Exhibit 99.2
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
June 2008
 
         
Table of Contents
 
        
Consolidated Balance Sheets
     1  
 
        
Loans and Leases Composition
     2  
 
        
Deposit Composition
     3  
 
        
Consolidated Quarterly Average Balance Sheets
     4  
 
        
Consolidated Quarterly Net Interest Margin Analysis
     5  
 
        
Quarterly Average Loans and Leases and Deposit Composition By Business Segment
     6  
 
        
Selected Quarterly Income Statement Data
     7  
 
        
Quarterly Mortgage Banking Income
     8  
 
        
Quarterly Credit Reserves Analysis
     9  
 
        
Quarterly Net Charge-Off Analysis
     10  
 
        
Quarterly Nonaccrual Loans (NALs), Nonperforming Assets (NPAs) and Past Due Loans and Leases
     11  
 
        
Quarterly Common Stock Summary, Capital, and Other Data
     12  
 
        
Consolidated Year to Date Average Balance Sheets
     13  
 
        
Consolidated Year to Date Net Interest Margin Analysis
     14  
 
        
Selected Year to Date Income Statement Data
     15  
 
        
Year to Date Mortgage Banking Income
     16  
 
        
Year to Date Credit Reserves Analysis
     17  
 
        
Year to Date Net Charge-Off Analysis
     18  
 
        
Year to Date Nonaccrual Loans (NALs), Nonperforming Assets (NPAs) and Past Due Loans and Leases
     19  
Notes:
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.
This document reflects the post-Sky merger organization structure effective on July 1, 2007. Accordingly, the balances presented include the impact of the acquisition from that date.

Contents

 

Huntington Bancshares Incorporated
Consolidated Balance Sheets
                                           
                              Change
    2008   2007     June ‘08 vs ‘07
(in thousands, except number of shares)   June 30,   December 31,   June 30,     Amount   Percent
    (Unaudited)           (Unaudited)                  
Assets
                                          
Cash and due from banks
   $ 1,159,819     $ 1,416,597     $ 818,877       $ 340,942       41.6 %
Federal funds sold and securities purchased under resale agreements
     198,333       592,649       857,080         (658,747 )     (76.9 )
Interest bearing deposits in banks
     313,855       340,090       271,133         42,722       15.8  
Trading account securities
     1,096,239       1,032,745       619,836         476,403       76.9  
Loans held for sale
     365,063       494,379       348,272         16,791       4.8  
Investment securities
     4,788,275       4,500,171       3,863,182         925,093       23.9  
Loans and leases (1)
     41,047,140       40,054,338       26,811,513         14,235,627       53.1  
Allowance for loan and lease losses
     (679,403 )     (578,442 )     (307,519 )       (371,884 )     N.M.  
           
Net loans and leases
     40,367,737       39,475,896       26,503,994         13,863,743       52.3  
           
Bank owned life insurance
     1,341,162       1,313,281       1,107,042         234,120       21.1  
Premises and equipment
     533,789       557,565       398,436         135,353       34.0  
Goodwill
     3,056,691       3,059,333       569,738         2,486,953       N.M.  
Other intangible assets
     395,250       427,970       54,646         340,604       N.M.  
Accrued income and other assets
     1,717,628       1,486,792       1,008,450         709,178       70.3  
           
Total Assets
   $ 55,333,841     $ 54,697,468     $ 36,420,686       $ 18,913,155       51.9 %
           
 
                                          
Liabilities and Shareholders’ Equity Liabilities
                                          
Deposits (2)
   $ 38,124,426     $ 37,742,921     $ 24,599,912       $ 13,524,514       55.0 %
Short-term borrowings
     2,313,190       2,843,638       2,860,939         (547,749 )     (19.1 )
Federal Home Loan Bank advances
     3,058,163       3,083,555       1,397,398         1,660,765       N.M.  
Other long-term debt
     2,608,092       1,937,078       2,016,199         591,893       29.4  
Subordinated notes
     1,879,900       1,934,276       1,494,197         385,703       25.8  
Accrued expenses and other liabilities
     968,805       1,206,860       987,900         (19,095 )     (1.9 )
           
Total Liabilities
     48,952,576       48,748,328       33,356,545         15,596,031       46.8  
           
 
                                          
Shareholders’ equity
                                          
Preferred stock — authorized 6,617,808 shares- 8.50% Series A Non-cumulative Perpetual Convertible Preferred Stock, 569,000 shares issued and outstanding.
     569,000       —       —         569,000       —  
Common stock —
                                          
Par value of $0.01 and authorized 1,000,000,000 shares; issued 367,019,713; 367,000,815, and 236,944,611 shares, respectively; outstanding 366,196,767; 366,261,676, and 236,244,063 shares respectively.
     3,670       3,670       2,369         1,301       54.9  
Capital surplus
     5,226,326       5,237,783       2,089,516         3,136,810       N.M.  
Less 822,946; 739,139 and 700,548 treasury shares at cost, respectively
     (15,224 )     (14,391 )     (13,754 )       (1,470 )     10.7  
Accumulated other comprehensive loss
     (243,122 )     (49,611 )     (80,790 )       (162,332 )     N.M.  
Retained earnings
     840,615       771,689       1,066,800         (226,185 )     (21.2 )
           
Total Shareholders’ Equity
     6,381,265       5,949,140       3,064,141         3,317,124       N.M.  
           
Total Liabilities and Shareholders’ Equity
   $ 55,333,841     $ 54,697,468     $ 36,420,686       $ 18,913,155       51.9 %
           
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
Loans and Leases Composition
                                                                   
                                                      Change
    2008   2007     June ‘08 vs ‘07
(in thousands)   June 30,   December 31,   June 30,     Amount   Percent
    (Unaudited)                   (Unaudited)                  
By Type
                                                                  
Commercial:
                                                                  
Commercial and industrial
   $ 13,745,515       33.5 %   $ 13,125,565       32.8 %   $ 8,185,451       30.5 %     $ 5,560,064       67.9 %
Commercial real estate:
                                                                  
Construction
     2,135,979       5.2       1,961,839       4.9       1,382,533       5.2         753,446       54.5  
Commercial
     7,565,486       18.4       7,221,213       18.0       3,484,039       13.0         4,081,447       N.M.  
           
Commercial real estate
     9,701,465       23.6       9,183,052       22.9       4,866,572       18.2         4,834,893       99.3  
           
Total commercial
     23,446,980       57.1       22,308,617       55.7       13,052,023       48.7         10,394,957       79.6  
           
Consumer:
                                                                  
Automobile loans
     3,758,715       9.2       3,114,029       7.8       2,424,105       9.0         1,334,610       55.1  
Automobile leases
     834,777       2.0       1,179,505       2.9       1,488,903       5.6         (654,126 )     (43.9 )
Home equity
     7,410,393       18.1       7,290,063       18.2       5,015,506       18.7         2,394,887       47.7  
Residential mortgage
    4,901,420       11.9       5,447,126       13.6       4,398,720       16.4         502,700       11.4  
Other loans
     694,855       1.7       714,998       1.8       432,256       1.6         262,599       60.8  
           
Total consumer
     17,600,160       42.9       17,745,721       44.3       13,759,490       51.3         3,840,670       27.9  
           
Total loans and leases
   $ 41,047,140       100.0     $ 40,054,338       100.0     $ 26,811,513       100.0       $ 14,235,627       53.1  
           
 
                                                                  
By Business Segment
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 5,226,741       12.7 %   $ 5,110,270       12.8 %   $ 3,701,459       13.8 %     $ 1,525,282       41.2 %
Northwest Ohio
     2,238,454       5.5       2,284,141       5.7       449,232       1.7         1,789,222       N.M.  
Greater Cleveland
     3,262,379       7.9       3,097,120       7.7       2,099,941       7.8         1,162,438       55.4  
Greater Akron/Canton
     2,088,189       5.1       2,020,447       5.0       1,330,102       5.0         758,087       57.0  
Southern Ohio/Kentucky
     2,966,035       7.2       2,659,870       6.6       2,275,224       8.5         690,811       30.4  
Mahoning Valley
     865,226       2.1       927,918       2.3       —       —         865,226       —  
Ohio Valley
     867,682       2.1       870,276       2.2       —       —         867,682       —  
West Michigan
     2,600,512       6.3       2,477,617       6.2       2,439,517       9.1         160,995       6.6  
East Michigan
     1,809,680       4.4       1,750,171       4.4       1,654,934       6.2         154,746       9.4  
Western Pennsylvania
     1,013,470       2.5       1,053,685       2.6       —       —         1,013,470       —  
Pittsburgh
     969,307       2.4       900,789       2.2       —       —         969,307       —  
Central Indiana
     1,527,627       3.7       1,421,116       3.5       1,004,934       3.7         522,693       52.0  
West Virginia
     1,213,033       3.0       1,155,719       2.9       1,148,573       4.3         64,460       5.6  
Other Regional
     5,828,043       14.2       6,176,485       15.6       3,832,953       14.3         1,995,090       52.1  
           
