##### 



Exhibit 99 (d)
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal Control  Integrated
Framework




---



##### 







|                          |                                   
|------------------------- | ----------------------------------
|CONSOLIDATEDBALANCESHEETS | HUNTINGTON BANCSHARES INCORPORATED

|                                                                        |                                                                                                                                                                  |                            |            |            |            |   |            |            |            | 
|----------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | 
|                                                                        |                                                                                                                                                                  |                           
|                                                                        |                                                                                                                                                                  | December 31,               |           
|                                                                       
|                                                                       
|                                                                        |                                                                                                                                                                 
|(in thousands, except number of shares)                                 |                                                                                                                                                                  | 2004                       |            |            | 2003       |  
|                                                                       
|Assets                                                                  |                                                                                                                                                                  |                            |            |            |            |   |            |           
|Cash and due from banks                                                 |                                                                                                                                                                  | $                          | 877,320    |            |            | $ | 899,689    |           
|Federal funds sold and securities purchased under
    resale agreements |                                                                                                                                                                  |                            | 628,040    |            |            |   | 96,814     |           
|Interest bearing deposits in banks                                      |                                                                                                                                                                  |                            | 22,398     |            |            |   | 33,627     |           
|Trading account securities                                              |                                                                                                                                                                  |                            | 309,630    |            |            |   | 7,589      |           
|Loans held for sale                                                     |                                                                                                                                                                  |                            | 223,469    |            |            |   | 226,729    |           
|Investment securities                                                   |                                                                                                                                                                  |                            | 4,238,945  |            |            |   | 4,929,060  |           
|Loans and leases:                                                       |                                                                                                                                                                  |                            |            |            |            |   |            |           
|                                                                        | Commercial                                                                                                                                                       |                            |            |            |            |   |            |            |           
|                                                                        |                                                                                                                                                                  | Commercial and industrial  |            |            | 5,829,685  |   |            |            | 5,313,517  | 
|                                                                        |                                                                                                                                                                  | Commercial real estate     |            |            | 4,473,293  |   |            |            | 4,172,083  | 
|                                                                        | Consumer                                                                                                                                                         |                            |            |            |            |   |            |            |           
|                                                                        |                                                                                                                                                                  | Automobile loans           |            |            | 1,948,667  |   |            |            | 2,991,642  | 
|                                                                        |                                                                                                                                                                  | Automobile leases          |            |            | 2,443,455  |   |            |            | 1,902,170  | 
|                                                                        |                                                                                                                                                                  | Home equity loans          |            |            | 4,554,540  |   |            |            | 3,733,861  | 
|                                                                        |                                                                                                                                                                  | Residential mortgage loans |            |            | 3,829,234  |   |            |            | 2,530,665  | 
|                                                                        |                                                                                                                                                                  | Other consumer loans       |            |            | 481,403    |   |            |            | 431,180    | 
|                                                                       
|Total loans and leases                                                  |                                                                                                                                                                  |                            | 23,560,277 |            |            |   | 21,075,118 |           
|Allowance for loan and lease losses                                     |                                                                                                                                                                  |                            | (271,211   | )          |            |   | (299,732   | )         
|                                                                       
|Net loans and leases                                                    |                                                                                                                                                                  |                            | 23,289,066 |            |            |   | 20,775,386 |           
|                                                                       
|Operating lease assets                                                  |                                                                                                                                                                  |                            | 587,310    |            |            |   | 1,260,440  |           
|Bank owned life insurance                                               |                                                                                                                                                                  |                            | 963,059    |            |            |   | 927,671    |           
|Premises and equipment                                                  |                                                                                                                                                                  |                            | 355,115    |            |            |   | 349,712    |           
|Goodwill and other intangible assets                                    |                                                                                                                                                                  |                            | 215,807    |            |            |   | 217,009    |           
|Customers acceptance liability                                         |                                                                                                                                                                  |                            | 11,299     |            |            |   | 9,553      |           
|Accrued income and other assets                                         |                                                                                                                                                                  |                            | 844,039    |            |            |   | 786,047    |           
|                                                                       
|Total Assets                                                            |                                                                                                                                                                  | $                          | 32,565,497 |            |            | $ | 30,519,326 |           
|                                                                       
|Liabilities and
    Shareholders Equity                                |                                                                                                                                                                  |                            |            |            |            |   |            |           
|Liabilities                                                             |                                                                                                                                                                  |                            |            |            |            |   |            |           
|                                                                        | Deposits in domestic offices                                                                                                                                     |                            |            |            |            |   |            |            |           
|                                                                        |                                                                                                                                                                  | Non-interest bearing       |            | $          | 3,392,123  |   |            | $          | 2,986,992  | 
|                                                                        |                                                                                                                                                                  | Interest bearing           |            |            | 16,935,091 |   |            |            | 15,025,188 | 
|                                                                        | Deposits in foreign offices                                                                                                                                      |                            |            | 440,947    |            |   |            | 475,215    |           
|                                                                       
|                                                                        | Total deposits                                                                                                                                                   |                            |            | 20,768,161 |            |   |            | 18,487,395 |           
|                                                                       
|                                                                        | Short-term borrowings                                                                                                                                            |                            |            | 1,207,233  |            |   |            | 1,452,304  |           
|                                                                        | Federal Home Loan Bank advances                                                                                                                                  |                            |            | 1,271,088  |            |   |            | 1,273,000  |           
|                                                                        | Other long-term debt                                                                                                                                             |                            |            | 4,016,004  |            |   |            | 4,544,509  |           
|                                                                        | Subordinated notes                                                                                                                                               |                            |            | 1,039,793  |            |   |            | 990,470    |           
|                                                                        | Allowance for unfunded loan commitments and
    letters of credit                                                                                                |                            |            | 33,187     |            |   |            | 35,522     |           
|                                                                        | Bank acceptances outstanding                                                                                                                                     |                            |            | 11,299     |            |   |            | 9,553      |           
|                                                                        | Deferred federal income tax liability                                                                                                                            |                            |            | 783,628    |            |   |            | 654,535    |           
|                                                                        | Accrued expenses and other liabilities                                                                                                                           |                            |            | 897,466    |            |   |            | 797,036    |           
|                                                                       
|Total Liabilities                                                       |                                                                                                                                                                  |                            | 30,027,859 |            |            |   | 28,244,324 |           
|                                                                       
|Shareholders equity                                                    |                                                                                                                                                                  |                            |            |            |            |   |            |           
|                                                                        | Preferred stock  authorized 6,617,808
    shares; none outstanding                                                                                              |                            |            |           |            |   |            |           |           
|                                                                        | Common stock  without par value;
    authorized 500,000,000 shares; issued 257,866,255 shares;
    outstanding 231,605,281 and 229,008,088 shares, respectively |                            |            | 2,484,204  |            |   |            | 2,483,542  |           
|                                                                        | Less 26,260,974 and 28,858,167 treasury
    shares, respectively                                                                                                 |                            |            | (499,259   | )          |   |            | (548,576   | )         
|                                                                        | Accumulated other comprehensive income (loss)                                                                                                                    |                            |            | (10,903    | )          |   |            | 2,678      |           
|                                                                        | Retained earnings                                                                                                                                                |                            |            | 563,596    |            |   |            | 337,358    |           
|                                                                       
|Total Shareholders Equity                                              |                                                                                                                                                                  |                            | 2,537,638  |            |            |   | 2,275,002  |           
|                                                                       
|Total Liabilities and
    Shareholders Equity                          |                                                                                                                                                                  | $                          | 32,565,497 |            |            | $ | 30,519,326 |           
|                                                                       

See Notes to Consolidated Financial
Statements.

96




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##### 







|                                |                                   
|------------------------------- | ----------------------------------
|CONSOLIDATEDSTATEMENTS OFINCOME | HUNTINGTON BANCSHARES INCORPORATED

|                                                                              |                                                                                        |                                  |           |         |           |   |           |         |           |   |           |         |           |  |  | 
|----------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | -------------------------------- | --------- | ------- | --------- | - | --------- | ------- | --------- | - | --------- | ------- | --------- |  |  | 
|                                                                              |                                                                                        |                                 
|                                                                              |                                                                                        | Twelve Months Ended December 31,
|                                                                             
|                                                                             
|                                                                             
|(in thousands, except per share amounts)                                      |                                                                                        | 2004                             |           |         | 2003      |   |           | 2002    |           |   |          
|                                                                             
|Interest and fee income                                                       |                                                                                        |                                  |           |         |           |   |           |         |           |   |           |         |           | 
|                                                                              | Loans and leases                                                                       |                                  |           |         |           |   |           |         |           |   |           |         |           |  | 
|                                                                              |                                                                                        | Taxable                          |           | $       | 1,132,938 |   |           | $       | 1,097,109 |   |           | $       | 1,088,932 |  |  | 
|                                                                              |                                                                                        | Taxable-exempt                   |           |         | 1,135     |   |           |         | 1,315     |   |           |         | 1,975     |  |  | 
|                                                                              | Investment securities                                                                  |                                  |           |         |           |   |           |         |           |   |           |         |           |  | 
|                                                                              |                                                                                        | Taxable                          |           |         | 171,709   |   |           |         | 159,590   |   |           |         | 173,107   |  |  | 
|                                                                              |                                                                                        | Taxable-exempt                   |           |         | 17,884    |   |           |         | 15,067    |   |           |         | 6,516     |  |  | 
|Other                                                                         |                                                                                        |                                  | 23,649    |         |           |   | 32,675    |         |           |   | 22,665    |         |           | 
|                                                                             
|Total Interest Income                                                         |                                                                                        |                                  | 1,347,315 |         |           |   | 1,305,756 |         |           |   | 1,293,195 |         |           | 
|                                                                             
|Interest expense                                                              |                                                                                        |                                  |           |         |           |   |           |         |           |   |           |         |           | 
|                                                                              | Deposits                                                                               |                                  |           | 257,099 |           |   |           | 288,271 |           |   |           | 385,733 |           |  | 
|                                                                              | Short-term borrowings                                                                  |                                  |           | 13,053  |           |   |           | 15,698  |           |   |           | 28,668  |           |  | 
|                                                                              | Federal Home Loan Bank advances                                                        |                                  |           | 33,253  |           |   |           | 24,394  |           |   |           | 5,946   |           |  | 
|                                                                              | Subordinated notes and other long-term debt
    including preferred capital securities |                                  |           | 132,536 |           |   |           | 128,407 |           |   |           | 123,274 |           |  | 
|                                                                             
|Total Interest Expense                                                        |                                                                                        |                                  | 435,941   |         |           |   | 456,770   |         |           |   | 543,621   |         |           | 
|                                                                             
|Net Interest Income                                                           |                                                                                        |                                  | 911,374   |         |           |   | 848,986   |         |           |   | 749,574   |         |           | 
|                                                                              | Provision for credit losses                                                            |                                  |           | 55,062  |           |   |           | 163,993 |           |   |           | 194,426 |           |  | 
|                                                                             
|Net Interest Income After Provision for
    Credit Losses                     |                                                                                        |                                  | 856,312   |         |           |   | 684,993   |         |           |   | 555,148   |         |           | 
|                                                                             
|                                                                              | Operating lease income                                                                 |                                  |           | 287,091 |           |   |           | 489,698 |           |   |           | 657,074 |           |  | 
|                                                                              | Service charges on deposit accounts                                                    |                                  |           | 171,115 |           |   |           | 167,840 |           |   |           | 153,564 |           |  | 
|                                                                              | Trust services                                                                         |                                  |           | 67,410  |           |   |           | 61,649  |           |   |           | 62,051  |           |  | 
|                                                                              | Brokerage and insurance income                                                         |                                  |           | 54,799  |           |   |           | 57,844  |           |   |           | 62,109  |           |  | 
|                                                                              | Bank owned life insurance income                                                       |                                  |           | 42,297  |           |   |           | 43,028  |           |   |           | 43,123  |           |  | 
|                                                                              | Other service charges and fees                                                         |                                  |           | 41,574  |           |   |           | 41,446  |           |   |           | 42,888  |           |  | 
|                                                                              | Mortgage banking                                                                       |                                  |           | 32,296  |           |   |           | 58,180  |           |   |           | 32,033  |           |  | 
|                                                                              | Securities gains                                                                       |                                  |           | 15,763  |           |   |           | 5,258   |           |   |           | 4,902   |           |  | 
|                                                                              | Gain on sales of automobile loans                                                      |                                  |           | 14,206  |           |   |           | 40,039  |           |   |           |        |           |  | 
|                                                                              | Gain on sale of branch offices                                                         |                                  |           |        |           |   |           | 13,112  |           |   |           |        |           |  | 
|                                                                              | Gain on sale of Florida operations                                                     |                                  |           |        |           |   |           |        |           |   |           | 182,470 |           |  | 
|                                                                              | Merchant Services gain                                                                 |                                  |           |        |           |   |           |        |           |   |           | 24,550  |           |  | 
|                                                                              | Other income                                                                           |                                  |           | 92,047  |           |   |           | 91,059  |           |   |           | 76,940  |           |  | 
|                                                                             
|Total Non-Interest Income                                                     |                                                                                        |                                  | 818,598   |         |           |   | 1,069,153 |         |           |   | 1,341,704 |         |           | 
|                                                                             
|                                                                              | Personnel costs                                                                        |                                  |           | 485,806 |           |   |           | 447,263 |           |   |           | 418,037 |           |  | 
|                                                                              | Operating lease expense                                                                |                                  |           | 236,478 |           |   |           | 393,270 |           |   |           | 518,970 |           |  | 
|                                                                              | Net occupancy                                                                          |                                  |           | 75,941  |           |   |           | 62,481  |           |   |           | 59,539  |           |  | 
|                                                                              | Outside data processing and other services                                             |                                  |           | 72,115  |           |   |           | 66,118  |           |   |           | 67,368  |           |  | 
|                                                                              | Equipment                                                                              |                                  |           | 63,342  |           |   |           | 65,921  |           |   |           | 68,323  |           |  | 
|                                                                              | Professional services                                                                  |                                  |           | 36,876  |           |   |           | 42,448  |           |   |           | 33,085  |           |  | 
|                                                                              | Marketing                                                                              |                                  |           | 26,489  |           |   |           | 27,490  |           |   |           | 27,911  |           |  | 
|                                                                              | Telecommunications                                                                     |                                  |           | 19,787  |           |   |           | 21,979  |           |   |           | 22,661  |           |  | 
|                                                                              | Printing and supplies                                                                  |                                  |           | 12,463  |           |   |           | 13,009  |           |   |           | 15,198  |           |  | 
|                                                                              | Amortization of intangibles                                                            |                                  |           | 817     |           |   |           | 816     |           |   |           | 2,019   |           |  | 
|                                                                              | Restructuring reserve (releases) charges                                               |                                  |           | (1,151  | )         |   |           | (6,666  | )         |   |           | 48,973  |           |  | 
|                                                                              | Loss on early extinguishment of debt                                                   |                                  |           |        |           |   |           | 15,250  |           |   |           |        |           |  | 
|                                                                              | Other expense                                                                          |                                  |           | 93,281  |           |   |           | 80,780  |           |   |           | 92,063  |           |  | 
|                                                                             
|Total Non-Interest Expense                                                    |                                                                                        |                                  | 1,122,244 |         |           |   | 1,230,159 |         |           |   | 1,374,147 |         |           | 
|                                                                             
|Income Before Income Taxes                                                    |                                                                                        |                                  | 552,666   |         |           |   | 523,987   |         |           |   | 522,705   |         |           | 
|                                                                              | Provision for income taxes                                                             |                                  |           | 153,741 |           |   |           | 138,294 |           |   |           | 198,974 |           |  | 
|                                                                             
|Income before cumulative effect of change in
    accounting principle         |                                                                                        |                                  | 398,925   |         |           |   | 385,693   |         |           |   | 323,731   |         |           | 
|Cumulative effect of change in accounting
    principle, net of tax of $7,178 |                                                                                        |                                  |          |         |           |   | (13,330   | )       |           |   |          |         |           | 
|                                                                             
|Net Income                                                                    |                                                                                        | $                                | 398,925   |         |           | $ | 372,363   |         |           | $ | 323,731   |         |           | 
|                                                                             
|Average common shares  basic                                                 |                                                                                        |                                  | 229,913   |         |           |   | 229,401   |         |           |   | 242,279   |         |           | 
|Average common shares  diluted                                               |                                                                                        |                                  | 233,856   |         |           |   | 231,582   |         |           |   | 244,012   |         |           | 
|                                                                             
|Per Common Share:                                                             |                                                                                        |                                  |           |         |           |   |           |         |           |   |           |         |           | 
|                                                                              | Income before cumulative effect of change in
    accounting principle  basic          |                                  |           | $ 1.74  |           |   | $         | 1.68    |           |   | $         | 1.34    |           |  | 
|                                                                              | Income before cumulative effect of change in
    accounting principle  diluted        |                                  |           | 1.71    |           |   |           | 1.67    |           |   |           | 1.33    |           |  | 
|                                                                              | Net Income  basic                                                                     |                                  |           | 1.74    |           |   |           | 1.62    |           |   |           | 1.34    |           |  | 
|                                                                              | Net Income  diluted                                                                   |                                  |           | 1.71    |           |   |           | 1.61    |           |   |           | 1.33    |           |  | 
|                                                                              | Cash dividends declared                                                                |                                  |           | 0.75    |           |   |           | 0.67    |           |   |           | 0.64    |           |  | 

See Notes to Consolidated Financial
Statements.

97




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##### 







|                                                       |                                   
|------------------------------------------------------ | ----------------------------------
|CONSOLIDATEDSTATEMENTS OFCHANGES INSHAREHOLDERSEQUITY | HUNTINGTON BANCSHARES INCORPORATED

|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          |         | 
|------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | - |  | ------------- | - | - | -------------- |  |  | ------- |  |  | -------- | --------- | ------ | ------ |  | ------- | ------------- | - | - | --------- | -------- | - | ----- | -------- | ------- | - | - | ------- | -------- | - | - | --------- | -------- | ------- | 
|                               
|                               
|                                |                                                                                                                                                                                  
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   | Accumulated    |  |  |         |  |  |         
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |               
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |               
|                                |                                                                                                                                                                                   | Preferred Stock            |   |  | Common Stock  |   |   | Treasury Stock |  |  | Other   |  |  | Retained |           |        |        | 
|                                |                                                                                                                                                                                   |                            |   |  | Comprehensive |   |   | Earnings       |  |  |        
|(in thousands)                  |                                                                                                                                                                                   | Shares                     |   |  | Amount        |   |   | Shares         |  |  | Amount  |  |  | Shares   |           |        | Amount |  |         | Income (Loss) |   |   | (Deficit) |          |   | Total |         
|                               
|Balance  January 1, 2002       |                                                                                                                                                                                   |                            |  |  |               | $ |  |                |  |  | 257,866 |  |  | $        | 2,490,724 |        |        |  | (6,672  | )             |   | $ | (123,849  | )        |   |       | $ 25,488 |         |   | $ | (50,466 | )        |   | $ | 2,341,897 |         
|                                | Comprehensive Income:                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          |        
|                                | Net income                                                                                                                                                                        |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | 323,731  |   |   |           | 323,731  |        
|                                | Unrealized net holding gains
    on securities available for sale
    arising during the period, net of reclassification adjustment
    for
    net gains included in net income  |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | 27,387  |   |   |         |          |   |   |           | 27,387   |        
|                                | Unrealized gains on derivative instruments used
    in cash flow hedging relationships                                                                                            |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | 9,620   |   |   |         |          |   |   |           | 9,620    |        
|                                | Minimum pension liability                                                                                                                                                         |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (195    | ) |   |         |          |   |   |           | (195     | )      
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                |                                                                                                                                                                                   | Total comprehensive income |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          | 360,543 | 
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                | Stock issued for acquisitions                                                                                                                                                     |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (838   | )      |  |         | 1,038         |   |   |           | 19,989   |   |       |          |         |   |   |         |          |   |   |           | 19,151   |        
|                                | Cash dividends declared
    ($0.64 per share)                                                                                                                                     |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | (154,794 | ) |   |           | (154,794 | )      
|                                | Stock options exercised                                                                                                                                                           |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (3,545 | )      |  |         | 373           |   |   |           | 6,757    |   |       |          |         |   |   |         |          |   |   |           | 3,212    |        
|                                | Treasury shares purchased                                                                                                                                                         |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         | (19,161       | ) |   |           | (370,012 | ) |       |          |         |   |   |         |          |   |   |           | (370,012 | )      
|                                | Other                                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (1,920 | )      |  |         | (565          | ) |   |           | (8,284   | ) |       |          |         |   |   |         |          |   |   |           | (10,204  | )      
|                               
|Balance  December 31, 2002     |                                                                                                                                                                                   |                            |  |  |               |   |  |                |  |  | 257,866 |  |  |          | 2,484,421 |        |        |  | (24,987 | )             |   |   | (475,399  | )        |   |       | 62,300   |         |   |   | 118,471 |          |   |   | 2,189,793 |         
|                               
|                                | Comprehensive Income:                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          |        
|                                | Net income                                                                                                                                                                        |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | 372,363  |   |   |           | 372,363  |        
|                                | Unrealized net holding losses
    on securities available for sale
    arising during the period, net of reclassification adjustment
    for
    net gains included in net income |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (47,427 | ) |   |         |          |   |   |           | (47,427  | )      
|                                | Unrealized losses on derivative instruments used
    in cash flow hedging relationships                                                                                           |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (11,081 | ) |   |         |          |   |   |           | (11,081  | )      
|                                | Minimum pension liability                                                                                                                                                         |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (1,114  | ) |   |         |          |   |   |           | (1,114   | )      
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                |                                                                                                                                                                                   | Total comprehensive income |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          | 312,741 | 
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                | Cash dividends declared
    ($0.67 per share)                                                                                                                                     |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | (153,476 | ) |   |           | (153,476 | )      
|                                | Stock options exercised                                                                                                                                                           |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (609   | )      |  |         | 481           |   |   |           | 8,691    |   |       |          |         |   |   |         |          |   |   |           | 8,082    |        
|                                | Treasury shares purchased                                                                                                                                                         |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         | (4,300        | ) |   |           | (81,061  | ) |       |          |         |   |   |         |          |   |   |           | (81,061  | )      
|                                | Other                                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (270   | )      |  |         | (52           | ) |   |           | (807     | ) |       |          |         |   |   |         |          |   |   |           | (1,077   | )      
|                               
|Balance  December 31, 2003     |                                                                                                                                                                                   |                            |  |  |               |   |  |                |  |  | 257,866 |  |  |          | 2,483,542 |        |        |  | (28,858 | )             |   |   | (548,576  | )        |   |       | 2,678    |         |   |   | 337,358 |          |   |   | 2,275,002 |         
|                               
|                                | Comprehensive Income:                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          |        
|                                | Net income                                                                                                                                                                        |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | 398,925  |   |   |           | 398,925  |        
|                                | Unrealized net holding losses
    on securities available for sale arising during the period,
    net
    of reclassification adjustment for
    net gains included in net income |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (22,112 | ) |   |         |          |   |   |           | (22,112  | )      
|                                | Unrealized gains on derivative instruments
    used in cash flow hedging relationships                                                                                            |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | 9,694   |   |   |         |          |   |   |           | 9,694    |        
|                                | Minimum pension liability                                                                                                                                                         |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          | (1,163  | ) |   |         |          |   |   |           | (1,163   | )      
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                |                                                                                                                                                                                   | Total comprehensive income |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         |          |   |   |           |          | 385,344 | 
|                                |                                                                                                                                                                                   |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |         
|                                | Cash dividends declared
    ($0.75 per share)                                                                                                                                     |                            |   |  |               |   |   |                |  |  |         |  |  |          |           |        |        |  |         |               |   |   |           |          |   |       |          |         |   |   |         | (172,687 | ) |   |           | (172,687 | )      
|                                | Stock options exercised                                                                                                                                                           |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | 678    |        |  |         | 2,432         |   |   |           | 46,561   |   |       |          |         |   |   |         |          |   |   |           | 47,239   |        
|                                | Other                                                                                                                                                                             |                            |   |  |               |   |   |                |  |  |         |  |  |          |           | (16    | )      |  |         | 165           |   |   |           | 2,756    |   |       |          |         |   |   |         |          |   |   |           | 2,740    |        
|                               
|Balance 
    December 31, 2004 |                                                                                                                                                                                   |                            |  |  |               | $ |  |                |  |  | 257,866 |  |  | $        | 2,484,204 |        |        |  | (26,261 | )             |   | $ | (499,259  | )        |   |       | $(10,903 | )       |   | $ | 563,596 |          |   | $ | 2,537,638 |         
|                               

See Notes to Consolidated Financial
Statements.

