Exhibit 99.2
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
June 2006
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  
 
Quarterly Average Loans and Direct Financing Leases and Deposit Composition By Business Segment
    6  
 
Selected Quarterly Income Statement Data
    7  
 
Quarterly Mortgage Banking Income and Net Impact of MSR Hedging
    8  
 
Quarterly Credit Reserves Analysis
    9  
 
Quarterly Net Charge-Off Analysis
    10  
 
Quarterly Non-Performing Assets and Past Due Loans and Leases
    11  
 
Quarterly Stock Summary, Capital, and Other Data
    12  
 
Quarterly Operating Lease Performance
    13  
 
Consolidated Year To Date Average Balance Sheets
    14  
 
Consolidated Year To Date Net Interest Margin Analysis
    15  
 
Selected Year To Date Income Statement Data
    16  
 
Year To Date Mortgage Banking Income and Net Impact of MSR Hedging
    17  
 
Year To Date Credit Reserves Analysis
    18  
 
Year To Date Net Charge-Off Analysis
    19  
 
Year To Date Non-Performing Assets and Past Due Loans and Leases
    20  
 
Year To Date Operating Lease Performance
    21  
Note:
The preparation of financial statement data in conformity with accounting principals generally accepted in the United States requires management to make estimates and assumptions that affect amounts reported. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period’s presentation.

 

 

Huntington Bancshares Incorporated
Consolidated Balance Sheets
                                           
                              Change  
    2006     2005       June ’06 vs ’05  
(in thousands, except number of shares)   June 30,     December 31,     June 30,       Amount     Percent  
    (Unaudited)             (Unaudited)                    
Assets
                                          
Cash and due from banks
   $ 876,121     $ 966,445     $ 976,432       $ (100,311 )     (10.3) %
Federal funds sold and securities purchased under resale agreements
     365,592       74,331       121,310         244,282       N.M.  
Interest bearing deposits in banks
     37,576       22,391       22,758         14,818       65.1  
Trading account securities
     113,376       8,619       328,715         (215,339 )     (65.5 )
Loans held for sale
     298,871       294,344       395,053         (96,182 )     (24.3 )
Investment securities
     5,124,682       4,526,520       3,849,955         1,274,727       33.1  
Loans and leases (1)
     26,354,581       24,472,166       24,567,148         1,787,433       7.3  
Allowance for loan and lease losses
     (287,517 )     (268,347 )     (254,784 )       (32,733 )     12.8  
                 
Net loans and leases
     26,067,064       24,203,819       24,312,364         1,754,700       7.2  
                 
Operating lease assets
     131,943       229,077       353,678         (221,735 )     (62.7 )
Bank owned life insurance
     1,070,909       1,001,542       983,302         87,607       8.9  
Premises and equipment
     365,763       360,677       356,697         9,066       2.5  
Goodwill
     571,697       212,530       212,200         359,497       N.M.  
Other intangible assets
     64,141       4,956       5,376         58,765       N.M.  
Accrued income and other assets
     1,178,042       859,554       1,071,134         106,908       10.0  
                 
Total Assets
   $ 36,265,777     $ 32,764,805     $ 32,988,974       $ 3,276,803       9.9 %
                 
 
                                          
Liabilities and Shareholders’ Equity
                                          
Liabilities
                                          
Deposits(2)
   $ 24,592,932     $ 22,409,675     $ 22,330,576       $ 2,262,356       10.1 %
Short-term borrowings
     2,125,932       1,889,260       1,266,535         859,397       67.9  
Federal Home Loan Bank advances
     1,271,678       1,155,647       903,864         367,814       40.7  
Other long-term debt
     2,716,784       2,418,419       3,034,154         (317,370 )     (10.5 )
Subordinated notes
     1,255,278       1,023,371       1,046,283         208,995       20.0  
Allowance for unfunded loan commitments and letters of credit
     38,914       36,957       37,511         1,403       3.7  
Deferred federal income tax liability
     615,543       743,655       784,504         (168,961 )     (21.5 )
Accrued expenses and other liabilities
     709,560       530,320       954,772         (245,212 )     (25.7 )
                 
Total Liabilities
     33,326,621       30,207,304       30,358,199         2,968,422       9.8  
                 
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 237,361,333; 224,106,172 and 230,842,020 shares, respectively.
    2,552,094       2,491,326       2,487,981         64,113       2.6  
Less 20,504,922; 33,760,083 and 27,024,235 treasury shares, respectively
    (457,758 )     (693,576 )     (526,814 )       69,056       (13.1 )
Accumulated other comprehensive loss
     (44,091 )     (22,093 )     (720 )       (43,371 )     N.M.  
Retained earnings
     888,911       781,844       670,328         218,583       32.6  
                 
Total Shareholders’ Equity
     2,939,156       2,557,501       2,630,775         308,381       11.7  
                 
Total Liabilities and Shareholders’ Equity
   $ 36,265,777     $ 32,764,805     $ 32,988,974       $ 3,276,803       9.9 %
                 
 
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
    2006   2005     June ’06 vs ’05
(in thousands)   June 30,   December 31,   June 30,     Amount   Percent
    (Unaudited)                   (Unaudited)                  
By Type
                                                                  
Commercial:
                                                                  
Middle market commercial and industrial
   $ 5,595,454       21.1 %   $ 5,084,244       20.6 %   $ 4,883,354       19.6 %     $ 712,100       14.6 %
Middle market commercial real estate:
                                                                  
Construction
     1,173,454       4.4       1,521,897       6.2       1,684,299       6.8         (510,845 )     (30.3 )
Commercial
     2,731,684       10.3       2,015,498       8.2       1,899,518       7.6         832,166       43.8  
               
Middle market commercial real estate
     3,905,138       14.7       3,537,395       14.4       3,583,817       14.4         321,321       9.0  
Small business
     2,531,176       9.6       2,223,740       9.1       2,258,097       9.1         273,079       12.1  
               
Total commercial
     12,031,768       45.4       10,845,379       44.1       10,725,268       43.1         1,306,500       12.2  
               
Consumer:
                                                                  
Automobile loans
     2,059,836       7.8       1,985,304       8.0       2,045,771       8.2         14,065       0.7  
Automobile leases
     2,042,215       7.7       2,289,015       9.3       2,458,432       9.9         (416,217 )     (16.9 )
Home equity
     4,888,958       18.5       4,638,841       18.8       4,683,577       18.8         205,381       4.4  
Residential mortgage
     4,739,814       17.9       4,193,139       17.0       4,152,203       16.7         587,611       14.2  
Other loans
     591,990       2.2       520,488       1.9       501,897       1.9         90,093       18.0  
               
Total consumer
     14,322,813       54.1       13,626,787       55.0       13,841,880       55.5         480,933       3.5  
               
Total loans and direct financing leases
   $ 26,354,581       99.5     $ 24,472,166       99.1     $ 24,567,148       98.6       $ 1,787,433       7.3  
               
 
                                                                  
Operating lease assets
     131,943       0.5       229,077       0.9       353,678       1.4         (221,735 )     (62.7 )
               
Total credit exposure
   $ 26,486,524       100.0 %   $ 24,701,243       100.0 %   $ 24,920,826       100.0 %     $ 1,565,698       6.3 %
               
 
                                                                  
               
Total automobile exposure (1)
   $ 4,233,994       16.0 %   $ 4,503,396       18.2 %   $ 4,857,881       19.5 %     $ (623,887 )     (12.8) %
               
 
                                                                  
By Business Segment (2)
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 3,598,342       13.6 %   $ 3,150,394       12.8 %   $ 3,154,443       12.7 %     $ 443,899       14.1 %
Northern Ohio
     2,660,450       10.0       2,522,854       10.2       2,533,670       10.2         126,780       5.0  
Southern Ohio / Kentucky
     2,195,013       8.3       2,037,190       8.2       2,100,446       8.4         94,567       4.5  
Eastern Ohio
     1,416,505       5.3       369,870       1.5       383,366       1.5         1,033,139       N.M.  
West Michigan
     2,397,525       9.1       2,363,162       9.6       2,386,311       9.6         11,214       0.5  
East Michigan
     1,597,741       6.0       1,573,413       6.4       1,495,277       6.0         102,464       6.9  
West Virginia
     1,053,464       4.0       970,953       3.9       918,612       3.7         134,852       14.7  
Indiana
     953,776       3.6       1,025,807       4.2       1,037,983       4.2         (84,207 )     (8.1 )
Mortgage and equipment leasing groups
     3,637,546       13.8       3,533,535       14.2       3,447,249       13.8         190,297       5.5  
               
