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HUNTINGTON BANCSHARES INCORPORATED (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of filing fee (Check the appropriate box): [ X ] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): --------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------- (5) Total fee paid: ------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ---------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------ (3) Filing Party: -------------------------------------------------- (4) Date Filed: ---------------------------------------------------- ================================ Huntington Bancshares Incorporated [LOGO] ================================ Building on Core Competencies o 34th Largest Banking Organization in United States o Total Assets $21.6 billion; ROA 1.35% o Strong Geographic Markets o Technology Pioneering o Track Record of Improving Efficiencies LOGO Huntington Bancshares FASTEST GROWING MARKETS IN U.S. o Principal states: Ohio, Michigan, Kentucky, Indiana, West Virginia and Florida o Growing faster than the U.S. as a whole
Huntington 5 Year Growth Rate Market United States ~~Population 0.93% 1.05% Gross State Product 2.77% 1.88% Employment 1.74% 1.39%~~
LOGO Huntington Bancshares TECHNOLOGY PIONEER: A STEP-BY-STEP PLAN 1990: Basic Data Integration and Voice Response 1991: Developing Technology Partnerships 1992: Direct Bank, Chex 1993: Bill Pay 1994: Huntington Access, Business Service Center 1995: Debit Card, EC Company 1996: CyberMark LLC, Huntington Web Bank/ Security First Network Bank 1997: Hogan, Huntington View, Data Warehouse LOGO Huntington Bancshares EFFICIENCY RATIO o Increased Revenues o Utilization of Technology
1994 1995 1996 1997 ~~61 59 56 50~~
LOGO Huntington Bancshares ONE BANK o Consolidate Operations and Support o Migrate to Common Operating System o Streamline Sales - Distribution Network o Merge All Banks into Huntington Nat'l Bank LOGO Huntington Bancshares NEW CORE COMPETENCIES o Manage Integrated Distribution Systems o Branch as Sales Office o Electronic Banking o Home Banking - Web Bank - Direct Bank o Private Financial Group o Strengthen Sales Focus o Integrated Marketing Strategy o Business Enabling Technology LOGO Huntington Bancshares MAXIMIZE SALES - DISTRIBUTION NETWORK
Banking Office 1995 1996 1997 Configuration ------------------------------------------------------ ADDING "TOUCHPOINTS" Full Service 288 283 280 FOR EXPANDED REACH ------------------------------------------------------ ATM 381 613 858 ------------------------------------------------------ Other 34 47 57 ------------------------------------------------------ Total 703 943 1195 ------------------------------------------------------ Growth 19% 34% 27% ------------------------------------------------------
LOGO Huntington Bancshares BRANCH AS SALES OFFICE PAST -------------- PRESENT o 75 o 45 o 25 BALANCES ------------ UNITS OF SALE LOGO Huntington Bancshares ELECTRONIC BANKING REVENUE (in millions) 1995 1996 1997 --------------------------------------------------- o Access Offices 2.175 10.358 21.169 o ATM Deployment o Access/Debit Cards o Bill Pay o Home Banking LOGO Huntington Bancshares HOME BANKING Web Bank + Huntington Direct = Huntington at Home LOGO Huntington Bancshares HUNTINGTON WEB BANK HOUSEHOLD PROFITABILITY
Web Bank Total Bank Households 4,508 1,363,300 Avg. Accounts/HH 6.8 2.8 Avg. Services/HH 5.2 2.2 Avg. Profit/HH $54.77 $26.84 Avg. Balances/HH $16,714 $16,981