98




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##### 



|                                   |                                   
|---------------------------------- | ----------------------------------
|CONSOLIDATEDSTATEMENTS OFCASHFLOWS | HUNTINGTON BANCSHARES INCORPORATED

|                                                     |                                                                                      |                                                                              |            |            |            |   |            |            |            |   |            |            |            |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------- | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | -
|                                                     |                                                                                      |                                                                             
|                                                     |                                                                                      | Twelve Months Ended December 31,                                             |           
|                                                    
|                                                    
|                                                     |                                                                                     
|(in thousands of dollars)                            |                                                                                      | 2004                                                                         |            |            | 2003       |   |            | 2002       |           
|                                                    
|                                                    
|                                                     |                                                                                     
|                                                     |                                                                                      |                                                                             
|                                                     |                                                                                      | (Restated)                                                                   |           
|Operating Activities                                 |                                                                                      |                                                                              |            |            |            |   |            |            |            |   |            |           
|                                                     | Net Income                                                                           |                                                                              | $          | 398,925    |            |   | $          | 372,363    |            |   | $          | 323,731    |           
|                                                     | Adjustments to reconcile net income to net cash
    provided by operating activities |                                                                              |            |            |            |   |            |            |            |   |            |            |           
|                                                     |                                                                                      | Cumulative effect of change in accounting
    principle, net of tax          |            |            |           |   |            |            | 13,330     |   |            |            |           |  
|                                                     |                                                                                      | Provision for credit losses                                                  |            |            | 55,062     |   |            |            | 163,993    |   |            |            | 194,426    |  
|                                                     |                                                                                      | Depreciation on operating lease assets                                       |            |            | 216,444    |   |            |            | 350,550    |   |            |            | 463,783    |  
|                                                     |                                                                                      | Amortization of mortgage servicing rights                                    |            |            | 19,019     |   |            |            | 25,966     |   |            |            | 12,051     |  
|                                                     |                                                                                      | Other depreciation and amortization                                          |            |            | 89,669     |   |            |            | 126,530    |   |            |            | 4,006      |  
|                                                     |                                                                                      | Mortgage servicing rights impairment
    (recoveries) charges                |            |            | (1,378     | ) |            |            | (14,957    | ) |            |            | 14,113     |  
|                                                     |                                                                                      | Deferred income tax expense                                                  |            |            | 140,962    |   |            |            | 258        |   |            |            | 96,718     |  
|                                                     |                                                                                      | (Increase) decrease in trading
    account securities                        |            |            | (302,041   | ) |            |            | (7,348     | ) |            |            | 13,151     |  
|                                                     |                                                                                      | Originations of loans held for sale                                          |            |            | (1,858,262 | ) |            |            | (4,221,322 | ) |            |            | (2,435,367 | )
|                                                     |                                                                                      | Principal payments on and proceeds from loans
    held for sale              |            |            | 1,861,272  |   |            |            | 4,522,972  |   |            |            | 2,536,374  |  
|                                                     |                                                                                      | Gains on sales of investment securities                                      |            |            | (15,763    | ) |            |            | (5,258     | ) |            |            | (4,902     | )
|                                                     |                                                                                      | Gains on sales/securitizations of loans                                      |            |            | (14,206    | ) |            |            | (45,610    | ) |            |            | (11,031    | )
|                                                     |                                                                                      | Gain on sale of branch offices                                               |            |            |           |   |            |            | (13,112    | ) |            |            |           |  
|                                                     |                                                                                      | Gain on sale of Florida banking and
    insurance operations                 |            |            |           |   |            |            |           |   |            |            | (182,470   | )
|                                                     |                                                                                      | Gain on restructuring of Huntington Merchant
    Services LLC                |            |            |           |   |            |            |           |   |            |            | (24,550    | )
|                                                     |                                                                                      | Loss on early extinguishment of debt                                         |            |            |           |   |            |            | 15,250     |   |            |            |           |  
|                                                     |                                                                                      | Restructuring (releases) charges                                             |            |            | (1,151     | ) |            |            | (6,666     | ) |            |            | 48,973     |  
|                                                     |                                                                                      | (Increase) decrease of cash surrender value of
    bank owned life insurance |            |            | (42,297    | ) |            |            | (43,028    | ) |            |            | (43,123    | )
|                                                     |                                                                                      | Increase (decrease) in payable to investors in
    securitized loans         |            |            | 24,541     |   |            |            | 64,986     |   |            |            | (13,794    | )
|                                                     |                                                                                      | Other, net                                                                   |            |            | (42,580    | ) |            |            | 40,373     |   |            |            | 37,972     |  
|                                                    
|Net Cash Provided by
    Operating Activities        |                                                                                      |                                                                              | 528,216    |            |            |   | 1,339,270  |            |            |   | 1,030,061  |           
|                                                    
|Investing Activities                                 |                                                                                      |                                                                              |            |            |            |   |            |            |            |   |            |           
|                                                     | Decrease (increase) in interest bearing
    deposits in banks                        |                                                                              |            | 11,229     |            |   |            | 3,673      |            |   |            | (16,095    | )         
|                                                     | Proceeds from:                                                                       |                                                                              |            |            |            |   |            |            |            |   |            |            |           
|                                                     |                                                                                      | Maturities and calls of investment securities                                |            |            | 881,305    |   |            |            | 1,585,979  |   |            |            | 1,036,706  |  
|                                                     |                                                                                      | Sales of investment securities                                               |            |            | 2,386,479  |   |            |            | 1,161,325  |   |            |            | 855,309    |  
|                                                     | Purchases of investment securities                                                   |                                                                              |            | (2,438,158 | )          |   |            | (4,341,946 | )          |   |            | (1,959,137 | )         
|                                                     | Proceeds from sales/securitizations of loans                                         |                                                                              |            | 1,534,395  |            |   |            | 2,576,869  |            |   |            | 465,699    |           
|                                                     | Net loan and lease originations,
    excluding sales                                 |                                                                              |            | (4,216,309 | )          |   |            | (4,506,843 | )          |   |            | (3,867,300 | )         
|                                                     | Purchases of operating lease assets                                                  |                                                                              |            | (14,666    | )          |   |            |           |            |   |            | (297,646   | )         
|                                                     | Proceeds from sale of operating lease assets                                         |                                                                              |            | 451,264    |            |   |            | 572,596    |            |   |            | 667,147    |           
|                                                     | Sale of branch offices                                                               |                                                                              |            |           |            |   |            | (81,367    | )          |   |            |           |           
|                                                     | Proceeds from sale of premises and equipment                                         |                                                                              |            | 1,188      |            |   |            | 7,382      |            |   |            | 19,390     |           
|                                                     | Purchases of premises and equipment                                                  |                                                                              |            | (56,531    | )          |   |            | (64,571    | )          |   |            | (57,761    | )         
|                                                     | Proceeds from sales of other real estate                                             |                                                                              |            | 16,388     |            |   |            | 14,083     |            |   |            | 13,112     |           
|                                                     | Consolidation of cash of securitization trust                                        |                                                                              |            |           |            |   |            | 58,500     |            |   |            |           |           
|                                                     | Net cash paid in purchase acquisitions                                               |                                                                              |            |           |            |   |            |           |            |   |            | (8,305     | )         
|                                                     | Proceeds from restructuring of Huntington
    Merchant Services, LLC                 |                                                                              |            |           |            |   |            |           |            |   |            | 27,000     |           
|                                                     | Net cash paid related to sale of Florida banking
    and insurance operations        |                                                                              |            |           |            |   |            |           |            |   |            | (1,277,767 | )         
|                                                    
|Net Cash Used for
    Investing Activities           |                                                                                      |                                                                              | (1,443,416 | )          |            |   | (3,014,320 | )          |            |   | (4,399,648 | )         
|                                                    
|Financing Activities                                 |                                                                                      |                                                                              |            |            |            |   |            |            |            |   |            |           
|                                                     | Increase in deposits                                                                 |                                                                              |            | 2,273,046  |            |   |            | 1,177,324  |            |   |            | 2,073,891  |           
|                                                     | (Decrease) increase in short-term borrowings                                         |                                                                              |            | (245,071   | )          |   |            | (688,712   | )          |   |            | 537,770    |           
|                                                     | Proceeds from issuance of subordinated notes                                         |                                                                              |            | 148,830    |            |   |            | 198,430    |            |   |            |           |           
|                                                     | Maturity of subordinated notes                                                       |                                                                              |            | (100,000   | )          |   |            | (250,000   | )          |   |            |           |           
|                                                     | Proceeds from Federal Home Loan Bank advances                                        |                                                                              |            | 1,088      |            |   |            | 270,000    |            |   |            | 1,000,000  |           
|                                                     | Maturity of Federal Home Loan Bank advances                                          |                                                                              |            | (3,000     | )          |   |            | (10,000    | )          |   |            | (4,000     | )         
|                                                     | Proceeds from issuance of long-term debt                                             |                                                                              |            | 925,000    |            |   |            | 2,075,000  |            |   |            | 1,025,000  |           
|                                                     | Maturity of long-term debt                                                           |                                                                              |            | (1,455,000 | )          |   |            | (895,250   | )          |   |            | (932,150   | )         
|                                                     | Dividends paid on common stock                                                       |                                                                              |            | (168,075   | )          |   |            | (151,023   | )          |   |            | (167,002   | )         
|                                                     | Repurchases of common stock                                                          |                                                                              |            |           |            |   |            | (81,061    | )          |   |            | (370,012   | )         
|                                                     | Net proceeds from issuance of common stock                                           |                                                                              |            | 47,239     |            |   |            | 8,082      |            |   |            | 3,212      |           
|                                                    
|Net Cash Provided by
    Financing Activities        |                                                                                      |                                                                              | 1,424,057  |            |            |   | 1,652,790  |            |            |   | 3,166,709  |           
|                                                    
|Change in Cash and
    Cash Equivalents              |                                                                                      |                                                                              | 508,857    |            |            |   | (22,260    | )          |            |   | (202,878   | )         
|Cash and Cash Equivalents at Beginning
    of Period |                                                                                      |                                                                              | 996,503    |            |            |   | 1,018,763  |            |            |   | 1,221,641  |           
|                                                    
|Cash and Cash Equivalents at End
    of Period       |                                                                                      | $                                                                            | 1,505,360  |            |            | $ | 996,503    |            |            | $ | 1,018,763  |           
|                                                    
|Supplemental disclosures                             |                                                                                      |                                                                              |            |            |            |   |            |            |            |   |            |           
|                                                     | Income taxes paid                                                                    |                                                                              | $          | 34,904     |            |   | $          | 72,128     |            |   | $          | 70,463     |           
|                                                     | Interest paid                                                                        |                                                                              |            | 422,060    |            |   |            | 469,331    |            |   |            | 560,731    |           
|                                                     | Non-cash activities:                                                                 |                                                                              |            |            |            |   |            |            |            |   |            |            |           
|                                                     |                                                                                      | Mortgage loans securitized                                                   |            |            | 115,929    |   |            |            | 354,200    |   |            |            | 386,385    |  
|                                                     |                                                                                      | Common stock dividends accrued, paid in
    subsequent year                  |            |            | 35,662     |   |            |            | 31,113     |   |            |            | 28,032     |  
|                                                     |                                                                                      | Stock issued for purchase acquisitions                                       |            |            |           |   |            |            |           |   |            |            | 19,151     |  

See Notes to Consolidated Financial
Statements.

99




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##### 



|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



1. SIGNIFICANT ACCOUNTING
POLICIES



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | NATURE OF
    OPERATIONS Huntington
    Bancshares Incorporated (Huntington) is a multi-state
    diversified financial holding company organized under Maryland
    law in 1966 and headquartered in Columbus, Ohio. Through its
    subsidiaries, Huntington is engaged in providing full-service
    commercial and consumer banking services, mortgage banking
    services, automobile financing, equipment leasing, investment
    management, trust services, and discount brokerage services, as
    well as reinsuring credit life and disability insurance, and
    selling other insurance and financial products and services.
    Huntingtons banking offices are located in Ohio, Michigan,
    West Virginia, Indiana, and Kentucky. Certain activities are
    also conducted in other states including Arizona, Florida,
    Georgia, Maryland, Nevada, New Jersey, Pennsylvania, and
    Tennessee. Huntington has a foreign office in the Cayman Islands
    and a foreign office in Hong Kong.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| | BASIS OF
    PRESENTATION The
    consolidated financial statements include the accounts of
    Huntington and its majority-owned subsidiaries and are presented
    in accordance with accounting principles generally accepted in
    the United States (GAAP). All significant intercompany
    transactions and balances have been eliminated in consolidation.
    Companies in which Huntington holds more than a 50% voting
    equity interest are consolidated. For consolidated entities
    where Huntington holds less than a 100% interest, Huntington
    recognizes a minority interest liability (included in other
    liabilities) for the voting equity held by others and minority
    interest expense (included in other non-interest expenses) for
    the portion of the entitys earnings attributable to
    minority interests. Investments in companies that are not
    consolidated are accounted for using the equity method when
    Huntington has the ability to exert significant influence,
    generally defined as a 20% or greater voting interest. Those
    investments for which Huntington does not have the ability to
    exert significant influence are generally accounted for using
    the cost method and are periodically evaluated for impairment.
    Investments in private investment partnerships are carried at
    fair value. Investments in private investment partnerships and
    investments that are accounted for under the equity method or
    the cost method are included in other assets in
    Huntingtons balance sheet and Huntingtons
    proportional interest in the investments earnings is
    included in other non-interest income. Huntington evaluates
    variable interest entities (VIEs) in which it holds a beneficial
    interest for consolidation. VIEs, as defined by the Financial
    Accounting Standards Board (FASB) Interpretation
    (FIN) No. 46, Consolidation of Variable Interest
    Entities, are legal entities with insubstantial equity,
    whose equity investors lack the ability to make decisions about
    the entitys activities, or whose equity investors do not
    have the right to receive the residual returns of the entity if
    they occur. Huntington adopted FIN 46 on July 1, 2003
    and therefore, consolidates these VIEs when it holds a majority
    of VIEs beneficial interests.



| |                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements in
    conformity with GAAP requires management to make estimates and
    assumptions that affect amounts reported in the financial
    statements. Actual results could differ from those estimates.
    Certain prior period amounts have been reclassified to conform
    to the current years presentation.



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SECURITIES
    Securities purchased with the intention of recognizing
    short-term profits are classified as trading account securities
    and reported at fair value. The unrealized gains or losses on
    trading securities are recorded in other non-interest income.
    All other securities are designated as investment securities.
    Investment securities include securities designated as available
    for sale, non-marketable equity securities, and securities held
    to maturity. Unrealized gains or losses on investment securities
    are reported as a separate component of accumulated
    other comprehensive income in shareholders equity.
    Declines in the value of debt and marketable equity
    securities that are considered other than temporary are recorded
    in non-interest income as a loss on investment securities.



| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | Securities transactions are recognized on the
    trade date (the date the order to buy or sell is executed).



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Nonmarketable equity securities include stock
    acquired for regulatory purposes, such as Federal Home Loan Bank
    stock and Federal Reserve Bank stock. These securities are
    generally accounted for at cost and are included in investment
    securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | The amortized cost of specific securities sold is
    used to compute realized gains and losses. Interest and
    dividends on securities, including amortization of premiums and
    accretion of discounts using the effective interest method over
    the period to maturity, are included in interest income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | Statement of Financial Accounting Standards
    (SFAS) 115, Accounting for Certain Investments in Debt
    and Equity Securities, and Securities and Exchange
    Commission (SEC) Staff Accounting Bulletin (SAB) 59,
    Accounting for Noncurrent Marketable Equity Securities,
    and Emerging issues Task Force (EITF) No. 03-1, The
    Meaning of Other-Than-Temporary Impairment and Its Application
    to Certain Investmentsprovide guidance on determining when
    an investment is other-than-temporarily impaired. Investments
    are reviewed quarterly for indicators of other-than-temporary
    impairment. This determination requires significant judgment. In
    making this judgment, we evaluate, among other factors, the
    duration and extent to which the fair value of an investment is
    less than its cost and our intent and ability to hold the
    investment. Investments with an indicator are further evaluated
    to determine the

100




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##### 



|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED





|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | likelihood of a significant adverse effect on the
    fair value and amount of the impairment as necessary. If market
    or economic conditions change, we may incur future impairments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
| | LOANS AND
    LEASES Loans are stated at
    the principal amount outstanding, net of unamortized deferred
    loan origination fees and costs and net of unearned income.
    Direct financing leases are reported at the aggregate of lease
    payments receivable and estimated residual values, net of
    unearned and deferred income. Interest income is accrued as
    earned based on unpaid principal balances. Huntington defers the
    fees it receives from the origination of loans and leases, as
    well as the costs of those activities, and amortizes these fees
    and costs on a level-yield basis over the estimated lives of the
    related loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| 
|  | Automobile loans and leases include loans secured
    by automobiles and leases of automobiles that qualify for the
    direct financing method of accounting. Substantially all of the
    direct financing leases that qualify for that accounting method
    do so because the present value of the lease payments and the
    guaranteed residual value are at least 90% of the cost of the
    vehicle. Huntington records the residual values of its leases
    based on estimated future market values of the automobiles as
    published in the Automotive Lease Guide (ALG), an authoritative
    industry source. Beginning in October 2000, Huntington
    purchased residual value insurance for its entire automobile
    lease portfolio to mitigate the risk of declines in residual
    values. Residual value insurance provides for the recovery of
    the vehicle residual value specified by the ALG at the inception
    of the lease. As a result, the risk associated with market
    driven declines in used car values is mitigated. Currently
    Huntington has three distinct residual value insurance policies
    in place to address the residual risk in the portfolio. Two
    residual value insurance policies cover all vehicles leased
    prior to May 2002, and have associated total payment caps
    of $120 million and $50 million, respectively.
    Management reviews expected future residual value losses to
    determine the need to either (a) establish a reserve for
    losses in excess of both insurance policy caps or
    (b) reduce the expected residual value and, therefore,
    increase the rate of depreciation. A third policy (the New
    Policy) provides similar coverage as the first two, but does not
    have a cap on losses payable under the policy. Leases covered by
    the New Policy qualify for the direct financing method of
    accounting. Leases covered by the earlier policies are accounted
    for using the operating lease method of accounting and are
    recorded as operating lease assets in Huntingtons
    consolidated balance sheet.
| 
|  | Residual values on leased automobiles and
    equipment are evaluated periodically for impairment. Impairment
    of the residual values of direct financing leases is recognized
    by writing the leases down to fair value with a charge to
    non-interest expense. Residual value losses arise if the market
    value at the end of the lease term is less than the residual
    value embedded in the original lease contract. Residual value
    insurance covers the difference between the recorded residual
    value and the fair value of the automobile at the end of the
    lease term as evidenced by Black Book valuations. This
    insurance, however, does not cover residual losses below Black
    Book value, which may arise when the automobile has excess wear
    and tear and/or excess mileage, not reimbursed by the lessee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| 
|  | Commercial and industrial loans and commercial
    real estate loans are generally placed on non-accrual status and
    stop accruing interest when principal or interest payments are
    90 days or more past due or the borrowers
    creditworthiness is in doubt. A loan may remain in accruing
    status when it is sufficiently collateralized, which means the
    collateral covers the full repayment of principal and interest,
    and is in the process of active collection.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
|  | Commercial and industrial and commercial real
    estate loans are evaluated for impairment in accordance with the
    provisions of Statement of Financial Accounting Standards
    (Statement) No. 114, Accounting by Creditors for
    Impairment of a Loan, as amended. This Statement requires an
    allowance to be established as a component of the allowance for
    loan and lease losses when it is probable that all amounts due
    pursuant to the contractual terms of the loan or lease will not
    be collected and the recorded investment in the loan or lease
    exceeds its fair value. Fair value is measured using either the
    present value of expected future cash flows discounted at the
    loans or leases effective interest rate, the
    observable market price of the loan or lease, or the fair value
    of the collateral if the loan or lease is collateral dependent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| 
|  | Consumer loans and leases, excluding residential
    mortgage and home equity loans, are subject to mandatory
    charge-off at a specified delinquency date and are not
    classified as non-performing prior to being charged off. These
    loans and leases are generally charged off in full no later than
    when the loan or lease becomes 120 days past due.
    Residential mortgage loans are placed on non-accrual status when
    principal payments are 180 days past due or interest
    payments are 210 days past due. A charge-off on a
    residential mortgage loan is recorded when the loan has been
    foreclosed and the loan balance exceeds the fair value of the
    collateral. The fair value of the collateral is then recorded as
    real estate owned and is reflected in other assets in the
    consolidated balance sheet. At September 30, 2004,
    Huntington adopted a new policy of placing home equity loans and
    lines on non-accrual status when they exceed 180 days past
    due. Such loans were previously classified as accruing loans and
    leases past due 90 days or more. This policy change
    conforms the home equity loans and lines classification to that
    of other consumer loans secured by residential real estate. The
    new policy did not have a material impact on total
    non-performing assets, the allowances for credit losses, or net
    income. (See Note 4 for further information.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | Huntington uses the cost recovery method of
    accounting for cash received on non-performing loans and leases.
    Under this method, cash receipts are applied entirely against
    principal until the loan or lease has been collected in full,
    after which time any additional cash receipts are recognized as
    interest income. When, in managements judgment, the
    borrowers ability to make periodic interest and principal
    payments resumes and collectibility is no longer in doubt, the
    loan or lease is returned to accrual status. When interest
    accruals are suspended, accrued interest income is reversed with
    current year accruals charged to earnings and prior year amounts
    generally charged off as a credit loss.                                                                                                                                                                        
| 
| | SOLD
    LOANS Loans that are sold
    are accounted for in accordance with Statement No. 140,
    Accounting for Transfers and Servicing of Financial Assets
    and Extinguishments of Liabilities. For loan sales, an asset
    is also recorded for the servicing of the loans sold, which is
    retained at the time of sale, based on the relative fair value
    of the servicing rights.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| 
|  | Gains and losses on the loans sold and servicing
    rights associated with loan sales are determined when the
    related loans are sold to the trust or third party. Fair values
    of the servicing rights are based on the present value of
    expected future cash flows from servicing the underlying loans,
    net of adequate compensation to service the loans. The present
    value of expected future cash flows is determined using
    assumptions for market interest rates, ancillary fees, and
    prepayment rates. Management also uses these assumptions to
    assess the servicing rights for impairment periodically. The
    servicing rights are recorded in other assets in the
    consolidated balance sheets. Servicing revenues on mortgage and
    automobile loans, net of the amortization of servicing rights,
    are included in mortgage banking income and other non-interest
    income, respectively.
| 
| | ALLOWANCE FOR LOAN AND LEASE
    LOSSES The allowance for
    loan and lease losses (ALLL) reflects managements
    judgment as to the level considered appropriate to absorb
    probable inherent credit losses in the loan and lease portfolio.
    This judgment is based on the size and current risk
    characteristics of the portfolio, a review of individual loans
    and leases, historical and anticipated loss experience, and a
    review of individual relationships where applicable. External
    influences such as general economic conditions, economic
    conditions in the relevant geographic areas and specific
    industries, regulatory guidelines, and other factors are also
    assessed in determining the level of the allowance.                                                                                                                                                                         
| 
|  | The allowance is determined subjectively,
    requiring significant estimates, including the timing and
    amounts of expected future cash flows on impaired loans and
    leases, consideration of current economic conditions, and
    historical loss experience pertaining to pools of homogeneous
    loans and leases, all of which may be susceptible to change. The
    allowance is increased through a provision that is charged to
    earnings, based on Managements quarterly evaluation of the
    factors previously mentioned, and is reduced by charge-offs, net
    of recoveries, and the allowance associated with securitized or
    sold loans.                                                                                                                                                                                                                                                                         
| 
|  | The ALLL consists of three components, the
    transaction reserve, specific reserve, and economic reserve.
    Loan and lease losses related to transaction and specific
    reserves are recognized and measured pursuant to Statements
    No. 5, Accounting for Contingenciesand 114, while
    losses related to the economic reserve are recognized and
    measured pursuant to Statement No. 5. The three components
    are more fully described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Transaction
Reserve

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | The transaction reserve component represents an
    estimate of loss based on characteristics of each commercial and
    consumer loan or lease in the portfolio. Each loan and lease is
    assigned a probability-of-default and a loss-in-event-of-default
    factor that are used to calculate the transaction reserve.                                                                                                                                                                                                                                                                              | 
|
| | For middle market commercial and industrial,
    middle market commercial real estate, and small business loans,
    the calculation involves the use of a standardized loan grading
    system that is applied on an individual loan level and updated
    on a continuous basis. The reserve factors applied to these
    portfolios were developed based on internal credit migration
    models that track historical movements of loans between loan
    ratings over time and a combination of long-term average loss
    experience of the Companys own portfolio and external
    industry data. | 
|
| | In the case of more homogeneous portfolios, such
    as consumer loans and leases and residential mortgage loans, the
    determination of the transaction component is conducted at an
    aggregate, or pooled, level. For such portfolios, the
    development of the reserve factors includes the use of
    forecasting models to measure inherent loss in these portfolios.                                                                                                                                                                                                                         | 
|
| | Models and analyses are updated frequently to
    capture the recent behavioral characteristics of the subject
    portfolios, as well as any changes in the loss mitigation or
    credit origination strategies. Adjustments to the reserve
    factors are made as needed based on observed results of the
    portfolio analytics.                                                                                                                                                                                                                                                                    | 