Regional Banking
     19,510,362       73.7       17,547,178       71.0       17,457,357       70.1         2,053,005       11.8  
Dealer Sales (3)
     5,167,300       19.5       5,429,997       22.0       5,761,321       23.1         (594,021 )     (10.3 )
Private Financial and Capital Markets Group
     1,808,862       6.8       1,724,068       7.0       1,702,148       6.8         106,714       6.3  
Treasury / Other
    —       —       —       —       —       —         —       —  
               
Total credit exposure
   $ 26,486,524       100.0 %   $ 24,701,243       100.0 %   $ 24,920,826       100.0 %     $ 1,565,698       6.3 %
               
 
N.M., not a meaningful value.
(1) Sum of automobile loans and leases and automobile operating lease assets.
(2) Prior period amounts have been reclassified to conform to the current period business segment structure.
(3) Includes operating lease inventory.

2

 

Huntington Bancshares Incorporated
Deposit Composition
                                                                   
                                                      Change
    2006   2005     June ’06 vs ’05
(in thousands)   June 30,   December 31,   June 30,     Amount   Percent
    (Unaudited)                   (Unaudited)  
By Type
                                                                  
Demand deposits — non-interest bearing
   $ 3,530,828       14.4 %   $ 3,390,044       15.1 %   $ 3,221,352       14.4 %     $ 309,476       9.6 %
Demand deposits — interest bearing
     7,702,311       31.3       7,380,044       32.9       7,674,807       34.4         27,504       0.4  
Savings and other domestic time deposits
     3,125,513       12.7       3,094,136       13.8       3,340,406       15.0         (214,893 )     (6.4 )
Certificates of deposit less than $100,000
     4,527,148       18.4       3,526,039       15.7       3,032,957       13.6         1,494,191       49.3  
               
Total core deposits
     18,885,800       76.8       17,390,263       77.5       17,269,522       77.4         1,616,278       9.4  
Domestic time deposits of $100,000 or more
     1,755,416       7.1       1,348,928       6.0       1,177,271       5.3         578,145       49.1  
Brokered deposits and negotiable CDs
     3,475,032       14.1       3,199,796       14.3       3,451,967       15.5         23,065       0.7  
Deposits in foreign offices
     476,684       2.0       470,688       2.2       431,816       1.8         44,868       10.4  
               
Total deposits
   $ 24,592,932       100.0 %   $ 22,409,675       100.0 %   $ 22,330,576       100.0 %     $ 2,262,356       10.1 %
               
 
                                                                  
Total core deposits:
                                                                  
Commercial
   $ 5,906,817       31.3 %   $ 5,352,053       30.8 %   $ 5,399,412       31.3 %     $ 507,405       9.4 %
Personal
     12,978,983       68.7       12,038,210       69.2       11,870,110       68.7         1,108,873       9.3  
               
Total core deposits
   $ 18,885,800       100.0 %   $ 17,390,263       100.0 %   $ 17,269,522       100.0 %     $ 1,616,278       9.4 %
               
 
                                                                  
By Business Segment (1)
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 4,753,677       19.3 %   $ 4,520,594       20.2 %   $ 4,629,282       20.7 %     $ 124,395       2.7 %
Northern Ohio
     3,536,794       14.4       3,498,463       15.6       3,430,984       15.4         105,810       3.1  
Southern Ohio / Kentucky
     2,226,385       9.1       1,951,322       8.7       1,823,359       8.2         403,026       22.1  
Eastern Ohio
     1,757,964       7.1       577,912       2.6       547,948       2.5         1,210,016       N.M.  
West Michigan
     2,798,498       11.4       2,790,787       12.5       2,592,896       11.6         205,602       7.9  
East Michigan
     2,259,497       9.2       2,263,898       10.1       2,231,589       10.0         27,908       1.3  
West Virginia
     1,512,351       6.1       1,463,592       6.5       1,412,285       6.3         100,066       7.1  
Indiana
     828,787       3.4       728,193       3.2       773,773       3.5         55,014       7.1  
Mortgage and equipment leasing groups
     165,807       0.7       161,866       0.7       183,744       0.8         (17,937 )     (9.8 )
               
Regional Banking
     19,839,760       80.7       17,956,627       80.1       17,625,860       78.9         2,213,900       12.6  
Dealer Sales
     60,513       0.2       65,237       0.3       68,436       0.3         (7,923 )     (11.6 )
Private Financial and Capital Markets Group
     1,217,627       5.0       1,179,915       5.3       1,176,313       5.3         41,314       3.5  
Treasury / Other (2)
     3,475,032       14.1       3,207,896       14.3       3,459,967       15.5         15,065       0.4  
               
Total deposits
   $ 24,592,932       100.0 %   $ 22,409,675       100.0 %   $ 22,330,576       100.0 %     $ 2,262,356       10.1 %
               
 
N.M., not a meaningful value.
(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   2006   2005     2Q06 vs 2Q05
(in millions)   Second   First   Fourth   Third   Second     Amount   Percent
           
Assets
                                                          
Interest bearing deposits in banks
   $ 62     $ 48     $ 51     $ 54     $ 54       $ 8       14.8 %
Trading account securities
     100       66       119       274       236         (136 )     (57.6 )
Federal funds sold and securities purchased under resale agreements
    285       201       103       142       225         60       26.7  
Loans held for sale
     287       274       361       427       276         11       4.0  
Investment securities:
                                                          
Taxable
     4,494       4,138       3,802       3,523       3,589         905       25.2  
Tax-exempt
     556       548       540       537       411         145       35.3  
               
Total investment securities
     5,050       4,686       4,342       4,060       4,000         1,050       26.3  
Loans and leases: (1)
                                                          
Commercial: (2)
                                                          
Middle market commercial and industrial
     5,458       5,132       4,946       4,708       4,901         557       11.4  
Middle market commercial real estate:
                                                          
Construction
     1,243       1,454       1,675       1,720       1,678         (435 )     (25.9 )
Commercial
     2,799       2,423       1,923       1,922       1,905         894       46.9  
               
Middle market commercial real estate
     4,042       3,877       3,598       3,642       3,583         459       12.8  
Small business
     2,456       2,121       2,230       2,251       2,230         226       10.1  
               
Total commercial
     11,956       11,130       10,774       10,601       10,714         1,242       11.6  
               
Consumer:
                                                          
Automobile loans
     2,044       1,994       2,018       2,078       2,069         (25 )     (1.2 )
Automobile leases
     2,095       2,221       2,337       2,424       2,468         (373 )     (15.1 )
               
Automobile loans and leases
     4,139       4,215       4,355       4,502       4,537         (398 )     (8.8 )
Home equity
     4,872       4,694       4,653       4,681       4,636         236       5.1  
Residential mortgage
     4,629       4,306       4,165       4,157       4,080         549       13.5  
Other loans
     605       586       521       507       491         114       23.2  
               
Total consumer
     14,245       13,801       13,694       13,847       13,744         501       3.6  
               
Total loans and leases
     26,201       24,931       24,468       24,448       24,458         1,743       7.1  
Allowance for loan and lease losses
     (293 )     (283 )     (262 )     (256 )     (270 )       (23 )     (8.5 )
               
Net loans and leases
     25,908       24,648       24,206       24,192       24,188         1,720       7.1  
               
Total earning assets
     31,985       30,206       29,444       29,405       29,249         2,736       9.4  
               
Operating lease assets
     152       200       245       309       409         (257 )     (62.8 )
Cash and due from banks
     806       789       742       867       865         (59 )     (6.8 )
Intangible assets
     638       362       218       217       218         420       N.M.  
All other assets
     2,402       2,215       2,227       2,197       2,149         253       11.8  
               
