EX-99.2 3 l31059aexv99w2.htm EX-99.2 EX-99.2
 

Exhibit 99.2
HUNTINGTON BANCSHARES INCORPORATED
Quarterly Financial Review
March 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 Stock Summary, Capital, and Other Data
     12  
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.
Beginning in the 2008 first quarter, IRA deposits greater than $100,000 are reflected in “Savings and other domestic time deposits”. Previously, these deposits were reflected in “Other domestic time deposits of $100,000 or more”. Prior period amounts have been reclassified to conform to the current period presentation.

Contents

 

Huntington Bancshares Incorporated
Consolidated Balance Sheets
                                           
                  Change  
    2008     2007       March ’08 vs ’07  
(in thousands, except number of shares)   March 31,     December 31,     March 31,       Amount     Percent  
    (Unaudited)             (Unaudited)                    
Assets
                                          
Cash and due from banks
   $ 1,242,422     $ 1,416,597     $ 867,256       $ 375,166       43.3 %
Federal funds sold and securities purchased under resale agreements
     1,038,820       592,649       701,951         336,869       48.0  
Interest bearing deposits in banks
     253,221       340,090       100,417         152,804       N.M.  
Trading account securities
     1,246,877       1,032,745       76,631         1,170,246       N.M.  
Loans held for sale
     632,266       494,379       277,538         354,728       N.M.  
Investment securities
     4,313,006       4,500,171       3,724,676         588,330       15.8  
Loans and leases (1)
     41,014,219       40,054,338       26,266,746         14,747,473       56.1  
Allowance for loan and lease losses
     (627,615 )     (578,442 )     (282,976 )       (344,639 )     N.M.  
                   
Net loans and leases
     40,386,604       39,475,896       25,983,770         14,402,834       55.4  
                     
Bank owned life insurance
     1,327,031       1,313,281       1,097,986         229,045       20.9  
Premises and equipment
     544,718       557,565       377,687         167,031       44.2  
Goodwill
     3,047,407       3,059,333       569,779         2,477,628       N.M.  
Other intangible assets
     409,055       427,970       57,165         351,890       N.M.  
Accrued income and other assets
     1,610,542       1,486,792       1,144,443         466,099       40.7  
                   
Total Assets
   $ 56,051,969     $ 54,697,468     $ 34,979,299       $ 21,072,670       60.2 %
                     
 
                                          
Liabilities and Shareholders’ Equity
                                          
Liabilities
                                          
Deposits (2)
   $ 38,116,341     $ 37,742,921     $ 24,585,893       $ 13,530,448       55.0 %
Short-term borrowings
     3,336,738       2,843,638       1,577,732         1,759,006       N.M.  
Federal Home Loan Bank advances
     3,685,858       3,083,555       1,197,411         2,488,447       N.M.  
Other long-term debt
     1,907,881       1,937,078       2,173,818         (265,937 )     (12.2 )
Subordinated notes
     1,928,518       1,934,276       1,280,870         647,648       50.6  
Accrued expenses and other liabilities
     1,170,054       1,206,860       1,112,215         57,839       5.2  
                   
Total Liabilities
     50,145,390       48,748,328       31,927,939         18,217,451       57.1  
                     
Shareholders’ equity
                                          
Preferred stock — authorized 6,617,808 shares; none outstanding
     —       —       —         —       —  
 
                                          
Common stock —
                                          
No par value and authorized 500,000,000 shares; issued 236,301,562 shares; outstanding 235,713,500 shares.
     —       —       2,072,976         (2,072,976 )     N.M.  
Par value of $0.01 and authorized 1,000,000,000 shares at March 31, 2008; issued 367,007,244 and 367,000,815 shares, respectively; outstanding 366,226,146 and 366,261,676 shares, respectively.
     3,670       3,670       —         3,670       N.M.  
Capital surplus
     5,241,033       5,237,783       —         5,241,033       N.M.  
Less 781,098; 739,139 and 588,062 treasury shares at cost, respectively
     (14,834 )     (14,391 )     (11,128 )       (3,706 )     33.3
Accumulated other comprehensive loss
     (122,217 )     (49,611 )     (59,509 )       (62,708 )     N.M.  
Retained earnings
     798,927       771,689       1,049,021         (250,094 )     (23.8 )
                     
Total Shareholders’ Equity
     5,906,579       5,949,140       3,051,360         2,855,219       93.6  
                     
Total Liabilities and Shareholders’ Equity
   $ 56,051,969     $ 54,697,468     $ 34,979,299       $ 21,072,670       60.2 %
                     
 
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     March ’08 vs ’07
(in thousands)   March 31,   December 31,   March 31,     Amount   Percent
    (Unaudited)                   (Unaudited)                  
By Type
                                                                  
Commercial:
                                                                  
Middle market commercial and industrial
   $ 10,772,168       26.3 %   $ 10,241,115       25.6     $ 6,181,645       23.5 %     $ 4,590,523       74.3 %
Middle market commercial real estate:
                                                                  
Construction
     2,035,974       5.0       1,958,191       4.9       1,187,991       4.5         847,983       71.4  
Commercial
     6,108,593       14.9       5,855,240       14.6       2,811,772       10.7         3,296,821       N.M.  
                       
