of dollars) March 31,     December 31,     March 31,       Amount     Percent  
    (Unaudited)                             (Unaudited)                            
           
By Type
                                                                 
Non-interest bearing demand deposits
  $ 3,186,187       14.6 %   $ 3,392,123       16.3 %   $ 2,918,380       15.4 %     $ 267,807       9.2 %
Interest bearing demand deposits
    7,848,458       36.1       7,786,377       37.5       6,866,174       36.2         982,284       14.3  
Savings and other domestic time deposits
    3,460,633       15.9       3,502,552       16.9       3,609,745       19.0         (149,112 )     (4.1 )
Retail certificates of deposit
    2,555,241       11.7       2,466,965       11.9       2,394,940       12.6         160,301       6.7  
           
           
Total core deposits
    17,050,519       78.3       17,148,017       82.6       15,789,239       83.2         1,261,280       8.0  
Domestic time deposits of $100,000 or more
    1,311,495       6.0       1,081,660       5.2       791,320       4.2         520,175       65.7  
Brokered time deposits and negotiable CDs
    3,007,124       13.8       2,097,537       10.1       1,941,963       10.2         1,065,161       54.8  
Foreign time deposits
    401,835       1.9       440,947       2.1       466,324       2.4         (64,489 )     (13.8 )
           
Total deposits
  $ 21,770,973       100.0 %   $ 20,768,161       100.0 %   $ 18,988,846       100.0 %     $ 2,782,127       14.7 %
           
 
                                                                 
Total core deposits:
                                                                 
Commercial
  $ 5,218,482       30.6 %   $ 5,293,666       30.9 %   $ 4,611,258       29.2 %     $ 607,224       13.2 %
Personal
    11,832,037       69.4       11,854,351       69.1       11,177,981       70.8         654,056       5.9  
           
Total core deposits
  $ 17,050,519       100.0 %   $ 17,148,017       100.0 %   $ 15,789,239       100.0 %     $ 1,261,280       8.0 %
           
 
                                                                 
By Business Segment (1)
                                                                 
Regional banking:
                                                                 
Central Ohio
  $ 4,748,903       21.8 %   $ 4,705,721       22.7 %   $ 4,389,011       23.1 %     $ 359,892       8.2 %
Northern Ohio
    3,929,993       18.1       4,068,385       19.6       3,508,376       18.5         421,617       12.0  
Southern Ohio / Kentucky
    1,774,229       8.1       1,742,353       8.4       1,475,506       7.8         298,723       20.2  
West Michigan
    2,685,054       12.3       2,643,510       12.7       2,608,967       13.7         76,087       2.9  
East Michigan
    2,298,679       10.6       2,222,191       10.7       2,025,914       10.7         272,765       13.5  
West Virginia
    1,368,763       6.3       1,375,151       6.6       1,291,913       6.8         76,850       5.9  
Indiana
    717,877       3.3       663,927       3.2       637,090       3.4         80,787       12.7  
           
Regional banking
    17,523,498       80.5       17,421,238       83.9       15,936,777       84.0         1,586,721       10.0  
Dealer Sales
    69,046       0.3       74,969       0.4       76,031       0.4         (6,985 )     (9.2 )
Private Financial Group
    1,139,139       5.2       1,176,303       5.7       1,060,639       5.6         78,500       7.4  
Treasury / Other (2)
    3,039,290       14.0       2,095,651       10.0       1,915,399       10.0         1,123,891       58.7  
           
           
Total deposits
  $ 21,770,973       100.0 %   $ 20,768,161       100.0 %   $ 18,988,846       100.0 %     $ 2,782,127       14.7 %
           

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

3


 

Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)

                                                           
  Average Balances       Change  
Fully Taxable Equivalent basis   2005     2004       1Q05 vs 1Q04  
(in millions of dollars)   First     Fourth     Third     Second     First       Amount     Percent  
           
Assets
                                                         
Interest bearing deposits in banks
  $ 53     $ 60     $ 55     $ 69     $ 79       $ (26 )     (32.9 )%
Trading account securities
    200       228       148       28       16         184       N.M.  
Federal funds sold and securities purchased under resale agreements
    475       695       318       168       92         383       N.M.  
Loans held for sale
    203       229       283       254       207         (4 )     (1.9 )
Investment securities:
                                                         