Total Assets
   $ 35,690     $ 33,489     $ 32,614     $ 32,739     $ 32,620       $ 3,070       9.4 %
               
 
                                                          
Liabilities and Shareholders’ Equity
                                                          
Deposits:
                                                          
Demand deposits — non-interest bearing
   $ 3,594     $ 3,436     $ 3,444     $ 3,406     $ 3,352       $ 242       7.2 %
Demand deposits — interest bearing
     7,778       7,562       7,496       7,539       7,677         101       1.3  
Savings and other domestic time deposits
     3,106       3,095       2,984       3,095       3,230         (124 )     (3.8 )
Certificates of deposit less than $100,000
     4,430       3,849       3,421       3,157       2,720         1,710       62.9  
               
Total core deposits
     18,908       17,942       17,345       17,197       16,979         1,929       11.4  
Domestic time deposits of $100,000 or more
     1,739       1,478       1,397       1,271       1,248         491       39.3  
Brokered deposits and negotiable CDs
     3,263       3,143       3,210       3,286       3,249         14       0.4  
Deposits in foreign offices
     474       465       490       462       434         40       9.2  
               
Total deposits
     24,384       23,028       22,442       22,216       21,910         2,474       11.3  
Short-term borrowings
     2,042       1,669       1,472       1,559       1,301         741       57.0  
Federal Home Loan Bank advances
     1,557       1,453       1,156       935       1,136         421       37.1  
Subordinated notes and other long-term debt
     3,428       3,346       3,687       3,960       4,100         (672 )     (16.4 )
               
Total interest bearing liabilities
     27,817       26,060       25,313       25,264       25,095         2,722       10.8  
               
All other liabilities
     1,284       1,264       1,283       1,458       1,554         (270 )     (17.4 )
Shareholders’ equity
     2,995       2,729       2,574       2,611       2,619         376       14.4  
               
Total Liabilities and Shareholders’ Equity
   $ 35,690     $ 33,489     $ 32,614     $ 32,739     $ 32,620       $ 3,070       9.4 %
               
 
(1) For purposes of this analysis, non-accrual loans are reflected in the average balances of loans.
(2) The middle market C&I and CRE loan balances in the first quarter of 2006 contain Unizan loan balances that were subject to reclassification when these loans were converted to Huntington’s loan systems.

4

 

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)
                                         
    Average Rates(2)
    2006   2005
Fully taxable equivalent basis (1)   Second   First   Fourth   Third   Second
         
Assets
                                        
Interest bearing deposits in banks
     4.04 %     3.78 %     3.20 %     2.13 %     1.47 %
Trading account securities
     5.56       4.49       4.53       3.95       3.94  
Federal funds sold and securities purchased under resale agreements
    4.75       4.30       3.78       3.41       2.76  
Loans held for sale
     6.23       5.92       5.68       5.43       6.04  
Investment securities:
                                        
Taxable
     5.32       5.00       4.70       4.37       4.13  
Tax-exempt
     6.83       6.71       6.77       6.62       6.76  
         
Total investment securities
     5.49       5.20       4.96       4.67       4.40  
Loans and leases: (3)
                                       
Commercial:
                                        
Middle market commercial and industrial
     7.26       6.80       6.28       5.87       5.65  
Middle market commercial real estate:
                                        
Construction
     8.01       7.55       7.27       6.58       6.04  
Commercial
     7.26       6.78       6.46       5.96       5.53  
         
Middle market commercial real estate
     7.49       7.07       6.84       6.25       5.77  
Small business
     7.10       6.67       6.43       6.18       6.01  
         
Total commercial
     7.30       6.87       6.50       6.07       5.76  
         
Consumer:
                                        
Automobile loans
     6.48       6.40       6.26       6.44       6.57  
Automobile leases
     5.01       4.97       4.98       4.94       4.91  
         
Automobile loans and leases
     5.74       5.65       5.57       5.63       5.67  
Home equity
    7.72       7.10       7.03       6.60       6.24  
Residential mortgage
    5.39       5.34       5.31       5.23       5.18  
Other loans
     6.83       6.39       5.98       5.92       6.22  
         
Total consumer
     6.35       6.08       6.00       5.85       5.74  
         
Total loans and leases
     6.79       6.43       6.22       5.94       5.75  
         
Total earning assets
     6.55 %     6.21 %     6.01 %     5.72 %     5.52 %
         
 
                                        
Liabilities and Shareholders’ Equity
                                        
Deposits:
                                        
Demand deposits — non-interest bearing
     — %     — %     — %     — %     — %
Demand deposits — interest bearing
     2.62       2.44       2.12       1.87       1.64  
Savings and other domestic time deposits
     1.59       1.49       1.44       1.39       1.34  
Certificates of deposit less than $100,000
     4.05       3.83       3.70       3.58       3.49  
         
Total core deposits
     2.83       2.61       2.36       2.15       1.94  
Domestic time deposits of $100,000 or more
     4.67       4.33       3.90       3.60       3.27  
Brokered deposits and negotiable CDs
     5.12       4.69       4.20       3.66       3.25  
Deposits in foreign offices
     2.68       2.62       2.66       2.28       1.95  
         
Total deposits
     3.34       3.07       2.79       2.52       2.26  
Short-term borrowings
     4.12       3.57       3.11       2.74       2.16  
Federal Home Loan Bank advances
     4.34       3.99       3.37       3.08       3.02  
Subordinated notes and other long-term debt
     5.67       5.22       4.72       4.20       3.91  
         
Total interest bearing liabilities
     3.74 %     3.43 %     3.12 %     2.82 %     2.56 %
         
 
                                        
Net interest rate spread
     2.81 %     2.78 %     2.89 %     2.90 %     2.96 %
Impact of non-interest bearing funds on margin
     0.53       0.54       0.45       0.41       0.40  
         
Net interest margin
     3.34 %     3.32 %     3.34 %     3.31 %     3.36 %
         
 
(1) Fully taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 7 for the FTE adjustment.
(2) Loan, lease, and deposit average rates include impact of applicable derivatives and non-deferrable fees.
(3) For purposes of this analysis, non-accrual loans are reflected in the average balances of loans.

5

 

Huntington Bancshares Incorporated
Quarterly Average Loans and Direct Financing Leases
   and Deposit Composition By Business Segment
(Unaudited)
                                                           
    Average Balances     Change
    2006   2005     2Q06 vs 2Q05
(in millions)   Second   First   Fourth   Third   Second     Amount   Percent
           
Loans and direct financing leases (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 3,580     $ 3,191     $ 3,228     $ 3,186     $ 3,179       $ 401       12.6 %
Northern Ohio
     2,615       2,520       2,546       2,551       2,532         83       3.3  
Southern Ohio / Kentucky
     2,193       2,092       2,064       2,075       2,062         131       6.4  
Eastern Ohio
     1,487       872       372       375       390         1,097       N.M.  
West Michigan
     2,386       2,362       2,382       2,377       2,366         20       0.8  
East Michigan
     1,565       1,551       1,536       1,506       1,478         87       5.9  
West Virginia
     1,013       966       963       944       907         106       11.7  
Indiana
     977       1,018       972       979       1,018         (41 )     (4.0 )
Mortgage and equipment leasing groups
     3,495       3,458       3,461       3,433       3,363         132       3.9  
               
Regional Banking
     19,311       18,030       17,524       17,426       17,295         2,016       11.7  
Dealer Sales
     5,134       5,183       5,225       5,316       5,496         (362 )     (6.6 )
Private Financial and Capital Markets Group
     1,756       1,718       1,719       1,706       1,667         89       5.3  
Treasury / Other
    —       —       —       —       —         —       —  
               
Total loans and direct financing leases
   $ 26,201     $ 24,931     $ 24,468     $ 24,448     $ 24,458       $ 1,743       7.1 %
               
 
                                                          
Deposit composition (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 4,810     $ 4,602     $ 4,498     $ 4,480     $ 4,544       $ 266       5.9 %
Northern Ohio
     3,539       3,603       3,546       3,505       3,385         154       4.5  
Southern Ohio / Kentucky
     2,244       2,058       1,938       1,861       1,750         494       28.2  
Eastern Ohio
     1,758       989       585       577       556         1,202       N.M.  
West Michigan
     2,805       2,791       2,774       2,666       2,630         175       6.7  
East Michigan
     2,253       2,255       2,287       2,257       2,261         (8 )     (0.4 )
West Virginia
     1,497       1,471       1,428       1,408       1,387         110       7.9  
Indiana
     822       746       743       747       724         98       13.5  
Mortgage and equipment leasing groups
     189       162       202       215       197         (8 )     (4.1 )
               
Regional Banking
     19,917       18,677       18,001       17,716       17,434         2,483       14.2  
Dealer Sales
     56       58       63       72       69         (13 )     (18.8 )
Private Financial and Capital Markets Group
     1,144       1,150       1,161       1,134       1,150         (6 )     (0.5 )
Treasury / Other
    3,267       3,143       3,217       3,294       3,257         10       0.3  
               
Total deposits
   $ 24,384     $ 23,028     $ 22,442     $ 22,216     $ 21,910       $ 2,474       11.3 %
               
 
(1) Prior period amounts have been reclassified to conform to the current period business segment structure.