Middle market commercial real estate
     8,144,567       19.9       7,813,431       19.5       3,999,763       15.2         4,144,804       N.M.  
Small business
     4,245,004       10.4       4,254,071       10.6       2,452,843       9.4         1,792,161       73.1  
                       
Total commercial
     23,161,739       56.6       22,308,617       55.7       12,634,251       48.1         10,527,488       83.3  
                         
Consumer:
                                                                  
Automobile loans
     3,491,369       8.5       3,114,029       7.8       2,251,215       8.6         1,240,154       55.1  
Automobile leases
     999,629       2.4       1,179,505       2.9       1,623,758       6.2         (624,129 )     (38.4 )
Home equity
     7,296,448       17.8       7,290,063       18.2       4,914,462       18.7         2,381,986       48.5  
Residential mortgage
    5,366,414       13.1       5,447,126       13.6       4,405,943       16.8         960,471       21.8  
Other loans
     698,620       1.6       714,998       1.8       437,117       1.6         261,503       59.8  
                       
Total consumer
     17,852,480       43.4       17,745,721       44.3       13,632,495       51.9         4,219,985       31.0  
                       
Total loans and leases
   $ 41,014,219       100.0 %   $ 40,054,338       100.0     $ 26,266,746       100.0       $ 14,747,473       56.1  
                         
 
                                                                  
By Business Segment
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 5,229,075       12.7 %   $ 5,110,270       12.8     $ 3,669,569       14.0 %     $ 1,559,506       42.5 %
Northwest Ohio
     2,280,255       5.6       2,284,141       5.7       455,075       1.7         1,825,180       N.M.  
Greater Cleveland
     3,194,533       7.8       3,097,120       7.7       2,019,820       7.7         1,174,713       58.2  
Greater Akron/Canton
     2,058,031       5.0       2,020,447       5.0       1,318,932       5.0         739,099       56.0  
Southern Ohio/Kentucky
     2,900,259       7.1       2,659,870       6.6       2,159,407       8.2         740,852       34.3  
Mahoning Valley
     893,317       2.2       927,918       2.3       —       —         893,317       —  
Ohio Valley
     870,833       2.1       870,276       2.2       —       —         870,833       —  
West Michigan
     2,535,359       6.2       2,477,617       6.2       2,453,300       9.3         82,059       3.3  
East Michigan
     1,766,750       4.3       1,750,171       4.4       1,646,028       6.3         120,722       7.3  
Western Pennsylvania
     1,031,319       2.5       1,053,685       2.6       —       —         1,031,319       —  
Pittsburgh
     926,487       2.3       900,789       2.2       —       —         926,487       —  
Central Indiana
     1,507,934       3.7       1,421,116       3.5       971,186       3.7         536,748       55.3  
West Virginia
     1,158,915       2.8       1,155,719       2.9       1,109,197       4.2         49,718       4.5  
Other Regional
     6,251,173       15.3       6,176,485       15.6       3,691,557       14.1         2,559,616       69.3  
                       
Regional Banking
     32,604,240       79.5       31,905,624       79.7       19,494,071       74.2         13,110,169       67.3  
Dealer Sales
    5,862,116       14.3       5,563,415       13.9       4,903,370       18.7         958,746       19.6  
Private Financial and Capital Markets Group
     2,547,863       6.2       2,585,299       6.4       1,869,305       7.1         678,558       36.3  
Treasury / Other
    —       —       —       —       —       —         —       —  
                       
Total loans and leases
   $ 41,014,219       100.0 %   $ 40,054,338       100.0     $ 26,266,746       100.0 %     $ 14,747,473       56.1 %
                         
 
N.M., not a meaningful value.    

2

 

Huntington Bancshares Incorporated
Deposit Composition
                                                                   
                                                      Change
    2008   2007     March ’08 vs ’07
(in thousands)   March 31,   December 31,   March 31,     Amount   Percent
    (Unaudited)                   (Unaudited)                  
By Type
                                                                  
Demand deposits — non-interest bearing
   $ 5,160,068       13.5 %   $ 5,371,747       14.2 %   $ 3,696,231       15.0 %     $ 1,463,837       39.6 %
Demand deposits — interest bearing
     4,040,747       10.6       4,048,873       10.7       2,486,304       10.1         1,554,443       62.5  
Money market deposits
     6,681,412       17.5       6,643,242       17.6       5,568,104       22.6         1,113,308       20.0  
Savings and other domestic deposits
     5,083,046       13.3       4,968,615       13.2       2,947,786       12.0         2,135,260       72.4  
Core certificates of deposit
     10,582,394       27.8       10,736,146       28.4       5,408,289       22.0         5,174,105       95.7  
                       
Total core deposits
     31,547,667       82.7       31,768,623       84.1       20,106,714       81.7         11,440,953       56.9  
Other domestic deposits of $100,000 or more
     2,160,339       5.7       1,870,730       5.0       1,218,498       5.0         941,841       77.3  
Brokered deposits and negotiable CDs
     3,361,957       8.8       3,376,854       8.9       2,721,927       11.1         640,030       23.5  
Deposits in foreign offices
     1,046,378       2.8       726,714       2.0       538,754       2.2         507,624       94.2  
                       
Total deposits
   $ 38,116,341       100.0 %   $ 37,742,921       100.0 %   $ 24,585,893       100.0 %     $ 13,530,448       55.0 %
                         
                                                                   
Total core deposits:
                                                                  
Commercial
   $ 8,715,690       27.6 %   $ 9,017,852       28.4 %   $ 6,314,309       31.4 %     $ 2,401,381       38.0 %
Personal
     22,831,977       72.4       22,750,771       71.6       13,792,405       68.6         9,039,572       65.5  
                       
Total core deposits
   $ 31,547,667       100.0 %   $ 31,768,623       100.0 %   $ 20,106,714       100.0 %     $ 11,440,953       56.9 %
                         
                                                                   
By Business Segment
                                                                  
Regional Banking:
                                                                  