Regional Banking
     32,476,378       79.1       31,905,624       79.7       19,936,869       74.4         12,539,509       62.9  
Dealer Sales
     5,958,599       14.5       5,563,415       13.9       4,944,386       18.4         1,014,213       20.5  
Private Financial and Capital Markets Group
     2,612,163       6.4       2,585,299       6.4       1,930,258       7.2         681,905       35.3  
Treasury/Other
     —       —       —       —       —       —         —       —  
           
Total loans and leases
   $ 41,047,140       100.0 %   $ 40,054,338       100.0 %   $ 26,811,513       100.0 %     $ 14,235,627       53.1 %
           
N.M., not a meaningful value.

2

 

Huntington Bancshares Incorporated
Deposit Composition
                                                                   
                                                      Change
    2008   2007     June ‘08 vs ‘07
           
(in thousands)   June 30,   December 31,   June 30,     Amount   Percent
           
    (Unaudited)                   (Unaudited)                  
By Type
                                                                  
Demand deposits — non-interest bearing
   $ 5,253,156       13.8 %   $ 5,371,747       14.2 %   $ 3,625,540       14.7 %     $ 1,627,616       44.9 %
Demand deposits — interest bearing
     4,074,202       10.7       4,048,873       10.7       2,496,250       10.1         1,577,952       63.2  
Money market deposits
     6,170,640       16.2       6,643,242       17.6       5,323,707       21.6         846,933       15.9  
Savings and other domestic deposits
     5,008,855       13.1       4,968,615       13.2       2,914,078       11.8         2,094,777       71.9  
Core certificates of deposit
     11,273,807       29.6       10,736,146       28.4       5,738,598       23.3         5,535,209       96.5  
           
Total core deposits
     31,780,660       83.4       31,768,623       84.1       20,098,173       81.5         11,682,487       58.1  
Other domestic deposits of $100,000 or more
     2,138,692       5.6       1,870,730       5.0       984,412       4.0         1,154,280       N.M.  
Brokered deposits and negotiable CDs
     3,100,955       8.1       3,376,854       8.9       2,920,726       11.9         180,229       6.2  
Deposits in foreign offices
     1,104,119       2.9       726,714       2.0       596,601       2.6         507,518       85.1  
           
Total deposits
   $ 38,124,426       100.0 %   $ 37,742,921       100.0 %   $ 24,599,912       100.0 %     $ 13,524,514       55.0 %
           
 
                                                                  
Total core deposits:
                                                                  
Commercial
   $ 8,471,809       26.7 %   $ 9,017,852       28.4 %   $ 6,267,644       31.2 %     $ 2,204,165       35.2 %
Personal
     23,308,851       73.3       22,750,771       71.6       13,830,529       68.8         9,478,322       68.5  
           
Total core deposits
   $ 31,780,660       100.0 %   $ 31,768,623       100.0 %   $ 20,098,173       100.0 %     $ 11,682,487       58.1 %
           
 
                                                                  
By Business Segment
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 6,618,913       17.4 %   $ 6,332,143       16.8 %   $ 5,016,401       20.4 %     $ 1,602,512       31.9 %
Northwest Ohio
     2,775,959       7.3       2,837,735       7.5       1,097,765       4.5         1,678,194       N.M.  
Greater Cleveland
     3,334,461       8.7       3,194,780       8.5       2,025,824       8.2         1,308,637       64.6  
Greater Akron/Canton
     2,631,229       6.9       2,636,564       7.0       1,883,329       7.7         747,900       39.7  
Southern Ohio/Kentucky
     2,655,612       7.0       2,628,766       7.0       2,353,087       9.6         302,525       12.9  
Mahoning Valley
     1,498,004       3.9       1,550,676       4.1       —       —         1,498,004       —  
Ohio Valley
     1,280,188       3.4       1,289,027       3.4       —       —         1,280,188       —  
West Michigan
     2,946,401       7.7       2,919,926       7.7       2,820,076       11.5         126,325       4.5  
East Michigan
     2,513,804       6.6       2,442,354       6.5       2,357,108       9.6         156,696       6.6  
Western Pennsylvania
     1,629,258       4.3       1,643,483       4.4       —       —         1,629,258       —  
Pittsburgh
     935,180       2.5       948,451       2.5       —       —         935,180       —  
Central Indiana
     1,973,110       5.2       1,896,433       5.0       851,839       3.5         1,121,271       N.M.  
West Virginia
     1,658,034       4.3       1,589,903       4.2       1,586,407       6.4         71,627       4.5  
Other Regional
     849,501       2.2       771,261       2.0       526,035       2.1         323,466       61.5  
           
Regional Banking
     33,299,654       87.3       32,681,502       86.6       20,517,871       83.4         12,781,783       62.3  
Dealer Sales
     56,517       0.1       58,196       0.2       57,554       0.2         (1,037 )     (1.8 )
Private Financial and Capital Markets Group
     1,666,608       4.4       1,626,043       4.3       1,106,329       4.5         560,279       50.6  
Treasury / Other (1)
     3,101,647       8.2       3,377,180       8.9       2,918,158       11.9         183,489       6.3  
           
Total deposits
   $ 38,124,426       100.0 %   $ 37,742,921       100.0 %   $ 24,599,912       100.0 %     $ 13,524,514       55.0 %
           
 
N.M., not a meaningful value.
 
(1)   Comprised largely of national market deposits.

3

 

Huntington Bancshares Incorporated
Consolidated Quarterly Average Balance Sheets
(Unaudited)
                                                           
    Average Balances     Change
Fully taxable equivalent basis   2008   2007     2Q08 vs 2Q07
(in millions)   Second   First   Fourth   Third   Second     Amount   Percent
           
Assets
                                                          
Interest bearing deposits in banks
   $ 256     $ 293     $ 324     $ 292     $ 259       $ (3 )     (1.2 )%
Trading account securities
     1,243       1,186       1,122       1,149       230         1,013       N.M.  
Federal funds sold and securities purchased under resale agreements
     566       769       730       557       574         (8 )     (1.4 )
Loans held for sale
     501       565       493       419       291         210       72.2  
Investment securities:
                                                          
Taxable
     3,971       3,774       3,807       3,951       3,253         718       22.1  
Tax-exempt
     717       703       689       675       629         88       14.0  
           
Total investment securities
     4,688       4,477       4,496       4,626       3,882         806       20.8  
Loans and leases: (1)
                                                          
Commercial:
                                                         
Commercial and industrial
     13,631       13,343       13,270       13,036       8,167         5,464       66.9  
Commercial real estate:
                                                          
Construction
     2,038       2,014       1,892       1,815       1,258         780       62.0  
Commercial
     7,563       7,273       7,161       7,165       3,393         4,170       N.M.  
           
Commercial real estate
     9,601       9,287       9,053       8,980       4,651         4,950       N.M.  
           
Total commercial
     23,232       22,630       22,323       22,016       12,818         10,414       81.2  
           
Consumer:
                                                          
Automobile loans
     3,636       3,309       3,052       2,931       2,322         1,314       56.6  
Automobile leases
     915       1,090       1,272       1,423       1,551         (636 )     (41.0 )
           
Automobile loans and leases
     4,551       4,399       4,324       4,354       3,873         678       17.5  
Home equity
    7,365       7,274       7,297       7,468       4,973         2,392       48.1  
Residential mortgage
    5,178       5,351       5,437       5,456       4,351         827       19.0  
Other loans
     699       713       728       534       424         275       64.9  
           
Total consumer
     17,793       17,737       17,786       17,812       13,621         4,172       30.6  
           
Total loans and leases
     41,025       40,367       40,109       39,828       26,439         14,586       55.2  
Allowance for loan and lease losses
     (654 )     (630 )     (474 )     (475 )     (297 )       (357 )     N.M.  
           