6

 

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data
(Unaudited)
                                                           
    2006   2005     2Q06 vs 2Q05
(in thousands, except per share amounts)   Second   First   Fourth   Third   Second     Amount   Percent
           
Interest income
   $ 521,903     $ 464,787     $ 442,476     $ 420,858     $ 402,326       $ 119,577       29.7 %
Interest expense
     259,708       221,107       198,800       179,221       160,426         99,282       61.9  
               
Net interest income
     262,195       243,680       243,676       241,637       241,900         20,295       8.4  
Provision for credit losses
     15,745       19,540       30,831       17,699       12,895         2,850       22.1  
               
Net interest income after provision for credit losses
     246,450       224,140       212,845       223,938       229,005         17,445       7.6  
               
Service charges on deposit accounts
     47,225       41,222       42,083       44,817       41,516         5,709       13.8  
Trust services
     22,676       21,278       20,425       19,671       19,113         3,563       18.6  
Brokerage and insurance income
     14,345       15,193       13,101       13,948       13,544         801       5.9  
Bank owned life insurance income
     10,604       10,242       10,389       10,104       10,139         465       4.6  
Other service charges and fees
     13,072       11,509       11,488       11,449       11,252         1,820       16.2  
Mortgage banking income (loss)
     20,355       17,832       10,909       21,116       (2,376 )       22,731       N.M.  
Securities gains (losses)
     (35 )     (20 )     (8,770 )     101       (343 )       308       89.8  
Gains on sales of automobile loans
     532       448       455       502       254         278       N.M.  
Other income
     19,394       22,440       22,900       9,770       24,974         (5,580 )     (22.3 )
               
Sub-total before operating lease income
     148,168       140,144       122,980       131,478       118,073         30,095       25.5  
Operating lease income
     14,851       19,390       24,342       29,262       38,097         (23,246 )     (61.0 )
               
Total non-interest income
     163,019       159,534       147,322       160,740       156,170         6,849       4.4  
               
Personnel costs
     137,904       131,557       116,111       117,476       124,090         13,814       11.1  
Net occupancy
     17,927       17,966       17,940       16,653       17,257         670       3.9  
Outside data processing and other services
     19,569       19,851       19,693       18,062       18,113         1,456       8.0  
Equipment
     18,009       16,503       16,093       15,531       15,637         2,372       15.2  
Professional services
     6,292       5,365       7,440       8,323       9,347         (3,055 )     (32.7 )
Marketing
     10,374       7,301       7,145       6,364       6,934         3,440       49.6  
Telecommunications
     4,990       4,825       4,453       4,512       4,801         189       3.9  
Printing and supplies
     3,764       3,074       3,084       3,102       3,293         471       14.3  
Amortization of intangibles
     2,992       1,075       218       203       204         2,788       N.M.  
Other expense
     19,734       16,291       19,452       20,003       19,581         153       0.8  
               
Sub-total before operating lease expense
     241,555       223,808       211,629       210,229       219,257         22,298       10.2  
Operating lease expense
     10,804       14,607       18,726       22,823       28,879         (18,075 )     (62.6 )
               
Total non-interest expense
     252,359       238,415       230,355       233,052       248,136         4,223       1.7  
               
Income before income taxes
     157,110       145,259       129,812       151,626       137,039         20,071       14.6  
Provision for income taxes
     45,506       40,803       29,239       43,052       30,614         14,892       48.6  
               
Net income
   $ 111,604     $ 104,456     $ 100,573     $ 108,574     $ 106,425       $ 5,179       4.9 %
               
Average common shares — diluted
     244,538       234,363       229,718       233,456       235,671         8,867       3.8 %
 
                                                          
Per common share
                                                          
Net income — diluted
   $ 0.46     $ 0.45     $ 0.44     $ 0.47     $ 0.45       $ 0.01       2.2  
Cash dividends declared
     0.250       0.250       0.215       0.215       0.215         0.035       16.3  
 
                                                          
Return on average total assets
     1.25 %     1.26 %     1.22 %     1.32 %     1.31 %       (0.06 )%     (4.6 )
Return on average total shareholders’ equity
     14.9       15.5       15.5       16.5       16.3         (1.4 )     (8.6 )
Net interest margin (1)
     3.34       3.32       3.34       3.31       3.36         (0.02 )     (0.6 )
Efficiency ratio (2)
     58.1       58.3       57.0       57.4       61.8         (3.7 )     (6.0 )
Effective tax rate
     29.0       28.1       22.5       28.4       22.3         6.7       30.0  
 
                                                          
Revenue — fully taxable equivalent (FTE)
                                                          
Net interest income
   $ 262,195     $ 243,680     $ 243,676     $ 241,637     $ 241,900       $ 20,295       8.4  
FTE adjustment
     3,984       3,836       3,837       3,734       2,961         1,023       34.5  
               
Net interest income (1)
     266,179       247,516       247,513       245,371       244,861         21,318       8.7  
Non-interest income
     163,019       159,534       147,322       160,740       156,170         6,849       4.4  
               
Total revenue (1)
   $ 429,198     $ 407,050     $ 394,835     $ 406,111     $ 401,031       $ 28,167       7.0 %
               
 
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).

7

 

Huntington Bancshares Incorporated
Quarterly Mortgage Banking Income and Net Impact of MSR Hedging
(Unaudited)
                                                           
    2006   2005     2Q06 vs 2Q05
(in thousands)   Second   First   Fourth   Third   Second     Amount   Percent
           
Mortgage Banking Income
                                                          
Origination fees
   $ 2,177     $ 1,977     $ 1,979     $ 3,037     $ 3,066       $ (889 )     (29.0 )%
Secondary marketing
     4,914       2,022       3,346       3,408       1,749         3,165       N.M.  
Servicing fees
     5,995       5,925       5,791       5,532       5,464         531       9.7  
Amortization of capitalized servicing (4)
     (3,293 )     (3,532 )     (3,785 )     (4,626 )     (5,187 )       1,894       36.5  
Other mortgage banking income
     2,280       2,227       3,193       3,308       2,763         (483 )     (17.5 )
               
Sub-total
     12,073       8,619       10,524       10,659       7,855         4,218       53.7  
MSR valuation adjustment
     8,281       9,213       385       10,457       (10,231 )       18,512       N.M.  
               
Total mortgage banking income (loss)
   $ 20,354     $ 17,832     $ 10,909     $ 21,116     $ (2,376 )     $ 22,730       N.M. %
               
 
                                                          
Capitalized mortgage servicing rights (1)
   $ 136,244     $ 123,257     $ 91,259     $ 85,940     $ 71,150       $ 65,094       91.5 %
MSR allowance (1)
     —       —       (404 )     (789 )     (11,246 )       11,246       N.M.  
Total mortgages serviced for others (1)
     7,725,000       7,585,000       7,276,000       7,081,000       6,951,000         774,000       11.1  
MSR % of investor servicing portfolio
     1.76 %     1.63 %     1.25 %     1.21 %     1.02 %       0.74 %     72.5  
 
                                                          
Net Impact of MSR Hedging
                                                          
MSR valuation adjustment (3) (4)
   $ 8,281     $ 9,213     $ 385     $ 10,457     $ (10,231 )     $ 18,512       N.M. %
Net trading gains (losses) related to MSR hedging (2)
     (6,739 )     (4,638 )     (2,091 )     (12,831 )     5,727         (12,466 )     N.M.  
Net interest income related to MSR hedging
     —       —       109       233       512         (512 )     N.M.  
               