LOGO Huntington Bancshares HUNTINGTON DIRECT Total Calls (MM) Total Sales (M) Sales/Call Ratio(%) '95 '96 '97 '95 '96 '97 '95 '96 '97 3.2 7.9 10.8 200 270 343 11.3 12.9 13.3 Plan Plan Plan LOGO Huntington Bancshares "PRIVATE FINANCIAL GROUP" o Reaches Out to Baby Boomers o Private Banking o Trust Up 12% o Insurance Up 31% o 450 Licensed Brokers o Investment Sales up 51% LOGO Huntington Bancshares NEW CORE COMPETENCIES o Manage Integrated Distribution Systems o Branch as Sales Office o Electronic Banking o Home Banking o Web Bank o Direct Bank LOGO o Private Financial Group o Strengthen Sales Focus o Integrated Marketing Strategy o Business Enabling Technology LOGO Huntington Bancshares A NEW SALES CULTURE o Cohen-Brown Sales Training o Focus on Unit Sales o new compensation structure LOGO o emphasis on non-interest income o Sales Goals For Every Employee o daily reviews LOGO Huntington Bancshares TOTAL RETAIL SALES PER FTE Week 1 Week 5 Week 7 Week 9 2.5 3.2 3.7 3.9 LOGO Huntington Bancshares NEW CORE COMPETENCIES o Manage Integrated Distribution Systems o Branch as Sales Office o Electronic Banking o Home Banking o Web Bank o Direct Bank o Private Financial Group o Strengthen Sales Focus LOGO o Integrated Marketing Strategy o Business Enabling Technology LOGO Huntington Bancshares BRAND CAMPAIGN LOGO Take Control of Your Money. LOGO Huntington Bancshares DATA WAREHOUSE
Average Average Huntington Households % Age Income - ------------------------------------------------------------------------------------------------ Fee Driven 9 35 16,301 - ------------------------------------------------------------------------------------------------ Credit Driven 19 30 49,594 - ------------------------------------------------------------------------------------------------ Middle Market 30 42 47,717 - ------------------------------------------------------------------------------------------------ Depositor 28 66 30,542 - ------------------------------------------------------------------------------------------------ Upscale 14 54 100,922
LOGO Huntington Bancshares DATA WAREHOUSE o 82% of profits are derived from 20% of customers o 20% of households control 55% of deposits o 96% of all households have one unprofitable account Huntington Household Profitability % NO. OF PRODUCTS HIGHLY PROFITABLE 20 3.2 PROFITABLE 59 2.5 NOT PROFITABLE 21 1.4 LOGO Huntington Bancshares DATA WAREHOUSE CUSTOMER PROFILE TOP THREE RECOMMENDED CENTRAL SALES PRODUCTS INFORMATION FORCE SYSTEM PROBABILITY OF SALE CUSTOMER'S CURRENT PROFITABILITY LOGO Huntington Bancshares NEW CORE COMPETENCIES o Manage Integrated Distribution Systems o Branch as Sales Office o Electronic Banking o Home Banking - Web Bank LOGO - Direct Bank o Private Financial Group o Strengthen Sales Focus o Integrated Marketing Strategy o Business Enabling Technology LOGO Huntington Bancshares BUSINESS ENABLING TECHNOLOGY o Huntington View o Balance Reporting o Cash Flow Management o Funds Transfer o Electronic Mail LOGO o Investments o Business Service Center o Streamline Approval for Loans <$250K o Credit Scoring o 24-48 Hour Approval LOGO Huntington Bancshares RESULTS: A MAJOR SMALL BUSINESS LENDER 97% of the Greater than $5 million 2% Huntington's Market is $250,000 to $5 million 17% Small Business $100,000 to $250,000 23% Less than $100,000 58% o Ranked 22nd in U.S. o Expanded Cash Management Services LOGO Huntington Bancshares AUTO FINANCING LEADERSHIP Among Top 5 U.S. Providers -J.D. Powers o Loan, Lease, Floor Plan, Insurance o Auto Financing up 14% o Expansion into Add-on Products o Drives New Business LOGO Huntington Bancshares HUNTINGTON FIRST Acquires BANCSHARES MICHIGAN LOGO Leveraging a Technology/Market Driven Company COMMON STRATEGY/COMMON VISION o Multi-Channel Distribution o Centrally Focused Technology/Operations o Consolidated Systems and Products o Sales/Service Orientation o Strong, Seasoned Management Team o Dominant Market Share in Major Markets LOGO Huntington Bancshares ENHANCE SHAREHOLDER VALUE o Accretion of 1% ($.02) in 1998; 4% ($.09) in 1999 o Clearly identifiable expense savings/revenue opportunities o IRR=16%, materially exceeds cost of equity o Skills to realize the full potential of fast growth markets o Leverages Huntington's strong core competency in retail, small business, products, marketing and technology LOGO Huntington Bancshares STRONG MARKET POSITIONS o Top 3 market share in 12 counties o #2 in market share in Grand Rapids MSA o 80% of FMBC deposits in Grand Rapids MSA o Top 3 in northern Michigan with 10% of FMBC