Central Ohio
   $ 6,665,031       17.5 %   $ 6,332,143       16.8 %   $ 4,984,215       20.3 %     $ 1,680,816       33.7 %
Northwest Ohio
     2,798,377       7.3       2,837,735       7.5       1,062,255       4.3         1,736,122       N.M.  
Greater Cleveland
     3,263,713       8.6       3,194,780       8.5       2,020,165       8.2         1,243,548       61.6  
Greater Akron/Canton
     2,660,216       7.0       2,636,564       7.0       1,909,677       7.8         750,539       39.3  
Southern Ohio/Kentucky
     2,676,381       7.0       2,628,766       7.0       2,353,129       9.6         323,252       13.7  
Mahoning Valley
     1,583,723       4.2       1,550,676       4.1       —       —         1,583,723       —  
Ohio Valley
     1,291,747       3.4       1,289,027       3.4       —       —         1,291,747       —  
West Michigan
     2,937,318       7.7       2,919,926       7.7       2,826,489       11.5         110,829       3.9  
East Michigan
     2,445,148       6.4       2,442,354       6.5       2,460,100       10.0         (14,952 )     (0.6 )
Western Pennsylvania
     1,630,114       4.3       1,643,483       4.4       —       —         1,630,114       —  
Pittsburgh
     956,254       2.5       948,451       2.5       —       —         956,254       —  
Central Indiana
     1,881,781       4.9       1,896,433       5.0       903,119       3.7         978,662       N.M.  
West Virginia
     1,584,233       4.2       1,589,903       4.2       1,547,095       6.3         37,138       2.4  
Other Regional
     781,967       2.1       771,261       2.0       571,095       2.3         210,872       36.9  
                       
Regional Banking
     33,156,003       87.0       32,681,502       86.6       20,637,339       83.9         12,518,664       60.7  
Dealer Sales
     55,557       0.1       58,196       0.2       54,644       0.2         913       1.7  
Private Financial and Capital Markets Group
     1,542,631       4.0       1,626,043       4.3       1,174,618       4.8         368,013       31.3  
Treasury / Other (1)
     3,362,150       8.9       3,377,180       8.9       2,719,292       11.1         642,858       23.6  
                       
Total deposits
   $ 38,116,341       100.0 %   $ 37,742,921       100.0 %   $ 24,585,893       100.0 %     $ 13,530,448       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       1Q08 vs 1Q07  
(in millions)   First     Fourth     Third     Second     First       Amount     Percent  
Assets
                                                          
Interest bearing deposits in banks
   $ 293     $ 324     $ 292     $ 259     $ 93       $ 200       N.M. %
Trading account securities
     1,186       1,122       1,149       230       48         1,138       N.M.  
Federal funds sold and securities purchased under resale agreements
     769       730       557       574       503         266       52.9  
Loans held for sale
     565       493       419       291       242         323       N.M.  
Investment securities:
                                                          
Taxable
     3,774       3,807       3,951       3,253       3,595         179       5.0  
Tax-exempt
     703       689       675       629       591         112       19.0  
                         
Total investment securities
     4,477       4,496       4,626       3,882       4,186         291       7.0  
Loans and leases: (1)
                                                          
Commercial:
                                                         
Middle market commercial and industrial
     10,506       10,445       10,328       6,227       6,084         4,422       72.7  
Middle market commercial real estate:
                                                          
Construction
     1,999       1,870       1,784       1,246       1,151         848       73.7  
Commercial
     5,912       5,801       5,637       2,872       2,775         3,137       N.M.  
                         
Middle market commercial real estate
     7,911       7,671       7,421       4,118       3,926         3,985       N.M.  
Small business
     4,213       4,207       4,267       2,473       2,449         1,764       72.0  
                         
Total commercial
     22,630       22,323       22,016       12,818       12,459         10,171       81.6  
                         
Consumer:
                                                          
Automobile loans
     3,309       3,052       2,931       2,322       2,215         1,094       49.4  
Automobile leases
     1,090       1,272       1,423       1,551       1,698         (608 )     (35.8 )
                         
Automobile loans and leases
     4,399       4,324       4,354       3,873       3,913         486       12.4  
Home equity
    7,274       7,297       7,468       4,973       4,913         2,361       48.1  
Residential mortgage
    5,351       5,437       5,456       4,351       4,496         855       19.0  
Other loans
     713       728       534       424       422         291       69.0  
                         
Total consumer
     17,737       17,786       17,812       13,621       13,744         3,993       29.1  
                         
Total loans and leases
     40,367       40,109       39,828       26,439       26,203         14,164       54.1  
Allowance for loan and lease losses
     (630 )     (474 )     (475 )     (297 )     (278 )       (352 )     N.M.  
                         
Net loans and leases
     39,737       39,635       39,353       26,142       25,925         13,812       53.3  
                         
Total earning assets
     47,657       47,274       46,871       31,675       31,275         16,382       52.4  
                         
Cash and due from banks
     1,036       1,098       1,111       748       826         210       25.4  
Intangible assets
     3,472       3,440       3,337       626       627         2,845       N.M.  
All other assets
     3,350       3,142       3,124       2,398       2,480         870       35.1  
                         
Total Assets
   $ 54,885     $ 54,480     $ 53,968     $ 35,150     $ 34,930       $ 19,955       57.1 %
                         
 
                                                          
Liabilities and Shareholders’ Equity
                                                          
Deposits:
                                                          
Demand deposits — non-interest bearing
   $ 5,034     $ 5,218     $ 5,384     $ 3,591     $ 3,530       $ 1,504       42.6 %
Demand deposits — interest bearing
     3,934       3,929       3,808       2,404       2,349         1,585       67.5  
Money market deposits
     6,753       6,845       6,869       5,466       5,489         1,264       23.0  
Savings and other domestic deposits
     5,004       5,012       5,127       2,931       2,898         2,106       72.7  
Core certificates of deposit
     10,796       10,674       10,425       5,591       5,455         5,341       97.9  
                         