Net impact of MSR hedging
   $ 1,542     $ 4,575     $ (1,597 )   $ (2,141 )   $ (3,992 )     $ 5,534       N.M. %
               
 
N.M., not a meaningful value.
(1) At period end.
(2) Included in other non-interest income.
(3) The first quarter of 2006, and subsequent quarters, reflect the adoption of SFAS 156, which records MSRs at fair value. Prior periods reflect temporary impairment or recovery, based on accounting for MSRs at the lower of cost or market.
(4) The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.

8

 

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
                                         
    2006   2005
(in thousands)   Second   First   Fourth   Third   Second
     
Allowance for loan and lease losses, beginning of period
   $ 283,839     $ 268,347     $ 253,943     $ 254,784     $ 264,390  
 
                                        
Acquired allowance for loan and lease losses
     1,498 (1)     22,187       —       —       —  
Loan and lease losses
     (24,325 )     (33,405 )     (27,072 )     (25,830 )     (25,733 )
Recoveries of loans previously charged off
     10,373       9,189       9,504       7,877       9,469  
         
Net loan and lease losses
     (13,952 )     (24,216 )     (17,568 )     (17,953 )     (16,264 )
         
Provision for loan and lease losses
     16,132       17,521       31,972       17,112       13,247  
Economic reserve transfer
     —       —       —       —       (6,253 )
Allowance of assets sold and securitized
     —       —       —       —       (336 )
         
Allowance for loan and lease losses, end of period
   $ 287,517     $ 283,839     $ 268,347     $ 253,943     $ 254,784  
         
 
                                        
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 39,301     $ 36,957     $ 38,098     $ 37,511     $ 31,610  
 
                                        
Acquired AULC
     —       325       —       —       —  
Provision for unfunded loan commitments and letters of credit losses
     (387 )     2,019       (1,141 )     587       (352 )
Economic reserve transfer
     —       —       —       —       6,253  
         
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 38,914     $ 39,301     $ 36,957     $ 38,098     $ 37,511  
         
 
                                        
Total allowances for credit losses
   $ 326,431     $ 323,140     $ 305,304     $ 292,041     $ 292,295  
         
 
                                        
Allowance for loan and lease losses (ALLL) as % of:
                                        
Transaction reserve
     0.89 %     0.88 %     0.89 %     0.84 %     0.82 %
Economic reserve
     0.20       0.21       0.21       0.20       0.22  
         
Total loans and leases
     1.09 %     1.09 %     1.10 %     1.04 %     1.04 %
         
Non-performing loans and leases (NPLs)
     213       209       263       283       304  
Non-performing assets (NPAs)
     168       183       229       249       262  
 
                                        
Total allowances for credit losses (ACL) as % of:
                                        
Total loans and leases
     1.24 %     1.24 %     1.25 %     1.19 %     1.19 %
Non-performing loans and leases
     241       238       300       326       349  
Non-performing assets
     191       209       261       287       300  
 
(1) Represents an adjustment of the allowance and corresponding adjustment to loan balances, resulting from the Unizan merger.

9

 

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
                                         
    2006     2005  
(in thousands)   Second     First     Fourth     Third     Second  
     
Net charge-offs by loan and lease type:
                                        
Commercial:
                                        
Middle market commercial and industrial
   $ (484 )   $ 6,887     $ (744 )   $ (1,082 )   $ 1,312  
Middle market commercial real estate:
                                        
Construction
     (161 )     (241 )     (175 )     495       (134 )
Commercial
     1,557       210       14       1,779       2,269  
         
Middle market commercial real estate
     1,396       (31 )     (161 )     2,274       2,135  
Small business
     2,530       3,709       4,465       3,062       2,141  
         
Total commercial
     3,442       10,565       3,560       4,254       5,588  
         
Consumer:
                                        
Automobile loans
     1,172       2,977       3,213       3,895       1,664  
Automobile leases
     1,758       3,515       3,422       3,105       2,123  
         
Automobile loans and leases
     2,930       6,492       6,635       7,000       3,787  
Home equity
     4,776       4,524       4,498       4,093       5,065  
Residential mortgage
     688       715       941       522       430  
Other loans
     2,116       1,920       1,934       2,084       1,394  
         
Total consumer
     10,510       13,651       14,008       13,699       10,676  
         
 
                                        
Total net charge-offs
   $ 13,952     $ 24,216     $ 17,568     $ 17,953     $ 16,264  
         
 
                                        
Net charge-offs — annualized percentages:
                                        
Commercial:
                                        
Middle market commercial and industrial
     (0.04 )%     0.54 %     (0.06 )%     (0.09 )%     0.11 %
Middle market commercial real estate:
                                        
Construction
     (0.05 )     (0.07 )     (0.04 )     0.12       (0.03 )
Commercial
     0.22       0.03       —       0.37       0.48  
         
Middle market commercial real estate
     0.14       —       (0.02 )     0.25       0.24  
Small business
     0.41       0.70       0.80       0.54       0.38  
         
Total commercial
     0.12       0.38       0.13       0.16       0.21  
         
Consumer:
                                        
Automobile loans
     0.23       0.60       0.64       0.75       0.32  
Automobile leases
     0.34       0.63       0.59       0.51       0.34  
         
Automobile loans and leases
     0.28       0.62       0.61       0.62       0.33  
Home equity
     0.39       0.39       0.39       0.35       0.44  
Residential mortgage
     0.06       0.07       0.09       0.05       0.04  
Other loans
     1.40       1.31       1.48       1.64       1.14  
         
Total consumer
     0.30       0.40       0.41       0.40       0.31  
         
 
                                        
Net charge-offs as a % of average loans
     0.21 %     0.39 %     0.29 %     0.29 %     0.27 %
         

10

 

Huntington Bancshares Incorporated
Quarterly Non-Performing Assets and Past Due Loans and Leases
(Unaudited)
                                         
    2006   2005
(in thousands)   June 30,   March 31,   December 31,   September 30,   June 30,
     
Non-accrual loans and leases:
                                        
Middle market commercial and industrial
   $ 45,713     $ 45,723     $ 28,888     $ 25,431     $ 26,856  
Middle market commercial real estate
     24,970       18,243       15,763       13,073       15,331  
Small business
     27,328       28,389       28,931       26,098       19,788  
Residential mortgage
     22,786       29,376       17,613       16,402       14,137  
Home equity
     14,466       13,778       10,720       8,705       7,748  
 
                                        
         
Total non-performing loans and leases
     135,263       135,509       101,915       89,709       83,860  
 
                                        
Other real estate, net:
                                        
Residential
     34,743       17,481       14,214       11,182       10,758  
Commercial
     1,062       1,903       1,026       909       2,800  
         
Total other real estate, net
     35,805       19,384       15,240       12,091       13,558  
         
 
                                        
Total non-performing assets
   $ 171,068     $ 154,893     $ 117,155     $ 101,800     $ 97,418  
         
 
                                        
Non-performing loans and leases guaranteed by the U.S. government (1)
   $ 30,710     $ 18,256     $ 7,324     $ 6,812     $ 5,892  
 
                                        
Non-performing loans and leases as a % of total loans and leases
     0.51 %     0.52 %     0.42 %     0.37 %     0.34 %
 
                                        
Non-performing assets as a % of total loans and leases and other real estate
     0.65       0.59       0.48       0.42       0.40  
 
                                        
Accruing loans and leases past due 90 days or more (1)
   $ 48,829     $ 52,297     $ 56,138     $ 50,780     $ 53,371  
 
                                        
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.19 %     0.20 %     0.23 %     0.21 %     0.22 %
                                         
    2006   2005
(in thousands)   Second   First   Fourth   Third   Second
     
Non-performing assets, beginning of period
   $ 154,893     $ 117,155     $ 101,800     $ 97,418     $ 73,303  
New non-performing assets (1)
     52,498       53,768       52,553       37,570       47,420  
Acquired non-performing assets
     —       33,843       —       —       —  
Returns to accruing status
     (12,143 )     (14,310 )     (3,228 )     (231 )     (250 )
Loan and lease losses
     (6,826 )     (13,314 )     (9,063 )     (5,897 )     (6,578 )
Payments
     (12,892 )     (13,195 )     (21,329 )     (21,203 )     (11,925 )
Sales
     (4,462 )     (9,054 )     (3,578 )     (5,857 )     (4,552 )
         
 
                                        
Non-performing assets, end of period
   $ 171,068     $ 154,893     $ 117,155     $ 101,800     $ 97,418  
         
 
(1)   Beginning in 2Q-2006, OREO includes balances for foreclosures on loans serviced for GNMA, that are reported in 90 day past due loans and leases in prior periods. These balances are fully guaranteed by the US Government.