deposits LOGO Huntington Bancshares PROVIDES ENTRY INTO FAST GROWING WESTERN MICHIGAN Unemployment (1) Grand Rapids MSA United States ---------------- ------------- 1995 4.1% 5.2% Population Growth (2) Grand Rapids MSA United States ---------------- ------------- 1980-1990 11.5% 9.8% 1990-1996 7.2% 7.0% 1996-2000 6.0% 3.8% o Ranked 22nd in U.S. Top 50 fastest growing metro areas (8.23% '90-'96) o One of only four midwestern metro areas in this top 25 (Grand Rapids, Minneapolis-St. Paul, Columbus, Indianapolis) Notes: (1) Securities Development of Labor, Michigan Securities Commission (2) Bureau of the Census, U.S. Department of Commerce, Market Statistics S & MM 1996 "Survey of Buying Power" FINANCIALLY ACCRETIVE TRANSACTION Pro Forma Earnings --------------------- 1998 1999 HBAN Estimated EPS $2.21 $2.41 Pro Forma EPS 2.23 2.50 Accretion 1% 4% o Drivers o $19 million cost reduction in 1998 o $32 million cost reduction in 1999 o $12 million revenue enhancements in 1999 LOGO Huntington Bancshares HISTORY OF SHAREHOLDER VALUE CREATION o Compound Annual Return to Shareholders* o 1 Year 24.7% o 5 Year 26.1% o 10 Year 19.3% o 20 Year 21.0% o Compound Dividend Growth 13.2% *Assumes reinvestment of all dividends LOGO Huntington Bancshares HUNTINGTON BANCSHARES, INC. LOGO Target ROE: 18% plus Target ROA: 1.30% Target Efficiency Ratio: 50% Take Control of Your Money. HUNTINGTON SPRING 1997 BANCSHARES [LOGO] INCORPORATED NASDAQ:HBAN - ------------------------------------------------------------------------------- INVESTMENT FEATURES DIVIDEND REINVESTMENT PLAN o partial and full dividend reinvestment o optional cash purchases VALUE ADDED o five-year total return of 26.1% o Stock price appreciated 20.7% in 1996 o Ten-year compound dividend growth of 13.2% CONTINUED PROFITABILITY 1996 ROA = 1.31% 1996 ROE = 17.33% HIGH QUALITY, DIVERSIFIED LOAN PORTFOLIO o historically low chargeoffs o non-performing loans less than 1% of total loans - ------------------------------------------------------------------------------- 20-YEAR RETURN TO SHAREHOLDERS 20.7% 20-YEAR COMPOUND AVERAGE ANNUAL TOTAL RETURN 76 1,000 77 1,108 78 1,272 79 1,282 80 1,251 81 1,397 82 1,529 83 3,724 84 5,180 85 7,774 86 7,355 87 6,767 88 7,894 89 10,887 90 7,099 91 13,598 92 20,441 93 24,077 94 22,888 95 34,507 96 42,916 Assumes limited investment of $1,000 and reinvestment of all dividends - ------------------------------------------------------------------------------- TOTAL RETURN TO SHAREHOLDERS 1 YEAR 24.7% 5 YEAR 26.1% 10 YEAR 19.3% 20 YEAR 20.7% - ------------------------------------------------------------------------------- INVESTMENT DATA (AS OF 3/31/97) 52 WEEK RANGE: 31 3/4 - 21 1/4 SHARES OUTSTANDING: 142.8 MILLION BOOK VALUE: $10.82 ANNUAL CASH DIVIDEND: $0.80 - ------------------------------------------------------------------------------- CORPORATE PROFILE o Regional bank holding company with assets in excess of $20 billion o Headquartered in Columbus, Ohio o Operate 419 banking and non-banking offices o Subsidiaries engage in retail and commercial banking, trust, investment and mortgage banking and other financial services Non-Banking offices only [Map] Banking and Non-Banking Offices [Map] [logo] - ------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Total Assets* $20,255 $20,852 Total Loans* $13,262 $14,261 Total Deposits* $12,637 $13,386 Total Risk-Based Capital Ratio 12.03% 11.31% Non Performing Loans/Total Loans .41% .35% Reserve Coverage of Non Performing Loans 354% 394% Return on Assets 1.28% 1.31% Return on Equity 16.27% 17.33% EPS $1.62 $1.80 *Dollars in millions - ------------------------------------------------------------------------------- STRATEGIES FOR FUTURE GROWTH PROFITABILITY TARGETS: ROA>1.30%, ROE>18.0% o Position bank as a strong sales organization o Continue to emphasize growth in deposits and fee-based businesses o Maximize net interest income while prudently managing liquidity, credit and interest rate risks o Control expense growth--improve operating efficiency o