Specific
Reserve

| |                                                                                                                                                                                                                                                          | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | The specific reserve component is associated only
    with the middle market commercial and industrial, middle market
    commercial real estate, and small business segments and is the
    result of credit-by-credit reserve decisions for individual | 

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| |                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | loans when it is determined that the calculated
    transaction reserve component is insufficient to cover the
    estimated losses. Individual non-performing and substandard
    loans over $250,000 are analyzed for impairment and possible
    assignment of a specific reserve. The impairment tests are done
    in accordance with applicable accounting standards and
    regulations. | 

Economic
Reserve

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | Changes in the economic environment are a
    significant judgmental factor management considers in
    determining the appropriate level of the ALLL. The economic
    reserve incorporates Managements determination of the
    impact of risks associated with the general economic environment
    on the portfolio. The economic reserve is designed to address
    economic uncertainties and is determined based on a variety of
    economic factors that are correlated to the historical
    performance of the loan portfolio. Because of this more
    quantitative approach to recognizing risks in the general
    economy, the economic reserve may fluctuate from period to
    period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
|
| | In an effort to be as quantitative as possible in
    the ALLL calculation, Management developed a revised methodology
    for calculating the economic reserve portion of the ALLL for
    implementation in 2004. The revised methodology is specifically
    tied to economic indices that have a high correlation to the
    Companys historic charge-off variability. The indices
    currently in the model consists of the U.S. Index of Leading
    Economic Indicators, U.S. Profits Index, U.S. Unemployment
    Index, and the University of Michigan Current Consumer
    Confidence Index. Beginning in 2004, the calculated economic
    reserve was determined based upon the variability of credit
    losses over a credit cycle. The indices and time frame may be
    adjusted as actual portfolio performance changes over time.
    Management has the capability to judgmentally adjust the
    calculated economic reserve amount by a maximum of +/- 20% to
    reflect, among other factors, differences in local versus
    national economic conditions. This adjustment capability is
    deemed necessary given the newness of the model and the
    continuing uncertainty of forecasting economic environment
    changes. | 



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | RESELL AND REPURCHASE
    AGREEMENTS Securities
    purchased under agreements to resell and securities sold under
    agreements to repurchase are generally treated as collateralized
    financing transactions and are recorded at the amounts at which
    the securities were acquired or sold plus accrued interest. The
    fair value of collateral either received from or provided to a
    third party is continually monitored and additional collateral
    is obtained or is requested to be returned to Huntington as
    deemed appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| 
| | GOODWILL AND OTHER INTANGIBLE
    ASSETS Under the purchase
    method of accounting, the net assets of entities acquired by
    Huntington were recorded at their estimated fair value at the
    date of acquisition. The excess of cost over the fair value of
    net assets acquired is recorded as goodwill. Prior to 2002,
    goodwill was amortized over periods generally up to
    25 years. Effective January 1, 2002, in accordance
    with Statement No. 142, Goodwill and Other Intangible
    Assets, goodwill is no longer amortized but is reviewed by
    management, along with other intangible assets arising from
    business combinations, for impairment as of September 30 each
    year, or whenever a significant event occurs that adversely
    affects operations, or when changes in circumstances indicate
    that the carrying value may not be recoverable. Other intangible
    assets are amortized on a straight-line basis over their
    estimated useful lives through 2011.
| 
| | MORTGAGE BANKING
    ACTIVITIES Loans held for
    sale are primarily composed of performing 1-to-4-family
    residential mortgage loans originated for resale and are carried
    at the lower of cost (net of purchase discounts or premiums and
    effects of hedge accounting) or fair value as determined on an
    aggregate basis. Fair value is determined using available
    secondary market prices for loans with similar coupons,
    maturities, and credit quality.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| 
|  | Huntington recognizes the rights to service
    mortgage loans as separate assets, which are included in other
    assets in the consolidated balance sheets, only when purchased
    or when servicing is contractually separated from the underlying
    mortgage loans by sale or securitization of the loans with
    servicing rights retained. The carrying value of loans sold or
    securitized is allocated between loans and servicing rights
    based on the relative fair values of each. Purchased mortgage
    servicing rights are initially recorded at cost. All servicing
    rights are subsequently carried at the lower of the initial
    carrying value, adjusted for amortization, or fair value, and
    are included in other assets.                                                                                                                                                                                                                                                        
| 
| | PREMISES AND
    EQUIPMENT Premises and
    equipment are stated at cost, less accumulated depreciation and
    amortization. Depreciation is computed principally by the
    straight-line method over the estimated useful lives of the
    related assets. Buildings and building improvements are
    depreciated over an average of 30 to 40 years and 10 to
    20 years, respectively. Land improvements and furniture and
    fixtures are depreciated over 10 years, while equipment is
    depreciated over a range of three to seven years. Leasehold
    improvements are amortized over the lesser of the asset life or
    term of the related leases. Maintenance and repairs are charged
    to expense as incurred, while improvements that extend the
    useful life of an asset are capitalized and depreciated over the
    remaining useful life.                                                                                                                                                 

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|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | OPERATING LEASE
    ASSETS Operating lease
    assets consist of automobiles leased to consumers and equipment
    leased to business customers. These assets are reported at cost,
    including net deferred origination fees or costs, less
    accumulated depreciation. For automobile operating leases, net
    deferred origination fees or costs include the referral payments
    Huntington makes to automobile dealers, which are deferred and
    amortized on a straight-line basis over the life of the lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| 
|  | Lease payments are recorded as rental income, a
    component of operating lease income in non-interest income. Net
    deferred origination fees or costs are amortized over the life
    of the lease to operating lease income. Depreciation expense is
    recorded on a straight-line basis over the term of the lease.
    Leased assets are depreciated to the estimated residual value at
    the end of the lease term. Depreciation expense is included in
    operating lease expense in the non-interest expense section of
    the consolidated income statement. Impairment of residual values
    of operating leases is evaluated under Statement No. 144,
    Accounting for the Impairment or Disposal of Long-Lived
    Assets. Under that Statement, when the future cash flows
    from the operating lease, including the expected realizable fair
    value of the automobile or equipment at the end of the lease, is
    less than the book value of the lease, an immediate impairment
    write-down is recognized. Otherwise, reductions in the expected
    residual value result in additional depreciation of the leased
    asset over the remaining term of the lease. Upon disposition, a
    gain or loss is recorded for any difference between the net book
    value of the lease and the proceeds from the disposition of the
    asset, including any insurance proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
|  | On a quarterly basis, Management evaluates the
    amount of residual value losses that it anticipates will result
    from the estimated fair value of a leased vehicle being less
    than the residual value inherent in the lease. Also as part of
    its quarterly analysis, Management evaluates automobile leases
    individually for impairment. Fair value includes estimated net
    proceeds from the sale of the leased vehicle plus expected
    residual value insurance proceeds and amounts expected to be
    collected from the lessee for excess mileage and other items
    that are billable under terms of the lease contract. When
    estimating the amount of expected insurance proceeds, Management
    takes into consideration policy caps that exist in two of the
    three residual value insurance policies and whether it expects
    aggregate claims under such policies to exceed these caps.
    Residual value losses exceeding any insurance policy cap are
    reflected in higher depreciation expense over the remaining life
    of the affected automobile lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| 
|  | Credit losses, included in operating lease
    expense, occur when a lease is terminated early because the
    lessee cannot make the required lease payments. These
    credit-generated terminations result in Huntington taking
    possession of the automobile earlier than expected. When this
    occurs, the market value of the automobile may be less than
    Huntingtons book value, resulting in a loss upon sale.
    Rental income payments accrued, but not received, are written
    off when they reach 120 days past due and at that time the
    asset is evaluated for impairment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| 
| | BANK OWNED LIFE
    INSURANCE
    Huntingtons bank owned life insurance policies are carried
    at their cash surrender value. Periodically, management confirms
    this cash surrender value with the insurance carriers that have
    issued each respective insurance policy. Huntington recognizes
    tax-free income from the periodic increases in the cash
    surrender value of these policies and from death benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| 
| | DERIVATIVE FINANCIAL
    INSTRUMENTS Derivative
    financial instruments, primarily interest rate swaps, are
    accounted for in accordance with Statement No. 133,
    Accounting for Derivative Instruments and Hedging
    Activities, as amended. This Statement requires every
    derivative instrument to be recorded in the consolidated balance
    sheet as either an asset or liability measured at its fair value
    and Huntington to formally document, designate, and assess the
    effectiveness of transactions for which hedge accounting is
    applied. Depending on the nature of the hedge and the extent to
    which it is effective, the changes in fair value of the
    derivative recorded through earnings will either be offset
    against the change in the fair value of the hedged item in
    earnings, or recorded in other comprehensive income and
    subsequently recognized in earnings in the period the hedged
    item affects earnings. The portion of a hedge that is
    ineffective and all changes in the fair value of derivatives not
    designated as hedges, referred to as trading instruments, are
    recognized immediately in earnings. Deferred gains or losses
    from derivatives that are terminated are amortized over the
    shorter of the original remaining term of the derivative or the
    remaining life of the underlying asset or liability. Trading
    instruments are carried at fair value with changes in fair value
    included in other non-interest income. Trading instruments are
    executed primarily with Huntingtons customers to fulfill
    their needs. Derivative instruments used for trading purposes
    include interest rate swaps, including callable swaps, interest
    rate caps and floors, and interest rate and foreign exchange
    futures, forwards, and options.
| 
| | ADVERTISING
    COSTS Advertising costs
    are expensed as incurred as a marketing expense, a component of
    non-interest expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
| | INCOME
    TAXES Income taxes are
    accounted for under the asset and liability method. Accordingly,
    deferred tax assets and liabilities are recognized for the
    future book and tax consequences attributable to temporary
    differences between the financial statement carrying amounts of
    existing assets and liabilities and their respective tax bases.
    Deferred tax assets and liabilities are determined using enacted
    tax rates expected to apply in the year in which those temporary
    differences are expected to be recovered or settled. The effect
    on deferred tax assets and liabilities of a change in tax rates
    is recognized in income at the time of enactment of such change
    in tax rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | TREASURY
    STOCK Acquisitions of
    treasury stock are recorded at cost. Reissuance of shares in
    treasury for acquisitions, stock option exercises, or for other
    corporate purposes, is recorded at their weighted-average cost.                                                                                                                                                                                                                                 
| 
| | STOCK-BASED
    COMPENSATION
    Huntingtons stock-based compensation plans are accounted
    for based on the intrinsic value method promulgated by
    Accounting Principles Board Opinion 25, Accounting for Stock
    Issued to Employees, and related interpretations.
    Compensation expense for employee stock options is generally not
    recognized if the exercise price of the option equals or exceeds
    the fair value of the stock on the date of grant.

The following pro forma disclosures for net
income and earnings per diluted common share is presented as if
Huntington had applied the fair value method of accounting of
Statement No. 123, Accounting for Stock-Based
Compensation, in measuring compensation costs for stock
options. The fair values of the stock options granted were
estimated using the Black-Scholes option-pricing model. This
model assumes that the estimated fair value of the options is
amortized over the options vesting periods and the
compensation costs would be included in personnel costs in the
consolidated income statement. The following table also includes
the weighted-average assumptions that were used in the
option-pricing model for options granted in each of the last
three years:

|                                                   |                                                       |                         |   |       |      |  |   |       |      |  |   |       |      | 
|-------------------------------------------------- | ----------------------------------------------------- | ----------------------- | - | ----- | ---- |  | - | ----- | ---- |  | - | ----- | ---- | 
|                                                   |                                                       |                        
|                                                   |                                                       | Year Ended December 31, |  
|                                                  
|                                                  
|                                                   |                                                      
|(in millions of dollars, except per share amounts) |                                                       | 2004                    |   |       | 2003 |  |   | 2002  |     
|                                                  
|Assumptions                                        |                                                       |                         |   |       |      |  |   |       |      |  |   |      
|                                                   | Risk-free interest rate                               |                         |   | 3.78  | %    |  |   | 4.45  | %    |  |   | 4.12  | %   
|                                                   | Expected dividend yield                               |                         |   | 3.20  |      |  |   | 3.11  |      |  |   | 3.34  |     
|                                                   | Expected volatility of Huntingtons
    common stock  |                         |   | 30.9  |      |  |   | 33.8  |      |  |   | 33.8  |     
|                                                  
|Pro Forma Results                                  |                                                       |                         |   |       |      |  |   |       |      |  |   |      
|                                                   | Net income, as reported                               |                         | $ | 398.9 |      |  | $ | 372.4 |      |  | $ | 323.7 |     
|                                                   | Less pro forma expense related to
    options granted |                         |   | (14.4 | )    |  |   | (10.9 | )    |  |   | (10.0 | )   
|                                                  
|                                                   | Pro Forma Net Income                                  |                         | $ | 384.5 |      |  | $ | 361.5 |      |  | $ | 313.7 |     
|                                                  
|                                                   | Net Income Per Common Share:                          |                         |   |       |      |  |   |       |      |  |   |       |     
|                                                   |                                                       | Basic, as reported      |   | $     | 1.74 |  |   | $     | 1.62 |  |   | $     | 1.34 | 
|                                                   |                                                       | Basic, pro forma        |   |       | 1.67 |  |   |       | 1.58 |  |   |       | 1.29 | 
|                                                   |                                                       | Diluted, as reported    |   |       | 1.71 |  |   |       | 1.61 |  |   |       | 1.33 | 
|                                                   |                                                       | Diluted, pro forma      |   |       | 1.64 |  |   |       | 1.56 |  |   |       | 1.29 | 



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | SEGMENT
    RESULTS Accounting
    policies for the lines of business are the same as those used in
    the preparation of the consolidated financial statements with
    respect to activities specifically attributable to each business
    line. However, the preparation of business line results requires
    management to establish methodologies to allocate funding costs
    and benefits, expenses, and other financial elements to each
    line of business. Changes are made in these methodologies
    utilized for certain balance sheet and income statement
    allocations performed by Huntingtons management reporting
    system, as appropriate.
| 
| | STATEMENT OF CASH
    FLOWS Cash and cash
    equivalents are defined as Cash and due from banks
    and Federal funds sold and securities purchased under
    resale agreements. The statement of cash flows for the
    year ended December 31, 2003, has been restated to properly
    reflect the sale of branch offices during the third quarter of
    2003. (See Note 30 of the Notes to Consolidated
    Financial Statements.)                                                                                                                                                                                                                              

2. NEW ACCOUNTING
STANDARDS



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | EMERGING ISSUES TASK FORCE ISSUE
    NO. 03-1, The Meaning of Other-Than-Temporary
    Impairments and Its Application to Certain Investments(EITF
    03-1) The Emerging Issues
    Task Force reached a consensus about the criteria that should be
    used to determine when an investment is considered impaired,
    whether that impairment is other than temporary, and the
    measurement of an impairment loss. EITF 03-1 also included
    accounting considerations subsequent to the recognition of an
    other-than-temporary impairment and requires certain disclosures
    about unrealized losses that have not been recognized as
    other-than-temporary impairments. On September 30, 2004,
    the FASB issued FSP EITF 03-1-1 which delayed the effective date
    for the measurement and recognition guidance contained in
    paragraphs 1020 of Issue 03-1. See Note 3 for more
    information.
| 
| | SEC STAFF ACCOUNTING
    BULLETIN NO. 105, Application of Accounting
    Principles to Loan Commitments(SAB 105) On
    March 9, 2004, the SEC issued SAB 105, which
    summarizes the views of the SEC staff regarding the application
    of generally accepted accounting principles to loan commitments
    accounted for as derivative instruments. Specifically,
    SAB 105 indicated that the fair value of loan commitments
    that are required to follow derivative accounting under
    Statement 133, Accounting for Derivative Instruments and                                                                                                                                                                                                                                                                                                                                                                 

105




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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | Hedging Activities,
    should not consider the expected future cash flows related to
    the associated servicing of the future loan. Prior to
    SAB 105, Huntington did not consider the expected future
    cash flows related to the associated servicing in determining
    the fair value of loan commitments. The adoption of SAB 105
    did not have a material effect on Huntingtons financial
    results.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| | FASB STAFF POSITION NO. 106-2,
    Accounting and Disclosure Requirements Related to the
    Medicare Prescription Drug, Improvement and Modernization Act of
    2003(FSP 106-2)
    In December 2003, a law was approved that expands Medicare
    benefits, primarily adding a prescription drug benefit for
    Medicare-eligible retirees beginning in 2006. The law also
    provides a federal subsidy to companies that sponsor
    postretirement benefit plans providing prescription drug
    coverage. FSP 106-2 was issued in May 2004 and supersedes
    FSP 106-1 issued in January 2004. FSP 106-2 specifies
    that any Medicare subsidy must be taken into account in
    measuring the employers postretirement health care benefit
    obligation and will also reduce the net periodic postretirement
    cost in future periods. The new guidance is effective for the
    reporting periods beginning on or after June 15, 2004. The
    impact of this new pronouncement was not material to
    Huntingtons financial condition, results of operations, or
    cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| | AICPA Statement of Position No. 03-3,
    Accounting for Certain Loans or Debt Securities Acquired in a
    Transfer(SOP 03-3) In
    December 2003, the Accounting Standards Executive Committee
    of the American Institute of Certified Public Accountants issued
    SOP 03-3 to address accounting for differences between the
    contractual cash flows of certain loans and debt securities and
    the cash flows expected to be collected when loans or debt
    securities are acquired in a transfer and those cash flow
    differences are attributable, at least in part, to credit
    quality. As such, SOP 03-3 applies to loans and debt securities
    purchased or acquired in purchase business combinations and does
    not apply to originated loans. The application of SOP 03-3
    limits the interest income, including accretion of purchase
    price discounts, that may be recognized for certain loans and
    debt securities. Additionally, SOP 03-3 requires that the excess
    of contractual cash flows over cash flows expected to be
    collected (nonaccretable difference) not be recognized as an
    adjustment of yield or valuation allowance, such as the
    allowance for credit losses. Subsequent to the initial
    investment, increases in expected cash flows generally should be
    recognized prospectively through adjustment of the yield on the
    loan or debt security over its remaining life. Decreases in
    expected cash flows should be recognized as impairment. SOP 03-3
    is effective for loans and debt securities acquired in fiscal
    years beginning after December 15, 2004, with early
    application encouraged. The impact of this new pronouncement is
    not expected to be material to Huntingtons financial
    condition, results of operations, or cash flows.
| 
| | FASB Staff Position No. 109-2,
    Accounting and Disclosure Guidance for the Foreign Earnings
    Repatriation Provision within the American Jobs Creation Act of
    2004 On
    October 22, 2004, the American Jobs Creation Act (the Act)
    was signed into law. The Act introduces a special one-time
    dividends received deduction on the repatriation of certain
    foreign earnings to a U.S. taxpayer, provided certain criteria
    are met. Huntington may elect to apply this provision to
    qualifying earnings repatriations in 2005. Huntington has begun
    an evaluation of the effects of the repatriation provision as it
    applies to earnings from foreign asset securitization
    activities. However, Huntington does not expect to be able to
    complete this evaluation until after Congress or the Treasury
    Department provides additional clarifying language on key
    elements of the provision.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
|  | The FASB staff believes that the lack of
    clarification of certain provisions within the Act and the
    timing of the enactment necessitate a practical exception to the
    Statement No. 109, Accounting for Income Taxes(SFAS 109) requirement to reflect in the period of
    enactment of the effect of a new tax law. Accordingly, in
    December 2004, the FASB issued FSP 109-2, which allows
    Huntington time beyond the fourth quarter of 2004, the period of
    enactment, to evaluate the effect of the Act on its plan for
    reinvestment or repatriation of foreign earnings for purposes of
    applying SFAS 109.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
|  | At December 31, 2004, the range of possible
    amounts that Huntington is considering for repatriation under
    this provision is between zero and $89.0 million. The
    related potential range of income tax is between zero and
    $4.7 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| | FASB STATEMENT NO. 123 (REVISED 2004),
    Share-Based Payment(Statement
    123R) Statement 123R was
    issued in December 2004, to provide investors and other
    users of financial statements with more complete financial
    information by requiring that the compensation cost relating to
    share-based payment transactions be recognized in the financial
    statements. That cost will be measured based on the fair value
    of the equity or liability instruments issued. Statement 123R
    covers a wide range of share-based compensation arrangements
    including share options, restricted share plans,
    performance-based awards, share appreciation rights, and
    employee share purchase plans. Statement 123R replaces FASB
    Statement No. 123, Accounting for Stock-Based
    Compensation(Statement 123), and supersedes APB Opinion
    No. 25, Accounting for Stock Issued to Employees(APB 25). Statement 123, as originally issued in 1995,
    established as preferable a fair-value-based method of
    accounting for share-based payment transactions with employees.
    However, that Statement permitted entities the option of
    continuing to apply the guidance in APB 25, as long as the
    footnotes to financial statements disclosed pro forma net income
    under the preferable fair-value-based method. Public entities
    (other than those filing as small business issuers) will be
    required to apply Statement 123(R) as of the first interim or
    annual reporting period that begins after June 15, 2005.
    Effective January 1, 2005, Huntington has adopted Statement
    123R. See Note 1 for the current accounting policy on
    share-based payments and Note 16 for the share-based
    payment disclosures.                                                             

106




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3. INVESTMENT
SECURITIES

Investment securities at December 31 were as
follows:


|                                                |                |                |           |            |             |   |        |              |  |   |            |         |   |   |           |         | 
|----------------------------------------------- | -------------- | -------------- | --------- | ---------- | ----------- | - | ------ | ------------ |  | - | ---------- | ------- | - | - | --------- | ------- | 
|                                                |                |                |           |            |             |  
|                                                |                |                |           | Unrealized |             |   |       
|                                                |                |                |           |            |             |  
|                                                |                |                |           |            |             |  
|                                                |                |                |           |            |             |   |       
|(in thousands of dollars)                       |                | Amortized Cost |           |            | Gross Gains |   |        | Gross Losses |  |   | Fair Value |        
|                                               
|2004                                            |                |                |           |            |             |   |        |              |  |   |            |         |   |   |           |        
|U.S. Treasury                                   |                | $              | 24,987    |            |             | $ | 362    |              |  | $ | (213       | )       |   | $ | 25,136    |        
|Federal Agencies
    Mortgage-backed securities |                |                | 985,846   |            |             |   | 177    |              |  |   | (12,507    | )       |   |   | 973,516   |        
|                                                | Other agencies |                |           | 986,954    |             |   |        | 1,193        |  |   |            | (15,901 | ) |   |           | 972,246 | 
|                                               
|Total U.S. Treasury and Federal Agencies        |                |                | 1,997,787 |            |             |   | 1,732  |              |  |   | (28,621    | )       |   |   | 1,970,898 |        
|Municipal securities                            |                |                | 410,614   |            |             |   | 7,404  |              |  |   | (1,794     | )       |   |   | 416,224   |        
|Private label CMO                               |                |                | 462,394   |            |             |   | 866    |              |  |   | (5,233     | )       |   |   | 458,027   |        
|Asset backed securities                         |                |                | 1,198,296 |            |             |   | 2,690  |              |  |   | (1,004     | )       |   |   | 1,199,982 |        
|Other securities                                |                |                | 189,513   |            |             |   | 4,962  |              |  |   | (661       | )       |   |   | 193,814   |        
|                                               
|Total Investment Securities                     |                | $              | 4,258,604 |            |             | $ | 17,654 |              |  | $ | (37,313    | )       |   | $ | 4,238,945 |        
|                                               

|                                                |                |                |           |            |             |   |        |              |  |   |            |         |   |   |           |           | 
|----------------------------------------------- | -------------- | -------------- | --------- | ---------- | ----------- | - | ------ | ------------ |  | - | ---------- | ------- | - | - | --------- | --------- | 
|                                                |                |                |           |            |             |  
|                                                |                |                |           | Unrealized |             |   |       
|                                                |                |                |           |            |             |  
|                                                |                |                |           |            |             |  
|                                                |                |                |           |            |             |   |       
|(in thousands of dollars)                       |                | Amortized Cost |           |            | Gross Gains |   |        | Gross Losses |  |   | Fair Value |        
|                                               
|2003                                            |                |                |           |            |             |   |        |              |  |   |            |         |   |   |           |          
|U.S. Treasury                                   |                | $              | 304,001   |            |             | $ | 4,410  |              |  | $ | (41        | )       |   | $ | 308,370   |          
|Federal Agencies
    Mortgage-backed securities |                |                | 1,811,793 |            |             |   | 19,782 |              |  |   | (13,552    | )       |   |   | 1,818,023 |          
|                                                | Other agencies |                |           | 1,162,896  |             |   |        | 13,137       |  |   |            | (16,510 | ) |   |           | 1,159,523 | 
|                                               
|Total U.S. Treasury and Federal Agencies        |                |                | 3,278,690 |            |             |   | 37,329 |              |  |   | (30,103    | )       |   |   | 3,285,916 |          
|Municipal securities                            |                |                | 432,129   |            |             |   | 6,405  |              |  |   | (2,273     | )       |   |   | 436,261   |          
|Private label CMO                               |                |                | 390,906   |            |             |   | 609    |              |  |   | (858       | )       |   |   | 390,657   |          
|Asset backed securities                         |                |                | 640,826   |            |             |   | 64     |              |  |   | (1,174     | )       |   |   | 639,716   |          
|Retained interests in securitizations           |                |                | 5,593     |            |             |   | 763    |              |  |   |           |         |   |   | 6,356     |          
|Other securities                                |                |                | 166,366   |            |             |   | 3,884  |              |  |   | (96        | )       |   |   | 170,154   |          
|                                               
|Total Investment Securities                     |                | $              | 4,914,510 |            |             | $ | 49,054 |              |  | $ | (34,504    | )       |   | $ | 4,929,060 |          
|                                               

Other securities include privately placed
collateralized mortgage obligations, Federal Home Loan Bank and
Federal Reserve Bank stock, corporate debt and municipal
securities, and marketable equity securities.