11

 

Huntington Bancshares Incorporated
Quarterly Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
                                         
    2006   2005
(in thousands, except per share amounts)   Second   First   Fourth   Third   Second
     
Common stock price, per share
                                        
High (1)
   $ 24.410     $ 24.750     $ 24.640     $ 25.410     $ 24.750  
Low (1)
     23.120       22.560       20.970       22.310       22.570  
Close
     23.580       24.130       23.750       22.470       24.140  
Average closing price
     23.732       23.649       23.369       24.227       23.771  
 
                                        
Dividends, per share
                                        
Cash dividends declared on common stock
   $ 0.250     $ 0.250     $ 0.215     $ 0.215     $ 0.215  
 
                                        
Common shares outstanding
                                        
Average — basic
     241,729       230,968       226,699       229,830       232,217  
Average — diluted
     244,538       234,363       229,718       233,456       235,671  
Ending
     237,361       245,183       224,106       229,006       230,842  
 
                                        
Book value per share
   $ 12.38     $ 12.56     $ 11.41     $ 11.45     $ 11.40  
Tangible book value per share
     9.70       9.95       10.44       10.50       10.45  
 
                                        
Common share repurchases
                                        
Number of shares repurchased
     8,100       4,831       5,175       2,598       1,818  
Capital adequacy
                                         
    2006   2005
(in millions)   June 30,   March 31,   December 31,   September 30,   June 30,
     
Total risk-weighted assets (2)
   $ 31,590     $ 31,298     $ 29,599     $ 29,352     $ 29,973  
 
                                        
Tier 1 leverage ratio (2)
     7.62 %     8.53 %     8.34 %     8.50 %     8.50 %
Tier 1 risk-based capital ratio (2)
     8.45       8.94       9.13       9.42       9.18  
Total risk-based capital ratio (2)
     11.51       12.12       12.42       12.70       12.39  
 
                                        
Tangible equity / asset ratio
     6.46       6.97       7.19       7.39       7.36  
Tangible equity / risk-weighted assets ratio (2)
     7.29       7.80       7.91       8.19       8.05  
Average equity / average assets
     8.39       8.15       7.89       7.97       8.03  
 
                                        
Other data
                                        
Number of employees (full-time equivalent)
     8,075       8,078       7,602       7,586       7,713  
Number of domestic full-service banking offices (3)
     379       385       344       346       344  
 
(1)   High and low stock prices are intra-day quotes obtained from NASDAQ.
 
(2)   June 30, 2006 figures are estimated.
 
(3)   Includes Private Financial Group offices in Florida.

12

 

Huntington Bancshares Incorporated
Quarterly Operating Lease Performance
(Unaudited)
                                                           
    2006   2005     2Q06 vs 2Q05
(in thousands)   Second   First   Fourth   Third   Second     Amount   Percent
           
Balance Sheet:
                                                          
Average operating lease assets outstanding
   $ 151,527     $ 199,998     $ 245,346     $ 308,952     $ 408,798       $ (257,271 )     (62.9 )%
               
 
                                                          
Income Statement:
                                                          
Net rental income
   $ 13,386     $ 17,515     $ 21,674     $ 26,729     $ 34,562       $ (21,176 )     (61.3 )%
Fees
     669       732       1,482       1,419       1,773         (1,104 )     (62.3 )
Recoveries — early terminations
     796       1,143       1,186       1,114       1,762         (966 )     (54.8 )
               
Total operating lease income
     14,851       19,390       24,342       29,262       38,097         (23,246 )     (61.0 )
               
 
                                                          
Depreciation and residual losses at termination
     10,229       13,437       17,223       20,856       26,560         (16,331 )     (61.5 )
Losses — early terminations
     575       1,170       1,503       1,967       2,319         (1,744 )     (75.2 )
               
Total operating lease expense
     10,804       14,607       18,726       22,823       28,879         (18,075 )     (62.6 )
               
Net earnings contribution
   $ 4,047     $ 4,783     $ 5,616     $ 6,439     $ 9,218       $ (5,171 )     (56.1 )%
               
 
                                                          
Earnings ratios (1)
                                                          
Net rental income
     35.3 %     35.0 %     35.3 %     34.6 %     33.8 %       1.5 %     4.4 %
Depreciation and residual losses at termination
     27.0       26.9       28.1       27.0       26.0         1.0       3.8  
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, annualized.

13

 

Huntington Bancshares Incorporated
Consolidated Year To Date Average Balance Sheets
(Unaudited)
                                 
    YTD Average Balances
Fully taxable equivalent basis   Six Months Ended June 30,   Change
(in millions)   2006   2005   Amount   Percent
     
Assets
                                
Interest bearing deposits in banks
   $ 55     $ 54     $ 1       1.9 %
Trading account securities
     83       218       (135 )     (61.9 )
Federal funds sold and securities purchased under resale agreements
     243       349       (106 )     (30.4 )
Loans held for sale
     281       240       41       17.1  
Investment securities:
                                
Taxable
     4,317       3,759       558       14.8  
Tax-exempt
     552       410       142       34.6  
         
Total investment securities
     4,869       4,169       700       16.8  
Loans and leases:(1)
                                
Commercial:
                                
Middle market commercial and industrial
     5,300       4,806       494       10.3  
Middle market commercial real estate:
                                
Construction
     1,348       1,659       (311 )     (18.7 )
Commercial
     2,612       1,894       718       37.9  
         
Middle market commercial real estate
     3,960       3,553       407       11.5  
Small business
     2,290       2,207       83       3.8  
         
Total commercial
     11,550       10,566       984       9.3  
         
Consumer:
                                
Automobile loans
     2,019       2,038       (19 )     (0.9 )
Automobile leases
     2,157       2,465       (308 )     (12.5 )
         
Automobile loans and leases
     4,176       4,503       (327 )     (7.3 )
Home equity
     4,784       4,603       181       3.9  
Residential mortgage
     4,468       4,000       468       11.7  
Other loans
     596       486       110       22.6  
         
Total consumer
     14,024       13,592       432       3.2  
         
Total loans and leases
     25,574       24,158       1,416       5.9  
Allowance for loan and lease losses
     (288 )     (276 )     (12 )     (4.3 )
         
Net loans and leases
     25,286       23,882       1,404       5.9  
         
Total earning assets
     31,105       29,188       1,917       6.6  
         
Operating lease assets
     176       469       (293 )     (62.5 )
Cash and due from banks
     798       887       (89 )     (10.0 )
Intangible assets
     500       218       282       N.M.  
All other assets
     2,309       2,115       194       9.2  
         
Total Assets
   $ 34,600     $ 32,601     $ 1,999       6.1 %
         
 
                                
Liabilities and Shareholders’ Equity
                                
Deposits:
                                
Demand deposits — non-interest bearing
   $ 3,515     $ 3,333     $ 182       5.5 %
Demand deposits — interest bearing
     7,671       7,800       (129 )     (1.7 )
Savings and other domestic time deposits
     3,101       3,274       (173 )     (5.3 )
Certificates of deposit less than $100,000
     4,141       2,609       1,532       58.7  
         
Total core deposits
     18,428       17,016       1,412       8.3  
Domestic time deposits of $100,000 or more
     1,609       1,249       360       28.8  
Brokered deposits and negotiable CDs
     3,203       2,987       216       7.2  
Deposits in foreign offices
     469       438       31       7.1  
         
Total deposits
     23,709       21,690       2,019       9.3  
Short-term borrowings
     1,856       1,240       616       49.7  
Federal Home Loan Bank advances
     1,505       1,166       339       29.1  
Subordinated notes and other long-term debt
     3,392       4,308       (916 )     (21.3 )
         
Total interest bearing liabilities
     26,947       25,071       1,876       7.5  
         
All other liabilities
     1,275       1,624       (349 )     (21.5 )
Shareholders’ equity
     2,863       2,573       290       11.3  
         
Total Liabilities and Shareholders’ Equity
   $ 34,600     $ 32,601     $ 1,999       6.1 %
         
 
N.M., not a meaningful value.
(1) For purposes of this analysis, non-accrual loans are reflected in the average balances of loans.