Total core deposits
     31,521       31,678       31,613       19,983       19,721         11,800       59.8  
Other domestic deposits of $100,000 or more
     1,983       1,731       1,610       1,056       1,148         835       72.7  
Brokered deposits and negotiable CDs
     3,542       3,518       3,728       2,682       3,020         522       17.3  
Deposits in foreign offices
     885       748       701       552       562         323       57.5  
                         
Total deposits
     37,931       37,675       37,652       24,273       24,451         13,480       55.1  
Short-term borrowings
     2,772       2,489       2,542       2,075       1,863         909       48.8  
Federal Home Loan Bank advances
     3,389       3,070       2,553       1,329       1,128         2,261       N.M.  
Subordinated notes and other long-term debt
     3,814       3,875       3,912       3,470       3,487         327       9.4  
Total interest bearing liabilities
     42,872       41,891       41,275       27,556       27,399         15,473       56.5  
                         
All other liabilities
     1,104       1,160       1,103       960       987         117       11.9  
Shareholders’ equity
     5,875       6,211       6,206       3,043       3,014         2,861       94.9  
                         
Total Liabilities and Shareholders’ Equity
   $ 54,885     $ 54,480     $ 53,968     $ 35,150     $ 34,930       $ 19,955       57.1 %
                         
 
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)   First     Fourth     Third     Second     First  
Assets
                                        
Interest bearing deposits in banks
     3.97 %     4.30 %     4.69 %     6.47 %     5.13 %
Trading account securities
     5.27       5.72       6.01       5.74       5.27  
Federal funds sold and securities purchased under resale agreements
     3.07       4.59       5.26       5.28       5.24  
Loans held for sale
     5.41       5.86       5.13       5.79       6.27  
Investment securities:
                                        
Taxable
     5.71       5.98       6.09       6.11       6.13  
Tax-exempt
     6.75       6.74       6.78       6.69       6.66  
                 
Total investment securities
     5.88       6.10       6.19       6.20       6.21  
 
                                        
Loans and leases: (3)
                                        
Commercial:
                                        
Middle market commercial and industrial
     6.16       6.81       7.79       7.39       7.49  
Middle market commercial real estate:
                                        
Construction
     5.82       7.21       7.68       7.62       8.41  
Commercial
     6.07       6.98       7.62       7.34       7.64  
                 
Middle market commercial real estate
     6.01       7.04       7.64       7.42       7.87  
Small business
     7.02       7.44       7.49       7.30       7.24  
                 
Total commercial
     6.27       7.00       7.68       7.38       7.56  
                 
Consumer:
                                        
Automobile loans
     7.25       7.31       7.25       7.10       6.92  
Automobile leases
     5.53       5.52       5.56       5.34       5.25  
                 
Automobile loans and leases
     6.82       6.78       6.70       6.39       6.25  
Home equity
    7.21       7.81       7.94       7.63       7.67  
Residential mortgage
    5.86       5.88       6.06       5.61       5.54  
Other loans
     10.43       10.91       11.48       9.57       9.52  
                 
Total consumer
     6.84       7.10       7.17       6.69       6.58  
                 
Total loans and leases
     6.51       7.05       7.45       7.03       7.05  
                 
Total earning assets
     6.40 %     6.88 %     7.25 %     6.92 %     6.98 %
                 
 
                                        
Liabilities and Shareholders’ Equity
                                        
Deposits:
                                        
Demand deposits — non-interest bearing
     — %     — %     — %     — %     — %
Demand deposits — interest bearing
     0.82       1.14       1.53       1.22       1.21  
Money market deposits
     2.83       3.67       3.78       3.85       3.78  
Savings and other domestic deposits
     2.27       2.54       2.54       2.23       2.09  
Core certificates of deposit
     4.68       4.83       4.99       4.79       4.72  
                 
Total core deposits
     3.18       3.55       3.69       3.50       3.42  
Other domestic deposits of $100,000 or more
     4.39       4.99       4.79       5.31       5.34  
Brokered deposits and negotiable CDs
     4.43       5.24       5.42       5.53       5.50  
Deposits in foreign offices
     2.16       3.27       3.29       3.16       2.99  
                 
Total deposits
     3.36       3.80       3.94       3.84       3.81  
Short-term borrowings
     2.78       3.74       4.10       4.50       4.32  
Federal Home Loan Bank advances
     3.94       5.03       5.31       4.76       4.44  
Subordinated notes and other long-term debt
     5.12       5.93       6.15       5.96       5.77  
                 
Total interest bearing liabilities
     3.53 %     4.09 %     4.24 %     4.20 %     4.14 %
                 
 
                                        
Net interest rate spread
     2.87 %     2.79 %     3.01 %     2.72 %     2.84 %
Impact of non-interest bearing funds on margin
     0.36       0.47       0.51       0.54       0.52  
                 
Net interest margin
     3.23 %     3.26 %     3.52 %     3.26 %     3.36 %
                 
 
(1)   Fully taxable equivalent (FTE) yields are calculated assuming a 35% tax rate. See page 7 for the FTE adjustment.
 
(2)   Loan, lease, and deposit average rates include impact of applicable derivatives and non-deferrable fees.
 