Net loans and leases
     40,371       39,737       39,635       39,353       26,142         14,229       54.4  
           
Total earning assets
     48,279       47,657       47,274       46,871       31,675         16,604       52.4  
           
Cash and due from banks
     943       1,036       1,098       1,111       748         195       26.1  
Intangible assets
     3,449       3,472       3,440       3,337       626         2,823       N.M.  
All other assets
     3,522       3,350       3,142       3,124       2,398         1,124       46.9  
           
Total Assets
   $ 55,539     $ 54,885     $ 54,480     $ 53,968     $ 35,150       $ 20,389       58.0 %
           
 
                                                          
Liabilities and Shareholders’ Equity
                                                          
Deposits:
                                                          
Demand deposits — non-interest bearing
   $ 5,061     $ 5,034     $ 5,218     $ 5,384     $ 3,591       $ 1,470       40.9 %
Demand deposits — interest bearing
     4,086       3,934       3,929       3,808       2,404         1,682       70.0  
Money market deposits
     6,267       6,753       6,845       6,869       5,466         801       14.7  
Savings and other domestic deposits
     5,047       5,004       5,012       5,127       2,931         2,116       72.2  
Core certificates of deposit
     10,952       10,796       10,674       10,425       5,591         5,361       95.9  
           
Total core deposits
     31,413       31,521       31,678       31,613       19,983         11,430       57.2  
Other domestic deposits of $100,000 or more
     2,143       1,983       1,731       1,610       1,056         1,087       N.M.  
Brokered deposits and negotiable CDs
     3,361       3,542       3,518       3,728       2,682         679       25.3  
Deposits in foreign offices
     1,110       885       748       701       552         558       N.M.  
           
Total deposits
     38,027       37,931       37,675       37,652       24,273         13,754       56.7  
Short-term borrowings
     2,854       2,772       2,489       2,542       2,075         779       37.5  
Federal Home Loan Bank advances
     3,412       3,389       3,070       2,553       1,329         2,083       N.M.  
Subordinated notes and other long-term debt
     3,928       3,814       3,875       3,912       3,470         458       13.2  
           
Total interest bearing liabilities
     43,160       42,872       41,891       41,275       27,556         15,604       56.6  
           
All other liabilities
     963       1,104       1,160       1,103       960         3       0.3  
Shareholders’ equity
     6,355       5,875       6,211       6,206       3,043         3,312       N.M.  
           
Total Liabilities and Shareholders’ Equity
   $ 55,539     $ 54,885     $ 54,480     $ 53,968     $ 35,150       $ 20,389       58.0 %
           
 
N.M., not a meaningful value.
 
(1)   For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans.

4

 

Huntington Bancshares Incorporated
Consolidated Quarterly Net Interest Margin Analysis
(Unaudited)
                                         
    Average Rates (2)
    2008   2007
Fully taxable equivalent basis (1)   Second   First   Fourth   Third   Second
     
Assets
                                        
Interest bearing deposits in banks
     2.77 %     3.97 %     4.30 %     4.69 %     6.47 %
Trading account securities
     5.13       5.27       5.72       6.01       5.74  
Federal funds sold and securities purchased under resale agreements
     2.08       3.07       4.59       5.26       5.28  
Loans held for sale
     5.98       5.41       5.86       5.13       5.79  
Investment securities:
                                        
Taxable
     5.50       5.71       5.98       6.09       6.11  
Tax-exempt
     6.77       6.75       6.74       6.78       6.69  
     
Total investment securities
     5.69       5.88       6.10       6.19       6.20  
Loans and leases: (3)
                                        
Commercial:
                                        
Commercial and industrial
     5.53       6.32       6.92       7.70       7.36  
Commercial real estate:
                                        
Construction
     4.81       5.86       7.24       7.70       7.63  
Commercial
     5.47       6.27       7.09       7.63       7.35  
     
Commercial real estate
     5.32       6.18       7.12       7.65       7.42  
     
Total commercial
     5.45       6.27       7.00       7.68       7.38  
     
Consumer:
                                        
Automobile loans
     7.12       7.25       7.31       7.25       7.10  
Automobile leases
     5.59       5.53       5.52       5.56       5.34  
     
Automobile loans and leases
     6.81       6.82       6.78       6.70       6.39  
Home equity
     6.43       7.21       7.81       7.94       7.63  
Residential mortgage
     5.78       5.86       5.88       6.06       5.61  
Other loans
     9.98       10.43       10.91       11.48       9.57  
     
Total consumer
     6.48       6.84       7.10       7.17       6.69  
     
Total loans and leases
     5.89       6.51       7.05       7.45       7.03  
     
Total earning assets
     5.85 %     6.40 %     6.88 %     7.25 %     6.92 %
     
 
                                        
Liabilities and Shareholders’ Equity
                                        
Deposits:
                                        
Demand deposits — non-interest bearing
     — %     — %     — %     — %     — %
Demand deposits — interest bearing
     0.55       0.82       1.14       1.53       1.22  
Money market deposits
     1.76       2.83       3.67       3.78       3.85  
Savings and other domestic deposits
     1.83       2.27       2.54       2.54       2.23  
Core certificates of deposit
     4.37       4.68       4.83       4.99       4.79  
     
Total core deposits
     2.67       3.18       3.55       3.69       3.50  
Other domestic deposits of $100,000 or more
     3.77       4.39       4.99       4.79       5.31  
Brokered deposits and negotiable CDs
     3.38       4.43       5.24       5.42       5.53  
Deposits in foreign offices
     1.66       2.16       3.27       3.29       3.16  
     
Total deposits
     2.78       3.36       3.80       3.94       3.84  
Short-term borrowings
     1.66       2.78       3.74       4.10       4.50  
Federal Home Loan Bank advances
     3.01       3.94       5.03       5.31       4.76  
Subordinated notes and other long-term debt
     4.21       5.12       5.93       6.15       5.96  
     
Total interest bearing liabilities
     2.85 %     3.53 %     4.09 %     4.24 %     4.20 %
     
 
                                        
Net interest rate spread
     3.00 %     2.87 %     2.79 %     3.01 %     2.72 %
Impact of non-interest bearing funds on margin
     0.29       0.36       0.47       0.51       0.54  
     
Net interest margin
     3.29 %     3.23 %     3.26 %     3.52 %     3.26 %
     
(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, nonaccrual loans are reflected in the average balances of loans.

5

 

Huntington Bancshares Incorporated
Quarterly Average Loans and Leases and Deposit
   Composition By Business Segment
(Unaudited)
                                                           
    Average Balances     Change
    2008   2007     2Q08 vs 2Q07
(in millions)   Second   First   Fourth   Third   Second     Amount   Percent
           
Loans and direct financing leases (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 5,199     $ 5,099     $ 5,011     $ 4,910     $ 3,644       $ 1,555       42.7 %
Northwest Ohio
     2,251       2,295       2,318       2,331       452         1,799       N.M.  
Greater Cleveland
     3,241       3,148       3,079       2,993       2,064         1,177       57.0  
Greater Akron/Canton
     2,085       2,021       2,037       2,024       1,328         757       57.0  
Southern Ohio/Kentucky
     2,925       2,782       2,576       2,527       2,205         720       32.7  
Mahoning Valley
     883       888       925       871       —         883       —  
Ohio Valley
     872       870       867       759       —         872       —  
West Michigan
     2,572       2,508       2,470       2,484       2,447         125       5.1  
East Michigan
     1,792       1,734       1,767       1,750       1,639         153       9.3  
Western Pennsylvania
     1,015       1,032       1,092       1,069       —         1,015       —  
Pittsburgh
     931       909       896       912       —         931       —  
Central Indiana
     1,527       1,463       1,397       1,406       982         545       55.5  
West Virginia
     1,199       1,160       1,135       1,163       1,128         71       6.3  
Other Regional
     6,062       6,185       6,500       6,754       3,774         2,288       60.6  
           