Contractual maturities of investment securities
as of December 31 were:

|                                      |  |                |           |  |            |   |           |                |  |   |            |  |  |   |           | 
|------------------------------------- |  | -------------- | --------- |  | ---------- | - | --------- | -------------- |  | - | ---------- |  |  | - | --------- | 
|                                      |  |                |           | 
|                                      |  | 2004           |           |  | 2003       |  
|                                     
|                                     
|                                      | 
|(in thousands of dollars)             |  | Amortized Cost |           |  | Fair Value |   |           | Amortized Cost |  |   | Fair Value | 
|                                     
|Under 1 year                          |  | $              | 8,597     |  |            | $ | 8,653     |                |  | $ | 185,016    |  |  | $ | 187,413   | 
|1-5 years                             |  |                | 610,189   |  |            |   | 606,140   |                |  |   | 695,691    |  |  |   | 705,100   | 
|6-10 years                            |  |                | 584,619   |  |            |   | 575,399   |                |  |   | 969,280    |  |  |   | 964,949   | 
|Over 10 years                         |  |                | 3,049,673 |  |            |   | 3,042,552 |                |  |   | 3,050,383  |  |  |   | 3,055,131 | 
|Retained interests in securitizations |  |                |          |  |            |   |          |                |  |   | 5,593      |  |  |   | 6,356     | 
|Marketable equity securities          |  |                | 5,526     |  |            |   | 6,201     |                |  |   | 8,547      |  |  |   | 10,111    | 
|                                     
|Total Investment Securities           |  | $              | 4,258,604 |  |            | $ | 4,238,945 |                |  | $ | 4,914,510  |  |  | $ | 4,929,060 | 
|                                     

At December 31, 2004, the carrying value of
investment securities pledged to secure public and trust
deposits, trading account liabilities, U.S. Treasury demand
notes, and security repurchase agreements totaled
$2.1 billion. There were no securities of a single issuer,
which are not governmental or government-sponsored, that
exceeded 10% of shareholders equity at December 31,
2004.

The following table provides the gross unrealized
losses and fair value, aggregated by investment category and
length of time the individual securities have been in a
continuous loss position, at December 31, 2004.



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|                                         |                            |                      |           |         |                |   |         |        |   |   |            |         |  |       |         |        |            |   |           |         |  |   |         |         |  
|---------------------------------------- | -------------------------- | -------------------- | --------- | ------- | -------------- | - | ------- | ------ | - | - | ---------- | ------- |  | ----- | ------- | ------ | ---------- | - | --------- | ------- |  | - | ------- | ------- | -
|                                         |                            |                     
|                                         |                            | At December 31, 2004 |          
|                                        
|                                        
|                                         |                           
|                                         |                            |                      |           |         |                |  
|                                         |                            | Less than 12 Months  |           |         | Over 12 Months |   |         |       
|                                         |                            |                      |           |         |                |   |         | Total  |  
|                                         |                            |                      |           |         |                |  
|                                         |                            |                      |           |         |                |   |        
|                                         |                            | Fair                 |           |         | Unrealized     |   |         | Fair   |   |   | Unrealized |         |  | Fair  |         |        | Unrealized |  
|(in thousands of dollars)                |                            | Value                |           |         | Losses         |   |         | Value  |   |   | Losses     |         |  | Value |         |        | Losses     |  
|                                        
|U.S. Treasury                            |                            | $                    | 19,794    |         |                | $ | (213    | )      |   | $ |           |         |  | $     |        |        |            | $ | 19,794    |         |  | $ | (213    | )      
|Federal agencies                         |                            |                      |           |         |                |   |         |        |   |   |            |         |  |       |         |        |            |   |           |         |  |   |         |        
|                                         | Mortgage-backed securities |                      |           | 810,462 |                |   |         | (8,666 | ) |   |            | 115,418 |  |       |         | (3,841 | )          |   |           | 925,880 |  |   |         | (12,507 | )
|                                         | Other agencies             |                      |           | 509,153 |                |   |         | (6,303 | ) |   |            | 255,809 |  |       |         | (9,598 | )          |   |           | 764,962 |  |   |         | (15,901 | )
|                                        
|Total U.S. Treasury and Federal Agencies |                            |                      | 1,339,409 |         |                |   | (15,182 | )      |   |   | 371,227    |         |  |       | (13,439 | )      |            |   | 1,710,636 |         |  |   | (28,621 | )      
|Municipal Securities                     |                            |                      | 62,187    |         |                |   | (273    | )      |   |   | 51,875     |         |  |       | (1,521  | )      |            |   | 114,062   |         |  |   | (1,794  | )      
|Private label CMO                        |                            |                      | 343,929   |         |                |   | (5,230  | )      |   |   | 2,046      |         |  |       | (3      | )      |            |   | 345,975   |         |  |   | (5,233  | )      
|Asset backed securities                  |                            |                      | 416,476   |         |                |   | (1,004  | )      |   |   |           |         |  |       |        |        |            |   | 416,476   |         |  |   | (1,004  | )      
|Other securities                         |                            |                      | 13,967    |         |                |   | (659    | )      |   |   |           |         |  |       | (2      | )      |            |   | 13,967    |         |  |   | (661    | )      
|                                        
|Total temporarily impaired securities    |                            | $                    | 2,175,968 |         |                | $ | (22,348 | )      |   | $ | 425,148    |         |  | $     | (14,965 | )      |            | $ | 2,601,116 |         |  | $ | (37,313 | )      
|                                        

Gross gains from sales of securities of
$34.7 million, $14.5 million, and $5.4 million,
were realized in 2004, 2003, and 2002, respectively. Gross
losses totaled $19.0 million in 2004, $9.2 million in
2003, and $0.5 million in 2002. At September 30, 2004,
Management determined that $11.0 million of equity
securities, with unrealized losses of $0.9 million were
other-than-temporarily impaired. Consequently, Huntington
recognized the unrealized losses in the third quarter of 2004.
There were no other-than-temporary impairments of any securities
recognized in 2003 or 2002. Huntington has both the intent and
ability to hold the securities contained in the table above for
a time necessary to recover the amortized cost.

4. LOANS AND
LEASES

At December 31, 2004, $2.1 billion of
commercial and industrial loans were pledged to secure potential
discount window borrowings from the Federal Reserve Bank. At
this same date, $4.7 billion of real estate qualifying
loans were pledged to secure advances from the Federal Home Loan
Bank. Real estate qualifying loans are comprised of residential
mortgage loans secured by first and second liens.


Huntingtons loan and lease portfolio
includes lease financing receivables consisting of direct
financing leases on equipment, which are included in commercial
and industrial loans, and on automobiles. Net investment in
lease financing receivables by category at December 31 were as
follows:

|                                                                   |                                           |                                                                |           |           |           |   |           |           |           | 
|------------------------------------------------------------------ | ----------------------------------------- | -------------------------------------------------------------- | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                   |                                           |                                                               
|                                                                   |                                           | At December 31,                                                |          
|                                                                  
|                                                                  
|                                                                   |                                          
|(in thousands of dollars)                                          |                                           | 2004                                                           |           |           | 2003      |  
|                                                                  
|Commercial and industrial                                          |                                           |                                                                |           |           |           |   |           |          
|                                                                   | Lease payments receivable                 |                                                                | $         | 391,157   |           |   | $         | 315,518   |          
|                                                                   | Estimated residual value of leased assets |                                                                |           | 37,704    |           |   |           | 36,300    |          
|                                                                  
|                                                                   |                                           | Gross investment in commercial lease
    financing receivables |           |           | 428,861   |   |           |           | 351,818   | 
|                                                                   | Unearned income                           |                                                                |           | (39,414   | )         |   |           | (33,478   | )        
|                                                                  
|Total net investment in commercial lease
    financing receivables |                                           | $                                                              | 389,447   |           |           | $ | 318,340   |          
|                                                                  
|Consumer                                                           |                                           |                                                                |           |           |           |   |           |          
|                                                                   | Lease payments receivable                 |                                                                | $         | 1,453,909 |           |   | $         | 1,238,843 |          
|                                                                   | Estimated residual value of leased assets |                                                                |           | 1,258,160 |           |   |           | 903,554   |          
|                                                                  
|                                                                   |                                           | Gross investment in consumer lease
    financing receivables   |           |           | 2,712,069 |   |           |           | 2,142,397 | 
|                                                                   | Deferred origination fees and costs       |                                                                |           | (2,130    | )         |   |           | (1,950    | )        
|                                                                   | Unearned income                           |                                                                |           | (266,484  | )         |   |           | (238,277  | )        
|                                                                  
|Total net investment in consumer lease
    financing receivables   |                                           | $                                                              | 2,443,455 |           |           | $ | 1,902,170 |          
|                                                                  

Included in the estimated residual value of
leased consumer assets, Huntington had a valuation reserve of
$4.2 million and $2.1 million at December 31,
2004 and 2003, respectively, for expected residual value
impairment that is not covered by residual value insurance.

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RELATED PARTY TRANSACTIONS

Huntington has made loans to its officers,
directors, and their associates. These loans were made in the
ordinary course of business under normal credit terms, including
interest rate and collateralization, and do not represent more
than the normal risk of collection. These loans to related
parties are summarized as follows:


|                           |                                                               |                 |        |          |  
|-------------------------- | ------------------------------------------------------------- | --------------- | ------ | -------- | -
|                           |                                                               | At December 31, |       
|(in thousands of dollars)  |                                                               | 2004            |       
|                          
|Balance, beginning of year |                                                               | $               | 81,357 |         
|                           | Loans made                                                    |                 |        | 171,313  |  
|                           | Repayments                                                    |                 |        | (179,044 | )
|                           | Changes due to status of executive officers
    and directors |                 |        | 12,392   |  
|                          
|Balance, end of year       |                                                               | $               | 86,018 |         
|                          

NON-PERFORMING ASSETS AND PAST DUE
LOANS

At December 31, 2004 and 2003, loans in
non-accrual status and loans past due 90 days or more and
still accruing interest, were as follows:


|                                        |  |                 |         |  |      |   |        | 
|--------------------------------------- |  | --------------- | ------- |  | ---- | - | ------ | 
|                                        |  |                
|                                        |  | At December 31, |        
|                                       
|                                       
|                                        | 
|(in thousands of dollars)               |  | 2004            |         |  | 2003 |  
|                                       
|Commercial and industrial               |  | $               | 34,692  |  |      | $ | 43,387 | 
|Commercial real estate                  |  |                 | 8,670   |  |      |   | 22,399 | 
|Residential mortgage                    |  |                 | 13,545  |  |      |   | 9,695  | 
|Home equity(1)                          |  |                 | 7,055   |  |      |   |       | 
|                                       
|Total non-performing loans              |  |                 | 63,962  |  |      |   | 75,481 | 
|Other real estate, net(2)               |  |                 | 44,606  |  |      |   | 11,905 | 
|                                       
|Total non-performing assets             |  | $               | 108,568 |  |      | $ | 87,386 | 
|                                       
|Accruing Loans Past Due 90 Days or More |  | $               | 54,283  |  |      | $ | 55,913 | 



|    |                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As of September 30, 2004, the Company
    adopted a policy, consistent with its policy for residential
    mortgage loans, of placing home equity loans and lines on
    nonaccrual status when they become greater than 180 days
    past due.                                                                                                
|   
|(2) | At December 31, 2004, other real estate
    owned included $35.7 million of properties that relate to
    the work-out of $5.9 million of mezzanine loans. These
    properties are subject to $29.8 million of non-recourse
    debt to another financial institution. Both properties are in
    contract for sale in the first half of 2005.

The amount of interest that would have been
recorded under the original terms for total loans classified as
non-accrual or renegotiated was $3.3 million for 2004,
$6.3 million for 2003, and $12.6 million for 2002.
Amounts actually collected and recorded as interest income for
these loans totaled $1.9 million, $3.0 million, and
$5.1 million for 2004, 2003, and 2002, respectively.

5. LOAN SALES AND
SECURITIZATIONS

AUTOMOBILE LOANS

Huntington sold $1.5 billion and
$2.1 billion of automobile loans in 2004 and 2003,
respectively. Pre-tax gains from the sales of automobile loans
totaled $14.2 million and $40.0 million in 2004 and
2003, respectively. No sales of automobile loans were made
in 2002.


A servicing asset is established at their initial
carrying value based on the relative fair value at the time of
the sale. Huntington has used the following assumptions to
measure fair value at the time of the sale: estimated servicing
income of 1.00%, estimated adequate compensation for servicing
of approximately 0.50%, other ancillary fees received of
approximately 0.12% to 0.15% and an estimated return on payments
prior to remittance to investors. The asset is then amortized
against the actual cash flows received from the investor over
time. Impairment, if any, is recognized when carrying value
exceeds the fair value as determined by calculating the present
value of expected net future cash flows. The primary risk
characteristic for measuring servicing assets is payoff rates of
the underlying loan pools. Valuation calculations rely
heavily on the predicted payoff assumption, and if actual payoff
is quicker than expected, then future value would be
impaired. Other impairment concerns would be changes to the
other assumptions mentioned above.

109




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##### 



|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



Changes in the carrying value of automobile loan
servicing rights for the three years ended December 31,
2004, and the fair value at the end of each period were as
follows:

|                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|--------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                  |  |                        
|                                  |  | Year Ended December 31, |        
|                                 
|                                 
|                                  | 
|(in thousands of dollars)         |  | 2004                    |         |   | 2003 |   |         | 2002 | 
|                                 
|Carrying value, beginning of year |  | $                       | 17,662  |   |      | $ | 12,676  |      |  | $ | 17,647  |  
|New servicing assets              |  |                         | 16,249  |   |      |   | 25,106  |      |  |   | 6,227   |  
|Amortization                      |  |                         | (13,625 | ) |      |   | (8,434  | )    |  |   | (11,198 | )
|Adoption of FIN 46                |  |                         |        |   |      |   | (11,686 | )    |  |   |        |  
|                                 
|Carrying value, end of year       |  | $                       | 20,286  |   |      | $ | 17,662  |      |  | $ | 12,676  |  
|                                 

|                        |  |                 |        |  |      |   |        |      |  |   |        | 
|----------------------- |  | --------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                        |  |                
|                        |  | At December 31, |       
|                       
|                       
|                        | 
|                        |  | 2004            |        |  | 2003 |   |        | 2002 | 
|                       
|Fair value, end of year |  | $               | 21,361 |  |      | $ | 18,501 |      |  | $ | 12,731 | 
|                       

Huntington has retained servicing
responsibilities and receives annual servicing fees of 1.0% of
the outstanding loan balances. The unpaid principal balance of
automobile loans serviced for third parties was
$2.3 billion, $1.8 billion, and $1.1 billion at
December 31, 2004, 2003, and 2002, respectively. Servicing
income, net of amortization of capitalized servicing assets,
amounted to $10.1 million in 2004, $4.3 million in
2003, and $1.0 million in 2002.

There were no pre-tax gains from automobile loan
securitization in 2004. Huntington recorded net pre-tax gains
from automobile loan securitizations of $5.6 million, and
$11.0 million in 2003, and 2002, respectively. Gains or
losses from securitizations depend in part on the previous
carrying amount of the financial assets involved, which are
allocated between the assets sold and the retained interests
based on their relative fair value at the date of transfer.
There were no impairment charges related to Huntingtons
retained interest in 2004 and 2003. Impairment charges of
retained interests were $4.0 million in 2002.

As a result of adopting FIN 46 in the third
quarter of 2003, one of the securitization trusts sponsored by
Huntington was consolidated. The impact of this consolidation
was to reduce the outstanding automobile loans serviced by
$1.0 billion, reduce the retained interest asset by
$142.3 million, and reduce the servicing asset by
$11.7 million. At December 31, 2004, cash of
$30.9 million was held by the subsidiary securitization
trust and was restricted as to Huntingtons ability to
withdraw this cash. In the second quarter of 2004, Huntington
repurchased all the outstanding loans of an unconsolidated trust
for $23.9 million, resulting in a $1.5 million pre-tax
gain.

RESIDENTIAL MORTGAGE LOANS

During 2004, Huntington sold $199.8 million
of residential mortgage loans held for investment, resulting in
a net pre-tax gain of $0.5 million. No sales of residential
mortgage loans were made in 2003 and 2002.


Huntington also securitized $115.9 million,
$354.2 million and $386.4 million of residential
mortgage loans in 2004, 2003, and 2002, respectively, and
retained all of the resulting securities. Accordingly, the
securitized amounts were reclassified from loans to investment
securities.

A mortgage servicing right (MSR) is established
only when the loans are sold or when servicing is contractually
separated from the underlying mortgage loans by sale or
securitization of the loans with servicing rights retained. The
initial carrying value of the asset is established based on its
relative fair value at the time of sale using assumptions that
are consistent with assumptions used at the time to estimate the
fair value of the total MSR portfolio. All servicing rights are
subsequently carried at the lower of the initial carrying value,
adjusted for amortization, or fair value, and are included in
other assets. From time-to-time, loans may be sold with
recourse. This recourse may be for a limited period of time or
for the life of the loan.

The unpaid principal balance of residential
mortgage loans serviced for third parties was $6.9 billion,
$6.4 billion, and $3.8 billion at December 31,
2004, 2003, and 2002, respectively.

110




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##### 



|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



A summary of loans serviced balances at
December 31, 2004 and average for the period ended, were as
follows:

|                         |                                 |                      |         |            |                   |  |        |       | 
|------------------------ | ------------------------------- | -------------------- | ------- | ---------- | ----------------- |  | ------ | ----- | 
|                         |                                 |                      |         | Year Ended |                  
|                         |                                 | At December 31, 2004 |         |            | December 31, 2004 | 
|                        
|                        
|                         |                                
|(in millions of dollars) |                                 | Principal Balance    |         |            | Average Balance   | 
|                        
|Loans serviced           |                                 |                      | $10,755 |            |                   |  | $9,930 |      
|                         | Less: loans serviced for others |                      |         | 6,861      |                   |  |        | 6,633 | 
|                        
|Loans held in portfolio  |                                 |                      | $ 3,894 |            |                   |  | $3,297 |      
|                        

Changes in the carrying value of mortgage
servicing rights and the associated valuation allowance for the
three years ended December 31, 2004, and the fair value at
the end of each period were as follows:

|                              |  |                         |         |   |      |   |         |      |  |   |         |  
|----------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                              |  |                        
|                              |  | Year Ended December 31, |        
|                             
|                             
|                              | 
|(in thousands of dollars)     |  | 2004                    |         |   | 2003 |   |         | 2002 | 
|                             
|Balance, beginning of year    |  | $                       | 71,087  |   |      | $ | 29,271  |      |  | $ | 35,282  |  
|New servicing assets          |  |                         | 23,738  |   |      |   | 52,896  |      |  |   | 41,586  |  
|Amortization                  |  |                         | (19,019 | ) |      |   | (25,966 | )    |  |   | (12,051 | )
|Impairment recovery (charges) |  |                         | 1,378   |   |      |   | 14,957  |      |  |   | (14,113 | )
|Sales                         |  |                         | (77     | ) |      |   | (71     | )    |  |   | (21,433 | )
|                             
|Balance, end of year          |  | $                       | 77,107  |   |      | $ | 71,087  |      |  | $ | 29,271  |  
|                             

|                        |  |                 |        |  |      |   |        |      |  |   |        | 
|----------------------- |  | --------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                        |  |                
|                        |  | At December 31, |       
|                       
|                       
|                        | 
|                        |  | 2004            |        |  | 2003 |   |        | 2002 | 
|                       
|Fair value, end of year |  | $               | 84,084 |  |      | $ | 74,684 |      |  | $ | 29,728 | 
|                       

Servicing rights are evaluated quarterly for
impairment based on the fair value of those rights, using a
disaggregated approach. The fair value of the servicing rights
is determined by estimating the present value of future net cash
flows, taking into consideration market loan prepayment speeds,
discount rates, servicing costs, and other economic factors.
Seven risk tranches are used in the evaluation of mortgage
servicing rights for impairment: three tranches for servicing
rights on 30-year fixed-rate mortgage loans (based on interest
rate bands of below 6.00%; 6.00% up to 6.99%; and 7.00% and
above), three tranches for servicing rights on 15-year
fixed-rate mortgage loans (based on interest rate bands of below
5.50%; 5.50% up to 6.49%; and 6.50% and above), and one tranche
encompassing balloon and adjustable rate mortgages. Huntington
began using the expanded interest rate bands in the fourth
quarter of 2003. Temporary impairment is recognized in a
valuation allowance against the mortgage servicing rights.
Huntington also analyzes its mortgage servicing rights
periodically for other-than-temporary impairment.
Other-than-temporary impairment is recognized as a direct
reduction of the carrying value of the mortgage servicing right
and cannot be recovered. Servicing rights are amortized over the
period of, and in proportion to, the estimated future net
servicing revenue. Amortization is recorded as a reduction of
servicing income, which is reflected in non-interest income in
Huntingtons consolidated income statement.

Changes in the impairment allowance of mortgage
servicing rights for the three years ended December 31,
2004, were as follows:

|                           |  |                         |         |   |      |   |         |      |  |   |         |  
|-------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                           |  |                        
|                           |  | Year Ended December 31, |        
|                          
|                          
|                           | 
|(in thousands of dollars)  |  | 2004                    |         |   | 2003 |   |         | 2002 | 
|                          
|Balance, beginning of year |  | $                       | (6,153  | ) |      | $ | (21,110 | )    |  | $ | (6,997  | )
|Impairment charges         |  |                         | (18,110 | ) |      |   | (10,713 | )    |  |   | (14,533 | )
|Impairment recovery        |  |                         | 19,488  |   |      |   | 25,670  |      |  |   | 420     |  
|                          
|Balance, end of year       |  | $                       | (4,775  | ) |      | $ | (6,153  | )    |  | $ | (21,110 | )
|                          

111




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##### 



|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



At December 31, 2004, the fair value,
assumptions and the sensitivity of the current fair value of
Huntingtons mortgage servicing rights to immediate 10% and
20% adverse changes in those assumptions were:

|                          |  |        |       |                              |        |   |         |        |  |   |      |  
|------------------------- |  | ------ | ----- | ---------------------------- | ------ | - | ------- | ------ |  | - | ---- | -
|                          |  |        |       |                             
|                          |  |        |       | Decline in fair value due to |       
|                          |  |        |       |                             
|                          |  |        |       |                             
|                          |  |        |       |                              |       
|                          |  |        |       | 10%                          |        |   | 20%     |       
|                          |  |        |       | adverse                      |        |   | adverse |       
|(in millions of dollars)  |  | Actual |       |                              | change |   |         | change | 
|                         
|Constant pre-payment rate |  |        | 21.70 | %                            |        | $ | (4.8    | )      |  | $ | (9.1 | )
|Discount rate             |  |        | 8.85  |                              |        |   | (2.2    | )      |  |   | (4.2 | )

Caution should be used when reading these
sensitivities as a change in an individual assumption and its
impact on fair value is shown independent of changes in other
assumptions. Economic factors are dynamic and may counteract or
magnify sensitivities.