(3)   For purposes of this analysis, 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       1Q08 vs 1Q07  
(in millions)   First     Fourth     Third     Second     First       Amount     Percent  
Loans and direct financing leases (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 5,099     $ 5,011     $ 4,910     $ 3,644     $ 3,601       $ 1,498       41.6 %
Northwest Ohio
     2,295       2,318       2,331       452       455         1,840       N.M.  
Greater Cleveland
     3,148       3,079       2,993       2,064       1,964         1,184       60.3  
Greater Akron/Canton
     2,021       2,037       2,024       1,328       1,326         695       52.4  
Southern Ohio/Kentucky
     2,782       2,576       2,527       2,205       2,181         601       27.6  
Mahoning Valley
     888       925       871       —       —         888       —  
Ohio Valley
     870       867       759       —       —         870       —  
West Michigan
     2,508       2,470       2,484       2,447       2,441         67       2.7  
East Michigan
     1,734       1,767       1,750       1,639       1,626         108       6.6  
Western Pennsylvania
     1,032       1,092       1,069       —       —         1,032       —  
Pittsburgh
     909       896       912       —       —         909       —  
Central Indiana
     1,463       1,397       1,406       982       959         504       52.6  
West Virginia
     1,160       1,135       1,163       1,128       1,106         54       4.9  
Other Regional
     6,185       6,500       6,754       3,774       3,780         2,405       63.6  
                         
Regional Banking
     32,094       32,070       31,953       19,663       19,439         12,655       65.1  
Dealer Sales
     5,720       5,515       5,376       4,888       4,917         803       16.3  
Private Financial and Capital Markets Group
     2,553       2,524       2,499       1,888       1,847         706       38.2  
Treasury / Other
    —       —       —       —       —         —       —  
                         
Total loans and direct financing leases
   $ 40,367     $ 40,109     $ 39,828     $ 26,439     $ 26,203       $ 14,164       54.1 %
                         
 
                                                          
Deposit composition (1)
                                                          
Regional Banking:
                                                          
Central Ohio
   $ 6,359     $ 6,169     $ 6,026     $ 4,962     $ 4,889       $ 1,470       30.1 %
Northwest Ohio
     2,828       2,825       2,856       1,070       1,061         1,767       N.M.  
Greater Cleveland
     3,189       3,089       2,969       2,024       2,005         1,184       59.1  
Greater Akron/Canton
     2,669       2,634       2,613       1,898       1,903         766       40.3  
Southern Ohio/Kentucky
     2,655       2,644       2,564       2,333       2,285         370       16.2  
Mahoning Valley
     1,542       1,550       1,562       —       —         1,542       —  
Ohio Valley
     1,284       1,345       1,380       —       —         1,284       —  
West Michigan
     2,904       2,925       2,868       2,784       2,790         114       4.1  
East Michigan
     2,420       2,404       2,423       2,397       2,431         (11 )     (0.5 )
Western Pennsylvania
     1,631       1,655       1,695       —       —         1,631       —  
Pittsburgh
     963       946       943       —       —         963       —  
Central Indiana
     1,888       1,940       1,831       854       870         1,018       N.M.  
West Virginia
     1,594       1,567       1,562       1,535       1,533         61       4.0  
Other Regional
     823       759       861       537       452         371       82.1  
                         
Regional Banking
     32,749       32,452       32,153       20,394       20,219         12,530       62.0  
Dealer Sales
     54       59       56       55       52         2       3.8  
Private Financial and Capital Markets Group
     1,583       1,629       1,645       1,142       1,148         435       37.9  
Treasury / Other
    3,545       3,535       3,798       2,682       3,032         513       16.9  
                         
Total deposits
   $ 37,931     $ 37,675     $ 37,652     $ 24,273     $ 24,451       $ 13,480       55.1 %
                         
 
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       1Q08 vs 1Q07  
(in thousands, except per share amounts)   First     Fourth     Third     Second     First       Amount     Percent  
Interest income
   $ 753,411     $ 814,398     $ 851,155     $ 542,461     $ 534,949       $ 218,462       40.8 %
Interest expense
     376,587       431,465       441,522       289,070       279,394         97,193       34.8  
                         
Net interest income
     376,824       382,933       409,633       253,391       255,555         121,269       47.5  
Provision for credit losses
     88,650       512,082       42,007       60,133       29,406         59,244       N.M.  
                         
Net interest income (loss) after provision for credit losses
     288,174       (129,149 )     367,626       193,258       226,149         62,025       27.4  
                         
Service charges on deposit accounts
     72,668       81,276       78,107       50,017       44,793         27,875       62.2  
Trust services
     34,128       35,198       33,562       26,764       25,894         8,234       31.8  
Brokerage and insurance income
     36,560       30,288       28,806       17,199       16,082         20,478       N.M.  
Other service charges and fees
     20,741       21,891       21,045       14,923       13,208         7,533       57.0  
Bank owned life insurance income
     13,750       13,253       14,847       10,904       10,851         2,899       26.7  
Mortgage banking (loss) income
     (7,063 )     3,702       9,629       7,122       9,351         (16,414 )     N.M.  
Securities gains (losses)
     1,429       (11,551 )     (13,152 )     (5,139 )     104         1,325       N.M.  
Other income (2)
     63,539       (3,500 )     31,830       34,403       24,894         38,645       N.M.  
                         
Total non-interest income
     235,752       170,557       204,674       156,193       145,177         90,575       62.4  
                         
Personnel costs
     201,943       214,850       202,148       135,191       134,639         67,304       50.0  
Outside data processing and other services
     34,361       39,130       40,600       25,701       21,814         12,547       57.5  
Net occupancy
     33,243       26,714       33,334       19,417       19,908         13,335       67.0  
Equipment
     23,794       22,816       23,290       17,157       18,219         5,575       30.6  
Amortization of intangibles
     18,917       20,163       19,949       2,519       2,520         16,397       N.M.  
Marketing
     8,919       16,175       13,186       8,986       7,696         1,223       15.9  
Professional services
     9,090       14,464       11,273       8,101       6,482         2,608       40.2  
Telecommunications
     6,245       8,513       7,286       4,577       4,126         2,119       51.4  
Printing and supplies
     5,622       6,594       4,743       3,672       3,242         2,380       73.4  
Other expense (2)
     28,347       70,133       29,754       19,334       23,426         4,921       21.0  
                         
Total non-interest expense
     370,481       439,552       385,563       244,655       242,072         128,409       53.0  
                         