Regional Banking
     32,554       32,094       32,070       31,953       19,663         12,891       65.6  
Dealer Sales
     5,877       5,720       5,515       5,376       4,888         989       20.2  
Private Financial and Capital Markets Group
     2,594       2,553       2,524       2,499       1,888         706       37.4  
Treasury / Other
    —       —       —       —       —         —       —  
           
Total loans and direct financing leases
   $ 41,025     $ 40,367     $ 40,109     $ 39,828     $ 26,439       $ 14,586       55.2 %
           
 
                                                          
Deposit composition (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 6,596     $ 6,359     $ 6,169     $ 6,026     $ 4,962       $ 1,634       32.9 %
Northwest Ohio
     2,765       2,828       2,825       2,856       1,070         1,695       N.M.  
Greater Cleveland
     3,317       3,189       3,089       2,969       2,024         1,293       63.9  
Greater Akron/Canton
     2,652       2,669       2,634       2,613       1,898         754       39.7  
Southern Ohio/Kentucky
     2,596       2,655       2,644       2,564       2,333         263       11.3  
Mahoning Valley
     1,520       1,542       1,550       1,562       —         1,520       —  
Ohio Valley
     1,282       1,284       1,345       1,380       —         1,282       —  
West Michigan
     2,906       2,904       2,925       2,868       2,784         122       4.4  
East Michigan
     2,458       2,420       2,404       2,423       2,397         61       2.5  
Western Pennsylvania
     1,624       1,631       1,655       1,695       —         1,624       —  
Pittsburgh
     972       963       946       943       —         972       —  
Central Indiana
     1,946       1,888       1,940       1,831       854         1,092       N.M.  
West Virginia
     1,608       1,594       1,567       1,562       1,535         73       4.8  
Other Regional
     851       823       759       861       537         314       58.5  
           
Regional Banking
     33,093       32,749       32,452       32,153       20,394         12,699       62.3  
Dealer Sales
     54       54       59       56       55         (1 )     (1.8 )
Private Financial and Capital Markets Group
     1,518       1,583       1,629       1,645       1,142         376       32.9  
Treasury / Other
    3,362       3,545       3,535       3,798       2,682         680       25.4  
           
Total deposits
   $ 38,027     $ 37,931     $ 37,675     $ 37,652     $ 24,273       $ 13,754       56.7 %
           
N.M., not a meaningful value.
 
(1)   Prior period amounts have been reclassified to conform to the current period presentation.

6

 

Huntington Bancshares Incorporated
Selected Quarterly Income Statement Data (1)
(Unaudited)
                                                           
    2008   2007     2Q08 vs 2Q07
(in thousands, except per share amounts)   Second   First   Fourth   Third   Second     Amount   Percent
           
Interest income
   $ 696,675     $ 753,411     $ 814,398     $ 851,155     $ 542,461       $ 154,214       28.4 %
Interest expense
     306,809       376,587       431,465       441,522       289,070         17,739       6.1  
           
Net interest income
     389,866       376,824       382,933       409,633       253,391         136,475       53.9  
Provision for credit losses
     120,813       88,650       512,082       42,007       60,133         60,680       N.M.  
           
Net interest income (loss) after provision for credit losses
     269,053       288,174       (129,149 )     367,626       193,258         75,795       39.2  
           
Service charges on deposit accounts
     79,630       72,668       81,276       78,107       50,017         29,613       59.2  
Trust services
     33,089       34,128       35,198       33,562       26,764         6,325       23.6  
Brokerage and insurance income
     35,694       36,560       30,288       28,806       17,199         18,495       N.M.  
Other service charges and fees
     23,242       20,741       21,891       21,045       14,923         8,319       55.7  
Bank owned life insurance income
     14,131       13,750       13,253       14,847       10,904         3,227       29.6  
Mortgage banking income (loss)
     12,502       (7,063 )     3,702       9,629       7,122         5,380       75.5  
Securities gains (losses)
     2,073       1,429       (11,551 )     (13,152 )     (5,139 )       7,212       N.M.  
Other income (loss) (2)
     36,069       63,539       (3,500 )     31,830       34,403         1,666       4.8  
           
Total non-interest income
     236,430       235,752       170,557       204,674       156,193         80,237       51.4  
           
Personnel costs
     199,991       201,943       214,850       202,148       135,191         64,800       47.9  
Outside data processing and other services
     30,186       34,361       39,130       40,600       25,701         4,485       17.5  
Net occupancy
     26,971       33,243       26,714       33,334       19,417         7,554       38.9  
Equipment
     25,740       23,794       22,816       23,290       17,157         8,583       50.0  
Amortization of intangibles
     19,327       18,917       20,163       19,949       2,519         16,808       N.M.  
Marketing
     7,339       8,919       16,175       13,186       8,986         (1,647 )     (18.3 )
Professional services
     13,752       9,090       14,464       11,273       8,101         5,651       69.8  
Telecommunications
     6,864       6,245       8,513       7,286       4,577         2,287       50.0  
Printing and supplies
     4,757       5,622       6,594       4,743       3,672         1,085       29.5  
Other expense (2)
     42,876       28,347       70,133       29,754       19,334         23,542       N.M.  
           
Total non-interest expense
     377,803       370,481       439,552       385,563       244,655         133,148       54.4  
           
Income (loss) before income taxes
     127,680       153,445       (398,144 )     186,737       104,796         22,884       21.8  
Provision (benefit) for income taxes
     26,328       26,377       (158,864 )     48,535       24,275         2,053       8.5  
           
Net income (loss)
   $ 101,352     $ 127,068     $ (239,280 )   $ 138,202     $ 80,521       $ 20,831       25.9 %
           
 
                                                          
Dividends declared on preferred shares
     11,151       —       —       —       —         11,151       —  
           
 
                                                          
Net income (loss) applicable to common shares
   $ 90,201     $ 127,068     $ (239,280 )   $ 138,202     $ 80,521       $ 9,680       12.0 %
           
 
                                                          
Average common shares — basic
     366,206       366,235       366,119       365,895       236,032         130,174       55.2 %
Average common shares — diluted (3)
     367,234       367,208       366,119       368,280       239,008         128,226       53.6  
 
                                                          
Per common share
                                                          
Net income (loss) — basic
   $ 0.25     $ 0.35     $ (0.65 )   $ 0.38     $ 0.34       $ (0.09 )     (26.5 )%
Net income (loss) — diluted
     0.25       0.35       (0.65 )     0.38       0.34         (0.09 )     (26.5 )
Cash dividends declared
     0.1325       0.2650       0.2650       0.2650       0.2650         (0.133 )     (50.2 )
 
                                                          
Return on average total assets
     0.73 %     0.93 %     (1.74 )%     1.02 %     0.92         (0.19 )%     (20.7 )
Return on average total shareholders’ equity
     6.4       8.7       (15.3 )     8.8       10.6         (4.2 )     (39.6 )
Return on average tangible shareholders’ equity (4)
     15.0       22.0       (30.7 )     19.7       13.5         1.5       11.1  
Net interest margin (5)
     3.29       3.23       3.26       3.52       3.26         0.03       0.9  
Efficiency ratio (6)
     56.9       57.0       73.5       57.7       57.8         (0.9 )     (1.6 )
Effective tax rate (benefit)
     20.6       17.2       (39.9 )     26.0       23.2         (2.6 )     (11.2 )
 
                                                          
Revenue — fully taxable equivalent (FTE)
                                                          
Net interest income
   $ 389,866     $ 376,824     $ 382,933     $ 409,633     $ 253,391       $ 136,475       53.9  
FTE adjustment
     5,624       5,502       5,363       5,712       4,127         1,497       36.3  
           
Net interest income (5)
     395,490       382,326       388,296       415,345       257,518         137,972       53.6  
Non-interest income
     236,430       235,752       170,557       204,674       156,193         80,237       51.4  
           
Total revenue (5)
   $ 631,920     $ 618,078     $ 558,853     $ 620,019     $ 413,711       $ 218,209       52.7 %
           
N.M., not a meaningful value.
(1)   Comparisons for presented periods are impacted by a number of factors. Refer to “Significant Items Influencing Financial Performance Comparisons”.
 
(2)   Automobile operating lease income and expense is included in ‘Other Income’ and ‘Other Expense’, respectively.
 