Taxable
    3,932       3,858       4,340       4,861       4,646         (714 )     (15.4 )
Tax-exempt
    409       404       398       410       437         (28 )     (6.4 )
           
Total investment securities
    4,341       4,262       4,738       5,271       5,083         (742 )     (14.6 )
Loans and leases:
                                                         
Commercial:
                                                         
Middle market commercial and industrial
    4,710       4,503       4,298       4,555       4,440         270       6.1  
Construction
    1,642       1,577       1,514       1,272       1,276         366       28.7  
Commercial
    1,883       1,852       1,913       1,919       1,873         10       0.5  
           
Middle market commercial real estate
    3,525       3,429       3,427       3,191       3,149         376       11.9  
Small business commercial and industrial and commercial real estate
    2,183       2,136       2,081       2,018       1,974         209       10.6  
           
Total commercial
    10,418       10,068       9,806       9,764       9,563         855       8.9  
           
Consumer:
                                                         
Automobile loans
    2,008       1,913       1,857       2,337       3,041         (1,033 )     (34.0 )
Automobile leases
    2,461       2,388       2,250       2,139       1,988         473       23.8  
           
Automobile loans and leases
    4,469       4,301       4,107       4,476       5,029         (560 )     (11.1 )
Home equity
    4,570       4,489       4,337       4,107       3,810         760       19.9  
Residential mortgage
    3,919       3,695       3,484       2,986       2,674         1,245       46.6  
Other loans
    480       479       461       434       426         54       12.7  
           
Total consumer
    13,438       12,964       12,389       12,003       11,939         1,499       12.6  
           
Total loans and leases
    23,856       23,032       22,195       21,767       21,502         2,354       10.9  
Allowance for loan and lease losses
    (282 )     (283 )     (288 )     (310 )     (313 )       31       9.9  
           
Net loans and leases
    23,574       22,749       21,907       21,457       21,189         2,385       11.3  
           
Total earning assets
    29,128       28,506       27,737       27,557       26,979         2,149       8.0  
           
Operating lease assets
    529       648       800       977       1,166         (637 )     (54.6 )
Cash and due from banks
    909       880       928       772       740         169       22.8  
Intangible assets
    218       216       216       216       217         1       0.5  
All other assets
    2,079       2,094       2,066       2,101       2,046         33       1.6  
           
Total Assets
  $ 32,581     $ 32,061     $ 31,459     $ 31,313     $ 30,835       $ 1,746       5.7 %
           
 
                                                         
Liabilities and Shareholders’ Equity
                                                         
Deposits:
                                                         
Non-interest bearing demand deposits
  $ 3,314     $ 3,401     $ 3,276     $ 3,223     $ 3,017       $ 297       9.8 %
Interest bearing demand deposits
    7,925       7,658       7,384       7,168       6,609         1,316       19.9  
Savings and other domestic time deposits
    3,309       3,395       3,436       3,439       3,456         (147 )     (4.3 )
Retail certificates of deposit
    2,496       2,454       2,414       2,400       2,399         97       4.0  
           
Total core deposits
    17,044       16,908       16,510       16,230       15,481         1,563       10.1  
Domestic time deposits of $100,000 or more
    1,249       990       886       795       788         461       58.5  
Brokered time deposits and negotiable CDs
    2,728       1,948       1,755       1,737       1,907         821       43.1  
Foreign time deposits
    442       465       476       542       549         (107 )     (19.5 )
           
Total deposits
    21,463       20,311       19,627       19,304       18,725         2,738       14.6  
Short-term borrowings
    1,179       1,302       1,342       1,396       1,603         (424 )     (26.5 )
Federal Home Loan Bank advances
    1,196       1,270       1,270       1,270       1,273         (77 )     (6.0 )
Subordinated notes and other long-term debt
    4,517       5,099       5,244       5,623       5,557         (1,040 )     (18.7 )
           
Total interest bearing liabilities
    25,041       24,581       24,207       24,370       24,141         900       3.7  
           
All other liabilities
    1,699       1,598       1,564       1,397       1,399         300       21.4  
Shareholders’ equity
    2,527       2,481       2,412       2,323       2,278         249       10.9  
           
Total Liabilities and Shareholders’ Equity
  $ 32,581     $ 32,061     $ 31,459     $ 31,313     $ 30,835       $ 1,746       5.7 %
           

N.M., not a meaningful value.

