Exhibit 99.1
SKY FINANCIAL GROUP, INC.
PROFIT SHARING, 401(k) AND ESOP PLAN
TABLE OF CONTENTS
 
         
    Page  
 
        
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     1  
 
        
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2007 (Liquidation Basis) AND 2006:
        
 
        
Statements of Net Assets Available for Benefits
     2  
 
        
Statements of Changes in Net Assets Available for Benefits
     3  
 
        
Notes to Financial Statements
     4-8  
 
        
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2007 —
     9  
 
        
Schedule H — Line 4i — Schedule of Assets (Held at End of Year)
     10  

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustee and Participants of the
Sky Financial Group, Inc. Profit Sharing, 401(k) and ESOP Plan
Columbus, Ohio
We have audited the accompanying statements of net assets available for benefits of the Sky Financial Group, Inc. Profit Sharing, 401(k) and ESOP Plan (the “Plan”) as of December 31, 2007 and 2006, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2007 and 2006, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the financial statements, Sky Financial Group, Inc., the Plan’s sponsor, decided to terminate the Plan effective June 30, 2007. In accordance with accounting principles generally accepted in the United States of America, the Plan has changed its basis of accounting from the ongoing plan basis used in presenting the December 31, 2006 financial statements to the liquidation basis in presenting the December 31, 2007 financial statements.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at year end) as of December 31, 2007, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The accompanying supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic 2007 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
/s/ Deloitte & Touche LLP
Columbus, Ohio
June 30, 2008

 

 

SKY FINANCIAL GROUP, INC.
PROFIT SHARING, 401(k) AND ESOP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2007 and 2006
 
                 
    2007   2006
    (Liquidation   (Accrual
    Basis)   Basis)
     
 
                
ASSETS:
                
Investments at fair value:
                
Huntington Bancshares Incorporated common stock
   $ 47,531,490     $ —  
Sky Financial Group, Inc. common stock
     —       95,408,906  
Mutual funds and common collective funds
     190,460,154       153,283,698  
Participant notes
     3,704,021       4,242,294  
Cash
     99,176       50  
     
Total investments
     241,794,841       252,934,948  
 
                
Receivables:
                
Employer contributions
     —       9,602,580  
Participant contributions
     —       368,226  
     
Total receivables
     —       9,970,806  
 
                
Due from Waterfield Group Savings and Investment Plan
     —       34,649,306  
Interest and dividends
     1,013,684       117,411  
     
Total assets
     242,808,525       297,672,471  
 
                
LIABILITIES:
                
Accrued expenses
     12,496       20,588  
Due to brokers for securities purchased
     29,436       552,093  
     
Total liabilities
     41,932       572,681  
     
NET ASSETS AVAILABLE FOR BENEFITS
   $ 242,766,593     $ 297,099,790  
     
See notes to financial statements.

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SKY FINANCIAL GROUP, INC.
PROFIT SHARING, 401(k) AND ESOP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2007 and 2006
 
                 
    2007   2006
    (Liquidation   (Accrual
    Basis)   Basis)
     
 
                
ADDITIONS TO NET ASSETS:
                
Investment income:
                
Net appreciation (depreciation) in fair value of investments:
                
Huntington Bancshares Incorporated common stock
   $ (31,188,105 )   $ —  
Sky Financial Group, Inc. common stock
     2,656,736       2,167,504  
Mutual funds and common collective funds
     10,380,255       15,073,090  
Interest and dividends:
                
Huntington Bancshares Incorporated common stock
     1,629,689       —  
Sky Financial Group, Inc. common stock
     2,589,310       3,133,261  
Mutual funds and common collective funds
     3,925,173       2,546,528  
     
Total investment (loss) income
     (10,006,942 )     22,920,383  
     
 
                
Contributions:
                
Employer
     3,376,764       14,714,459  
Participants
     6,318,891       9,608,760  
Participant rollovers
     275,930       1,533,298  
     
Total contributions
     9,971,585       25,856,517  
     
 
                
Transfers from:
                
Waterfield Group Savings and Investment Plan
     —       34,649,306  
Other
     —       17,873  
     
Total transfers
     —       34,667,179  
     
 
                
Total additions
     (35,357 )     83,444,079  
     
 
                
DEDUCTIONS FROM NET ASSETS:
                
Benefits paid to participants
     54,114,957       21,317,259  
Administrative and investment services expenses
     182,883       246,753  
     
Total deductions
     54,297,840       21,564,012  
     
 
                
NET (DECREASE) INCREASE IN NET ASSETS
     (54,333,197 )     61,880,067  
 
                
NET ASSETS AVAILABLE FOR BENEFITS:
                
Beginning of year
     297,099,790       235,219,723  
 
                
     
End of year
   $ 242,766,593     $ 297,099,790  
     
See notes to financial statements.