(3)   For the three months ended June 30, 2008, the impact of the convertible preferred stock issued in April of 2008 was excluded from the diluted share calculation. It was excluded because the result would have been higher than basic earnings per common share (anti-dilutive) for the period.
 
(4)   Net income less expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible equity equals average total stockholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.
 
(5)   On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(6)   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
(Unaudited)
                                                           
    2008   2007     2Q08 vs 2Q07
(in thousands, except as noted)   Second   First   Fourth   Third   Second     Amount   Percent
           
Mortgage Banking Income
                                                          
Origination and secondary marketing
   $ 13,098     $ 9,332     $ 5,879     $ 8,375     $ 6,771       $ 6,327       93.4 %
Servicing fees
     11,166       10,894       11,405       10,811       6,976         4,190       60.1  
Amortization of capitalized servicing(1)
     (7,024 )     (6,914 )     (5,929 )     (6,571 )     (4,449 )       (2,575 )     (57.9 )
Other mortgage banking income
     5,959       4,331       4,113       3,016       2,822         3,137       N.M.  
           
Sub-total
     23,199       17,643       15,468       15,631       12,120         11,079       91.4  
MSR valuation adjustment (1)
     39,031       (18,093 )     (21,245 )     (9,863 )     16,034         22,997       N.M.  
Net trading (losses) gains related to MSR hedging
     (49,728 )     (6,613 )     9,479       3,861       (21,032 )       (28,696 )     N.M.  
           
Total mortgage banking income (loss)
   $ 12,502     $ (7,063 )   $ 3,702     $ 9,629     $ 7,122       $ 5,380       75.5 %
           
 
                                                          
Capitalized mortgage servicing rights(2)
   $ 240,024     $ 191,806     $ 207,894     $ 228,933     $ 155,420       $ 84,604       54.4 %
Total mortgages serviced for others (in millions)(2)
     15,770       15,138       15,088       15,073       8,693         7,077       81.4  
MSR % of investor servicing portfolio
     1.52 %     1.27 %     1.38 %     1.52 %     1.79 %       (0.27 )%     (15.1 )
           
 
                                                          
Net Impact of MSR Hedging
                                                          
MSR valuation adjustment (1)
   $ 39,031     $ (18,093 )   $ (21,245 )   $ (9,863 )   $ 16,034       $ 22,997       N.M. %
Net trading (losses) gains related to MSR hedging
     (49,728 )     (6,613 )     9,479       3,861       (21,032 )       (28,696 )     N.M.  
Net interest income related to MSR hedging
     9,364       5,934       3,192       2,357       248         9,116       N.M.  
           
Net impact of MSR hedging
   $ (1,333 )   $ (18,772 )   $ (8,574 )   $ (3,645 )   $ (4,750 )     $ 3,417       (71.9 )%
           
N.M., not a meaningful value.
(1)   The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
 
(2)   At period end.

8

 

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
                                         
    2008   2007
(in thousands)   Second   First   Fourth   Third   Second
     
 
                                        
Allowance for loan and lease losses, beginning of period
   $ 627,615     $ 578,442     $ 454,784     $ 307,519     $ 282,976  
 
                                        
Acquired allowance for loan and lease losses
     —       —       —       188,128       —  
Loan and lease losses
     (78,084 )     (60,804 )     (388,506 )     (57,466 )     (44,158 )
Recoveries of loans previously charged off
     12,837       12,355       10,599       10,360       9,658  
     
Net loan and lease losses
     (65,247 )     (48,449 )     (377,907 )     (47,106 )     (34,500 )
     
Provision for loan and lease losses
     117,035       97,622       503,781       36,952       59,043  
Allowance for loans transferred to held-for-sale
     —       —       (2,216 )     (30,709 )     —  
     
Allowance for loan and lease losses, end of period
   $ 679,403     $ 627,615     $ 578,442     $ 454,784     $ 307,519  
     
 
                                        
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 57,556     $ 66,528     $ 58,227     $ 41,631     $ 40,541  
 
                                        
Acquired AULC
     —       —       —       11,541       —  
Provision for (reduction in) unfunded loan commitments and letters of credit losses
     3,778       (8,972 )     8,301       5,055       1,090  
     
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 61,334     $ 57,556     $ 66,528     $ 58,227     $ 41,631  
     
 
Total allowances for credit losses
   $ 740,737     $ 685,171     $ 644,970     $ 513,011     $ 349,150  
     
 
                                        
Allowance for loan and lease losses (ALLL) as % of:
                                        
Transaction reserve
     1.45 %     1.34 %     1.27 %     0.97 %     0.94 %
Economic reserve
     0.21       0.19       0.17       0.17       0.21  
     
Total loans and leases
     1.66 %     1.53 %     1.44 %     1.14 %     1.15 %
     
Nonaccrual loans and leases (NALs)
     127       166       181       182       145  
 
                                        
Total allowances for credit losses (ACL) as % of:
                                        
Total loans and leases
     1.80 %     1.67 %     1.61 %     1.28 %     1.30 %
Nonaccrual loans and leases
     138       182       202       206       165  
     

9

 

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
                                         
    2008   2007
(in thousands)   Second   First   Fourth   Third   Second
     
 
                                        
Net charge-offs by loan and lease type:
                                        
Commercial:
                                        
Commercial and industrial
   $ 12,361     $ 10,732     $ 323,905     $ 12,641     $ 7,251  
Commercial real estate:
                                        
Construction
     575       122       6,800       2,157       2,888  
Commercial
     14,524       4,153       13,936       2,506       10,396  
     
Commercial real estate
     15,099       4,275       20,736       4,663       13,284  
     
Total commercial
     27,460       15,007       344,641       17,304       20,535  
     
Consumer:
                                        
Automobile loans
     8,522       8,008       7,347       5,354       1,631  
Automobile leases
     2,928       3,211       3,046       2,561       2,699  
     
Automobile loans and leases
     11,450       11,219       10,393       7,915       4,330  
Home equity
     13,984       14,515       12,212       10,841       5,405  
Residential mortgage
     4,286       2,927       3,340       4,405       1,695  
Other loans
     8,067       4,781       7,321       6,641       2,535  
     
Total consumer
     37,787       33,442       33,266       29,802       13,965  
     
 
Total net charge-offs
   $ 65,247     $ 48,449     $ 377,907     $ 47,106     $ 34,500  
     
 
                                        
Net charge-offs — annualized percentages:
                                        
Commercial:
                                        
Commercial and industrial
     0.36 %     0.32 %     9.76 %     0.39 %     0.36 %
Commercial real estate:
                                        
Construction
     0.11       0.02       1.44       0.48       0.92  
Commercial
     0.77       0.23       0.78       0.14       1.23  
     
Commercial real estate
     0.63       0.18       0.92       0.21       1.14  
     
Total commercial
     0.47       0.27       6.18       0.31       0.64  
     
Consumer:
                                        
Automobile loans
     0.94       0.97       0.96       0.73       0.28  
Automobile leases
     1.28       1.18       0.96       0.72       0.70  
     
Automobile loans and leases
     1.01       1.02       0.96       0.73       0.45  
Home equity
     0.76       0.80       0.67       0.58       0.43  
Residential mortgage
     0.33       0.22       0.25       0.32       0.16  
Other loans
     4.62       2.68       4.02       4.97       2.39  
     
Total consumer
     0.85       0.75       0.75       0.67       0.41  
     
 
Net charge-offs as a % of average loans
     0.64 %     0.48 %     3.77 %     0.47 %     0.52 %
     

10

 

Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans (NALs), Nonperforming Assets (NPAs) and Past Due Loans and Leases
(Unaudited)
                                         
    2008   2007
(in thousands)   June 30,   March 31,   December 31,   September 30,   June 30,
     
 
                                        
Nonaccrual loans and leases:
                                        
Commercial and industrial
   $ 161,345     $ 101,842     $ 87,679     $ 82,960     $ 65,846  
Commercial real estate
     261,739       183,000       148,467       95,587       88,965  
Residential mortgage
     82,882       66,466       59,557       47,738       39,868  
Home equity
     29,076       26,053       24,068       23,111       16,837  
     
Total nonaccrual loans and leases
     535,042       377,361       319,771       249,396       211,516  
Restructured loans
     368,379       1,157,361       1,187,368       —       —  
Other real estate, net:
                                        