14

 

Huntington Bancshares Incorporated
Consolidated Year To Date Net Interest Margin Analysis
(Unaudited)
                 
    YTD Average Rates (2)
    Six Months Ended June 30,
Fully Taxable Equivalent basis (1)   2006   2005
 
Assets
                
Interest bearing deposits in banks
     3.93 %     1.67 %
Trading account securities
     5.33       4.03  
Federal funds sold and securities purchased under resale agreements
     4.56       2.49  
Loans held for sale
     6.08       5.83  
Investment securities:
                
Taxable
     5.17       3.99  
Tax-exempt
     6.77       6.75  
 
Total investment securities
     5.35       4.26  
Loans and leases:
                
Commercial:
                
Middle market commercial and industrial
     7.03       5.34  
Middle market commercial real estate:
                
Construction
     7.76       5.79  
Commercial
     7.04       5.38  
 
Middle market commercial real estate
     7.28       5.57  
Small business
     6.90       5.91  
 
Total commercial
     7.09       5.54  
 
Consumer:
                
Automobile loans
     6.44       6.70  
Automobile leases
     4.99       4.91  
 
Automobile loans and leases
     5.69       5.72  
Home equity
     7.41       6.01  
Residential mortgage
     5.37       5.16  
Other loans
     6.61       6.32  
 
Total consumer
     6.22       5.67  
 
Total loans and leases
     6.61       5.62  
 
Total earning assets
     6.38 %     5.37 %
 
 
                
Liabilities and Shareholders’ Equity
                
Deposits:
                
Demand deposits — non-interest bearing
     — %     — %
Demand deposits — interest bearing
     2.54       1.54  
Savings and other domestic time deposits
     1.54       1.30  
Certificates of deposit less than $100,000
     3.95       3.46  
 
Total core deposits
     2.72       1.85  
Domestic time deposits of $100,000 or more
     4.51       3.10  
Brokered deposits and negotiable CDs
     4.91       3.05  
Deposits in foreign offices
     2.65       1.69  
 
Total deposits
     3.21       2.13  
Short-term borrowings
     3.87       1.91  
Federal Home Loan Bank advances
     4.17       2.96  
Subordinated notes and other long-term debt
     5.44       3.64  
 
Total interest bearing liabilities
     3.59       2.42  
 
 
                
Net interest rate spread
     2.79       2.95  
Impact of non-interest bearing funds on margin
     0.54       0.39  
 
Net interest margin
     3.33 %     3.34 %
 
N.M., not a meaningful value.
(1) Fully taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 16 for the FTE adjustment.
(2) Loan and lease and deposit average rates include impact of applicable derivatives and non-deferrable fees.
(3) For purposes of this analysis, non-accrual loans are reflected in the average balances of loans.

15

 

Huntington Bancshares Incorporated
Selected Year To Date Income Statement Data
(Unaudited)
                                 
    Six Months Ended June 30,   Change
(in thousands, except per share amounts)   2006   2005   Amount   Percent
     
Interest income
   $ 986,690     $ 778,431     $ 208,259       26.8 %
Interest expense
     480,815       301,333       179,482       59.6  
         
Net interest income
     505,875       477,098       28,777       6.0  
Provision for credit losses
     35,285       32,769       2,516       7.7  
         
Net interest income after provision for credit losses
     470,590       444,329       26,261       5.9  
         
Service charges on deposit accounts
     88,447       80,934       7,513       9.3  
Trust services
     43,954       37,309       6,645       17.8  
Brokerage and insurance income
     29,538       26,570       2,968       11.2  
Bank owned life insurance income
     20,846       20,243       603       3.0  
Other service charges and fees
     24,581       21,411       3,170       14.8  
Mortgage banking income
     38,187       9,685       28,502       N.M.  
Securities gains
     (55 )     614       (669 )     N.M.  
Gains on sales of automobile loans
     980       254       726       N.M.  
Other income
     41,834       42,371       (537 )     (1.3 )
         
Sub-total before operating lease income
     288,312       239,391       48,921       20.4  
Operating lease income
     34,241       84,829       (50,588 )     (59.6 )
         
Total non-interest income
     322,553       324,220       (1,667 )     (0.5 )
         
Personnel costs
     269,461       248,071       21,390       8.6  
Net occupancy
     35,893       36,499       (606 )     (1.7 )
Outside data processing and other services
     39,420       36,883       2,537       6.9  
Equipment
     34,512       31,500       3,012       9.6  
Professional services
     11,657       18,806       (7,149 )     (38.0 )
Marketing
     17,675       12,770       4,905       38.4  
Telecommunications
     9,815       9,683       132       1.4  
Printing and supplies
     6,838       6,387       451       7.1  
Amortization of intangibles
     4,067       408       3,659       N.M.  
Other expense
     36,025       38,579       (2,554 )     (6.6 )
         
Sub-total before operating lease expense
     465,363       439,586       25,777       5.9  
Operating lease expense
     25,411       66,827       (41,416 )     (62.0 )
         
Total non-interest expense
     490,774       506,413       (15,639 )     (3.1 )
         
Income before income taxes
     302,369       262,136       40,233       15.3  
Provision for income taxes
     86,309       59,192       27,117       45.8  
         
Net income
   $ 216,060     $ 202,944     $ 13,116       6.5 %
         
 
                                
Average common shares — diluted
     239,451       235,362       4,089       1.7 %
 
                                
Per common share
                                
Net income per common share — diluted
   $ 0.90     $ 0.86     $ 0.04       4.7 %
Cash dividends declared
     0.500       0.415       0.085       20.5  
 
                                
Return on average total assets
     1.26 %     1.26 %     — %     — %
Return on average total shareholders’ equity
     15.2       15.9       (0.7 )     (4.4 )
Net interest margin (1)
     3.33       3.34       (0.01 )     (0.3 )
Efficiency ratio (2)
     58.2       62.7       (4.5 )     (7.2 )
Effective tax rate
     28.5       22.6       5.9       26.1  
 
                                
Revenue — fully taxable equivalent (FTE)
                                
Net interest income
   $ 505,875     $ 477,098     $ 28,777       6.0 %
FTE adjustment (1)
     7,820       5,822       1,998       34.3  
         
Net interest income
     513,695       482,920       30,775       6.4  
Non-interest income
     322,553       324,220       (1,667 )     (0.5 )
         
Total revenue
   $ 836,248     $ 807,140     $ 29,108       3.6 %
         
 
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.

16

 

Huntington Bancshares Incorporated
Year To Date Mortgage Banking Income and Net Impact of MSR Hedging
(Unaudited)
                                 
    Six Months Ended June 30,   Change
(in thousands)   2006   2005   Amount   Percent
     
Mortgage Banking Income
                                
Origination fees
   $ 4,154     $ 5,765     $ (1,611 )     (27.9 )%
Secondary marketing
     6,936       4,232       2,704       63.9  
Servicing fees
     11,920       10,858       1,062       9.8  
Amortization of capitalized servicing (4)
     (6,825 )     (9,948 )     3,123       31.4  
Other mortgage banking income
     4,507       5,249       (742 )     (14.1 )
         
Sub-total
     20,692       16,156       4,536       28.1  
MSR recovery / (impairment)
     17,494       (6,471 )     23,965       N.M.  
         