4


 

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

                                         
    Average Rates (2)
2005         2004
Fully Taxable Equivalent basis (1)   First     Fourth     Third     Second     First  
     
Assets
                                       
Interest bearing deposits in banks
    1.88 %     1.61 %     0.91 %     1.05 %     0.71 %
Trading account securities
    4.14       4.15       4.44       3.02       3.98  
Federal funds sold and securities purchased under resale agreements
    2.36       1.99       1.53       1.21       1.41  
Loans held for sale
    5.55       5.69       5.25       5.17       5.33  
Investment securities:
                                       
Taxable
    3.87       3.77       3.83       3.83       4.06  
Tax-exempt
    6.73       6.89       7.06       7.07       6.88  
     
Total investment securities
    4.14       4.07       4.10       4.09       4.30  
Loans and leases:
                                       
Commercial:
                                       
Middle market commercial and industrial
    5.02       4.80       4.46       4.05       4.33  
Construction
    5.13       4.65       4.13       3.73       3.68  
Commercial
    5.15       4.80       4.45       4.20       4.31  
     
Middle market commercial real estate
    5.14       4.73       4.31       4.02       4.05  
Small business commercial and industrial and commercial real estate
    5.81       5.67       5.45       5.33       5.46  
     
Total commercial
    5.23       4.96       4.62       4.30       4.47  
     
Consumer:
                                       
Automobile loans
    6.83       7.31       7.65       7.20       6.93  
Automobile leases
    4.92       5.00       5.02       5.06       4.94  
     
Automobile loans and leases
    5.78       6.02       6.21       6.17       6.14  
Home equity
    5.60       5.30       4.84       4.75       4.69  
Residential mortgage
    5.55       5.53       5.48       5.40       5.51  
Other loans
    6.42       6.87       6.54       6.21       5.83  
     
Total consumer
    5.67       5.66       5.54       5.49       5.52  
     
Total loans and leases
    5.48       5.34       5.12       4.95       5.04  
     
Total earning assets
    5.21 %     5.05 %     4.89 %     4.76 %     4.89 %
     
 
                                       
Liabilities and Shareholders’ Equity
                                       
Deposits:
                                       
Non-interest bearing demand deposits
    %     %     %     %     %
Interest bearing demand deposits
    1.45       1.21       1.06       0.94       0.88  
Savings and other domestic time deposits
    1.27       1.26       1.24       1.23       1.41  
Retail certificates of deposit
    3.43       3.38       3.32       3.27       3.47  
     
Total core deposits
    1.76       1.62       1.52       1.45       1.53  
Domestic time deposits of $100,000 or more
    2.92       2.51       2.40       2.37       2.14  
Brokered time deposits and negotiable CDs
    2.80       2.26       1.84       1.57       1.51  
Foreign time deposits
    1.41       0.98       0.83       0.76       0.72  
     
Total deposits
    1.99       1.73       1.58       1.48       1.53  
Short-term borrowings
    1.66       1.17       0.92       0.80       0.83  
Federal Home Loan Bank advances
    2.90       2.68       2.60       2.52       2.50  
Subordinated notes and other long-term debt
    3.39       2.67       2.62       2.24       2.33  
     
Total interest bearing liabilities
    2.27 %     1.94 %     1.82 %     1.66 %     1.71 %
     
 
                                       
Net interest rate spread
    2.94 %     3.11 %     3.07 %     3.10 %     3.18 %
Impact of non-interest bearing funds on margin
    0.37       0.27       0.23       0.19       0.18  
     
Net interest margin
    3.31 %     3.38 %     3.30 %     3.29 %     3.36 %
     

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

5


 

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data

(Unaudited)

                                                           
2005           2004       1Q05 vs 1Q04  
(in thousands of dollars, except per share amounts)   First     Fourth     Third     Second     First       Amount     Percent  
           
Interest income
  $ 376,105     $ 359,215     $ 338,002     $ 324,167     $ 325,931       $ 50,174       15.4 %
Interest expense
    140,907       120,147       110,944       101,604       103,246         37,661       36.5  
           