Residential
     59,119       63,675       60,804       49,555       47,590  
Commercial
     13,259       10,181       14,467       19,310       2,079  
     
Total other real estate, net
     72,378       73,856       75,271       68,865       49,669  
Impaired loans held for sale (1)
     14,759       66,353       73,481       100,485       —  
Other NPAs (2)
     2,557       2,836       4,379       16,296       —  
     
Total nonperforming assets
   $ 993,115     $ 1,677,767     $ 1,660,270     $ 435,042     $ 261,185  
     
 
                                        
Nonaccrual loans and leases as a % of total loans and leases (NAL ratio)
     1.30 %     0.92 %     0.80 %     0.62 %     0.79 %
 
                                        
NPA ratio (3)
     2.41       4.08       4.13       1.08       0.97  
 
                                        
Accruing loans and leases past due 90 days or more
   $ 136,914     $ 152,897     $ 140,977     $ 115,607     $ 67,277  
 
                                        
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.33 %     0.37 %     0.35 %     0.29 %     0.25 %
                                         
    2008   2007
(in thousands)   Second   First   Fourth   Third   Second
     
 
                                        
Nonperforming assets, beginning of period
   $ 1,677,767     $ 1,660,270     $ 435,042     $ 261,185     $ 206,678  
New nonperforming assets
     256,308       141,090       211,134       92,986       112,348  
Restructured loans (4)
     (762,033 )     —       1,187,368       —       —  
Acquired nonperforming assets
     —       —       —       144,492       —  
Returns to accruing status
     (5,817 )     (13,484 )     (5,273 )     (8,829 )     (4,674 )
Loan and lease losses
     (40,808 )     (27,896 )     (62,502 )     (28,031 )     (27,149 )
Payments
     (73,040 )     (68,753 )     (30,756 )     (17,589 )     (19,662 )
Sales
     (59,262 )     (13,460 )     (74,743 )     (9,172 )     (6,356 )
     
Nonperforming assets, end of period
   $ 993,115     $ 1,677,767     $ 1,660,270     $ 435,042     $ 261,185  
     
 
(1)   Represent impaired loans obtained from the Sky Financial acquisition. Held for sale loans are carried at the lower of cost or fair value less costs to sell. The decline from March 31, 2008 to June 30, 2008 was primarily due to the sale of these loans.
 
(2)   Other NPAs represent certain investment securities backed by mortgage loans to borrowers with lower FICO scores.
 
(3)   Nonperforming assets divided by the sum of loans and leases, impaired loans held for sale, net other real estate, and other NPAs.
 
(4)   Restructured loans include loans to Franklin Credit Management Corporation (Franklin) that were restructured during the 2007 fourth quarter, and the subsequent removal of the Franklin Tranche A loans from non-performing status during the 2008 second quarter.

11

 

Huntington Bancshares Incorporated
Quarterly Common Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
                                         
    2008     2007  
(in thousands, except per share amounts)   Second     First     Fourth     Third     Second  
     
 
                                        
Common stock price, per share
                                        
High (1)
   $ 11.750     $ 14.870     $ 18.390     $ 22.930     $ 22.960  
Low (1)
     4.940       9.640       13.500       16.050       21.300  
Close
     5.770       10.750       14.760       16.980       22.740  
Average closing price
     8.783       12.268       16.125       18.671       22.231  
 
                                        
Dividends, per share
                                        
Cash dividends declared per common share
   $ 0.1325     $ 0.2650     $ 0.2650     $ 0.2650     $ 0.2650  
 
                                        
Common shares outstanding
                                        
Average — basic
     366,206       366,235       366,119       365,895       236,032  
Average — diluted
     367,234       367,208       366,119       368,280       239,008  
Ending
     366,197       366,226       366,262       365,898       236,244  
 
                                        
Book value per common share
   $ 15.87     $ 16.13     $ 16.24     $ 17.08     $ 12.97  
Tangible book value per common share (2)
     6.82       7.08       7.13       8.10       10.41  
 
                                         
Capital data            
             
    2008     2007  
(in millions)   June 30,     March 31,     December 31,     September 30,     June 30,  
     
 
                                        
Calculation of tangible equity / asset ratio:
                                        
Total shareholders’ equity
   $ 6,381     $ 5,907     $ 5,949     $ 6,250     $ 3,064  
Less: goodwill
     (3,057 )     (3,047 )     (3,059 )     (2,996 )     (570 )
Less: other intangible assets
     (395 )     (409 )     (428 )     (443 )     (55 )
Add: related deferred tax liability (2)
     138       143       150       155       19  
 
                              
Total tangible equity
     3,068       2,593       2,612       2,965       2,459  
Less: Preferred equity
     (569 )     —       —       —       —  
 
                              
Total tangible common equity
   $ 2,499     $ 2,593     $ 2,612     $ 2,965     $ 2,459  
     
 
                                        
Total assets
   $ 55,334     $ 56,052     $ 54,697     $ 55,304     $ 36,421  
Less: goodwill
     (3,057 )     (3,047 )     (3,059 )     (2,996 )     (570 )
Less: other intangible assets
     (395 )     (409 )     (428 )     (443 )     (55 )
Add: related deferred tax liability (2)
     138       143       150       155       19  
 
                              
Total tangible assets
   $ 52,020     $ 52,739     $ 51,360     $ 52,020     $ 35,815  
     
 
                                        
Tangible equity / asset ratio
     5.90 %     4.92 %     5.08 %     5.70 %     6.87 %
Tangible common equity / asset ratio
     4.80       4.92       5.08       5.70       6.87  
 
                                        
Other capital data:
                                        
Total risk-weighted assets (3)
   $ 45,540     $ 46,546     $ 46,044     $ 45,931     $ 32,121  
 
                                        
Tier 1 leverage ratio (3)
     7.88 %     6.83 %     6.77 %     7.57 %     9.07 %
Tier 1 risk-based capital ratio (3)
     9.03       7.56       7.51       8.35       9.74  
Total risk-based capital ratio (3)
     12.31       10.87       10.85       11.58       13.49  
 
                                        
Tangible equity / risk-weighted assets ratio (3)
     6.74       5.57       5.67       6.46       7.66  
Average equity / average assets
     11.44       10.70       11.40       11.50       8.66  
 
                                        
Other data:
                                        
Number of employees (full-time equivalent)
     11,258       11,786       11,925       12,312       8,410  
Number of domestic full-service banking offices (4)
     625       627       625       620       379  
 
(1)   High and low stock prices are intra-day quotes obtained from NASDAQ.
 
(2)   Other intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.
 
(3)   June 30, 2008 figures are estimated. Based on an interim decision by the banking agencies on December 14, 2006, Huntington has excluded the impact of adopting Statement 158 from the regulatory capital calculations.
 
(4)   Includes Private Financial Group offices.

12

 

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)   2008   2007   Amount   Percent
     
Assets
                                
Interest bearing deposits in banks
   $ 274     $ 212     $ 62       29.2 %
Trading account securities
     1,214       139       1,075       N.M.  
Federal funds sold and securities purchased under resale agreements
     668       538       130       24.2  
Loans held for sale
     533       266       267       N.M.  
Investment securities:
                                
Taxable
     3,873       3,423       450       13.1  
Tax-exempt
     710       610       100       16.4  
     
Total investment securities
     4,583       4,033       550       13.6  
Loans and leases: (1)
                                
Commercial:
                                
Commercial and industrial
     13,487       8,077       5,410       67.0  
Commercial real estate:
                                
Construction
     2,026       1,208       818       67.7  
Commercial
     7,418       3,355       4,063       N.M.  
     
Commercial real estate
     9,444       4,563       4,881       N.M.  
     
Total commercial
     22,931       12,640       10,291       81.4  
     
Consumer:
                                
Automobile loans
     3,472       2,269       1,203       53.0  
Automobile leases
     1,003       1,624       (621 )     (38.2 )
     
Automobile loans and leases
     4,475       3,893       582       14.9  
Home equity
    7,320       4,943       2,377       48.1  
Residential mortgage
    5,264       4,423       841       19.0  
Other loans
     706       423       283       66.9  
     
Total consumer
     17,765       13,682       4,083       29.8  
     
Total loans and leases
     40,696       26,322       14,374       54.6  
Allowance for loan and lease losses
     (642 )     (288 )     (354 )     N.M.  
     