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SKY FINANCIAL GROUP, INC.
PROFIT SHARING, 401(k) AND ESOP PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 and 2006
 
1.   DESCRIPTION OF PLAN AND PLAN TERMINATION
 
    The following description of the Sky Financial Group, Inc. Profit Sharing, 401(k) and ESOP Plan (the Plan) provides only general information. The Plan includes a profit sharing component, a 401(k) component and an employee stock ownership component. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
 
    Plan Termination — On December 20, 2006, Sky Financial Group Inc. (Sky Financial) announced that it had signed a definitive agreement to merge with Huntington Bancshares Incorporated (Huntington). The merger subsequently closed on July 1, 2007. The day before the merger with Huntington, the Plan was terminated. In October 2007, a favorable determination letter application was filed with the Internal Revenue Service (IRS) with respect to the termination of the Plan.
 
    General — The Plan was originally effective January 1, 1966 and was amended and restated on January 1, 1995, 1999, 2001, and 2004. On June 4, 2007, the Plan was further amended to terminate the Plan. The Plan was a defined contribution plan covering substantially all employees of Sky Financial, and its wholly owned subsidiaries, who have attained age 18 and are not classified as independent contractors or leased employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
 
    Administration — Pursuant to the Plan document, the Plan Administrator is the Sky Financial Benefit Plans Committee (the Sky Committee). The Sky Committee was disbanded prior to the merger in 2007, and in October 2007, per resolution of the Huntington Board, duties of the Sky Committee were delegated to the Huntington’s Benefit Committee. Record keeping for the Plan was performed by Marshall and Ilsley for all of 2007 and this relationship continues into 2008. The Plan administrator believes that the Plan is currently designed and operated in compliance with the applicable requirements of the Internal Revenue Code (the Code) and the provisions of ERISA, as amended.
 
    Contributions — As described in the Plan, there are no employer contributions required subsequent to June 30, 2007. Matching contributions were made with respect to participant 401(k) contributions made through June 30, 2007. Participants are not permitted to make any 401(k) contributions subsequent to June 30, 2007. In addition, no profit sharing contribution or ESOP contribution is required for 2007.
 
    Participant Accounts — Each participant’s account is credited with the participant’s own contribution and an allocation of the employer’s contribution and Plan earnings. Investment income or loss is allocated to participant accounts based on proportional account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.
 
    Vesting — All Participants became fully vested on June 30, 2007.
 
    Merger of Plans and Transfer of Plan Assets — Sky Financial completed several acquisitions of community banks and financial service affiliates prior to the merger with Huntington. In conjunction with such acquisitions, Sky Financial has generally merged the qualified defined contribution plan of the acquired entity into the Plan. Sky Financial gave the continuing former employees of the acquired

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    entities past service credit for their employment with the acquired entity for the purpose of vesting in the Plan.
   
    The following table presents the plan of an entity acquired by Sky Financial that was approved in 2006 for merger into the Sky Financial Group, Inc. Profit Sharing, 401(k) and ESOP Plan:
                                 
            Effective           Plan Assets
Entity Acquired/   Acquisition   Date of   Eligible   Transferred
Entity’s Benefit Plan   Date   Plan Merger   Participants   into the Plan
 
                                
Waterfield Mortgage Company, Inc.
Waterfield Group Savings and Investment Plan
   October 17, 2006   January 1, 2007     910     $ 34,649,306  
    Investment Options — The Plan provides for the establishment of a variety of investment funds and a company stock fund. These investment funds are participant directed. The company stock fund includes both participant and non-participant directed funds. Participants may transfer account balances between funds, subject to certain limitations. The company has the sole discretion to determine or change the number and nature of investment funds.
 