Income (Loss) before income taxes
     153,445       (398,144 )     186,737       104,796       129,254         24,191       18.7  
Provision (Benefit) for income taxes
     26,377       (158,864 )     48,535       24,275       33,528         (7,151 )     (21.3 )
                         
Net income (loss)
   $ 127,068     $ (239,280 )   $ 138,202     $ 80,521     $ 95,726       $ 31,342       32.7 %
                         
 
                                                          
Average common shares — diluted
     367,208       366,119       368,280       239,008       238,754         128,454       53.8 %
 
                                                          
Per common share
                                                          
Net income (loss) — diluted
   $ 0.35     $ (0.65 )   $ 0.38     $ 0.34     $ 0.40       $ (0.05 )     (12.5 )
Cash dividends declared
     0.265       0.265       0.265       0.265       0.265         —       —  
 
                                                          
Return on average total assets
     0.93 %     (1.74) %     1.02 %     0.92 %     1.11 %       (0.18 )%     (16.2 )
Return on average total shareholders’ equity
     8.7       (15.3 )     8.8       10.6       12.9         (4.2 )     (32.6 )
Return on average tangible shareholders’ equity (3)
     22.0       (30.7 )     19.7       13.5       16.4         5.6       34.1  
Net interest margin (4)
     3.23       3.26       3.52       3.26       3.36         (0.13 )     (3.9 )
Efficiency ratio (5)
     57.0       73.5       57.7       57.8       59.2         (2.2 )     (3.7 )
Effective tax rate (benefit)
     17.2       (39.9 )     26.0       23.2       25.9         (8.7 )     (33.6 )
 
                                                          
Revenue — fully taxable equivalent (FTE)
                                                          
Net interest income
   $ 376,824     $ 382,933     $ 409,633     $ 253,391     $ 255,555       $ 121,269       47.5  
FTE adjustment
     5,502       5,363       5,712       4,127       4,047         1,455       36.0  
                         
Net interest income (4)
     382,326       388,296       415,345       257,518       259,602         122,724       47.3  
Non-interest income
     235,752       170,557       204,674       156,193       145,177         90,575       62.4  
                         
Total revenue (4)
   $ 618,078     $ 558,853     $ 620,019     $ 413,711     $ 404,779       $ 213,299       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)   Net income less expense for amortization of intangibles for the period divided by average tangible common shareholders’ equity. Average tangible common equity equals average total common stockholders’ equity less average intangible assets and goodwill. Expense for amortization of intangibles, as well as other intangible assets, are net of deferred tax liability, and are calculated assuming a 35% tax rate.
 
(4)   On a fully taxable equivalent (FTE) basis assuming a 35% tax rate.
 
(5)   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       1Q08 vs 1Q07  
(in thousands, except as noted)   First     Fourth     Third     Second     First       Amount     Percent  
Mortgage Banking Income
                                                          
Origination and secondary marketing
   $ 9,332     $ 5,879     $ 8,375     $ 6,771     $ 4,940       $ 4,392       88.9 %
Servicing fees
     10,894       11,405       10,811       6,976       6,820         4,074       59.7  
Amortization of capitalized servicing (1)
     (6,914 )     (5,929 )     (6,571 )     (4,449 )     (3,638 )       (3,276 )     (90.0 )
Other mortgage banking income
     4,326       4,113       3,016       2,822       3,247         1,079       33.2  
                         
Sub-total
     17,638       15,468       15,631       12,120       11,369         6,269       55.1  
MSR valuation adjustment (1)
     (18,093 )     (21,245 )     (9,863 )     16,034       (1,057 )       (17,036 )     N.M.  
Net trading (losses) gains related to MSR hedging
     (6,609 )     9,479       3,861       (21,032 )     (961 )       (5,648 )     N.M.  
                         
Total mortgage banking (loss) income
   $ (7,064 )   $ 3,702     $ 9,629     $ 7,122     $ 9,351       $ (16,415 )     N.M. %
                         
 
                                                          
Capitalized mortgage servicing rights (2)
   $ 191,806     $ 207,894     $ 228,933     $ 155,420     $ 134,845       $ 56,961       42.2 %
Total mortgages serviced for others (in millions) (2)
     15,138       15,088       15,073       8,693       8,494         6,644       78.2  
MSR % of investor servicing portfolio
     1.27 %     1.38 %     1.52 %     1.79 %     1.59 %       (0.32 )%     (20.1 )
                         
 
                                                          
Net Impact of MSR Hedging
                                                          
MSR valuation adjustment (1)
   $ (18,093 )   $ (21,245 )   $ (9,863 )   $ 16,034     $ (1,057 )     $ (17,036 )     N.M. %
Net trading (losses) gains related to MSR hedging
     (6,609 )     9,479       3,861       (21,032 )     (961 )       (5,648 )     N.M.  
Net interest income related to MSR hedging
     5,934       3,192       2,357       248       —         5,934       —  
                         
Net impact of MSR hedging
   $ (18,768 )   $ (8,574 )   $ (3,645 )   $ (4,750 )   $ (2,018 )     $ (16,750 )     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.