Maintain leadership position through the strategic application of technology to banking services o Expand market share through internal growth and select acquisitions which enhance shareholder value - ------------------------------------------------------------------------------- FOR MORE INFORMATION, CONTACT [LOGO] CHERI GRAY Investor Relations (614) 480-3803 Huntington Bancshares Incorporated Huntington Center, HC0635 Columbus, Ohio 43287 - ------------------------------------------------------------------------------- 10-YEAR DIVIDEND HISTORY o Thirty-six consecutive years of increased cash dividends o Stock dividend or stock split issued in each of the past 23 years 13.2% 10-Year Compound Annual Dividend Growth Rate* '87 .25 '88 .27 '89 .30 '90 .35 '91 .40 '92 .44 '93 .51 '94 .62 '95 .70 '96 .76 * Restated for stock dividends and splits. - ------------------------------------------------------------------------------- 5-YEAR TOTAL RETURN COMPARISON 26.1% 5-Year Total Return '91 '92 '93 '94 '95 '96 HBI $100 $151 $178 $169 $258 $319 KBW50 $100 $128 $134 $128 $204 $289 S&P 500 $100 $108 $118 $120 $165 $203 Assumes initial investment of $100 and reinvestment of all dividends. - ------------------------------------------------------------------------------- HUNTINGTON WEB SITE Visit our Web Site at www.huntington.com FMB David M. Ondersma First Michigan Bank Chairman and Chief Executive Officer Corporation July 31, 1997 Dear Shareholder, First Michigan Bank Corporation reported another record quarter for the three months ended June 30, 1997. Net income for the second quarter of 1997 was $11,057,000, an 8.4% increase over 1996. Total assets rose 11.1% in the past 12 months, to $3,673,155,000 on June 30, 1997. It is a tribute to the entire FMB team that our company sustained strong sales and continued growth during a quarter which also brought significant changes. As you know, FMB announced on May 5, 1997 that it had signed a definitive agreement to affiliate with Huntington Bancshares Incorporated of Columbus, Ohio. This agreement is subject to shareholder and regulatory approval. You should have received by now the proxy statement/prospectus concerning this merger. Your vote is very important, and I urge you to return your signed proxy and, if possible, plan to attend our special shareholders meeting on September 9, at 9:30 a.m., at Rembrandt's at Bridgewater, 333 Bridge Street NW, Grand Rapids. I know the proxy statement/prospectus is lengthy and often uses legal language, but I encourage you to read the document. Let me call to your attention a page entitled "Questions and Answers About the Merger," a copy of which I have attached to this letter. By unanimously approving the proposed merger, the Board believes this proposal is in the best interest of our shareholders. Therefore, the Board recommends that you vote in favor of the transaction. The offer received from Huntington reflects one of the highest prices in the nation paid for a banking company, as a multiple of earnings and book value, when compared to other mergers of First Michigan's size. First Michigan shareholders also can expect to receive a 28% increase in cash dividends as a shareholder of Huntington if Huntington continues to maintain its present cash dividend rate. Planning for the integration of our two companies is underway. Because both of us share a similar customer service philosophy, we are confident that FMB bankers will continue to meet customer needs with the same high standards as they have done in the past. Your second quarter dividend is enclosed and includes a dividend on the new shares awarded in FMB's annual 5% stock dividend. Because the Dividend Reinvestment Program has been suspended, all dividends are being paid in cash. You will receive information on the Huntington Bancshares Dividend Reinvestment Plan following the completion of the merger. Thank you for your continued support of our company. Sincerely, /s/ David M. Ondersma David M. Ondersma Chairman and Chief Executive Officer