    Participant Loans — The Plan provides that participants can borrow funds against their account balances. These loans are limited to the lesser of $50,000 or 50% of the participant’s vested account balance. Participant loans bear interest at a fixed annual rate, as determined by the committee on the date of loan approval. Loan issuances are accounted for as a transfer from the participant directed accounts into a participant loan fund. Each loan is secured by the balance in the participant’s account. Loan principal and interest payments are made through payroll deductions for periods up to five years for a personal loan and up to 15 years for a residential home loan.
 
    Payment of Benefits — Upon termination of service, a participant may elect to receive either a lump-sum amount equal to the value of his or her vested interest in their profit sharing and 401(k) account, or the vested portion of a participant’s balance may be distributed in installments or partial distributions. The ESOP’s normal form of benefits is a joint and survivor annuity with optional forms of lump sum, straight life annuity or installments.
 
    Distributions — Former Sky Financial associates who terminate employment prior to receipt of a favorable determination from the IRS will be able to take distribution of their account from the Plan at the time their employment terminates. Distribution of the remaining accounts will be made after the Plan receives its favorable determination from the IRS. In addition, participants will be able to make investment election changes in the Plan until their accounts are distributed.
 
2.   SUMMARY OF ACCOUNTING POLICIES
 
    Basis of Accounting — As a result of the termination, the Plan changed its basis of accounting from the accrual basis to the liquidation basis. There were no material changes to the financial statements as a result of this change in accounting.
 
    Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of net assets available for benefits and changes therein during the reporting period. Actual results may differ from these estimates.

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    Investments — Investments in Huntington common stock are stated at fair value as measured by quoted market prices in an active market. Other investments consist principally of investments in mutual funds and common/collective funds and are stated at fair value as determined by the trustee, based upon the market values of the underlying assets of the funds. Participant loans are stated at cost, which approximates fair value.
 
    Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis and dividend income is recorded on the ex-dividend date.
 
    The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the value of investment securities will occur in the near term and such change could materially affect the amounts reported in the statements of net assets available for benefits and statements of changes in net assets available for benefits.
 
    Distributions to Participants — Distributions to participants are recorded when paid.
 
    Administrative Expenses — The costs of administering the Plan are paid by the Plan or Huntington as determined by Huntington.
 
3.   INVESTMENTS
 
    The following presents, at fair value, investments that represent 5% or more of the Plan’s net assets.
                 
    2007   2006
     
 
                
Huntington Bancshares Incorporated common stock
   $ 47,531,490     $ —  
Harbor International Fund
     29,068,346       21,030,331  
Davis New York Venture Fund — A
     24,694,291       21,185,849  
Federated Prime Obligations Fund
     21,669,526       17,292,818  
RS Partners Fund
     17,428,547       20,865,490  
Vanguard Growth Index Fund
     16,204,346       —  
Baron Partners Fund
     12,985,573       —  
Sky Financial Group, Inc. common stock*
     —       95,408,906  
 
*   Includes nonparticipant-directed investments
    The Plan’s investments (including investments bought, sold, and held during the year) appreciated (depreciated) as follows:
                 
    2007   2006
     
 
                
Huntington Bancshares Incorporated common stock
   $ (31,188,105 )   $ —  
Sky Financial Group, Inc. common stock
     2,656,736       2,167,504  
Mutual funds
     9,377,372       13,138,912  
Common collective funds
     1,002,883       1,934,178  
     
Total
   $ (18,151,114 )   $ 17,240,594  
     

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    On July 1, 2007, Huntington completed its merger with Sky Financial in a stock and cash transaction. Under the terms of the merger agreement, Sky Financial shareholders, including the Plan, received 1.098 shares of Huntington common stock, on a tax-free basis, and a cash payment of $3.023 for each share of Sky Financial common stock.
 
4.   NONPARTICIPANT-DIRECTED INVESTMENTS
 
    The Plan’s only nonparticipant-directed transactions are contained within the Sky Financial Group, Inc. Stock Fund (the Company Stock Fund), which includes both participant and nonparticipant-directed transactions. In May 2007, the Plan was amended to allow all investments to be participant directed. Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed portion of the Company Stock Fund is as follows:
                 
    2007     2006  
     
 
                
Net assets— Company Stock Fund
   $ —     $ 61,501,007  
     
 
                
Changes in net assets:
                