8

 

Huntington Bancshares Incorporated
Quarterly Credit Reserves Analysis
(Unaudited)
                                         
    2008     2007  
(in thousands)   First     Fourth     Third     Second     First  
Allowance for loan and lease losses, beginning of period
   $ 578,442     $ 454,784     $ 307,519     $ 282,976     $ 272,068  
 
                                        
Acquired allowance for loan and lease losses
     —       —       188,128       —       —  
Loan and lease losses
     (60,804 )     (388,506 )     (57,466 )     (44,158 )     (27,813 )
Recoveries of loans previously charged off
     12,355       10,599       10,360       9,658       9,695  
                 
Net loan and lease losses
     (48,449 )     (377,907 )     (47,106 )     (34,500 )     (18,118 )
                 
Provision for loan and lease losses
     97,622       503,781       36,952       59,043       29,026  
Allowance for loans transferred to held-for-sale
     —       (2,216 )     (30,709 )     —       —  
                 
Allowance for loan and lease losses, end of period
   $ 627,615     $ 578,442     $ 454,784     $ 307,519     $ 282,976  
                 
 
                                        
Allowance for unfunded loan commitments and letters of credit, beginning of period
   $ 66,528     $ 58,227     $ 41,631     $ 40,541     $ 40,161  
 
                                        
Acquired AULC
     —       —       11,541       —       —  
(Reduction in) Provision for unfunded loan commitments and letters of credit losses
     (8,972 )     8,301       5,055       1,090       380  
                 
Allowance for unfunded loan commitments and letters of credit, end of period
   $ 57,556     $ 66,528     $ 58,227     $ 41,631     $ 40,541  
                 
 
                                        
Total allowances for credit losses
   $ 685,171     $ 644,970     $ 513,011     $ 349,150     $ 323,517  
                 
 
                                        
Allowance for loan and lease losses (ALLL) as % of:
                                        
Transaction reserve
     1.34 %     1.27 %     0.97 %     0.94 %     0.89 %
Economic reserve
     0.19       0.17       0.17       0.21       0.19  
                 
Total loans and leases
     1.53 %     1.44 %     1.14 %     1.15 %     1.08 %
                 
Nonaccrual loans and leases (NALs)
     166       181       182       145       180  
 
                                        
Total allowances for credit losses (ACL) as % of:
                                        
Total loans and leases
     1.67 %     1.61 %     1.28 %     1.30 %     1.23 %
Nonaccrual loans and leases
     182       202       206       165       206  
                 

9

 

Huntington Bancshares Incorporated
Quarterly Net Charge-Off Analysis
(Unaudited)
                                         
    2008     2007  
(in thousands)   First     Fourth     Third     Second     First  
Net charge-offs (recoveries) by loan and lease type:
                                        
Commercial:
                                        
Middle market commercial and industrial
   $ 3,128     $ 318,485     $ 7,760     $ 3,628     $ (11 )
Middle market commercial real estate:
                                        
Construction
     112       6,800       2,160       2,876       9  
Commercial
     2,639       13,313       2,282       10,428       377  
                 
Middle market commercial real estate
     2,751       20,113       4,442       13,304       386  
Small business
     9,128       6,043       5,102       3,603       2,089  
                 
Total commercial
     15,007       344,641       17,304       20,535       2,464  
                 
Consumer:
                                        
Automobile loans
     8,008       7,347       5,354       1,631       2,853  
Automobile leases
     3,211       3,046       2,561       2,699       2,201  
                 
Automobile loans and leases
     11,219       10,393       7,915       4,330       5,054  
Home equity
     14,515       12,212       10,841       5,405       5,968  
Residential mortgage
     2,927       3,340       4,405       1,695       1,931  
Other loans
     4,781       7,321       6,641       2,535       2,701  
                 
Total consumer
     33,442       33,266       29,802       13,965       15,654  
                 
 
                                        
Total net charge-offs
   $ 48,449     $ 377,907     $ 47,106     $ 34,500     $ 18,118  
                 
 
                                        
Net charge-offs (recoveries) — annualized percentages:
                                        
Commercial:
                                        
Middle market commercial and industrial
     0.12 %     12.20 %     0.30 %     0.23 %     — %
Middle market commercial real estate:
                                        
Construction
     0.02       1.45       0.48       0.92       —  
Commercial
     0.18       0.92       0.16       1.45       0.05  
                 
Middle market commercial real estate
     0.14       1.05       0.24       1.29       0.04  
Small business
     0.87       0.57       0.48       0.58       0.34  
                 
Total commercial
     0.27       6.18       0.31       0.64       0.08  
                 
Consumer:
                                        
Automobile loans
     0.97       0.96       0.73       0.28       0.52  
Automobile leases
     1.18       0.96       0.72       0.70       0.52  
                 
Automobile loans and leases
     1.02       0.96       0.73       0.45       0.52  
Home equity
     0.80       0.67       0.58       0.43       0.49  
Residential mortgage
     0.22       0.25       0.32       0.16       0.17  
Other loans
     2.68       4.02       4.97       2.39       2.56  
                 
Total consumer
     0.75       0.75       0.67       0.41       0.46  
                 
 
                                        
Net charge-offs as a % of average loans
     0.48 %     3.77 %     0.47 %     0.52 %     0.28 %
                 

10

 

Huntington Bancshares Incorporated
Quarterly Nonaccrual Loans (NALs), Nonperforming Assets (NPAs) and Past Due Loans and Leases
(Unaudited)
                                         
    2008     2007  
(in thousands)   March 31,     December 31,     September 30,     June 30,     March 31,  
Nonaccrual loans and leases:
                                        
Middle market commercial and industrial
   $ 65,833     $ 51,875     $ 56,691     $ 41,644     $ 32,970  
Middle market commercial real estate
     161,062       132,157       85,144       81,108       42,458  
Small business
     57,947       52,114       36,712       32,059       30,015  
Residential mortgage
     66,466       59,557       47,738       39,868       35,491  
Home equity
     26,053       24,068       23,111       16,837       16,396  
 
                                        
                 
Total nonaccrual loans and leases
     377,361       319,771       249,396       211,516       157,330  
Restructured loans
     1,157,361       1,187,368       —       —       —  
Other real estate, net:
                                        
Residential
     63,675       60,804       49,555       47,590       46,892  
Commercial
     10,181       14,467       19,310       2,079       2,456  
                 