Net interest income
    235,198       239,068       227,058       222,563       222,685         12,513       5.6  
Provision for credit losses
    19,874       12,654       11,785       5,027       25,596         (5,722 )     (22.4 )
           
Net interest income after provision for credit losses
    215,324       226,414       215,273       217,536       197,089         18,235       9.3  
           
Operating lease income
    46,732       55,106       64,412       78,706       88,867         (42,135 )     (47.4 )
Service charges on deposit accounts
    39,418       41,747       43,935       43,596       41,837         (2,419 )     (5.8 )
Trust services
    18,196       17,315       17,064       16,708       16,323         1,873       11.5  
Brokerage and insurance income
    13,026       12,879       13,200       13,523       15,197         (2,171 )     (14.3 )
Bank owned life insurance income
    10,104       10,484       10,019       11,309       10,485         (381 )     (3.6 )
Other service charges and fees
    10,159       10,617       10,799       10,645       9,513         646       6.8  
Mortgage banking
    12,061       8,822       4,448       23,322       (4,296 )       16,357       N.M.  
Securities gains (losses)
    957       2,100       7,803       (9,230 )     15,090         (14,133 )     (93.7 )
Gain on sales of automobile loans
                312       4,890       9,004         (9,004 )     N.M.  
Other income
    17,397       23,870       17,899       24,659       25,619         (8,222 )     (32.1 )
           
Total non-interest income
    168,050       182,940       189,891       218,128       227,639         (59,589 )     (26.2 )
           
Personnel costs
    123,981       122,738       121,729       119,715       121,624         2,357       1.9  
Operating lease expense
    37,948       48,320       54,885       62,563       70,710         (32,762 )     (46.3 )
Net occupancy
    19,242       26,082       16,838       16,258       16,763         2,479       14.8  
Outside data processing and other services
    18,770       18,563       17,527       17,563       18,462         308       1.7  
Equipment
    15,863       15,733       15,295       16,228       16,086         (223 )     (1.4 )
Professional services
    9,459       9,522       12,219       7,836       7,299         2,160       29.6  
Marketing
    6,454       5,581       5,000       8,069       7,839         (1,385 )     (17.7 )
Telecommunications
    4,882       4,596       5,359       4,638       5,194         (312 )     (6.0 )
Printing and supplies
    3,094       3,148       3,201       3,098       3,016         78       2.6  
Amortization of intangibles
    204       205       204       204       204                
Restructuring reserve releases
                (1,151 )                          
Other expense
    18,380       26,526       22,317       25,981       18,457         (77 )     (0.4 )
           
Total non-interest expense
    258,277       281,014       273,423       282,153       285,654         (27,377 )     (9.6 )
           
Income before income taxes
    125,097       128,340       131,741       153,511       139,074         (13,977 )     (10.1 )
Provision for income taxes
    28,578       37,201       38,255       43,384       34,901         (6,323 )     (18.1 )
           
Net income
  $ 96,519     $ 91,139     $ 93,486     $ 110,127     $ 104,173       $ (7,654 )     (7.3) %
           
 
                                                         
Average common shares — diluted
    235,053       235,502       234,348       232,659       232,915         2,138       0.9 %
 
                                                         
Per common share
                                                         
Net income — diluted
  $ 0.41     $ 0.39     $ 0.40     $ 0.47     $ 0.45       $ (0.04 )     (8.9 )
Cash dividends declared
    0.200       0.200       0.200       0.175       0.175         0.025       14.3  
Return on average total assets
    1.20 %     1.13 %     1.18 %     1.41 %     1.36 %       (0.16) %     (11.8 )
Return on average total shareholders’ equity
    15.5       14.6       15.4       19.1       18.4         (2.9 )     (15.8 )
Net interest margin (1)
    3.31       3.38       3.30       3.29       3.36         (0.05 )     (1.5 )
Efficiency ratio (2)
    63.7       66.4       66.3       62.3       65.1         (1.4 )     (2.2 )
Effective tax rate
    22.8       29.0       29.0       28.3       25.1         (2.3 )     (9.2 )
 
                                                         
Revenue — fully taxable equivalent (FTE)
                                                         