Net loans and leases
     40,054       26,034       14,020       53.9  
     
Total earning assets
     47,968       31,510       16,458       52.2  
     
Cash and due from banks
     990       752       238       31.6  
Intangible assets
     3,460       626       2,834       N.M.  
All other assets
     3,436       2,441       995       40.8  
     
Total Assets
   $ 55,212     $ 35,041     $ 20,171       57.6 %
     
 
                                
Liabilities and Shareholders’ Equity
                                
Deposits:
                                
Demand deposits — non-interest bearing
   $ 5,047     $ 3,561     $ 1,486       41.7 %
Demand deposits — interest bearing
     4,010       2,377       1,633       68.7  
Money market deposits
     6,510       5,477       1,033       18.9  
Savings and other domestic deposits
     5,026       2,915       2,111       72.4  
Core certificates of deposit
    10,874       5,523       5,351       96.9  
     
Total core deposits
     31,467       19,853       11,614       58.5  
Other domestic deposits of $100,000 or more
     2,063       1,101       962       87.4  
Brokered deposits and negotiable CDs
     3,451       2,850       601       21.1  
Deposits in foreign offices
     998       557       441       79.2  
     
Total deposits
     37,979       24,361       13,618       55.9  
Short-term borrowings
     2,813       1,970       843       42.8  
Federal Home Loan Bank advances
     3,399       1,229       2,170       N.M.  
Subordinated notes and other long-term debt
     3,872       3,478       394       11.3  
     
Total interest bearing liabilities
     43,016       27,477       15,539       56.6  
     
All other liabilities
     1,034       974       60       6.2  
Shareholders’ equity
     6,115       3,029       3,086       N.M.  
     
Total Liabilities and Shareholders’ Equity
   $ 55,212     $ 35,041     $ 20,171       57.6 %
     
N.M.,   not a meaningful value.
 
(1)   For purposes of this analysis, nonaccrual loans are reflected in the average balances of loans.

13

 

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)   2008   2007
 
Assets
                
Interest bearing deposits in banks
     3.43 %     5.09 %
Trading account securities
     5.18       5.66  
Federal funds sold and securities purchased under resale agreements
     2.65       5.26  
Loans held for sale
     5.68       6.01  
Investment securities:
                
Taxable
     5.60       6.12  
Tax-exempt
     6.76       6.67  
 
Total investment securities
     5.78       6.21  
Loans and leases (3):
                
Commercial:
                
Commercial and industrial
     5.92       7.38  
Commercial real estate:
                
Construction
     5.34       8.02  
Commercial
     5.86       7.49  
 
Commercial real estate
     5.75       7.63  
 
Total commercial
     5.85       7.47  
 
Consumer:
                
Automobile loans
     7.18       7.01  
Automobile leases
     5.56       5.29  
 
Automobile loans and leases
     6.82       6.29  
Home equity
    6.82       7.65  
Residential mortgage
    5.82       5.58  
Other loans
     10.21       9.55  
 
Total consumer
     6.66       6.65  
 
Total loans and leases
     6.20       7.04  
 
Total earning assets
     6.13 %     6.95 %
 
 
                
Liabilities and Shareholders’ Equity
                
Deposits:
                
Demand deposits — non-interest bearing
     — %     — %
Demand deposits — interest bearing
     0.68       1.21  
Money market deposits
     2.31       3.81  
Savings and other domestic deposits
     2.05       2.16  
Core certificates of deposit
     4.52       4.76  
 
Total core deposits
     2.93       3.46  
Other domestic deposits of $100,000 or more
     4.07       5.32  
Brokered deposits and negotiable CDs
     3.92       5.51  
Deposits in foreign offices
     1.88       3.07  
 
Total deposits
     3.07       3.83  
Short-term borrowings
     2.21       4.41  
Federal Home Loan Bank advances
     3.47       4.61  
Subordinated notes and other long-term debt
     4.66       5.87  
 
Total interest bearing liabilities
     3.19       4.16  
 
 
                
Net interest rate spread
     2.94       2.79  
Impact of non-interest bearing funds on margin
     0.32       0.52  
 
Net interest margin
     3.26 %     3.31 %
 
(1)   Fully taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 15 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, nonaccrual loans are reflected in the average balances of loans.

14

 

Huntington Bancshares Incorporated
Selected Year to Date Income Statement Data (1)
(Unaudited)
                                 
    Six Months Ended June 30,   Change
(in thousands, except per share amounts)   2008   2007   Amount   Percent
     
Interest income
   $ 1,450,086     $ 1,077,410     $ 372,676       34.6 %
Interest expense
     683,396       568,464       114,932       20.2  
     
Net interest income
     766,690       508,946       257,744       50.6  
Provision for credit losses
     209,463       89,539       119,924       N.M.  
     
Net interest income after provision for credit losses
     557,227       419,407       137,820       32.9  
     
Service charges on deposit accounts
     152,298       94,810       57,488       60.6  
Trust services
     67,217       52,658       14,559       27.6  
Brokerage and insurance income
     72,254       33,281       38,973       N.M.  
Other service charges and fees
     43,983       28,131       15,852       56.4  
Bank owned life insurance income
     27,881       21,755       6,126       28.2  
Mortgage banking income
     5,439       16,473       (11,034 )     (67.0 )
Securities gains (losses)
     3,502       (5,035 )     8,537       N.M.  
Other income (2)
     99,608       59,297       40,311       68.0  
     
Total non-interest income
     472,182       301,370       170,812       56.7  
     
Personnel costs
     401,934       269,830       132,104       49.0  
Outside data processing and other services
     64,547       47,515       17,032       35.8  
Net occupancy
     60,214       39,325       20,889       53.1  
Equipment
     49,534       35,376       14,158       40.0  
Amortization of intangibles
     38,244       5,039       33,205       N.M.  
Marketing
     16,258       16,682       (424 )     (2.5 )
Professional services
     22,842       14,583       8,259       56.6  
Telecommunications
     13,109       8,703       4,406       50.6  
Printing and supplies
     10,379       6,914       3,465       50.1  
Other expense (2)
     71,223       42,760       28,463       66.6  
     
Total non-interest expense
     748,284       486,727       261,557       53.7  
     
Income before income taxes
     281,125       234,050       47,075       20.1  
Provision for income taxes
     52,705       57,803       (5,098 )     (8.8 )
     
Net income
   $ 228,420     $ 176,247     $ 52,173       29.6 %
     
 
                                
Dividends declared on preferred shares
     11,151       —       11,151       —  
     
 
                                
Net income applicable to common shares
   $ 217,269     $ 176,247     $ 41,022       23.3 %
     
 
                                
Average common shares — basic
     366,221       235,809       130,412       55.3 %
Average common shares — diluted (3)
     387,322       238,881       148,441       62.1  
 
                                
Per common share
                                
Net income per common share — basic
   $ 0.59     $ 0.75     $ (0.16 )     (21.3 )%
Net income per common share — diluted
     0.59       0.74       (0.15 )     (20.3 )
Cash dividends declared
     0.3975       0.5300       (0.1325 )     (25.0 )
 
                                
Return on average total assets
     0.83 %     1.01 %     (0.18 )%     (17.8 )%
Return on average total shareholders’ equity
     7.5       11.7       (4.2 )     (35.9 )
Return on average tangible shareholders’ equity (4)
     18.2       14.9       3.3       22.1  
Net interest margin (5)
     3.26       3.31       (0.05 )     (1.5 )
Efficiency ratio (6)
     57.0       58.5       (1.5 )     (2.6 )
Effective tax rate
     18.7       24.7       (6.0 )     (24.3 )
 
                                
Revenue — fully taxable equivalent (FTE)
                                
Net interest income
   $ 766,690     $ 508,946     $ 257,744       50.6 %
FTE adjustment (5)
     11,126       8,174       2,952       36.1  
     
Net interest income
     777,816       517,120       260,696       50.4  
Non-interest income
     472,182       301,370       170,812       56.7  
     
Total revenue
   $ 1,249,998     $ 818,490     $ 431,508       52.7 %
     
N.M., not a meaningful value.
 