6. ALLOWANCES FOR CREDIT
LOSSES (ACL)

The Company maintains two reserves, both of which
are available to absorb possible credit losses: the allowance
for loan and lease losses (ALLL) and the allowance for
unfunded loan commitments and letters of credit (AULC). When
summed together, these reserves constitute the total allowances
for credit losses (ACL). The ALLL had historically included a
component for unfunded loan commitments and letters of credit.
To reflect the nature of this reserve and consistent with better
disclosure, in the first quarter of 2004 the AULC was
reclassified as a separate liability on the balance sheet. Prior
period balance sheet amounts have also been reclassified to be
consistent with the current yearss presentation. This
reclassification had no impact on net income, shareholders
equity, or the amount of total reserves aligned with credit
risks. A summary of the transactions in the allowances for
credit losses and details regarding impaired loans and leases
follows for the three years ended December 31:


|                                                                                       |                                                                       |                         |          |         |      |   |          |          |   |   |          |          |  
|-------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ----------------------- | -------- | ------- | ---- | - | -------- | -------- | - | - | -------- | -------- | -
|                                                                                       |                                                                       |                        
|                                                                                       |                                                                       | Year Ended December 31, |         
|                                                                                      
|                                                                                      
|                                                                                       |                                                                      
|(in thousands of dollars)                                                              |                                                                       | 2004                    |          |         | 2003 |   |          | 2002     |  
|                                                                                      
|                                                                                      
|                                                                                       |                                                                      
|Allowance for Loan and Leases Losses,
    Beginning of Period                          |                                                                       | $                       | 299,732  |         |      | $ | 300,503  |          |   | $ | 345,402  |         
|Loan and lease losses                                                                  |                                                                       |                         | (126,115 | )       |      |   | (201,534 | )        |   |   | (234,352 | )       
|Recoveries of loans previously charged off                                             |                                                                       |                         | 47,580   |         |      |   | 39,725   |          |   |   | 37,440   |         
|                                                                                      
|                                                                                       | Net loan and lease losses                                             |                         |          | (78,535 | )    |   |          | (161,809 | ) |   |          | (196,912 | )
|                                                                                      
|Provision for credit losses                                                            |                                                                       |                         | 55,062   |         |      |   | 163,993  |          |   |   | 194,426  |         
|Net change in allowance for unfunded loan
    commitments and letters of credit        |                                                                       |                         | 2,335    |         |      |   | 623      |          |   |   | (12,215  | )       
|Allowance for assets sold and
    securitized(1)                                       |                                                                       |                         | (7,383   | )       |      |   | (3,578   | )        |   |   | (30,198  | )       
|                                                                                      
|Allowance for Loan and Lease Losses, End
    of Period                                 |                                                                       | $                       | 271,211  |         |      | $ | 299,732  |          |   | $ | 300,503  |         
|                                                                                      
|Allowance for Unfunded Loan Commitments and
    Letters of Credit, Beginning of Period |                                                                       | $                       | 35,522   |         |      | $ | 36,145   |          |   | $ | 23,930   |         
|Net change                                                                             |                                                                       |                         | (2,335   | )       |      |   | (623     | )        |   |   | 12,215   |         
|                                                                                      
|Allowance for Unfunded Loan Commitments and
    Letters of Credit, End of Period       |                                                                       | $                       | 33,187   |         |      | $ | 35,522   |          |   | $ | 36,145   |         
|                                                                                      
|Total Allowances for Credit Losses                                                     |                                                                       | $                       | 304,398  |         |      | $ | 335,254  |          |   | $ | 336,648  |         
|                                                                                      
|Recorded Balance of Impaired Loans, at end of
    year(2):                             |                                                                       |                         |          |         |      |   |          |          |   |   |          |         
|                                                                                       | With specific reserves assigned to the loan and
    lease balances    |                         | $        | 51,875  |      |   | $        | 54,853   |   |   | $        | 91,578   |  
|                                                                                       | With no specific reserves assigned to the loan
    and lease balances |                         |          | 29,296  |      |   |          |         |   |   |          | 2,972    |  
|                                                                                      
|Total                                                                                  |                                                                       | $                       | 81,171   |         |      | $ | 54,853   |          |   | $ | 94,550   |         
|                                                                                      
|Average Balance of Impaired Loans for the
    Year(2)                                  |                                                                       | $                       | 54,445   |         |      | $ | 33,970   |          |   | $ | 87,286   |         
|Allowance for Loan and Lease Losses on Impaired
    Loans(2)                           |                                                                       | $                       | 23,447   |         |      | $ | 26,249   |          |   | $ | 37,984   |         



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In conjunction with the automobile loan sales and
    securitizations in 2004, 2003, and 2002, an allowance for loan
    and lease losses attributable to the associated loans sold was
    included as a component of the loans carrying value upon
    their sale. The allowance associated with the 2002 sale of the
    Florida banking and insurance operations was $22,297.                                                                                                                                                                                                                                
|   
|(2) | Includes impaired commercial and industrial loans
    and commercial real estate loans with outstanding balances
    greater than $500,000. A loan is impaired when it is probable
    that Huntington will be unable to collect all amounts due
    according to the contractual terms of the loan agreement.
    Impaired loans are included in non-performing assets. The amount
    of interest recognized in 2004 on impaired loans while they were
    considered impaired was $1.1 million. There was no interest
    recognized in 2003 or 2002 on impaired loans while they were
    considered impaired.

112




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|                                       |                                   
|-------------------------------------- | ----------------------------------
|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



7. OPERATING LEASE
ASSETS

For periods before May 2002, Huntington
purchased vehicles, primarily automobiles, for lease to
consumers under operating lease arrangements. These operating
lease arrangements required the lessee to make a fixed monthly
rental payment over a specified lease term, typically from 36 to
66 months. These vehicles, net of accumulated depreciation,
were recorded as operating lease assets in the consolidated
balance sheet. Rental income is earned by Huntington on the
operating lease assets and reported as non-interest income.
These vehicles are depreciated over the term of the lease to the
estimated fair value of the vehicle at the end of the lease. The
depreciation of these vehicles is reported as a component of
non-interest expense. At the end of the lease, the vehicle is
either purchased by the lessee or returned to Huntington. The
following is a summary of operating lease assets at December 31:


|                                                                                                     |  |  |  |      |  |                 |           |   |  |   |           |  
|---------------------------------------------------------------------------------------------------- |  |  |  | ---- |  | --------------- | --------- | - |  | - | --------- | -
|                                                                                                     |  |  |  |     
|                                                                                                    
|                                                                                                    
|                                                                                                     |  |  |  |      |  | At December 31,
|                                                                                                     | 
|(in thousands of dollars)                                                                            |  |  |  | 2004 |  |                 | 2003      |  
|                                                                                                    
|                                                                                                    
|                                                                                                     | 
|Cost of operating lease assets (including
    residual value of $406,965 and $814,078, respectively) |  |  |  |      |  | $               | 1,173,616 |   |  | $ | 2,136,502 |  
|Deferred origination fees and costs                                                                  |  |  |  |      |  |                 | (1,138    | ) |  |   | (2,117    | )
|Accumulated depreciation                                                                             |  |  |  |      |  |                 | (585,168  | ) |  |   | (873,945  | )
|                                                                                                    
|Total                                                                                                |  |  |  |      |  | $               | 587,310   |   |  | $ | 1,260,440 |  
|                                                                                                    

The future lease rental payments due from
customers on operating lease assets at December 31, 2004,
totaled $259.8 million and are due as follows:
$164.7 million in 2005; $82.2 million in 2006; and
$12.9 million in 2007. Depreciation expense for each of the
years ended December 31, 2004, 2003, and 2002 was
$216.4 million, $350.6 million, and
$463.8 million, respectively.

8. PREMISES AND
EQUIPMENT

At December 31, premises and equipment
stated at cost were comprised of the following:


|                                                   |  |  |  |      |  |                 |          |   |  |   |          |  
|-------------------------------------------------- |  |  |  | ---- |  | --------------- | -------- | - |  | - | -------- | -
|                                                   |  |  |  |     
|                                                  
|                                                  
|                                                   |  |  |  |      |  | At December 31,
|                                                   | 
|(in thousands of dollars)                          |  |  |  | 2004 |  |                 | 2003     |  
|                                                  
|                                                  
|                                                   | 
|Land and land improvements                         |  |  |  |      |  | $               | 63,406   |   |  | $ | 59,347   |  
|Buildings                                          |  |  |  |      |  |                 | 237,071  |   |  |   | 216,076  |  
|Leasehold improvements                             |  |  |  |      |  |                 | 142,764  |   |  |   | 127,830  |  
|Equipment                                          |  |  |  |      |  |                 | 467,674  |   |  |   | 477,385  |  
|                                                  
|Total premises and equipment                       |  |  |  |      |  |                 | 910,915  |   |  |   | 880,638  |  
|Less accumulated depreciation
    and amortization |  |  |  |      |  |                 | (555,800 | ) |  |   | (530,926 | )
|                                                  
|Net Premises and Equipment                         |  |  |  |      |  | $               | 355,115  |   |  | $ | 349,712  |  
|                                                  

Depreciation and amortization charged to expense
and rental income credited to occupancy expense for the year
ended December 31 were:

|                                                                  |  |                         |        |  |      |   |        |      |  |   |        | 
|----------------------------------------------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                                  |  |                        
|                                                                 
|                                                                 
|                                                                  |  | Year Ended December 31, |       
|                                                                  | 
|(in thousands of dollars)                                         |  | 2004                    |        |  | 2003 |   |        | 2002 | 
|                                                                 
|                                                                 
|                                                                  | 
|Total depreciation and amortization of premises
    and equipment |  | $                       | 50,097 |  |      | $ | 46,746 |      |  | $ | 46,319 | 
|Rental income credited to occupancy expense                       |  |                         | 13,081 |  |      |   | 14,837 |      |  |   | 15,868 | 

9. GOODWILL AND OTHER
INTANGIBLE ASSETS

At December 31, goodwill and other
intangible assets, net of accumulated amortization, were
comprised of:


|                           |  |  |  |      |  |                 |         |  |  |   |         | 
|-------------------------- |  |  |  | ---- |  | --------------- | ------- |  |  | - | ------- | 
|                           |  |  |  |     
|                          
|                          
|                           |  |  |  |      |  | At December 31,
|                           | 
|(in thousands of dollars)  |  |  |  | 2004 |  |                 | 2003    | 
|                          
|                          
|                           | 
|Goodwill                   |  |  |  |      |  | $               | 210,155 |  |  | $ | 210,539 | 
|Favorable lease intangible |  |  |  |      |  |                 | 5,652   |  |  |   | 6,470   | 
|                          
|Balance, end of period     |  |  |  |      |  | $               | 215,807 |  |  | $ | 217,009 | 
|                          

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



At December 31, 2004, none of
Huntingtons goodwill is deductible for tax purposes.
Goodwill and other intangible assets, net of accumulated
amortization, and related activity, by segment, for the years
ended December 31, 2004 and 2003, were as follows:

|                           |  |          |         |   |        |   |     |  |           |       |        |            |              |   |       |   |  |  |          |  
|-------------------------- |  | -------- | ------- | - | ------ | - | --- |  | --------- | ----- | ------ | ---------- | ------------ | - | ----- | - |  |  | -------- | -
|                           |  | Regional |         |   | Dealer |   |     |  | Treasury/ |       |        | Huntington |             
|(in thousands of dollars)  |  | Banking  |         |   | Sales  |   | PFG |  |           | Other |        |            | Consolidated |  
|                          
|                          
|                           | 
|Balance, January 1, 2003   |  | $        | 198,335 |   |        |   |    |  |           | $     | 12,947 |            |              | $ | 7,285 |   |  |  | $218,567 |  
|Disposals                  |  |          | (333    | ) |        |   |    |  |           |       |       |            |              |   |      |   |  |  | (333     | )
|Amortization               |  |          |        |   |        |   |    |  |           |       |       |            |              |   | (816  | ) |  |  | (816     | )
|Adjustments                |  |          | (409    | ) |        |   |    |  |           |       |       |            |              |   |      |   |  |  | (409     | )
|                          
|Balance, December 31, 2003 |  |          | 197,593 |   |        |   |    |  |           |       | 12,947 |            |              |   | 6,469 |   |  |  | 217,009  |  
|Amortization               |  |          |        |   |        |   |    |  |           |       |       |            |              |   | (817  | ) |  |  | (817     | )
|Adjustments                |  |          |        |   |        |   |    |  |           |       | (385   | )          |              |   |      |   |  |  | (385     | )
|                          
|Balance, December 31, 2004 |  | $        | 197,593 |   |        | $ |    |  |           | $     | 12,562 |            |              | $ | 5,652 |   |  |  | $215,807 |  
|                          

The $0.4 million adjustment in 2004 relates
to goodwill recorded as part of the Haberer Registered
Investment Advisor, Inc. acquisition in 2002. During 2003,
Huntington completed the sale of certain banking offices in West
Virginia, resulting in a $0.3 million write-off of the
remaining associated goodwill. The remaining $0.4 million
write-off in 2003 related to an adjustment of the goodwill
amount recorded as part of the LeaseNet, Inc. acquisition in
2002. No impairment of goodwill was recognized in 2004, 2003, or
2002.

A substantial portion of the remaining goodwill
is attributable to the previously acquired banking operations
reported under the Regional Banking line of business. For the
years 2005 through 2009, amortization expense associated with
the leasehold intangible is expected to be $0.8 million
each year.

10. SHORT-TERM
BORROWINGS

At December 31, short-term borrowings were
comprised of the following:


|                                                   |  |                 |           |  |      |   |           | 
|-------------------------------------------------- |  | --------------- | --------- |  | ---- | - | --------- | 
|                                                   |  |                
|                                                   |  | At December 31, |          
|                                                  
|                                                  
|                                                   | 
|(in thousands of dollars)                          |  | 2004            |           |  | 2003 |  
|                                                  
|                                                  
|                                                   | 
|Federal funds purchased                            |  | $               | 30,620    |  |      | $ | 230,585   | 
|Securities sold under agreements
    to repurchase |  |                 | 1,093,247 |  |      |   | 1,147,473 | 
|Commercial paper                                   |  |                 | 1,928     |  |      |   | 3,481     | 
|Other                                              |  |                 | 81,438    |  |      |   | 70,765    | 
|                                                  
|Total Short-term Borrowings                        |  | $               | 1,207,233 |  |      | $ | 1,452,304 | 
|                                                  

Information concerning securities sold under
agreements to repurchase at December 31 is summarized as follows:

|                                          |  |                         |           |   |      |   |           |  
|----------------------------------------- |  | ----------------------- | --------- | - | ---- | - | --------- | -
|                                          |  |                        
|                                          |  | Year Ended December 31, |          
|                                         
|                                         
|                                          | 
|(in thousands of dollars)                 |  | 2004                    |           |   | 2003 |  
|                                         
|                                         
|                                          | 
|Average balance during the year           |  | $                       | 1,410,174 |   |      | $ | 880,363   |  
|Average interest rate during the year     |  |                         | 0.93      | % |      |   | 0.73      | %
|Maximum month-end balance during the year |  | $                       | 1,500,267 |   |      | $ | 1,276,761 |  

Commercial paper is issued by Huntington
Bancshares Financial Corporation, a non-bank subsidiary, with
principal and interest guaranteed by the parent company.

11. FEDERAL HOME LOAN
BANK ADVANCES

Huntingtons long-term advances from the
Federal Home Loan Bank had weighted average interest rates of
2.32% and 1.23% at December 31, 2004 and 2003,
respectively. These advances, which predominately had variable
interest rates, were collateralized by qualifying real estate
loans. As of December 31, 2004 and 2003, Huntingtons
maximum borrowing capacity was $1.5 billion and
$1.4 billion, respectively. The advances of
$1.3 billion mature over the next 15 years as follows:
$100 million in 2005; none in 2006; $900 million in
2007; $270 million in 2008; none in 2009, and
$1 million thereafter. The terms of advances include
various restrictive covenants including limitations on the
acquisition of additional debt in excess of specified levels,
dividend payments, and the disposition of subsidiaries. As of
December 31, 2004, Huntington was in compliance with all
such covenants.


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12. SUBORDINATED
NOTES

At December 31, Huntingtons
subordinated notes consisted of the following:


|                              |                                                       |                 |           |         |      |   |         |         | 
|----------------------------- | ----------------------------------------------------- | --------------- | --------- | ------- | ---- | - | ------- | ------- | 
|                              |                                                       |                
|                              |                                                       | At December 31, |          
|                             
|                             
|                              |                                                      
|(in thousands of dollars)     |                                                       | 2004            |           |         | 2003 |  
|                             
|                             
|                              |                                                      
|Parent company:               |                                                       |                 |           |         |      |   |         |        
|                              | 2.86% junior subordinated debentures due
    2027(1)  |                 | $         | 206,186 |      |   | $       | 206,186 | 
|                              | 3.115% junior subordinated debentures due
    2028(2) |                 |           | 103,093 |      |   |         | 103,093 | 
|The Huntington National Bank: |                                                       |                 |           |         |      |   |         |        
|                              | Floating rate subordinated notes due 2008             |                 |           |        |      |   |         | 100,000 | 
|                              | 8.00% subordinated notes due 2010                     |                 |           | 160,692 |      |   |         | 162,769 | 
|                              | 4.90% subordinated notes due 2014                     |                 |           | 199,136 |      |   |         | 198,431 | 
|                              | 6.60% subordinated notes due 2018                     |                 |           | 219,505 |      |   |         | 219,991 | 
|                              | 5.375% subordinated notes due 2019                    |                 |           | 151,181 |      |   |         |        | 
|                             
|Total subordinated notes      |                                                       | $               | 1,039,793 |         |      | $ | 990,470 |        
|                             



|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(1) | Variable effective rate at December 31,
    2004, based on three month LIBOR + 0.70. 
|   
|(2) | Variable effective rate at December 31,
    2004, based on three month LIBOR + 0.625.

The Bank issued $100 million of long-term
notes in 2002 that were called in the first quarter of 2004.
Proceeds from lower rate subordinated notes issued in the first
quarter of 2004 were used to fund the payment of the long-term
notes. The weighted-average interest rate for subordinated notes
was 5.16 % at December 31, 2004, and 6.36% at the end of
2003.

Amounts above are reported net of unamortized
discounts and include values related to hedging with derivative
financial instruments. The derivative instruments, principally
interest rate swaps, are used to match the funding rates on
certain assets by hedging the cash flow variability associated
with certain variable-rate debt by converting the debt to
fixed-rate and hedging the fair values of certain fixed-rate
debt by converting the debt to a variable rate. See Note 20
for more information regarding such financial instruments. All
principal is due upon maturity of the note as described in the
table above.

13. OTHER LONG-TERM
DEBT

At December 31, Huntingtons other
long-term debt consisted of the following:


|                           |                                                                                              |                 |           |           |      |   |           |           | 
|-------------------------- | -------------------------------------------------------------------------------------------- | --------------- | --------- | --------- | ---- | - | --------- | --------- | 
|                           |                                                                                              |                
|                           |                                                                                              | At December 31, |          
|                          
|                          
|                           |                                                                                             
|(in thousands of dollars)  |                                                                                              | 2004            |           |           | 2003 |  
|                          
|                          
|                           |                                                                                             
|                           | The Huntington National Bank                                                                 |                 | $         | 3,866,004 |      |   | $         | 4,394,509 | 
|                           | Parent company (maturing in 2005 and interest
    rate of 2.63%)(1)                          |                 |           | 100,000   |      |   |           | 100,000   | 
|                           | Class C preferred securities of REIT
    subsidiary (no maturity and interest rate of 7.88%) |                 |           | 50,000    |      |   |           | 50,000    | 
|                          
|Total Other Long-Term Debt |                                                                                              | $               | 4,016,004 |           |      | $ | 4,544,509 |          
|                          



|    |                                                                                   
|--- | ----------------------------------------------------------------------------------
|(1) | Variable effective rate at December 31,
    2004, of 1.40% plus three-month LIBOR.

Amounts above include values related to hedging
with derivative financial instruments. The derivative
instruments, principally interest rate swaps, are used to match
the funding rates on certain assets by hedging the cash flow
variability associated with certain variable-rate debt by
converting the debt to fixed-rate and hedging the fair values of
certain fixed-rate debt by converting the debt to a variable
rate. See Note 20 for more information regarding such
financial instruments.

The weighted-average interest rate for other
long-term debt at December 31, 2004 and 2003, was 2.86% and
1.67%, respectively. At December 31, 2004,
Huntingtons other long-term debt included
$300 million of secured borrowings, which had variable
rates based on three-month LIBOR. At December 31, 2004,
these secured borrowings had a remaining average maturity of
0.6 years and a weighted average cost of 2.24%.

The terms of the other long-term debt obligations
contain various restrictive covenants including limitations on
the acquisition of additional debt in excess of specified
levels, dividend payments, and the disposition of subsidiaries.
As of December 31, 2004, Huntington was in compliance with
all such covenants.

Other long-term debt maturities for the next five
years are as follows: $1.5 billion in 2005;
$0.8 billion in 2006; $0.1 billion in 2007;
$0.2 billion in 2008; $0.2 billion in 2009; and
$1.2 billion in 2010 and thereafter.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



14. OTHER COMPREHENSIVE
INCOME

The components of Huntingtons Other
Comprehensive Income in each of the three years ended December
31 were as follows:


|                                                                                                                                                                                        |                               |                         |         |         |         |   |         |         |         |   |        |         |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ----------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------ | ------- | ------ | -
|                                                                                                                                                                                        |                               |                        
|                                                                                                                                                                                        |                               | Year Ended December 31, |        
|                                                                                                                                                                                       
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                              
|(in thousands of dollars)                                                                                                                                                               |                               | 2004                    |         |         | 2003    |   |         | 2002    |        
|                                                                                                                                                                                       
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                              
|Unrealized holding gains and losses on securities
    available for sale arising during the period:                                                                                     |                               |                         |         |         |         |   |         |         |         |   |        |        
|                                                                                                                                                                                        | Unrealized net (losses) gains |                         | $       | (18,555 | )       |   | $       | (67,520 | )       |   | $      | 46,655  |       
|                                                                                                                                                                                        | Related tax benefit (expense) |                         |         | 6,689   |         |   |         | 23,511  |         |   |        | (16,082 | )     
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                               | Net                     |         |         | (11,866 | ) |         |         | (44,009 | ) |        |         | 30,573 |  
|                                                                                                                                                                                       
|Reclassification adjustment for net gains from
    sales of securities available for sale realized
    during the period:                                                               |                               |                         |         |         |         |   |         |         |         |   |        |        
|                                                                                                                                                                                        | Realized net gains            |                         |         | (15,763 | )       |   |         | (5,258  | )       |   |        | (4,902  | )     
|                                                                                                                                                                                        | Related tax expense           |                         |         | 5,517   |         |   |         | 1,840   |         |   |        | 1,716   |       
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                               | Net                     |         |         | (10,246 | ) |         |         | (3,418  | ) |        |         | (3,186 | )
|                                                                                                                                                                                       
|Total unrealized holding (losses) gains on
    securities available for sale arising during the period,
    net of reclassification adjustment for net gains
    included in net income |                               |                         | (22,112 | )       |         |   | (47,427 | )       |         |   | 27,387 |        
|                                                                                                                                                                                       
|Unrealized holding gains and losses on
    derivatives used in cash flow hedging relationships arising
    during the period:                                                           |                               |                         |         |         |         |   |         |         |         |   |        |        
|                                                                                                                                                                                        | Unrealized net gains (losses) |                         |         | 14,914  |         |   |         | (17,048 | )       |   |        | 14,799  |       
|                                                                                                                                                                                        | Related tax (expense) benefit |                         |         | (5,220  | )       |   |         | 5,967   |         |   |        | (5,179  | )     
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                               | Net                     |         |         | 9,694   |   |         |         | (11,081 | ) |        |         | 9,620  |  
|                                                                                                                                                                                       
|Minimum pension liability:                                                                                                                                                              |                               |                         |         |         |         |   |         |         |         |   |        |        
|                                                                                                                                                                                        | Unrealized net loss           |                         |         | (1,789  | )       |   |         | (1,714  | )       |   |        | (300    | )     
|                                                                                                                                                                                        | Related tax benefit           |                         |         | 626     |         |   |         | 600     |         |   |        | 105     |       
|                                                                                                                                                                                       
|                                                                                                                                                                                        |                               | Net                     |         |         | (1,163  | ) |         |         | (1,114  | ) |        |         | (195   | )
|                                                                                                                                                                                       
|Total Other Comprehensive (Loss) Income                                                                                                                                                 |                               | $                       | (13,581 | )       |         | $ | (59,622 | )       |         | $ | 36,812 |        
|                                                                                                                                                                                       

Activity in Accumulated Other Comprehensive
Income for the most recent three years is as follows:

|                           |  |                      |         |   |                                 |   |         |                   |  |   |        |   |  |   |         |  
|-------------------------- |  | -------------------- | ------- | - | ------------------------------- | - | ------- | ----------------- |  | - | ------ | - |  | - | ------- | -
|                           |  | Unrealized gains and |         |   | Unrealized gains and losses on  |   |         |                   |  |  
|                           |  | losses on securities |         |   | derivative instruments used in  |   |         | Minimum           |  |   |       
|(in thousands of dollars)  |  | available for sale   |         |   | cash flow hedging relationships |   |         | pension liability |  |   | Total  |  
|                          
|                          
|                           | 
|Balance, January 1, 2002   |  | $                    | 29,469  |   |                                 | $ | (3,981  | )                 |  | $ |       |   |  | $ | 25,488  |  
|Current period change      |  |                      | 27,387  |   |                                 |   | 9,620   |                   |  |   | (195   | ) |  |   | 36,812  |  
|                          
|Balance, December 31, 2002 |  |                      | 56,856  |   |                                 |   | 5,639   |                   |  |   | (195   | ) |  |   | 62,300  |  
|Current period change      |  |                      | (47,427 | ) |                                 |   | (11,081 | )                 |  |   | (1,114 | ) |  |   | (59,622 | )
|                          
|Balance, December 31, 2003 |  |                      | 9,429   |   |                                 |   | (5,442  | )                 |  |   | (1,309 | ) |  |   | 2,678   |  
|Current period change      |  |                      | (22,112 | ) |                                 |   | 9,694   |                   |  |   | (1,163 | ) |  |   | (13,581 | )
|                          
|Balance, December 31, 2004 |  | $                    | (12,683 | ) |                                 | $ | 4,252   |                   |  | $ | (2,472 | ) |  | $ | (10,903 | )
|                          

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



15. EARNINGS PER
SHARE

Basic earnings per share is the amount of
earnings for the period available to each share of common stock
outstanding during the reporting period. Diluted earnings per
share is the amount of earnings available to each share of
common stock outstanding during the reporting period adjusted
for the potential issuance of common shares for dilutive stock
options. The calculation of basic and diluted earnings per share
for each of the three years ended December 31 is as follows:


|                                                                    |         |                                                          |         |  |       |   |         |      |       |   |         |  |       | 
|------------------------------------------------------------------- | ------- | -------------------------------------------------------- | ------- |  | ----- | - | ------- | ---- | ----- | - | ------- |  | ----- | 
|                                                                    |         |                                                         
|                                                                    |         | Year Ended December 31,                                  |        
|                                                                   
|                                                                   
|                                                                    |        
|(in thousands, except per share amounts)                            |         | 2004                                                     |         |  | 2003  |   |         | 2002 |      
|                                                                   
|                                                                   
|                                                                    |        
|Income before cumulative effect of
    accounting change            |         | $                                                        | 398,925 |  |       | $ | 385,693 |      |       | $ | 323,731 | 
|Cumulative effect of change in accounting
    principle, net of tax |         |                                                          |        |  |       |   | (13,330 | )    |       |   |        | 
|                                                                   
|Net income                                                          |         | $                                                        | 398,925 |  |       | $ | 372,363 |      |       | $ | 323,731 | 
|                                                                   
|Average common shares outstanding                                   |         |                                                          | 229,913 |  |       |   | 229,401 |      |       |   | 242,279 | 
|Dilutive effect of common stock equivalents                         |         |                                                          | 3,943   |  |       |   | 2,181   |      |       |   | 1,733   | 
|                                                                   
|Diluted average common shares outstanding                           |         |                                                          | 233,856 |  |       |   | 231,582 |      |       |   | 244,012 | 
|                                                                   
|Earnings Per Share                                                  |         |                                                          |         |  |       |   |         |      |       |   |         | 
|                                                                    | Basic   |                                                          |         |  |       |   |         |      |       |   |         |  |      
|                                                                    |         | Income before cumulative effect of
    accounting change |         |  | $1.74 |   |         |      | $1.68 |   |         |  | $1.34 | 
|                                                                    |         | Net income                                               |         |  | 1.74  |   |         |      | 1.62  |   |         |  | 1.34  | 
|                                                                    | Diluted |                                                          |         |  |       |   |         |      |       |   |         |  |      
|                                                                    |         | Income before cumulative effect of
    accounting change |         |  | 1.71  |   |         |      | 1.67  |   |         |  | 1.33  | 
|                                                                    |         | Net income                                               |         |  | 1.71  |   |         |      | 1.61  |   |         |  | 1.33  | 

The average market price of Huntingtons
common stock for the period was used in determining the dilutive
effect of outstanding stock options. Common stock equivalents
are computed based on the number of shares subject to stock
options that have an exercise price less than the average market
price of Huntingtons common stock for the period.