Net interest income
  $ 235,198     $ 239,068     $ 227,058     $ 222,563     $ 222,685       $ 12,513       5.6  
FTE adjustment (1)
    2,861       2,847       2,864       2,919       3,023         (162 )     (5.4 )
           
Net interest income
    238,059       241,915       229,922       225,482       225,708         12,351       5.5  
Non-interest income
    168,050       182,940       189,891       218,128       227,639         (59,589 )     (26.2 )
           
Total revenue
  $ 406,109     $ 424,855     $ 419,813     $ 443,610     $ 453,347       $ (47,238 )     (10.4) %
           

N.M., not a meaningful value.
(1)    On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
(2)    Non-interest expense less amortization of intangibles divided by the sum of FTE net interest income and non-interest income excluding securities gains (losses).

6


 

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis

(Unaudited)

                                         
2005        2004
(in thousands of dollars)   First     Fourth     Third     Second     First  
     
Allowance for loan and leases losses, beginning of period
  $ 271,211     $ 282,650     $ 286,935     $ 295,377     $ 299,732  
 
                                       
Loan and lease losses
    (37,213 )     (31,737 )     (26,366 )     (30,845 )     (37,167 )
Recoveries of loans previously charged off
    8,941       10,824       9,886       18,330       8,540  
     
Net loan and lease losses
    (28,272 )     (20,913 )     (16,480 )     (12,515 )     (28,627 )
     
Provision for loan and lease losses
    21,451       9,474       12,971       5,923       29,029  
Allowance of assets sold and securitized
                (776 )     (1,850 )     (4,757 )
     
Allowance for loan and lease losses, end of period
  $ 264,390     $ 271,211     $ 282,650     $ 286,935     $ 295,377  
     
 
                                       
Allowance for unfunded loan commitments and letters of credit, beginning of period
  $ 33,187     $ 30,007     $ 31,193     $ 32,089     $ 35,522  
 
                                       
Provision for unfunded loan commitments and letters of credit losses
    (1,577 )     3,180       (1,186 )     (896 )     (3,433 )
     
Allowance for unfunded loan commitments and letters of credit, end of period
  $ 31,610     $ 33,187     $ 30,007     $ 31,193     $ 32,089  
     
 
                                       
Total allowances for credit losses
  $ 296,000     $ 304,398     $ 312,657     $ 318,128     $ 327,466  
     
 
                                       
Allowance for loan and lease losses (ALLL) as % of:
                                       
Transaction reserve
    0.81       0.78       0.84       0.86       0.91  
Economic reserve
    0.27       0.32       0.33       0.36       0.38  
Specific reserve
    0.01       0.05       0.08       0.10       0.10  
     
Total loans and leases
    1.09 %     1.15 %     1.25 %     1.32 %     1.39 %
     
Non-performing loans and leases (NPLs)
    441       424       417       464       383  
Non-performing assets (NPAs)
    361       250       351       384       322  
 
                                       
Total allowances for credit losses (ACL) as % of:
                                       
Total loans and leases
    1.22 %     1.29 %     1.38 %     1.46 %     1.55 %
Non-performing loans and leases
    494       476       461       515       425  
Non-performing assets
    404       280       389       426       357  

7


 

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis

(Unaudited)

                                         
2005          2004  
     
(in thousands of dollars)   First     Fourth     Third     Second     First  
     
     
Net charge-offs by loan and lease type:
                                       
Commercial:
                                       
Middle market commercial and industrial
  $ 14,092     $ 1,239     $ (102 )   $ (3,642 )   $ 4,425  
Construction
    (51 )     704       (19 )     276       1,504  
Commercial
    (152 )     1,834       1,490       2,222       (40 )
     
     
Middle market commercial real estate
    (203 )     2,538       1,471       2,498       1,464  
     
     
Small business commercial and industrial
and commercial real estate
    2,283       1,386       1,195       1,281       1,704  
     
     
Total commercial
    16,172       5,163       2,564       137       7,593  
     
     
Consumer:
                                       
Automobile loans
    3,216       4,406       5,142       5,604       13,422  
Automobile leases
    3,014       3,104       2,415       2,159       3,159  
     
     
Automobile loans and leases
    6,230       7,510       7,557       7,763       16,581  
Home equity
    3,963       5,346       4,259       2,569       2,900  
Residential mortgage
    439       608       534       302       316  
Other loans
    1,468       2,286       1,566       1,744       1,237  
     