Total other real estate, net
     73,856       75,271       68,865       49,669       49,348  
Impaired loans held for sale (1)
     66,353       73,481       100,485       —       —  
Other NPAs (2)
     2,836       4,379       16,296       —       —  
                 
Total nonperforming assets
   $ 1,677,767     $ 1,660,270     $ 435,042     $ 261,185     $ 206,678  
                 
 
                                        
Nonaccrual loans and leases as a % of total loans and leases (NAL ratio)
     0.92 %     0.80 %     0.62 %     0.79 %     0.60 %
 
                                        
NPA ratio (3)
     4.08       4.13       1.08       0.97       0.79  
 
                                        
Accruing loans and leases past due 90 days or more
   $ 152,897     $ 140,977     $ 115,607     $ 67,277     $ 70,179  
 
                                        
Accruing loans and leases past due 90 days or more as a percent of total loans and leases
     0.37 %     0.35 %     0.29 %     0.25 %     0.27 %
                                         
    2008     2007  
(in thousands)   First     Fourth     Third     Second     First  
Nonperforming assets, beginning of period
   $ 1,660,270     $ 435,042     $ 261,185     $ 206,678     $ 193,620  
New nonperforming assets
     141,090       211,134       92,986       112,348       51,588  
Restructured loans (4)
     —       1,187,368       —       —       —  
Acquired nonperforming assets
     —       —       144,492       —       —  
Returns to accruing status
     (13,484 )     (5,273 )     (8,829 )     (4,674 )     (6,176 )
Loan and lease losses
     (27,896 )     (62,502 )     (28,031 )     (27,149 )     (9,072 )
Payments
     (68,753 )     (30,756 )     (17,589 )     (19,662 )     (18,086 )
Sales
     (13,460 )     (74,743 )     (9,172 )     (6,356 )     (5,196 )
                 
Nonperforming assets, end of period
   $ 1,677,767     $ 1,660,270     $ 435,042     $ 261,185     $ 206,678  
                 
 
(1)   Represent impaired loans obtained from the Sky Financial acquisition that are intended to be sold. Held for sale loans are carried at the lower of cost or market value.
 
(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 are net of loan losses and payments.

11

 

Huntington Bancshares Incorporated
Quarterly Stock Summary, Capital, and Other Data
(Unaudited)
Quarterly common stock summary
                                         
    2008     2007  
(in thousands, except per share amounts)   First     Fourth     Third     Second     First  
Common stock price, per share
                                        
High (1)
   $ 14.870     $ 18.390     $ 22.930     $ 22.960     $ 24.140  
Low (1)
     9.640       13.500       16.050       21.300       21.610  
Close
     10.750       14.760       16.980       22.740       21.850  
Average closing price
     12.268       16.125       18.671       22.231       23.117  
 
                                        
Dividends, per share
                                        
Cash dividends declared per common share
   $ 0.265     $ 0.265     $ 0.265     $ 0.265     $ 0.265  
 
                                        
Common shares outstanding
                                        
Average — basic
     366,235       366,119       365,895       236,032       235,586  
Average — diluted
     367,208       366,119       368,280       239,008       238,754  
Ending
     366,226       366,262       365,898       236,244       235,714  
Book value per share
   $ 16.13     $ 16.24     $ 17.08     $ 12.97     $ 12.95  
Tangible book value per share (2)
     7.08       7.13       8.10       10.41       10.37  
 
                                        
Capital data
                                         
    2008     2007  
(in millions)   March 31,     December 31,     September 30,     June 30,     March 31,  
Calculation of tangible equity / asset ratio:
                                        
Total shareholders’ equity
   $ 5,907     $ 5,949     $ 6,250     $ 3,064     $ 3,051  
Less: goodwill
     (3,047 )     (3,059 )     (2,996 )     (570 )     (570 )
Less: other intangible assets
     (409 )     (428 )     (443 )     (55 )     (57 )
Add: related deferred tax liability (2)
     143       150       155       19       20  
 
                              
Total tangible equity
   $ 2,593     $ 2,612     $ 2,965     $ 2,459     $ 2,444  
 
                              
 
                                        
Total assets
   $ 56,052     $ 54,697     $ 55,304     $ 36,421     $ 34,979  
Less: goodwill
     (3,047 )     (3,059 )     (2,996 )     (570 )     (570 )
Less: other intangible assets
     (409 )     (428 )     (443 )     (55 )     (57 )
Add: related deferred tax liability (2)
     143       150       155       19       20  
 
                              
Total tangible assets
   $ 52,739     $ 51,360     $ 52,020     $ 35,815     $ 34,372  
 
                              
 
                                        
Tangible equity / asset ratio
     4.92 %     5.08 %     5.70 %     6.87 %     7.11 %
 
                                        
Other capital data:
                                        
Total risk-weighted assets (3)
   $ 46,572     $ 46,044     $ 45,931     $ 32,121     $ 31,473  
 
                                        
Tier 1 leverage ratio (3)
     6.82 %     6.77 %     7.57 %     9.07 %     8.24 %
Tier 1 risk-based capital ratio (3)
     7.55       7.51       8.35       9.74       8.98  
Total risk-based capital ratio (3)
     10.86       10.85       11.58       13.49       12.82  
 
                                        
Tangible equity / risk-weighted assets ratio (3)
     5.57       5.67       6.46       7.66       7.77  
Average equity / average assets
     10.70       11.40       11.50       8.66       8.63  
 
                                        
Other data:
                                        
Number of employees (full-time equivalent)
     11,496       11,925       12,312       8,410       8,029  
Number of domestic full-service banking offices (4)
     627       625       620       379       375  
 
(1)   High and low stock prices are intra-day quotes obtained from NASDAQ.
 
(2)   Other intangible assets is net of deferred tax liability, and is calculated assuming a 35% tax rate.
 
(3)   March 31, 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.

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