Approximately 2.6 million, 2.8 million,
and 7.7 million stock options outstanding at the end of
2004, 2003, and 2002, respectively, were not included in the
computation of diluted earnings per share because the effect
would be antidilutive. The weighted average exercise price for
these options was $26.96 per share, $26.74 per share, and $22.19
per share at the end of the same respective periods.

On January 7, 2005, Huntington released from
escrow 86,118 shares of Huntington common stock to former
shareholders of LeaseNet, Inc., which were previously issued in
September 2002. A total of 373,896 common shares,
previously held in escrow, was returned to Huntington. All
shares in escrow had been accounted for as treasury stock.

16. STOCK-BASED
COMPENSATION

Huntington sponsors nonqualified and incentive
stock option plans. These plans provide for the granting of
stock options to officers and other employees. Huntingtons
board of directors has approved all of the plans. Shareholders
have approved each of the plans, except for the broad-based
Employee Stock Incentive Plan. Approximately 28.8 million
shares have been authorized under the plans, of which
8.8 million were available for future grants at
December 31, 2004. Options that were granted in the most
recent seven years vest ratably over three years or when other
conditions are met while those granted in 1994 through 1997
vested ratably over four years. All grants preceding 1994 became
fully exercisable after one year. All options granted have a
maximum term of ten years.


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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



The fair value of the options granted was
estimated at the date of grant using a Black-Scholes
option-pricing model. Huntingtons stock option activity
and related information for each of the recent three years ended
December 31 is summarized below:

|                                                                   |  |           |        |   |       |   |           |         |  |  |        |           |  |         |       |  |       |  |        |   |  |   |       | 
|------------------------------------------------------------------ |  | --------- | ------ | - | ----- | - | --------- | ------- |  |  | ------ | --------- |  | ------- | ----- |  | ----- |  | ------ | - |  | - | ----- | 
|                                                                   |  |           |        |   |       |  
|                                                                   |  | 2004      |        |   | 2003  |   |           | 2002    | 
|                                                                  
|                                                                  
|                                                                   | 
|                                                                   |  | Weighted- |        |   |       |   | Weighted- |         |  |  |        | Weighted- | 
|                                                                   |  | Average   |        |   |       |   | Average   |         |  |  |        | Average   | 
|                                                                   |  | Exercise  |        |   |       |   | Exercise  |         |  |  |        | Exercise  | 
|(in thousands, except per share amounts)                           |  | Options   |        |   | Price |   |           | Options |  |  | Price  |           |  | Options |       |  | Price | 
|                                                                  
|                                                                  
|                                                                   | 
|Outstanding at beginning of year                                   |  |           | 19,997 |   |       | $ | 19.40     |         |  |  | 18,024 |           |  | $       | 18.93 |  |       |  | 14,649 |   |  | $ | 18.70 | 
|Granted                                                            |  |           | 3,200  |   |       |   | 23.05     |         |  |  | 3,659  |           |  |         | 20.38 |  |       |  | 5,511  |   |  |   | 18.78 | 
|Exercised                                                          |  |           | (2,478 | ) |       |   | 17.05     |         |  |  | (788   | )         |  |         | 14.40 |  |       |  | (887   | ) |  |   | 12.79 | 
|Forfeited/expired                                                  |  |           | (702   | ) |       |   | 20.02     |         |  |  | (898   | )         |  |         | 19.32 |  |       |  | (1,249 | ) |  |   | 19.89 | 
|                                                                  
|Outstanding at end of year                                         |  |           | 20,017 |   |       | $ | 20.25     |         |  |  | 19,997 |           |  | $       | 19.40 |  |       |  | 18,024 |   |  | $ | 18.93 | 
|                                                                  
|Exercisable at end of year                                         |  |           | 11,984 |   |       | $ | 19.68     |         |  |  | 9,649  |           |  | $       | 19.60 |  |       |  | 8,352  |   |  | $ | 19.62 | 
|                                                                  
|Weighted-Average Fair Value of Options Granted
    During the Year |  |           |        |   |       | $ | 5.78      |         |  |  |        |           |  | $       | 5.64  |  |       |  |        |   |  | $ | 5.18  | 

Additional information regarding options
outstanding as of December 31, 2004, is as follows:

|                                         |  |                     |             |  |                     |          |     |       |  |           |          |  |  |       |        |  |  |   |       | 
|---------------------------------------- |  | ------------------- | ----------- |  | ------------------- | -------- | --- | ----- |  | --------- | -------- |  |  | ----- | ------ |  |  | - | ----- | 
|                                         |  |                     |             | 
|                                         |  | Options Outstanding |             |  | Exercisable Options |         
|                                        
|                                        
|                                         | 
|                                         |  | Weighted-           |             |  |                    
|                                         |  | Average             |             |  | Weighted-           |          |     |       |  | Weighted- |         
|Range of                                 |  |                     | Remaining   |  |                     | Average  |     |       |  |           | Average  | 
|Exercise Prices                          |  |                     | Contractual |  |                     | Exercise |     |       |  |           | Exercise | 
|(in thousands, except per share amounts) |  | Shares              |             |  | Life (Years)        |          |     | Price |  |           | Shares   |  |  | Price |       
|                                        
|                                        
|                                         | 
|$11.09 to $15.00                         |  |                     | 1,242       |  |                     |          | 4.1 |       |  | $         | 14.38    |  |  |       | 1,242  |  |  | $ | 14.38 | 
|$15.01 to $20.00                         |  |                     | 9,507       |  |                     |          | 6.5 |       |  |           | 18.17    |  |  |       | 6,890  |  |  |   | 17.72 | 
|$20.01 to $25.00                         |  |                     | 6,927       |  |                     |          | 7.3 |       |  |           | 21.80    |  |  |       | 1,534  |  |  |   | 21.30 | 
|$25.01 to $28.35                         |  |                     | 2,341       |  |                     |          | 4.1 |       |  |           | 27.24    |  |  |       | 2,318  |  |  |   | 27.26 | 
|                                        
|Total                                    |  |                     | 20,017      |  |                     |          | 6.4 |       |  | $         | 20.25    |  |  |       | 11,984 |  |  | $ | 19.68 | 
|                                        

On August 27, 2002, common stock options
were granted to, with certain specified exceptions, full- and
part-time employees under the Huntington Bancshares Incorporated
Employee Stock Incentive Plan (the Incentive Plan). Under the
terms of the Incentive Plan, these options are to vest on the
earlier of August 27, 2007, or at such time as the closing
price for Huntingtons common stock for five consecutive
trading days reached or exceeded $27.00. As of December 31,
2004, 1.7 million shares under option remain unvested.

17. INCOME
TAXES

The following is a summary of the provision for
income taxes:


|                           |         |                 |         |         |      |   |         |         |  |   |         |         | 
|-------------------------- | ------- | --------------- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                           |         |                
|                           |         | At December 31, |        
|                          
|                          
|                           |        
|(in thousands of dollars)  |         | 2004            |         |         | 2003 |   |         | 2002    | 
|                          
|                          
|                           |        
|Currently payable          |         |                 |         |         |      |   |         |         |  |   |         |        
|                           | Federal |                 | $       | 12,779  |      |   | $       | 138,036 |  |   | $       | 102,256 | 
|Deferred tax expense       |         |                 |         |         |      |   |         |         |  |   |         |        
|                           | Federal |                 |         | 140,962 |      |   |         | 258     |  |   |         | 96,718  | 
|                          
|Provision for income taxes |         | $               | 153,741 |         |      | $ | 138,294 |         |  | $ | 198,974 |        
|                          

Tax expense associated with securities
transactions included in the above amounts was $5.5 million
in 2004, $1.8 million in 2003, and $1.7 million in
2002.

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The following is a reconcilement of income tax
expense to the amount computed at the statutory rate of 35%:

|                                                      |                                             |        |         |         |      |  |       |        |   |   |         |         |   |        |       |      |      |   |         |         |   |  |       |      |  
|----------------------------------------------------- | ------------------------------------------- | ------ | ------- | ------- | ---- |  | ----- | ------ | - | - | ------- | ------- | - | ------ | ----- | ---- | ---- | - | ------- | ------- | - |  | ----- | ---- | -
|                                                      |                                             |        |         |         |      | 
|                                                      |                                             | 2004   |         |         | 2003 |  |       | 2002   |  
|                                                     
|                                                     
|                                                      |                                            
|(in thousands of dollars)                             |                                             | Amount |         |         | Rate |  |       | Amount |   |   | Rate    |         |   | Amount |       |      | Rate |  
|                                                     
|                                                     
|                                                      |                                            
|Income tax expense computed at the
    statutory rate |                                             | $      | 193,433 |         |      |  | 35.0% |        |   | $ | 183,396 |         |   |        | 35.0% |      |      | $ | 182,947 |         |   |  | 35.0% |     
|Increases (decreases):                                |                                             |        |         |         |      |  |       |        |   |   |         |         |   |        |       |      |      |   |         |         |   |  |       |     
|                                                      | Tax-exempt interest income                  |        |         | (7,640  | )    |  |       | (1.4   | ) |   |         | (6,381  | ) |        |       | (1.2 | )    |   |         | (3,528  | ) |  |       | (0.7 | )
|                                                      | Tax-exempt bank owned life insurance income |        |         | (14,804 | )    |  |       | (2.7   | ) |   |         | (15,060 | ) |        |       | (2.9 | )    |   |         | (15,093 | ) |  |       | (2.9 | )
|                                                      | Asset securitization activities             |        |         | (6,278  | )    |  |       | (1.1   | ) |   |         | (5,211  | ) |        |       | (1.0 | )    |   |         | (8,244  | ) |  |       | (1.6 | )
|                                                      | Nondeductible goodwill                      |        |         |        |      |  |       |       |   |   |         |        |   |        |       |     |      |   |         | 52,500  |   |  |       | 10.0 |  
|                                                      | General business credits                    |        |         | (7,768  | )    |  |       | (1.4   | ) |   |         | (11,176 | ) |        |       | (2.1 | )    |   |         | (2,100  | ) |  |       | (0.4 | )
|                                                      | Other, net                                  |        |         | (3,202  | )    |  |       | (0.6   | ) |   |         | (7,274  | ) |        |       | (1.4 | )    |   |         | (7,508  | ) |  |       | (1.3 | )
|                                                     
|Income taxes                                          |                                             | $      | 153,741 |         |      |  | 27.8% |        |   | $ | 138,294 |         |   |        | 26.4% |      |      | $ | 198,974 |         |   |  | 38.1% |     
|                                                     

The significant components of deferred assets and
liabilities at December 31, are as follows:

|                             |                                     |                 |           |         |      |   |         |         | 
|---------------------------- | ----------------------------------- | --------------- | --------- | ------- | ---- | - | ------- | ------- | 
|                             |                                     |                
|                             |                                     | At December 31, |          
|                            
|                            
|                             |                                    
|(in thousands of dollars)    |                                     | 2004            |           |         | 2003 |  
|                            
|                            
|                             |                                    
|Deferred tax assets:         |                                     |                 |           |         |      |   |         |        
|                             | Allowance for loan losses           |                 | $         | 122,926 |      |   | $       | 153,060 | 
|                             | Net operating loss                  |                 |           | 22,936  |      |   |         | 8,715   | 
|                             | Fair value adjustments              |                 |           | 6,791   |      |   |         |        | 
|Other                        |                                     |                 | 95,527    |         |      |   | 170,964 |        
|                            
|Total deferred tax assets    |                                     |                 | 248,180   |         |      |   | 332,739 |        
|                            
|Deferred tax liabilities:    |                                     |                 |           |         |      |   |         |        
|                             | Lease financing                     |                 |           | 861,273 |      |   |         | 871,684 | 
|                             | Pension and other employee benefits |                 |           | 31,822  |      |   |         | 3,037   | 
|                             | Mortgage servicing rights           |                 |           | 32,947  |      |   |         | 15,770  | 
|                             | Fair value adjustments              |                 |           |        |      |   |         | 5,078   | 
|                             | Other                               |                 |           | 105,766 |      |   |         | 91,705  | 
|                            
|Total deferred tax liability |                                     |                 | 1,031,808 |         |      |   | 987,274 |        
|                            
|Net deferred tax liability   |                                     | $               | 783,628   |         |      | $ | 654,535 |        
|                            

At December 31, 2004, Huntingtons
deferred tax asset related to loss and credit carry-forwards
amounted to $22.9 million. This is comprised of a net
operating loss carry-forward for U.S. federal tax purposes,
which will begin expiring in 2023, with the remaining expiring
in 2024. A valuation allowance is provided when it is more
likely than not that some portion of the federal tax asset will
not be realized. In Managements opinion, the results of
future operations will generate sufficient taxable income to
realize the deferred tax assets. Consequently, Management has
determined that a valuation allowance for deferred tax assets
was not required as of December 31, 2004 or 2003.

18. BENEFIT
PLANS

Huntington sponsors the Huntington Bancshares
Retirement Plan (the Plan), a non-contributory defined benefit
pension plan covering substantially all employees. The Plan
provides benefits based upon length of service and compensation
levels. The funding policy of Huntington is to contribute an
annual amount that is at least equal to the minimum funding
requirements but not more than that deductible under the
Internal Revenue Code.


In addition, Huntington has an unfunded defined
benefit post-retirement plan that provides certain health-care
and life insurance benefits to retired employees who have
attained the age of 55 and have at least 10 years of
vesting service under this plan. For any employee retiring on or
after January 1, 1993, post-retirement healthcare benefits
are based upon the employees number of months of service
and are limited to the actual cost of coverage. Life insurance
benefits are a percentage of the employees base salary at
the time of retirement, with a maximum of $50,000 of coverage.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



The following table shows the weighted-average
assumptions used to determine the benefit obligation at
December 31, 2004 and 2003, and the net periodic benefit
cost for the years then ended. Huntington selected
September 30, 2004 as the measurement date for all
calculations and contracted an actuary to provide measurement
services.

|                                                                                                                 |                                |                  |  |                 |          |      |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------------------------------------------------------------------------------- | ------------------------------ | ---------------- |  | --------------- | -------- | ---- |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                                                                                                 |                                |                  |  |                 |          |     
|                                                                                                                 |                                |                  |  | Post-Retirement |         
|                                                                                                                 |                                | Pension Benefits |  |                 | Benefits |     
|                                                                                                                
|                                                                                                                
|                                                                                                                 |                               
|                                                                                                                
|                                                                                                                
|                                                                                                                 |                                | 2004             |  | 2003            |          | 2004 |  | 2003 |   | 
|                                                                                                                 |                               
|Weighted-average assumptions used to determine
    benefit obligations at December 31                            |                                |                  |  |                 |          |      |  |      |   |  |  |      |   |  |  |     
|                                                                                                                 | Discount rate                  |                  |  | 5.81            | %        |      |  | 6.00 | % |  |  | 5.81 | % |  |  | 6.00 | %
|                                                                                                                 | Rate of compensation increase  |                  |  | 5.00            |          |      |  | 5.00 |   |  |  | N/A  |   |  |  | N/A  |  
|Weighted-average assumptions used to determine
    net
    periodic benefit cost for the years ended December 31 |                                |                  |  |                 |          |      |  |      |   |  |  |      |   |  |  |     
|                                                                                                                 | Discount rate                  |                  |  | 6.00            |          |      |  | 6.75 |   |  |  | 6.00 |   |  |  | 6.75 |  
|                                                                                                                 | Expected return on plan assets |                  |  | 7.00            |          |      |  | 8.50 |   |  |  | N/A  |   |  |  | N/A  |  
|                                                                                                                 | Rate of compensation increase  |                  |  | 5.00            |          |      |  | 5.00 |   |  |  | N/A  |   |  |  | N/A  |  

N/ A, not applicable.

The investment objective of the Plan is to
maximize the return on Plan assets over a long time horizon,
while meeting the Plan obligations. At September 30, 2004,
Plan assets were invested 73% in equity investments and 27% in
bonds, with an average duration of four years on bond
investments. The estimated life of benefit obligations was
12 years. Management believes that this mix is appropriate
for the current economic environment. In 2004, Huntington
lowered its assumptions for the discount rate. The 5.81% assumed
discount rate was based upon the Moodys daily long-term
corporate Aa bond yield as of the Plans measurement date.
The impact of lowering this assumption will increase
Huntingtons 2005 pension expense.

The following table reconciles the beginning and
ending balances of the benefit obligation of the Plan and the
post-retirement benefit plan with the amounts recognized in the
consolidated balance sheets at December 31:

|                                                                           |                                            |                  |         |                 |          |   |         |        |        |   |        |        |    |   |        |        |       | 
|-------------------------------------------------------------------------- | ------------------------------------------ | ---------------- | ------- | --------------- | -------- | - | ------- | ------ | ------ | - | ------ | ------ | -- | - | ------ | ------ | ----- | 
|                                                                           |                                            |                  |         |                 |          |  
|                                                                           |                                            |                  |         | Post-Retirement |         
|                                                                           |                                            | Pension Benefits |         |                 | Benefits |  
|                                                                          
|                                                                          
|                                                                           |                                           
|(in thousands of dollars)                                                  |                                            | 2004             |         |                 | 2003     |   |         | 2004   |        |   | 2003   |       
|                                                                          
|                                                                          
|                                                                           |                                           
|Change in Benefit Obligation:                                              |                                            |                  |         |                 |          |   |         |        |        |   |        |        |    |   |        |       
|Projected Benefit Obligation at beginning of
    measurement year          |                                            | $                | 299,028 |                 |          | $ | 253,456 |        |        | $ | 55,490 |        |    | $ | 53,552 |       
|Changes due to:                                                            |                                            |                  |         |                 |          |   |         |        |        |   |        |        |    |   |        |       
|                                                                           | Service cost                               |                  |         | 11,819          |          |   |         | 9,567  |        |   |        | 1,302  |    |   |        | 1,121  |      
|                                                                           | Interest cost                              |                  |         | 17,482          |          |   |         | 16,647 |        |   |        | 3,209  |    |   |        | 3,479  |      
|                                                                           | Benefits paid                              |                  |         | (6,900          | )        |   |         | (6,542 | )      |   |        | (2,986 | )  |   |        | (2,967 | )    
|                                                                           | Settlements                                |                  |         | (8,977          | )        |   |         | (9,684 | )      |   |        |       |    |   |        |       |      
|                                                                           | Actuarial assumptions and gains and losses |                  |         | 23,555          |          |   |         | 35,584 |        |   |        | (1,511 | )  |   |        | 305    |      
|                                                                          
|                                                                           |                                            | Total changes    |         |                 | 36,979   |   |         |        | 45,572 |   |        |        | 14 |   |        |        | 1,938 | 
|                                                                          
|Projected Benefit Obligation at end of
    measurement year (September 30) |                                            | $                | 336,007 |                 |          | $ | 299,028 |        |        | $ | 55,504 |        |    | $ | 55,490 |       
|                                                                          

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



The following table reconciles the beginning and
ending balances of the fair value of Plan assets with the
amounts recognized in the consolidated balance sheets at the
September 30, 2004, measurement date:

|                                                                        |                              |                  |         |        |        |   |         |         |        | 
|----------------------------------------------------------------------- | ---------------------------- | ---------------- | ------- | ------ | ------ | - | ------- | ------- | ------ | 
|                                                                        |                              |                 
|                                                                        |                              | Pension Benefits |        
|                                                                       
|                                                                       
|                                                                        |                             
|(in thousands of dollars)                                               |                              | 2004             |         |        | 2003   |  
|                                                                       
|                                                                       
|                                                                        |                             
|Change in Plan Assets:                                                  |                              |                  |         |        |        |   |         |        
|Fair Value of Plan Assets at beginning of
    measurement year          |                              | $                | 288,569 |        |        | $ | 246,643 |        
|Changes due to:                                                         |                              |                  |         |        |        |   |         |        
|                                                                        | Actual return on plan assets |                  |         | 35,962 |        |   |         | 33,594  |       
|                                                                        | Employer contributions       |                  |         | 44,667 |        |   |         | 25,000  |       
|                                                                        | Settlements                  |                  |         | (9,076 | )      |   |         | (10,126 | )     
|                                                                        | Benefits paid                |                  |         | (6,900 | )      |   |         | (6,542  | )     
|                                                                       
|                                                                        |                              | Total changes    |         |        | 64,653 |   |         |         | 41,926 | 
|                                                                       
|Fair Value of Plan Assets at end of measurement
    year (September 30) |                              | $                | 353,222 |        |        | $ | 288,569 |        
|                                                                       

Huntingtons accumulated benefit obligation
was $294 million and $262 million at
September 30, 2004 and 2003, respectively. In both years,
the fair value of Huntingtons plan assets exceeded its
accumulated benefit obligation.