     
Total consumer
    12,100       15,750       13,916       12,378       21,034  
     
     
 
                                       
Total net charge-offs
  $ 28,272     $ 20,913     $ 16,480     $ 12,515     $ 28,627  
     
     
 
                                       
Net charge-offs — annualized percentages:
                                       
Commercial:
                                       
Middle market commercial and industrial
    1.20 %     0.11 %     (0.01) %     (0.32) %     0.40 %
Construction
    (0.01 )     0.18       (0.01 )     0.09       0.47  
Commercial
    (0.03 )     0.40       0.31       0.46       (0.01 )
     
Middle market commercial real estate
    (0.02 )     0.30       0.17       0.31       0.19  
     
     
Small business commercial and industrial
and commercial real estate
    0.42       0.26       0.23       0.25       0.35  
     
     
Total commercial
    0.62       0.21       0.10       0.01       0.32  
     
     
Consumer:
                                       
Automobile loans
    0.64       0.92       1.11       0.96       1.77  
Automobile leases
    0.49       0.52       0.43       0.40       0.64  
     
     
Automobile loans and leases
    0.56       0.70       0.74       0.69       1.32  
Home equity
    0.35       0.48       0.39       0.25       0.30  
Residential mortgage
    0.04       0.07       0.06       0.04       0.05  
Other loans
    1.22       1.91       1.36       1.62       1.17  
     
     
Total consumer
    0.36       0.49       0.45       0.41       0.70  
     
     
Net charge-offs as a % of average loans
    0.47 %     0.36 %     0.30 %     0.23 %     0.53 %
     
     

8


 

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

(Unaudited)

                                         
2005          2004  
     
(in thousands of dollars)   March 31,     December 31,     September 30,     June 30,     March 31,  
     
     
Non-accrual loans and leases:
                                       
Middle market commercial and industrial
  $ 16,993     $ 24,179     $ 20,098     $ 24,336     $ 36,854  
Middle market commercial real estate
    6,682       4,582       14,717       11,122       16,097  
Small business commercial and industrial and commercial real estate
    16,387       14,601       12,087       12,368       12,124  
Residential mortgage
    12,498       13,545       13,197       13,952       12,052  
Home equity (1)
    7,333       7,055       7,685              
     
     
Total non-performing loans and leases
    59,893       63,962       67,784       61,778       77,127  
Other real estate, net:
                                       
Residential
    10,571       8,762       8,840       8,851       9,132  
Commercial (2)
    2,839       35,844       3,852       4,067       5,435  
     
     
Total other real estate, net
    13,410       44,606       12,692       12,918       14,567  
     
     
Total non-performing assets
  $ 73,303     $ 108,568     $ 80,476     $ 74,696     $ 91,694  
     
     
 
                                       
Non-performing loans and leases as a % of
total loans and leases
    0.25 %     0.27 %     0.30 %     0.28 %     0.36 %
 
                                       
Non-performing assets as a % of total loans
and leases and other real estate
    0.30       0.46       0.36       0.34       0.43  
 
                                       
Accruing loans and leases past due 90
days or more (1)
  $ 50,086     $ 54,283     $ 53,456     $ 51,490     $ 59,697  
 
                                       
Accruing loans and leases past due 90 days or
more as a percent of total loans and leases
    0.21 %     0.23 %     0.24 %     0.24 %     0.28 %
                                         
2005          2004  
     
(in thousands of dollars)   March 31,     December 31,     September 30,     June 30,     March 31,  
     
     
Non-performing assets, beginning of period
  $ 108,568     $ 80,476     $ 74,696     $ 91,694     $ 87,386  
New non-performing assets (1) (2)
    33,607       61,684       22,740       25,727       27,208  
Returns to accruing status
    (3,838 )     (2,248 )           (1,493 )     (54 )
Loan and lease losses
    (17,281 )     (8,578 )     (5,424 )     (12,872 )     (10,463 )
Payments
    (10,404 )     (8,829 )     (10,202 )     (13,571 )     (10,717 )
Sales
    (37,349 )     (13,937 )     (1,334 )     (14,789 )     (1,666 )
     
     
Non-performing assets, end of period
  $ 73,303     $ 108,568     $ 80,476     $ 74,696     $ 91,694  
     