(1)   Comparisons for presented periods are impacted by a number of factors. Refer to the “Significant Items Influencing Financial Performance Comparisons”.
 
(2)   Automobile operating lease income and expense is included in ‘Other Income’ and ‘Other Expense’, respectively.
 
(3)   For the six months ended June 30, 2008, the impact of the convertible preferred stock issued in April of 2008 was included in the diluted share calculation. It was included because the result was less than basic earnings per share (dilutive) on a year-to-date basis.
 
(4)   Net income less expense for amortization of intangibles for the period divided by average tangible shareholders’ equity. Average tangible shareholders’ equity equals average total shareholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles and average intangible assets are net of deferred tax liability, and calculated assuming a 35% tax rate.
 
(5)   On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(6)   Non-interest expense less amortization of intangibles divided by the sum of FTE net interest income and non-interest income excluding securities losses.

15

 

Huntington Bancshares Incorporated
Year to Date Mortgage Banking Income
(Unaudited)
                                 
    Six Months Ended June 30,   Change
(in thousands, except as noted)   2008   2007   Amount   Percent
     
Mortgage Banking Income
                                
Origination and secondary marketing
   $ 22,430     $ 11,711     $ 10,719       91.5 %
Servicing fees
     22,060       13,796       8,264       59.9  
Amortization of capitalized servicing (1)
     (13,938 )     (8,087 )     (5,851 )     (72.4 )
Other mortgage banking income
     10,290       6,069       4,221       69.6  
     
Sub-total
     40,842       23,489       17,353       73.9  
MSR valuation adjustment (1)
     20,938       14,977       5,961       39.8  
 
Net trading losses related to MSR hedging
     (56,341 )     (21,993 )     (34,348 )     N.M.  
     
Total mortgage banking income
   $ 5,439     $ 16,473     $ (11,034 )     (67.0 )%
     
 
                                
Capitalized mortgage servicing rights (2)
   $ 240,024     $ 155,420     $ 84,604       54.4 %
Total mortgages serviced for others (in millions) (2)
     15,770       8,693       7,077       81.4  
MSR % of investor servicing portfolio
     1.52 %     1.79 %     (0.27 )%     (15.1 )
     
 
Net Impact of MSR Hedging
                                
MSR valuation adjustment (1)
   $ 20,938     $ 14,977     $ 5,961       39.8 %
Net trading losses related to MSR hedging
     (56,341 )     (21,993 )     (34,348 )     N.M.  
Net interest income related to MSR hedging
     15,298       248       15,050       N.M.  
     
Net impact of MSR hedging
   $ (20,105 )   $ (6,768 )   $ (13,337 )     N.M. %
     
N.M., not a meaningful value.
 
(1)   The change in fair value for the period represents the MSR valuation adjustment, net of amortization of capitalized servicing.
 
(2)   At period end.

16

 

Huntington Bancshares Incorporated
Year to Date Credit Reserves Analysis
(Unaudited)
                 
    Six Months Ended June 30,
(in thousands)   2008   2007
 
 
Allowance for loan and lease losses, beginning of period
   $ 578,442     $ 272,068  
 
                
Loan and lease losses
     (138,888 )     (71,971 )
Recoveries of loans previously charged off
     25,192       19,353  
 
Net loan and lease losses
     (113,696 )     (52,618 )
 
Provision for loan and lease losses
     214,657       88,069  
 
Allowance for loan and lease losses, end of period
   $ 679,403     $ 307,519  
 
 
                
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 66,527     $ 40,161  
(Reduction in) provision for unfunded loan commitments and letters of credit losses
     (5,194 )     1,470  
 
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 61,333     $ 41,631  
 
 
                
Total allowances for credit losses
   $ 740,736     $ 349,150  
 
 
                
Allowance for loan and lease losses (ALLL) as% of:
                
Transaction reserve
     1.45 %     0.94 %
Economic reserve
     0.21       0.21  
 
Total loans and leases
     1.66 %     1.15 %
 
Nonaccrual loans and leases (NALs)
     127       145  
 
                
Total allowances for credit losses (ACL) as% of:
                
Total loans and leases
     1.80 %     1.30 %
Nonaccrual loans and leases
     138       165  
 

17

 

Huntington Bancshares Incorporated
Year to Date Net Charge-Off Analysis
(Unaudited)
                 
    Six Months Ended June 30,
 
(in thousands)   2008   2007
 
 
                
Net charge-offs by loan and lease type:
                
Commercial:
                
Commercial and industrial
   $ 23,093     $ 9,294  
Commercial real estate:
                
Construction
     697       2,897  
Commercial
     18,677       10,808  
 
Commercial real estate
     19,374       13,705  
 
Total commercial
     42,467       22,999  
 
Consumer:
                
Automobile loans
     16,530       4,484  
Automobile leases
     6,139       4,900  
 
Automobile loans and leases
     22,669       9,384  
Home equity
     28,499       11,373  
Residential mortgage
     7,213       3,626  
Other loans
     12,848       5,236  
 
Total consumer
     71,229       29,619  
 
 
                
Total net charge-offs
   $ 113,696     $ 52,618  
 
 
                
Net charge-offs — annualized percentages:
                
Commercial:
                
Commercial and industrial
     0.34 %     0.23 %
Commercial real estate:
                
Construction
     0.07       0.48  
Commercial
     0.50       0.64  
 
Commercial real estate
     0.41       0.60  
 
Total commercial
     0.37       0.36  
 
Consumer:
                
Automobile loans
     0.95       0.40  
Automobile leases
     1.22       0.60  
 
Automobile loans and leases
     1.01       0.48  
Home equity
     0.78       0.46  
Residential mortgage
     0.27       0.16  
Other loans
     3.64       2.48  
 
Total consumer
     0.80       0.43  
 
 
                
Net charge-offs as a % of average loans
     0.56 %     0.40 %
 

18

 

Huntington Bancshares Incorporated
Year to Date Nonaccrual Loans (NALs), Nonperforming Assets
(NPAs) and Past Due Loans and Leases
(Unaudited)
                 
    Six Months Ended June 30,
 
(in thousands)   2008   2007
 
 
                
Nonaccrual loans and leases:
                
Middle market commercial and industrial
   $ 161,345     $ 65,846  
Middle market commercial real estate
     261,739       88,965  
Residential mortgage
     82,882       39,868  
Home equity
     29,076       16,837  
 
Total nonaccrual loans and leases
     535,042       211,516  
Restructured loans
     368,379       —  
Other real estate, net:
                
Residential
     59,119       47,590  
Commercial
     13,259       2,079  
 
Total other real estate, net
     72,378       49,669  
Impaired loans held for sale (1)
     14,759       —  
Other NPAs (2)
     2,557       —  
 
 
                
Total nonperforming assets
   $ 993,115     $ 261,185  
 
 
                
Nonperforming loans and leases as a % of total loans and leases
     1.30 %     0.79 %
 
                
NPA ratio (3)
     2.41       0.97  
 
                
Accruing loans and leases past due 90 days or more
   $ 136,914     $ 67,277  
 
                
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.33 %     0.25 %
                 
    Six Months Ended June 30,
 
(in thousands)   2008   2007
 
 
                
Nonperforming assets, beginning of period
   $ 1,660,270     $ 193,620  
New nonperforming assets
     397,398       163,936  
Restructured loans (4)
     (762,033 )     —  
Returns to accruing status
     (19,301 )     (10,850 )
Loan and lease losses
     (68,704 )     (36,221 )
Payments
     (141,793 )     (37,748 )
Sales
     (72,722 )     (11,552 )
 
 
                
Non-performing assets, end of period
   $ 993,115     $ 261,185  
 
(1)   Represent impaired loans obtained from the Sky acquisition. Held for sale loans are carried at the lower of cost or fair value less costs to sell.
 
(2)   Other NPAs represent certain investment securities backed by mortgage loans to borrowers with lower FICO scores.
 
(3)   Nonperforming assets divided by the sum of loans and leases, impaired loans held for sale, net other real estate, and other NPAs.
 
(4)   Restructured loans include loans to Franklin Credit Management Corporation (Franklin) that were restructured during the 2007 fourth quarter, and the subsequent removal of the Franklin Tranche A loans from non-performing status during the 2008 second quarter.

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