The following table presents the funded status of
the Plan and the post-retirement benefit plan with the amounts
recognized in the consolidated balance sheets at December 31:

|                                                                   |  |                  |         |                 |          |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------------------------------------ |  | ---------------- | ------- | --------------- | -------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                   |  |                  |         |                 |          |  
|                                                                   |  |                  |         | Post-Retirement |         
|                                                                   |  | Pension Benefits |         |                 | Benefits |  
|                                                                  
|                                                                  
|                                                                   | 
|(in thousands of dollars)                                          |  | 2004             |         |                 | 2003     |   |         | 2004 |  |   | 2003    |  
|                                                                  
|                                                                  
|                                                                   | 
|Projected benefit obligation less
    (greater) than plan assets   |  |                  | 17,215  |                 |          |   | (10,459 | )    |  |   | (55,504 | ) |  |   | (55,490 | )
|Unrecognized net actuarial loss                                    |  |                  | 116,744 |                 |          |   | 118,952 |      |  |   | 718     |   |  |   | 2,229   |  
|Unrecognized prior service cost                                    |  |                  | 1,789   |                 |          |   | 1,790   |      |  |   | 3,856   |   |  |   | 4,439   |  
|Unrecognized transition (asset) liability,
    net of amortization |  |                  |        |                 |          |   |        |      |  |   | 8,831   |   |  |   | 9,936   |  
|                                                                  
|Prepaid (Accrued) Benefit Costs                                    |  | $                | 135,748 |                 |          | $ | 110,283 |      |  | $ | (42,099 | ) |  | $ | (38,886 | )
|                                                                  

The following table shows the components of net
periodic benefit cost recognized in the most recent three years:

|                                   |  |                  |         |   |                          |   |         |      |  |   |         |   |  |      |       |  |      |   |       |  |  |   |       | 
|---------------------------------- |  | ---------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | ---- | ----- |  | ---- | - | ----- |  |  | - | ----- | 
|                                   |  |                  |         |  
|                                   |  | Pension Benefits |         |   | Post-Retirement Benefits |  
|                                  
|                                  
|                                   | 
|(in thousands of dollars)          |  | 2004             |         |   | 2003                     |   |         | 2002 |  |   | 2004    |   |  | 2003 |       |  | 2002 |  
|                                  
|                                  
|                                   | 
|Service cost                       |  | $                | 12,159  |   |                          | $ | 9,817   |      |  | $ | 8,263   |   |  | $    | 1,302 |  |      | $ | 1,121 |  |  | $ | 1,126 | 
|Interest cost                      |  |                  | 17,482  |   |                          |   | 16,647  |      |  |   | 15,458  |   |  |      | 3,209 |  |      |   | 3,479 |  |  |   | 3,603 | 
|Expected return on plan assets     |  |                  | (21,530 | ) |                          |   | (25,138 | )    |  |   | (26,416 | ) |  |      |      |  |      |   |      |  |  |   |      | 
|Amortization of transition asset   |  |                  | 1       |   |                          |   | (251    | )    |  |   | (265    | ) |  |      | 1,104 |  |      |   | 1,104 |  |  |   | 1,104 | 
|Amortization of prior service cost |  |                  | 1       |   |                          |   |        |      |  |   | (185    | ) |  |      | 583   |  |      |   | 605   |  |  |   | 605   | 
|Curtailments                       |  |                  |        |   |                          |   |        |      |  |   | 2,022   |   |  |      |      |  |      |   |      |  |  |   | 2,526 | 
|Settlements                        |  |                  | 3,151   |   |                          |   | 4,354   |      |  |   | 3,373   |   |  |      |      |  |      |   |      |  |  |   |      | 
|Recognized net actuarial loss      |  |                  | 7,936   |   |                          |   | 1,774   |      |  |   |        |   |  |      |      |  |      |   |      |  |  |   |      | 
|                                  
|Benefit Cost                       |  | $                | 19,200  |   |                          | $ | 7,203   |      |  | $ | 2,250   |   |  | $    | 6,198 |  |      | $ | 6,309 |  |  | $ | 8,964 | 
|                                  

Service costs presented in the above table
included $0.3 million of plan expenses that were recognized
in each of the three years ended December 31, 2004. The
curtailment reflected above related to the sale of the Florida
banking and insurance operations. This expense was recognized in
Huntingtons results of operations in 2002. It is
Huntingtons policy to recognize settlement gains and
losses as incurred. Management expects net periodic pension cost
to approximate $20 million and net periodic post-retirement
benefits cost to approximate $6 million for 2005.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



At September 30, 2004 and 2003, The
Huntington National Bank, as trustee, held all Plan assets. The
Plan assets consisted of investments in a variety of Huntington
mutual funds, Huntington common stock, and other equity
investments as follows:

|                                          |  |            |         |  |      |  |     |         |  |   |         |  |  |  |     |  
|----------------------------------------- |  | ---------- | ------- |  | ---- |  | --- | ------- |  | - | ------- |  |  |  | --- | -
|                                          |  |           
|                                          |  | Fair Value |        
|                                          |  |           
|                                          |  |           
|                                          |  |            |        
|                                          |  |            |         | 
|                                          |  | 2004       |         |  | 2003 | 
|                                         
|                                         
|                                          | 
|(in thousands of dollars)                 |  | Balance    |         |  | %    |  |     | Balance |  |   | %       | 
|                                         
|                                         
|                                          | 
|Cash                                      |  | $          | 300     |  |      |  |    | %       |  | $ |        |  |  |  |    | %
|Huntington Funds  money market           |  |            | 500     |  |      |  |    |         |  |   | 1,570   |  |  |  | 1   |  
|Huntington Funds  equity funds           |  |            | 240,456 |  |      |  | 68  |         |  |   | 191,616 |  |  |  | 66  |  
|Huntington Funds  fixed
    income funds |  |            | 95,837  |  |      |  | 27  |         |  |   | 82,520  |  |  |  | 29  |  
|Huntington Common Stock                   |  |            | 16,129  |  |      |  | 5   |         |  |   | 12,863  |  |  |  | 4   |  
|                                         
|Fair value of plan assets at September 30 |  |            | 353,222 |  |      |  | 100 | %       |  |   | 288,569 |  |  |  | 100 | %
|                                         

The number of shares of Huntington common stock
held by the Plan was 642,364 at December 31, 2004 and 2003.
Dividends and interest received by the Plan during 2004 and 2003
were $11.0 million and $7.0 million, respectively. The
Plan has acquired and held Huntington common stock in compliance
at all times with Section 407 of the Employee Retirement
Income Security Act of 1978.

The following table shows when benefit payments,
which include expected future service, as appropriate, are
expected to be paid:

|                          |                   |                  |   |         |                          |  |   |        | 
|------------------------- | ----------------- | ---------------- | - | ------- | ------------------------ |  | - | ------ | 
|(in thousands of dollars) |                   | Pension Benefits |   |         | Post-Retirement Benefits | 
|                         
|                         
|                          |                  
|Fiscal Year:              |                   |                  |   |         |                          |  |   |       
|                          | 2005              |                  | $ | 16,194  |                          |  | $ | 3,948  | 
|                          | 2006              |                  |   | 17,126  |                          |  |   | 4,131  | 
|                          | 2007              |                  |   | 19,249  |                          |  |   | 4,268  | 
|                          | 2008              |                  |   | 21,228  |                          |  |   | 4,355  | 
|                          | 2009              |                  |   | 22,741  |                          |  |   | 4,437  | 
|                          | 2010 through 2014 |                  |   | 134,355 |                          |  |   | 23,409 | 

There is no expected minimum contribution for
2005 to the Plan. However, Huntington may choose to make a
contribution to the Plan up to the maximum deductible limit in
the 2005 plan year. Expected contributions for 2005 for the
Post-Retirement Benefit plan are $4.0 million.

The assumed health-care cost trend rate has a
significant effect on the amounts reported. A one-percentage
point increase would increase service and interest costs and the
post-retirement benefit obligation by $48,000 and
$0.7 million, respectively. A one-percentage point decrease
would reduce service and interest costs by $44,000 and the
post-retirement benefit obligation by $0.6 million. The
2005 health care cost trend rate was projected to be 10.99% for
pre-65 participants and 10.86% for post-65 participants compared
with an estimate of 12.18% for pre-65 participants and 12.23%
for post-65 participants in 2003. These rates are assumed to
decrease gradually until they reach 5.09% for pre-65
participants and 5.17% for post-65 participants in the year 2017
and remain at that level thereafter. Huntington updated the
immediate health care cost trend rate assumption based on
current market data and Huntingtons claims experience.
This trend rate is expected to decline over time to a trend
level consistent with medical inflation and long-term economic
assumptions.

Huntington also sponsors other retirement plans,
the most significant being the Supplemental Executive Retirement
Plan and the Supplemental Retirement Income Plan. These plans
are nonqualified plans that provide certain former officers and
directors of Huntington and its subsidiaries with defined
pension benefits in excess of limits imposed by federal tax law.
At December 31, 2004 and 2003, the accrued pension
liability for these plans totaled $25.1 million and
$23.3 million, respectively. Pension expense for the plans
was $2.1 million, $1.7 million, and $2.3 million
in 2004, 2003, and 2002, respectively. Huntington recorded a
$1.1 million, net of tax, minimum pension liability
adjustment within other comprehensive income associated with
these unfunded plans in 2004.

Huntington has a defined contribution plan that
is available to eligible employees. Matching contributions by
Huntington equal 100% on the first 3%, then 50% on the next 2%,
of participant elective deferrals. The cost of providing this
plan was $9.2 million in 2004, $8.6 million in 2003,
and $8.4 million in 2002. The number of shares of
Huntington common stock held by this plan was 7,914,602 at
December 31, 2004, and 8,368,383 at the end of the prior
year. The market value of these shares was $195.8 million
and $188.3 million at the same respective dates. Dividends
received by the plan were $10.1 million during 2004 and
$7.6 million during 2003.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



19. FAIR VALUE OF
FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of
Huntingtons financial instruments at December 31 are
presented in the following table:


|                          |                                       |          |   |             |       |  |   |             |   |  |       |             |   |  |   |             |  
|------------------------- | ------------------------------------- | -------- | - | ----------- | ----- |  | - | ----------- | - |  | ----- | ----------- | - |  | - | ----------- | -
|                          |                                       |          |   |            
|                          |                                       | 2004     |   |             | 2003  | 
|                         
|                         
|                          |                                      
|                          |                                       | Carrying |   |             | Fair  |  |   | Carrying    |   |  | Fair  |            
|(in thousands of dollars) |                                       | Amount   |   |             | Value |  |   | Amount      |   |  | Value |            
|                         
|Financial Assets:         |                                       |          |   |             |       |  |   |             |   |  |       |             |   |  |   |            
|                          | Cash and short-term assets            |          | $ | 1,527,758   |       |  | $ | 1,527,758   |   |  | $     | 1,030,130   |   |  | $ | 1,030,130   |  
|                          | Trading account securities            |          |   | 309,630     |       |  |   | 309,630     |   |  |       | 7,589       |   |  |   | 7,589       |  
|                          | Mortgages held for sale               |          |   | 223,469     |       |  |   | 223,469     |   |  |       | 226,729     |   |  |   | 226,729     |  
|                          | Investment securities                 |          |   | 4,238,945   |       |  |   | 4,238,945   |   |  |       | 4,929,060   |   |  |   | 4,929,060   |  
|                          | Net loans and direct financing leases |          |   | 23,289,066  |       |  |   | 23,528,066  |   |  |       | 20,775,386  |   |  |   | 21,256,386  |  
|                          | Customers acceptance liability       |          |   | 11,299      |       |  |   | 11,299      |   |  |       | 9,553       |   |  |   | 9,553       |  
|                          | Derivatives                           |          |   | 41,809      |       |  |   | 41,809      |   |  |       | 100,180     |   |  |   | 100,180     |  
|Financial Liabilities:    |                                       |          |   |             |       |  |   |             |   |  |       |             |   |  |   |            
|                          | Deposits                              |          |   | (20,768,161 | )     |  |   | (19,915,161 | ) |  |       | (18,487,395 | ) |  |   | (17,903,395 | )
|                          | Short-term borrowings                 |          |   | (1,207,233  | )     |  |   | (1,207,233  | ) |  |       | (1,452,304  | ) |  |   | (1,452,304  | )
|                          | Bank acceptances outstanding          |          |   | (11,299     | )     |  |   | (11,299     | ) |  |       | (9,553      | ) |  |   | (9,553      | )
|                          | Federal Home Loan Bank advances       |          |   | (1,271,088  | )     |  |   | (1,271,088  | ) |  |       | (1,273,000  | ) |  |   | (1,273,000  | )
|                          | Subordinated notes                    |          |   | (1,039,793  | )     |  |   | (1,039,793  | ) |  |       | (990,470    | ) |  |   | (990,470    | )
|                          | Other long term debt                  |          |   | (4,016,004  | )     |  |   | (4,094,004  | ) |  |       | (4,544,509  | ) |  |   | (4,613,509  | )
|                          | Derivatives                           |          |   | (4,903      | )     |  |   | (4,903      | ) |  |       | (95,008     | ) |  |   | (95,008     | )

The short-term nature of certain assets and
liabilities result in their carrying value approximating fair
value. These include trading account securities, customers
acceptance liabilities, short-term borrowings, bank acceptances
outstanding, Federal Home Loan Bank Advances and cash and
short-term assets, which include cash and due from banks,
interest-bearing deposits in banks, and federal funds sold and
securities purchased under resale agreements. Loan commitments
and letters of credit generally have short-term, variable-rate
features and contain clauses that limit Huntingtons
exposure to changes in customer credit quality. Accordingly,
their carrying values, which are immaterial at the respective
balance sheet dates, are reasonable estimates of fair value.

Certain assets, the most significant being
operating lease assets, bank owned life insurance, and premises
and equipment, do not meet the definition of a financial
instrument and are excluded from this disclosure. Similarly,
mortgage and non-mortgage servicing rights, deposit base, and
other customer relationship intangibles are not considered
financial instruments and are not discussed below. Accordingly,
this fair value information is not intended to, and does not,
represent Huntingtons underlying value. Many of the assets
and liabilities subject to the disclosure requirements are not
actively traded, requiring fair values to be estimated by
management. These estimations necessarily involve the use of
judgment about a wide variety of factors, including but not
limited to, relevancy of market prices of comparable
instruments, expected future cash flows, and appropriate
discount rates.

The following methods and assumptions were used
by Huntington to estimate the fair value of the remaining
classes of financial instruments:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | MORTGAGES HELD FOR
    SALE valued using
    outstanding commitments from investors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | INVESTMENT
    SECURITIES based on quoted
    market prices, where available. If quoted market prices are not
    available, fair values are based on quoted market prices of
    comparable instruments. Retained interests in securitized assets
    are valued using a discounted cash flow analysis. The carrying
    amount and fair value of securities exclude the fair value of
    asset/liability management interest rate contracts designated as
    hedges of securities available for sale.                                                                                                                  
| 
| | LOANS AND DIRECT FINANCING
    LEASES variable-rate loans
    that reprice frequently are based on carrying amounts, as
    adjusted for estimated credit losses. The fair values for other
    loans and leases are estimated using discounted cash flow
    analyses and employ interest rates currently being offered for
    loans and leases with similar terms. The rates take into account
    the position of the yield curve, as well as an adjustment for
    prepayment risk, operating costs, and profit. This value is also
    reduced by an estimate of probable losses in the loan and lease
    portfolio.
| 
| | DEPOSITS
    demand deposits, savings accounts, and money market deposits
    are, by definition, equal to the amount payable on demand. The
    fair values of fixed-rate time deposits are estimated by
    discounting cash flows using interest rates currently being
    offered on certificates with similar maturities.                                                                                                                                                                                                                                                                                             
| 
| | DEBT
    fixed-rate, long-term debt is based upon quoted market prices
    or, in the absence of quoted market prices, discounted cash
    flows using rates for similar debt with the same maturities. The
    carrying amount of variable-rate obligations approximates
    fair value.                                                                                                                                                                                                                                                                                                                                  

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



20. DERIVATIVE FINANCIAL
INSTRUMENTS

A variety of derivative financial instruments,
principally interest rate swaps, are used in asset and liability
management activities to protect against the risk of adverse
price or interest rate movements on the value of certain assets
and liabilities and on future cash flows. These instruments
provide flexibility in adjusting the Companys sensitivity
to changes in interest rates without exposure to loss of
principal and higher funding requirements. By using derivatives
to manage interest rate risk, the effect is a smaller, more
efficient balance sheet, with a lower wholesale funding
requirement and a higher net interest margin, but with a
comparable level of net interest revenue and return on equity.
All derivatives are reflected at fair value in the consolidated
balance sheet. Huntington also uses derivatives, principally
loan sale commitments, in the hedging of its mortgage loan
commitments and its mortgage loans held for sale.


Market risk, which is the possibility that
economic value of net assets or net interest income will be
adversely affected by changes in interest rates or other
economic factors, is managed through the use of derivatives.
Derivatives are also sold to meet customers financing
needs and, like other financial instruments, contain an element
of credit risk, which is the possibility that Huntington will
incur a loss because a counter-party fails to meet its
contractual obligations. Notional values of interest rate swaps
and other off-balance sheet financial instruments significantly
exceed the credit risk associated with these instruments and
represent contractual balances on which calculations of amounts
to be exchanged are based. Credit exposure is limited to the sum
of the aggregate fair value of positions that have become
favorable to Huntington, including any accrued interest
receivable due from counterparties. Potential credit losses are
minimized through careful evaluation of counterparty credit
standing, selection of counterparties from a limited group of
high quality institutions, collateral agreements, and other
contract provisions.

ASSET AND LIABILITY MANAGEMENT

Derivatives that are used in asset and liability
management are classified as fair value hedges or cash flow
hedges and are required to meet specific criteria. To qualify as
a hedge, the hedge relationship is designated and formally
documented at inception, detailing the particular risk
management objective and strategy for the hedge. This includes
identifying the item and risk being hedged, the derivative being
used, and how the effectiveness of the hedge is being assessed.
A derivative must be highly effective in accomplishing the
objective of offsetting either changes in fair value or cash
flows for the risk being hedged. Correlation is evaluated on a
retrospective and prospective basis using quantitative measures.
If a hedge relationship is found to be ineffective, the
derivative no longer qualifies as a hedge and any excess gains
or losses attributable to ineffectiveness, as well as subsequent
changes in its fair value, are recognized in other income.


For fair value hedges, deposits, short-term
borrowings, and long-term debt are effectively converted to
variable-rate obligations by entering into interest rate swap
contracts whereby fixed-rate interest is received in exchange
for variable-rate interest without the exchange of the
contracts underlying notional amount. Forward contracts,
used primarily in connection with its mortgage banking
activities, settle in cash at a specified future date based on
the differential between agreed interest rates applied to a
notional amount. The changes in fair value of the hedged item
and the hedging instrument are reflected in current earnings.
The amounts recognized in connection with the ineffective
portion of Huntingtons fair value hedging in 2004, 2003,
and 2002 were insignificant.

For cash flow hedges, interest rate swap
contracts were entered into that pay fixed-rate interest in
exchange for the receipt of variable-rate interest without the
exchange of the contracts underlying notional amount,
which effectively converts a portion of its floating-rate debt
to fixed-rate. This reduces the potentially adverse impact of
increases in interest rates on future interest expense. In like
fashion, certain LIBOR-based commercial and industrial loans
were effectively converted to fixed-rate by entering into
contracts that swap variable-rate interest for fixed-rate
interest over the life of the contracts.

To the extent these derivatives are effective in
offsetting the variability of the hedged cash flows, changes in
the derivatives fair value will not be included in current
earnings but are reported as a component of accumulated other
comprehensive income in shareholders equity. These changes
in fair value will be included in earnings of future periods
when earnings are also affected by the changes in the hedged
cash flows. To the extent these derivatives are not effective,
changes in their fair values are immediately included in
earnings. During 2004, 2003, and 2002, a net loss was recognized
in connection with the ineffective portion of its cash flow
hedging instruments. The amounts were classified in other
non-interest income and were considered insignificant. No
amounts were excluded from the assessment of effectiveness
during 2004 and 2003 for derivatives designated as cash flow
hedges.

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Derivatives used to manage Huntingtons
interest rate risk at December 31, 2004, are shown in the
table below:

|                                 |                          |          |           |           |          |  |     |       |                       |   |         |        |   |     |      |      |   |  |      |      |  
|-------------------------------- | ------------------------ | -------- | --------- | --------- | -------- |  | --- | ----- | --------------------- | - | ------- | ------ | - | --- | ---- | ---- | - |  | ---- | ---- | -
|                                 |                          |          |           |           |          |  |     |      
|                                 |                          |          |           | Average   |          |  |     |       | Weighted-Average Rate |  
|                                 |                          |          |           |           |          |  |     |      
|                                 |                          |          |           |           |          |  |     |      
|                                 |                          | Notional |           |           | Maturity |  |     | Fair  |                       |   |         |       
|(in thousands of dollars)        |                          | Value    |           |           | (years)  |  |     | Value |                       |   | Receive |        |   | Pay |     
|                                
|Asset conversion swaps           |                          |          |           |           |          |  |     |       |                       |   |         |        |   |     |      |      |   |  |      |     
|                                 | Receive fixed  generic  |          | $         | 350,000   |          |  |     | 3.3   |                       |   | $       | (1,692 | ) |     |      | 3.41 | % |  |      | 2.25 | %
|                                 | Pay fixed  forwards     |          |           | 50,000    |          |  |     | N/A   |                       |   |         | (316   | ) |     |      | N/A  |   |  |      | N/A  |  
|                                
|Total asset conversion swaps     |                          | $        | 400,000   |           |          |  | 3.3 |       |                       |   | (2,008  | )      |   |     | 3.41 | %    |   |  | 2.25 | %   
|                                
|Liability conversion swaps       |                          |          |           |           |          |  |     |       |                       |   |         |        |   |     |      |      |   |  |      |     
|                                 | Receive fixed  generic  |          |           | 1,450,000 |          |  |     | 6.8   |                       |   |         | 19,318 |   |     |      | 4.23 | % |  |      | 2.54 | %
|                                 | Receive fixed  callable |          |           | 637,000   |          |  |     | 8.6   |                       |   |         | (5,461 | ) |     |      | 4.50 |   |  |      | 2.13 |  
|                                 | Pay fixed  generic      |          |           | 2,266,000 |          |  |     | 2.0   |                       |   |         | 7,863  |   |     |      | 2.23 |   |  |      | 2.96 |  
|                                 | Pay fixed  forwards     |          |           | 410,000   |          |  |     | N/A   |                       |   |         | (1,829 | ) |     |      | N/A  |   |  |      | N/A  |  
|                                
|Total liability conversion swaps |                          |          | 4,763,000 |           |          |  | 4.6 |       |                       |   | 19,891  |        |   |     | 3.23 | %    |   |  | 2.70 | %   
|                                
|Total Swap Portfolio             |                          | $        | 5,163,000 |           |          |  | 4.5 |       |                       | $ | 17,883  |        |   |     | 3.24 | %    |   |  | 2.67 | %   
|                                

N/ A, not applicable

At December 31, 2003, the fair value of the
swap portfolio used for asset and liability management was a
liability of $11.3 million. These values must be viewed in
the context of the overall financial structure of Huntington,
including the aggregate net position of all on- and off-balance
sheet financial instruments.

As is the case with cash securities, the fair
value of interest rate swaps is largely a function of the
financial markets expectations regarding the future
direction of interest rates. Accordingly, current market values
are not necessarily indicative of the future impact of the swaps
on net interest income. This will depend, in large part, on the
shape of the yield curve as well as interest rate levels.
Management made no assumptions regarding future changes in
interest rates with respect to the variable-rate information
presented in the table above.

The next table represents the gross notional
value of derivatives used to manage interest rate risk at
December 31, 2004, identified by the underlying interest
rate-sensitive instruments. The notional amounts shown in the
tables above and below should be viewed in the context of
overall interest rate risk management activities to assess the
impact on the net interest margin.

|                                          |                                 |            |           |         |           |   |           |           |  |   |           |           | 
|----------------------------------------- | ------------------------------- | ---------- | --------- | ------- | --------- | - | --------- | --------- |  | - | --------- | --------- | 
|                                          |                                 | Fair Value |           |         | Cash Flow |   |           |          
|(in thousands of dollars)                 |                                 | Hedges     |           |         | Hedges    |   |           | Total     | 
|                                         
|Instruments associated with:              |                                 |            |           |         |           |   |           |           |  |   |           |          
|                                          | Investment securities           |            | $         | 50,000  |           |   | $         | 25,000    |  |   | $         | 75,000    | 
|                                          | Loans                           |            |           |        |           |   |           | 325,000   |  |   |           | 325,000   | 
|                                          | Deposits                        |            |           | 647,000 |           |   |           | 70,000    |  |   |           | 717,000   | 
|                                          | Federal Home Loan Bank advances |            |           |        |           |   |           | 901,000   |  |   |           | 901,000   | 
|                                          | Subordinated notes              |            |           | 500,000 |           |   |           | 300,000   |  |   |           | 800,000   | 
|                                          | Other long term debt            |            |           | 950,000 |           |   |           | 1,395,000 |  |   |           | 2,345,000 | 
|                                         
|Total Notional Value at December 31, 2004 |                                 | $          | 2,147,000 |         |           | $ | 3,016,000 |           |  | $ | 5,163,000 |          
|                                         

The estimated amount of the existing unrealized
gains and losses to be reclassified to pre-tax earnings from
accumulated other comprehensive income within the next
12 months is expected to be a net loss of $2.9 million.

Collateral agreements are regularly entered into
as part of the underlying derivative agreements with its
counterparties to mitigate the credit risk associated with both
the derivatives used for asset and liability management and used
in trading activities. At December 31, 2004 and 2003,
aggregate credit risk associated with these derivatives, net of
collateral that has been pledged by the counterparty, was
$12.3 million and $17.2 million, respectively. The
credit risk associated with interest rate swaps is calculated
after considering master netting agreements.

These derivative financial instruments were
entered into for the purpose of altering the interest rate risk
embedded in its assets and liabilities. Consequently, net
amounts receivable or payable on contracts hedging either
interest earning assets or interest bearing liabilities were
accrued as an adjustment to either interest income or interest
expense. The net amount resulted in an increase to net interest
income of $24.0 million, $51.6 million, and
$48.4 million in 2004, 2003, and 2002, respectively.