     

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

9


 

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

(Unaudited)

Quarterly common stock summary

                                         
2005          2004
(in thousands of dollars, except per share amounts)   First     Fourth     Third     Second     First  
 
   
Common stock price, per share
                                       
High (1)
  $ 24.780     $ 25.380     $ 25.150     $ 23.120     $ 23.780  
Low (1)
    22.150       23.110       22.700       20.890       21.000  
Close
    23.900       24.740       24.910       22.980       22.030  
Average closing price
    23.216       24.241       24.105       22.050       22.501  
 
                                       
Dividends, per share
                                       
Cash dividends declared on common stock
  $ 0.200     $ 0.200     $ 0.200     $ 0.175     $ 0.175  
 
                                       
Common shares outstanding
                                       
Average — basic
    231,824       231,147       229,848       229,429       229,227  
Average — diluted
    235,053       235,502       234,348       232,659       232,915  
Ending
    232,002       231,605       230,153       229,476       229,410  
Book value per share
  $ 11.16     $ 10.96     $ 10.69     $ 10.40     $ 10.31  
 
                                       
Common share repurchase program
                                       
Number of shares repurchased
                             


Capital adequacy

                                         
2005         2004
(in thousands of dollars)   March 31,     December 31,     September 30,     June 30,     March 31,  
 
   
Total risk-adjusted assets (2)
  $ 29,947,075     $ 29,542,401     $ 28,679,142     $ 28,415,519     $ 28,247,258  
 
                                       
Tier 1 leverage ratio (2)
    8.48 %     8.42 %     8.36 %     8.20 %     8.07 %
Tier 1 risk-based capital ratio (2)
    9.17       9.08       9.10       8.98       8.74  
Total risk-based capital ratio (2)
    12.50       12.48       12.53       12.56       12.13  
 
                                       
Tangible equity / asset ratio
    7.42       7.18       7.11       6.95       6.97  
Tangible equity / risk-weighted assets ratio (2)
    7.92       7.86       7.83       7.64       7.60  
Average equity / average assets
    7.76       7.74       7.67       7.42       7.39  
 
                                       
Other data
                                       
Number of employees (full-time equivalent)
    7,813       7,812       7,906       8,045       7,915  
Number of domestic full-service banking offices (3)
    343       342       341       341       337  


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

10


 

Huntington Bancshares Incorporated
Quarterly Operating Lease Performance

(Unaudited)

                                                           
2005             2004       1Q05 vs 1Q04
(in thousands of dollars)   First     Fourth     Third     Second     First       Amount     Percent  
 
         
Balance Sheet:
                                                         
Average operating lease assets outstanding
  $ 529,245     $ 647,970     $ 800,145     $ 976,626     $ 1,166,146       $ (636,901 )     (54.6) %
 
         
 
                                                         
Income Statement:
                                                         
Net rental income
  $ 43,554     $ 51,016     $ 60,267     $ 72,402     $ 83,517       $ (39,963 )     (47.9) %
Fees
    1,857       2,111       2,965       4,838       3,543         (1,686 )     (47.6 )
Recoveries — early terminations
    1,321       1,979       1,180       1,466       1,807         (486 )     (26.9 )
 
         
Total operating lease income
    46,732       55,106       64,412       78,706       88,867         (42,135 )     (47.4 )
 
         
 
                                                         
Depreciation and residual losses at
termination
    34,703       45,293       49,917       57,412       63,823         (29,120 )     (45.6 )
Losses — early terminations
    3,245       3,027       4,968       5,151       6,887         (3,642 )     (52.9 )
 
         
Total operating lease expense
    37,948       48,320       54,885       62,563       70,710         (32,762 )     (46.3 )
 
         
Net earnings contribution
  $ 8,784     $ 6,786     $ 9,527     $ 16,143     $ 18,157       $ (9,373 )     (51.6) %
 
         
 
                                                         
Earnings ratios (1)
                                                         
Net rental income
    32.9 %     31.5 %     30.1 %     29.7 %     28.6 %       4.3 %     15.0 %
Depreciation and residual losses at
termination
    26.2       28.0       25.0       23.5       21.9         4.3       19.6  


Definition of term(s):

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

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

11