Contributions
   $ 4,527,887     $ 4,239,660  
Dividends
     —       3,133,261  
Net appreciation (depreciation) in fair value of investments
     (2,983,209 )     1,486,411  
Benefits paid to participants
     (1,007,183 )     (4,388,009 )
Transfers (to) from other participant-directed investments—net
     (61,873,145 )     (540,576 )
Other
     (165,352 )     (160,920 )
     
 
                
Net change
     (61,501,007 )     3,769,827  
 
                
Company Stock Fund—beginning of year
     61,501,007       57,731,180  
     
 
                
Company Stock Fund—end of year
   $ —     $ 61,501,007  
     
5.   PARTY-IN-INTEREST TRANSACTIONS
 
    Subsequent to the Plan termination, certain Plan investments are shares of Huntington Bancshares Incorporated mutual funds managed by Huntington Asset Advisors, Inc, a wholly-owned subsidiary of Huntington, and therefore, qualify as party-in-interest investments. Costs and expenses paid by the Plan to Huntington totaled $26,674 in 2007. The Plan did not make any payments to Huntington during 2006.
 
    Prior to the Plan termination, certain Plan investments were shares of Sky Financial common stock and shares of common/collective investment funds managed by Sky Trust, N.A. Sky Trust, N.A. was a fiduciary of the Plan and wholly owned subsidiary of Sky Financial, and Sky Financial was the sponsor of the Plan. Fees paid by the Plan to Sky Trust, N.A. for administrative and investment services were $205,001 and $246,753 in 2007 and 2006, respectively.

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6.   INCOME TAX STATUS
 
    The IRS has determined and informed Sky Financial by letter dated November 14, 2002, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (“IRC”). The Plan has been amended since receipt of this determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. In October 2007, a favorable determination letter application was filed with the IRS with respect to the termination of the Plan.
******

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SUPPLEMENTAL SCHEDULE

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SKY FINANCIAL GROUP, INC.
PROFIT SHARING, 401(k) AND ESOP PLAN
SCHEDULE H — LINE 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN 34-1372535 — PLAN NO. 001
DECEMBER 31, 2007
 
                         
    (b) Identity of Issuer, Borrower,               (e) Current  
(a)   Lessor or Similar Party   (c) Description of Investment   (d) Cost     Value  
       
 
                
*   Huntington Bancshares Incorporated Stock Fund        
       
2,140,602 shares of common stock
   **     $ 46,574,777  
       
Money market
     **       956,713  
       
 
              
       
 
             47,531,490  
       
 
                
    Harbor Funds  
Harbor International Fund
     **       29,068,346  
    Davis Selected Advisers LP  
Davis New York Venture Fund — A
     **       24,694,291  
    Federated Investors  
Federated Prime Obligations Fund
     **       21,669,526  
    RS Investment Management LP  
RS Partners Fund
     **       17,428,547  
    Vanguard Group  
Vanguard Growth Index Fund
     **       16,204,346  
    Baron Select Fund  
Baron Partners Fund
     **       12,985,573  
    Vanguard Group  
Vanguard Institutional Index Fund
     **       12,007,362  
*   Huntington Funds  
Huntington Intermediate Government Income Fund
     **       9,079,023  
    Vanguard Group  
Vanguard Small Cap Growth Index Fund
     **       8,946,779  
    Pimco Funds  
Pimco Low Duration Fund
     **       7,549,662  
    Vanguard Group  
Vanguard LifeStrategy Moderate Growth Fund
     **       7,421,372  
    Wells Fargo Funds Trust  
Wells Fargo Advantage Mid Cap Disciplined Fund
     **       7,042,093  
    Vanguard Group  
Vanguard LifeStrategy Growth Fund
     **       6,090,246  
    Vanguard Group  
Vanguard GNMA Fund
     **       3,125,812  
    Vanguard Group  
Vanguard LifeStrategy Conservative Growth Fund
     **       3,074,500  
    Vanguard Group  
Vanguard Long-Term Investment Grade Fund
     **       2,887,901  
    Vanguard Group  
Vanguard LifeStrategy Income Fund
     **       1,184,775  
    Cash in Bank  
Cash
             99,176  
*   Participant Notes  
Loans to participants, varying maturity dates and interest rates ranging from 4.00% to 10.50%
             3,704,021  
       
 
              
       
 
                
       
Total
           $ 241,794,841  
       
 
              
 
*   Party-in-interest.
 
**   Indicates a participant-directed fund. The cost disclosure is not required.

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