Total mortgage banking income (loss)
   $ 38,186     $ 9,685     $ 28,501       N.M. %
         
 
                                
Capitalized mortgage servicing rights (1)
   $ 136,244     $ 71,150     $ 65,094       91.5 %
MSR allowance (1)
     —       (11,246 )     11,246       N.M.  
Total mortgages serviced for others (1)
     7,725,000       6,951,000       774,000       11.1  
MSR % of investor servicing portfolio
     1.76 %     1.02 %     0.74 %     72.5  
 
                                
Net Impact of MSR Hedging
                                
MSR valuation adjustment (3) (4)
   $ 17,494     $ (6,471 )   $ 23,965       N.M. %
Net trading gains (losses) related to MSR hedging (2)
     (11,377 )     1,545       (12,922 )     N.M.  
Net interest income related to MSR hedging
     —       1,346       (1,346 )     N.M.  
         
Net impact of MSR hedging
   $ 6,117     $ (3,580 )   $ 9,697       N.M. %
         
 
N.M., not a meaningful value.
 
(1)   At period end.
 
(2)   Included in other non-interest income.
 
(3)   The first quarter of 2006, and subsequent quarters, reflect the adoption of SFAS 156, which records MSRs at fair value. Prior periods reflect temporary impairment or recovery, based on accounting for MSRs at the lower of cost or market.
 
(4)   The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.

17

 

Huntington Bancshares Incorporated
Year To Date Credit Reserves Analysis
(Unaudited)
                 
    Six Months Ended June 30,
(in thousands)   2006   2005
 
Allowance for loan and lease losses, beginning of period
   $ 268,347     $ 271,211  
 
                
Acquired allowance for loan and lease losses
     23,685       —  
Loan and lease losses
     (57,730 )     (62,946 )
Recoveries of loans previously charged off
     19,562       18,410  
 
Net loan and lease losses
     (38,168 )     (44,536 )
 
Provision for loan and lease losses
     33,653       34,698  
Economic reserve transfer
     —       (6,253 )
Allowance of assets sold and securitized
     —       (336 )
 
Allowance for loan and lease losses, end of period
   $ 287,517     $ 254,784  
 
 
                
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 36,957     $ 33,187  
 
                
Acquired AULC
     325       —  
Provision for unfunded loan commitments and letters of credit losses
     1,632       (1,929 )
Economic reserve transfer
     —       6,253  
 
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 38,914     $ 37,511  
 
 
                
Total allowances for credit losses
   $ 326,431     $ 292,295  
 
 
                
Allowance for loan and lease losses (ALLL) as % of:
                
Transaction reserve
     0.89 %     0.82 %
Economic reserve
     0.20       0.22  
 
Total loans and leases
     1.09 %     1.04 %
 
Non-performing loans and leases (NPLs)
     213       304  
Non-performing assets (NPAs)
     168       262  
 
                
Total allowances for credit losses (ACL) as % of:
                
Total loans and leases
     1.24 %     1.19 %
Non-performing loans and leases
     241       349  
Non-performing assets
     191       300  
 
N.A., not applicable.

18

 

Huntington Bancshares Incorporated
Year To Date Net Charge-Off Analysis
(Unaudited)
                 
    Six Months Ended June 30,
(in thousands)   2006   2005
 
Net charge-offs by loan and lease type:
                
Commercial:
                
Middle market commercial and industrial
   $ 6,403     $ 15,404  
Middle market commercial real estate:
                
Construction
     (402 )     (185 )
Commercial
     1,767       2,117  
 
Middle market commercial real estate
     1,365       1,932  
Small business
     6,239       4,424  
 
Total commercial
     14,007       21,760  
 
Consumer:
                
Automobile loans
     4,149       4,880  
Automobile leases
     5,273       5,137  
 
Automobile loans and leases
     9,422       10,017  
Home equity
     9,300       9,028  
Residential mortgage
     1,403       869  
Other loans
     4,036       2,862  
 
Total consumer
     24,161       22,776  
 
 
                
Total net charge-offs
   $ 38,168     $ 44,536  
 
 
                
Net charge-offs — annualized percentages:
                
Commercial:
                
Middle market commercial and industrial
     0.24 %     0.64 %
Middle market commercial real estate:
                
Construction
     (0.06 )     (0.02 )
Commercial
     0.14       0.22  
 
Middle market commercial real estate
     0.07       0.11  
Small business
     0.54       0.40  
 
Total commercial
     0.24       0.41  
 
Consumer:
                
Automobile loans
     0.41       0.48  
Automobile leases
     0.49       0.42  
 
Automobile loans and leases
     0.45       0.44  
Home equity
     0.39       0.39  
Residential mortgage
     0.06       0.04  
Other loans
     1.35       1.18  
 
Total consumer
     0.34       0.34  
 
 
                
Net charge-offs as a % of average loans
     0.30 %     0.37 %
 
N.M., not a meaningful value.

19

 

Huntington Bancshares Incorporated
Year To Date Non-Performing Assets and Past Due Loans and Leases
(Unaudited)
                 
    June 30,
(in thousands)   2006   2005
 
Non-accrual loans and leases:
                
Middle market commercial and industrial
   $ 45,713     $ 26,856  
Middle market commercial real estate
     24,970       15,331  
Small business
     27,328       19,788  
Residential mortgage
     22,786       14,137  
Home equity
     14,466       7,748  
 
                
 
Total non-performing loans and leases
     135,263       83,860  
 
                
Other real estate, net:
                
Residential
     34,743       10,758  
Commercial
     1,062       2,800  
 
Total other real estate, net
     35,805       13,558  
 
 
                
Total non-performing assets
   $ 171,068     $ 97,418  
 
 
                
Non-performing loans and leases guaranteed by the U.S. government (1)
   $ 30,710     $ 5,892  
 
                
Non-performing loans and leases as a % of total loans and leases
     0.51 %     0.34 %
 
                
Non-performing assets as a % of total loans and leases and other real estate
     0.65       0.40  
 
                
Accruing loans and leases past due 90 days or more (1)
   $ 48,829     $ 53,371  
 
                
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.19 %     0.22 %
                 
    June 30,
(in thousands)   2006   2005
 
Non-performing assets, beginning of period
   $ 117,155     $ 108,568  
New non-performing assets (1)
     106,266       81,027  
Acquired non-performing assets
     33,843       —  
Returns to accruing status
     (26,453 )     (4,088 )
Loan and lease losses
     (20,140 )     (23,859 )
Payments
     (26,087 )     (22,329 )
Sales
     (13,516 )     (41,901 )
 
 
                
Non-performing assets, end of period
   $ 171,068     $ 97,418  
 
 
(1)   Beginning in 2Q-2006, OREO includes balances for foreclosures on loans serviced for GNMA, that are reported in 90 day past due loans and leases in prior periods. These balances are fully guaranteed by the US Government.

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Huntington Bancshares Incorporated
Year To Date Operating Lease Performance
(Unaudited)
                                 
    Six Months Ended June 30,   2006 vs 2005
(in thousands)   2006   2005   Amount   Percent
         
Balance Sheet:
                                
Average operating lease assets outstanding
   $ 175,629     $ 468,688     $ (293,059 )     (62.5 )%
         
 
                                
Income Statement:
                                
Net rental income
   $ 30,901     $ 78,116     $ (47,215 )     (60.4 )
Fees
     1,401       3,630       (2,229 )     (61.4 )
Recoveries — early terminations
     1,939       3,083       (1,144 )     (37.1 )
         
Total operating lease income
     34,241       84,829       (50,588 )     (59.6 )
         
 
                                
Depreciation and residual losses at termination
     23,666       61,263       (37,597 )     (61.4 )
Losses — early terminations
     1,745       5,564       (3,819 )     (68.6 )
         
Total operating lease expense
     25,411       66,827       (41,416 )     (62.0 )
         
Net earnings contribution
   $ 8,830     $ 18,002     $ (9,172 )     (50.9 )%
         
 
                                
Earnings ratios (1)
                                
Net rental income
     35.2 %     33.3 %     1.9 %     5.7 %
Depreciation and residual losses at termination
     26.9       26.1       0.8       3.1  
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, annualized.

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