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DERIVATIVES USED IN MORTGAGE BANKING
ACTIVITIES

Huntington also uses derivatives, principally
loan sale commitments, in the hedging of its mortgage loan
commitments and its mortgage loans held for sale. For
derivatives that are used in hedging mortgage loans held for
sale, ineffective hedge gains and losses are reflected in
mortgage banking revenue in the income statement. Mortgage loan
commitments are derivatives that are not included in FAS 133
relationships. These derivative financial instruments are
carried at fair value on the consolidated balance sheet with
changes in fair value reflected in mortgage banking revenue. The
following is a summary of the derivative assets and liabilities
that Huntington used in its mortgage banking activities:


|                             |                               |                 |        |      |      |   |        |        |  
|---------------------------- | ----------------------------- | --------------- | ------ | ---- | ---- | - | ------ | ------ | -
|                             |                               |                
|                             |                               | At December 31, |       
|                            
|                            
|                             |                              
|(in thousands of dollars)    |                               | 2004            |        |      | 2003 |  
|                            
|Derivative assets:           |                               |                 |        |      |      |   |        |       
|                             | Interest rate lock agreements |                 | $      | 479  |      |   | $      | 658    |  
|                             | Forward trades                |                 |        | 853  |      |   |        | 24     |  
|                            
|Total derivative assets      |                               |                 | 1,332  |      |      |   | 682    |       
|                            
|Derivative liabilities:      |                               |                 |        |      |      |   |        |       
|                             | Interest rate lock agreements |                 |        | (993 | )    |   |        | (270   | )
|                             | Forward trades                |                 |        | (334 | )    |   |        | (2,021 | )
|                            
|Total derivative liabilities |                               |                 | (1,327 | )    |      |   | (2,291 | )     
|                            
|Net derivative liability     |                               | $               | 5      |      |      | $ | (1,609 | )     
|                            

DERIVATIVES USED IN TRADING
ACTIVITIES

Various derivative financial instruments are
offered to enable customers to meet their financing and
investing objectives and for their risk management purposes.
Derivative financial instruments held in Huntingtons
trading portfolio during 2004 and 2003 consisted predominantly
of interest rate swaps, but also included interest rate caps,
floors, and futures, as well as foreign exchange options.
Interest rate options grant the option holder the right to buy
or sell an underlying financial instrument for a predetermined
price before the contract expires. Interest rate futures are
commitments to either purchase or sell a financial instrument at
a future date for a specified price or yield and may be settled
in cash or through delivery of the underlying financial
instrument. Interest rate caps and floors are option-based
contracts that entitle the buyer to receive cash payments based
on the difference between a designated reference rate and a
strike price, applied to a notional amount. Written options,
primarily caps, expose Huntington to market risk but not credit
risk. Purchased options contain both credit and market risk.
They are used to manage fluctuating interest rates as exposure
to loss from interest rate contracts changes.


Supplying these derivatives to customers results
in fee income. These instruments are carried at fair value in
other assets with gains and losses reflected in other
non-interest income. Total trading revenue for customer
accommodation was $8.8 million in 2004, $10.3 million
in 2003, and $6.4 million in 2002. The total notional value
of derivative financial instruments used by Huntington on behalf
of customers (for which the related interest rate risk is offset
by third parties) was $4.5 billion at the end of 2004 and
$5.0 billion at the end of the prior year.
Huntingtons credit risk from interest rate swaps used for
trading purposes was $53.8 million and $82.2 million
at the same dates.

In connection with its securitization activities,
interest rate caps were purchased with a notional value totaling
$1 billion. These purchased caps were assigned to the
securitization trust for the benefit of the security holders.
Interest rate caps were also sold totaling $1 billion
outside the securitization structure. Both the purchased and
sold caps are marked to market through income in accordance with
accounting principles generally accepted in the United States.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED



21. COMMITMENTS AND
CONTINGENT LIABILITIES

COMMITMENTS TO EXTEND CREDIT

In the ordinary course of business, Huntington
makes various commitments to extend credit that are not
reflected in the financial statements. The contract amount of
these financial agreements, representing the credit risk, at
December 31 were:


|                             |                        |                 |     |       |      |  |     |       | 
|---------------------------- | ---------------------- | --------------- | --- | ----- | ---- |  | --- | ----- | 
|                             |                        |                
|                             |                        | At December 31, |    
|                            
|                            
|                             |                       
|(in millions of dollars)     |                        | 2004            |     |       | 2003 | 
|                            
|Commitments to extend credit |                        |                 |     |       |      |  |     |      
|                             | Commercial             |                 | $   | 5,076 |      |  | $   | 5,712 | 
|                             | Consumer               |                 |     | 4,086 |      |  |     | 3,652 | 
|                             | Commercial real estate |                 |     | 340   |      |  |     | 952   | 
|Standby letters of credit    |                        |                 | 945 |       |      |  | 961 |      
|Commercial letters of credit |                        |                 | 72  |       |      |  | 90  |      

Commitments to extend credit generally have fixed
expiration dates, are variable-rate, and contain clauses that
permit Huntington to terminate or otherwise renegotiate the
contracts in the event of a significant deterioration in the
customers credit quality. These arrangements normally
require the payment of a fee by the customer, the pricing of
which is based on prevailing market conditions, credit quality,
probability of funding, and other relevant factors. Since many
of these commitments are expected to expire without being drawn
upon, the contract amounts are not necessarily indicative of
future cash requirements. The interest rate risk arising from
these financial instruments is insignificant as a result of
their predominantly short-term, variable-rate nature.

Standby letters of credit are conditional
commitments issued to guarantee the performance of a customer to
a third party. These guarantees are primarily issued to support
public and private borrowing arrangements, including commercial
paper, bond financing, and similar transactions. Most of these
arrangements mature within two years. At December 31, 2004,
approximately 47% of standby letters of credit are
collateralized and nearly 97% are expected to expire without
being drawn upon. The carrying amount of deferred revenue
associated with these guarantees was $4.1 million and
$3.8 million at December 31, 2004, and 2003,
respectively.

Commercial letters of credit represent
short-term, self-liquidating instruments that facilitate
customer trade transactions and have maturities of no longer
than 90 days. The merchandise or cargo being traded
normally secures these instruments.

COMMITMENTS TO SELL LOANS

Huntington entered into forward contracts,
relating to its mortgage banking business. At December 31,
2004 and 2003, Huntington had commitments to sell residential
real estate loans of $311.3 million and
$276.9 million, respectively. These contracts mature in
less than one year.


LITIGATION

In the ordinary course of business, there are
various legal proceedings pending against Huntington and its
subsidiaries. In the opinion of management, the aggregate
liabilities, if any, arising from such proceedings are not
expected to have a material adverse effect on Huntingtons
consolidated financial position (See also Note 22.)


COMMITMENTS UNDER CAPITAL AND OPERATING LEASE
OBLIGATIONS

At December 31, 2004, Huntington and its
subsidiaries were obligated under noncancelable leases for land,
buildings, and equipment. Many of these leases contain renewal
options and certain leases provide options to purchase the
leased property during or at the expiration of the lease period
at specified prices. Some leases contain escalation clauses
calling for rentals to be adjusted for increased real estate
taxes and other operating expenses or proportionately adjusted
for increases in the consumer or other price indices.


The future minimum rental payments required under
operating leases that have initial or remaining noncancelable
lease terms in excess of one year as of December 31, 2004,
were $32.5 million in 2005, $30.6 million in 2006,
$29.1 million in 2007, $27.1 million in 2008,
$25.9 million in 2009, and $176.2 million thereafter.
At December 31, 2004, total minimum lease payments have not
been reduced by minimum sublease rentals of $82.1 million
due in the future under noncancelable subleases. The rental
expense for all operating leases was $40.4 million,
$36.1 million, and $38.7 million for 2004, 2003, and
2002, respectively. Huntington had no material obligations under
capital leases.

22. SECURITIES AND
EXCHANGE COMMISSION FORMAL INVESTIGATION

On June 26, 2003, Huntington announced that the
Securities and Exchange Commission (SEC) staff was conducting a
formal investigation into certain financial accounting matters
relating to fiscal years 2002 and earlier and certain related
disclosure matters. On August 9, 2004, Huntington announced
the Company was in negotiations with the staff of the SEC
regarding a settlement of the


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128


formal investigation and disclosed that it
expected that a settlement of this matter, which is subject to
approval by the SEC, would involve the entry of an order
requiring, among other possible matters, Huntington to comply
with various provisions of the Securities Exchange Act of 1934
and the Securities Act of 1933, along with the imposition of a
civil money penalty. At December 31, 2004, the Company had
reserves related to the expectation of the imposition of a civil
money penalty, which the Company viewed as sufficient given
negotiations with the SEC. However, no assurances can be made
that any assessed penalty may not exceed this amount.


Management continues to have ongoing discussions
with the staff of the SEC regarding resolution of this matter.
The final results of the investigation, however, are not known
at the time of this filing and therefore, the impact to
Huntingtons financial condition, results of operations,
and cash flows is not known.

23. FORMAL REGULATORY
SUPERVISORY AGREEMENTS

On March 1, 2005, Huntington announced that
it had entered into formal written agreements with its banking
regulators, the Federal Reserve Bank of Cleveland
(FRBC) and the Office of the Comptroller of the Currency
(OCC), providing for a comprehensive action plan designed to
enhance its corporate governance, internal audit, risk
management, accounting policies and procedures, and financial
and regulatory reporting. They call for independent third-party
reviews, as well as the submission of written plans and progress
reports by management. These written agreements remain in effect
until terminated by the banking regulators.


Management has been working with its banking
regulators over the past several months and has been taking
actions and devoting significant resources to address all of the
issues raised. Management believes that the changes that it has
already made, and is in the process of making, will address
these issues fully and comprehensively. No assurances, however,
can be provided as to the ultimate timing or outcome of these
matters.

24. OTHER REGULATORY
MATTERS

Huntington and its bank subsidiary, The
Huntington National Bank, are subject to various regulatory
capital requirements administered by federal and state banking
agencies. These requirements involve qualitative judgments and
quantitative measures of assets, liabilities, capital amounts,
and certain off-balance sheet items as calculated under
regulatory accounting practices. Failure to meet minimum capital
requirements can initiate certain actions by regulators that, if
undertaken, could have a material adverse effect on
Huntingtons and The Huntington National Banks
financial statements. Applicable capital adequacy guidelines
require minimum ratios of 4.00% for Tier 1 Risk-based
Capital, 8.00% for Total Risk-based Capital, and 4.00% for
Tier 1 Leverage Capital. To be considered well capitalized
under the regulatory framework for prompt corrective action, the
ratios must be at least 6.00%, 10.00%, and 5.00%, respectively.


As of December 31, 2004, Huntington and The
Huntington National Bank (the Bank) met all capital adequacy
requirements and had regulatory capital ratios in excess of the
levels established for well-capitalized institutions. The
period-end capital amounts and capital ratios of Huntington and
the Bank are as follows:

|                                   |        |        |   |       |               |  |   |                 |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |  
|---------------------------------- | ------ | ------ | - | ----- | ------------- |  | - | --------------- | - |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                   |        |        |   |       |               | 
|                                   |        | Tier 1 |   |       | Total Capital |  |   | Tier 1 Leverage |  
|                                  
|                                  
|                                   |       
|(in millions of dollars)           |        | 2004   |   |       | 2003          |  |   | 2004            |   |  | 2003 |       |   | 2004 |   |       | 2003 | 
|                                  
|Huntington Bancshares Incorporated |        |        |   |       |               |  |   |                 |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |      
|                                   | Amount |        | $ | 2,683 |               |  | $ | 2,401           |   |  | $    | 3,687 |   |      | $ | 3,367 |      |  | $ | 2,683 |   |  | $ | 2,401 |  
|                                   | Ratio  |        |   | 9.08  | %             |  |   | 8.53            | % |  |      | 12.48 | % |      |   | 11.95 | %    |  |   | 8.42  | % |  |   | 7.98  | %
|The Huntington National Bank       |        |        |   |       |               |  |   |                 |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |      
|                                   | Amount |        | $ | 1,770 |               |  | $ | 1,782           |   |  | $    | 2,955 |   |      | $ | 2,983 |      |  | $ | 1,770 |   |  | $ | 1,782 |  
|                                   | Ratio  |        |   | 6.08  | %             |  |   | 6.36            | % |  |      | 10.16 | % |      |   | 10.65 | %    |  |   | 5.66  | % |  |   | 6.01  | %

Tier 1 Risk-Based Capital consists of total
equity plus qualifying capital securities and minority
interests, excluding unrealized gains and losses accumulated in
other comprehensive income, and non-qualifying intangible and
servicing assets. Total Risk-Based Capital is Tier 1
Risk-Based Capital plus qualifying subordinated notes and
allowable allowances for credit losses (limited to 1.25% of
total risk-weighted assets). Tier 1 Leverage Capital is
equal to Tier 1 Capital. Both Tier 1 Capital and Total
Capital ratios are derived by dividing the respective capital
amounts by net risk-weighted assets, which are calculated as
prescribed by regulatory agencies. Tier 1 Leverage Capital
ratio is calculated by dividing the Tier 1 capital amount
by average adjusted total assets for the fourth quarter of 2004
and 2003, less non-qualifying intangibles and other adjustments.

Huntington and its subsidiaries are also subject
to various regulatory requirements that impose restrictions on
cash, debt, and dividends. The Bank is required to maintain cash
reserves based on the level of certain of its deposits. This
reserve requirement may be met by holding cash in banking
offices or on deposit at the Federal Reserve Bank. During 2004
and 2003, the average balance of these deposits were
$70.4 million and $66.6 million, respectively.



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Under current Federal Reserve regulations, the
Bank is limited as to the amount and type of loans it may make
to the parent company and non-bank subsidiaries. At
December 31, 2004, the Bank could lend $295.5 million
to a single affiliate, subject to the qualifying collateral
requirements defined in the regulations.

Dividends from the Bank are one of the major
sources of funds for Huntington. These funds aid the parent
company in the payment of dividends to shareholders, expenses,
and other obligations. Payment of dividends to the parent
company is subject to various legal and regulatory limitations.
Regulatory approval is required prior to the declaration of any
dividends in excess of available retained earnings. The amount
of dividends that may be declared without regulatory approval is
further limited to the sum of net income for the current year
and retained net income for the preceding two years, less any
required transfers to surplus or common stock. The Bank could
declare, without regulatory approval, dividends in 2005 of
approximately $274.3 million plus an additional amount
equal to its net income through the date of declaration in 2005.

25. PARENT COMPANY
FINANCIAL STATEMENTS

The parent company condensed financial
statements, which include transactions with subsidiaries, are as
follows.


|                                                               |  |              |           |  |      |   |           |  |  | 
|-------------------------------------------------------------- |  | ------------ | --------- |  | ---- | - | --------- |  |  | 
|                                                               |  |              |           | 
|                                                              
|                                                              
|Balance Sheets                                                 |  | December 31,
|                                                              
|(in thousands of dollars)                                      |  | 2004         |           |  | 2003 |   |           | 
|                                                              
|                                                              
|                                                              
|ASSETS                                                         |  |              |           |  |      |   |           |  |  | 
|Cash and cash equivalents                                      |  | $            | 630,444   |  |      | $ | 432,632   |  |  | 
|Due from The Huntington National Bank                          |  |              | 250,771   |  |      |   | 250,759   |  |  | 
|Due from non-bank subsidiaries                                 |  |              | 204,976   |  |      |   | 172,371   |  |  | 
|Investment in The Huntington National Bank                     |  |              | 1,472,357 |  |      |   | 1,492,278 |  |  | 
|Investment in non-bank subsidiaries                            |  |              | 595,233   |  |      |   | 584,741   |  |  | 
|Goodwill, net of accumulated amortization                      |  |              | 9,877     |  |      |   | 9,877     |  |  | 
|Accrued interest receivable and other assets                   |  |              | 141,284   |  |      |   | 155,114   |  |  | 
|                                                              
|Total Assets                                                   |  | $            | 3,304,942 |  |      | $ | 3,097,772 |  |  | 
|                                                              
|LIABILITIES                                                    |  |              |           |  |      |   |           |  |  | 
|Long-term borrowed funds from
    unaffiliated companies       |  | $            | 411,750   |  |      | $ | 513,291   |  |  | 
|Dividends payable, accrued expenses, and
    other liabilities |  |              | 355,554   |  |      |   | 309,479   |  |  | 
|                                                              
|Total Liabilities                                              |  |              | 767,304   |  |      |   | 822,770   |  |  | 
|                                                              
|Shareholders Equity                                           |  |              | 2,537,638 |  |      |   | 2,275,002 |  |  | 
|                                                              
|Total Liabilities and
    Shareholders Equity                 |  | $            | 3,304,942 |  |      | $ | 3,097,772 |  |  | 
|                                                              

The parent company had a $100 million line
of credit to one of its non-bank subsidiaries at
December 31, 2004 and 2003. This line of credit remained
undrawn during 2003 and 2004.



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|                                                                                                                                 |                                   |                              |         |        |         |   |         |        |         |   |         |        |         |   |  | 
|-------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------------------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | - | ------- | ------ | ------- | - |  | 
|                                                                                                                                 |                                   |                             
|Statements of Income                                                                                                             |                                   | Year Ended December 31,     
|                                                                                                                                
|                                                                                                                                
|                                                                                                                                
|(in thousands of dollars)                                                                                                        |                                   | 2004                         |         |        | 2003    |   |         | 2002   |         |   |        
|                                                                                                                                
|                                                                                                                                
|                                                                                                                                
|Income                                                                                                                           |                                   |                              |         |        |         |   |         |        |         |   |         |        |         |  
|                                                                                                                                 | Dividends from                    |                              |         |        |         |   |         |        |         |   |         |        |         |   | 
|                                                                                                                                 |                                   | The Huntington National Bank |         | $      | 400,000 |   |         | $      | 150,533 |   |         | $      | 231,000 |   |  | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 8,202   |   |         |        | 3,000   |   |         |        | 8,142   |   |  | 
|                                                                                                                                 | Interest from                     |                              |         |        |         |   |         |        |         |   |         |        |         |   | 
|                                                                                                                                 |                                   | The Huntington National Bank |         |        | 13,417  |   |         |        | 20,098  |   |         |        | 29,611  |   |  | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 7,638   |   |         |        | 7,356   |   |         |        | 5,854   |   |  | 
|                                                                                                                                 | Management fees from subsidiaries |                              |         | 34,603 |         |   |         | 34,129 |         |   |         | 33,070 |         |   | 
|                                                                                                                                 | Other                             |                              |         | (810   | )       |   |         | 3,214  |         |   |         | 877    |         |   | 
|                                                                                                                                
|Total Income                                                                                                                     |                                   |                              | 463,050 |        |         |   | 218,330 |        |         |   | 308,554 |        |         |  
|                                                                                                                                
|Expense                                                                                                                          |                                   |                              |         |        |         |   |         |        |         |   |         |        |         |  
|                                                                                                                                 |                                   | Personnel costs              |         |        | 32,227  |   |         |        | 18,608  |   |         |        | 23,695  |   |  | 
|                                                                                                                                 |                                   | Interest on debt             |         |        | 4,317   |   |         |        | 12,976  |   |         |        | 20,213  |   |  | 
|                                                                                                                                 |                                   | Other                        |         |        | 36,738  |   |         |        | 27,347  |   |         |        | 37,868  |   |  | 
|                                                                                                                                
|Total Expense                                                                                                                    |                                   |                              | 73,282  |        |         |   | 58,931  |        |         |   | 81,776  |        |         |  
|                                                                                                                                
|Income before income taxes and equity in
    undistributed net income of subsidiaries                                            |                                   |                              | 389,768 |        |         |   | 159,399 |        |         |   | 226,778 |        |         |  
|Benefit from income taxes                                                                                                        |                                   |                              | (4,223  | )      |         |   | (5,130  | )      |         |   | (12,970 | )      |         |  
|                                                                                                                                
|Income before equity in undistributed net income
    of subsidiaries and
    cumulative effect of change in accounting principle |                                   |                              | 393,991 |        |         |   | 164,529 |        |         |   | 239,748 |        |         |  
|Cumulative effect of change in accounting
    principle net of tax of $1,315                                                     |                                   |                              |        |        |         |   | (2,442  | )      |         |   |        |        |         |  
|                                                                                                                                
|Income before equity in undistributed net income
    of subsidiaries                                                             |                                   |                              | 393,991 |        |         |   | 162,087 |        |         |   | 239,748 |        |         |  
|Equity in undistributed net
    (loss) income of                                                                                 |                                   |                              |         |        |         |   |         |        |         |   |         |        |         |  
|                                                                                                                                 |                                   | The Huntington National Bank |         |        | (9,073  | ) |         |        | 196,659 |   |         |        | 88,710  |   |  | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 14,007  |   |         |        | 13,617  |   |         |        | (4,727  | ) |  | 
|                                                                                                                                
|Net Income                                                                                                                       |                                   | $                            | 398,925 |        |         | $ | 372,363 |        |         | $ | 323,731 |        |         |  
|                                                                                                                                



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|                                                        |                                                                                       |                                                         |          |          |         |   |          |          |          |   |          |          |         |   |  | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------- | -------- | -------- | ------- | - | -------- | -------- | -------- | - | -------- | -------- | ------- | - |  | 
|                                                        |                                                                                       |                                                        
|Statements of Cash Flows                                |                                                                                       | Year Ended December 31,                                
|                                                       
|                                                       
|                                                       
|(in thousands of dollars)                               |                                                                                       | 2004                                                    |          |          | 2003    |   |          | 2002     |          |   |         
|                                                       
|                                                       
|                                                       
|Operating Activities                                    |                                                                                       |                                                         |          |          |         |   |          |          |          |   |          |          |         |  
|                                                        | Net Income                                                                            |                                                         | $        | 398,925  |         |   | $        | 372,363  |          |   | $        | 323,731  |         |   | 
|                                                        | Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                         |          |          |         |   |          |          |          |   |          |          |         |   | 
|                                                        |                                                                                       | Cumulative effect of change in
    accounting principle |          |          |        |   |          |          | 2,442    |   |          |          |        |   |  | 
|                                                        |                                                                                       | Equity in undistributed net income
    of subsidiaries  |          |          | (4,934  | ) |          |          | (210,275 | ) |          |          | (83,983 | ) |  | 
|                                                        |                                                                                       | Depreciation and amortization                           |          |          | 2,690   |   |          |          | 2,211    |   |          |          | 1,254   |   |  | 
|                                                        |                                                                                       | Gain on sales of securities available
    for sale      |          |          |        |   |          |          | (5       | ) |          |          | (709    | ) |  | 
|                                                        |                                                                                       | Change in other assets and other liabilities            |          |          | (13,609 | ) |          |          | (67,852  | ) |          |          | 45,575  |   |  | 
|                                                        |                                                                                       | Restructuring charges                                   |          |          |        |   |          |          |         |   |          |          | 6,859   |   |  | 
|                                                       
|Net Cash Provided by Operating Activities               |                                                                                       |                                                         | 383,072  |          |         |   | 98,884   |          |          |   | 292,727  |          |         |  
|                                                        |                                                                                       |                                                        
|Investing Activities                                    |                                                                                       |                                                         |          |          |         |   |          |          |          |   |          |          |         |  
|                                                        | Decrease in investments in subsidiaries                                               |                                                         |          |         |         |   |          |         |          |   |          | 670,000  |         |   | 
|                                                        | Repayments from subsidiaries                                                          |                                                         |          | 117,314  |         |   |          | 27,001   |          |   |          | 66,258   |         |   | 
|                                                        | Advances to subsidiaries                                                              |                                                         |          | (80,197  | )       |   |          | (74,650  | )        |   |          | (58,861  | )       |   | 
|                                                        | Proceeds from sale of securities available
    for sale                               |                                                         |          |         |         |   |          | 46       |          |   |          | 8,977    |         |   | 
|                                                        |                                                                                       |                                                        
|Net Cash Provided by (Used in)
    Investing Activities |                                                                                       |                                                         | 37,117   |          |         |   | (47,603  | )        |          |   | 686,374  |          |         |  
|                                                        |                                                                                       |                                                        
|Financing Activities                                    |                                                                                       |                                                         |          |          |         |   |          |          |          |   |          |          |         |  
|                                                        | Proceeds from issuance of other
    long-term debt                                    |                                                         |          |         |         |   |          | 100,000  |          |   |          | 100,000  |         |   | 
|                                                        | Payment of other long-term debt                                                       |                                                         |          | (101,541 | )       |   |          | (41,544  | )        |   |          | (154,020 | )       |   | 
|                                                        | Dividends paid on common stock                                                        |                                                         |          | (168,075 | )       |   |          | (151,023 | )        |   |          | (167,002 | )       |   | 
|                                                        | Acquisition of treasury stock                                                         |                                                         |          |         |         |   |          | (81,061  | )        |   |          | (370,012 | )       |   | 
|                                                        | Proceeds from issuance of treasury stock                                              |                                                         |          | 47,239   |         |   |          | 8,082    |          |   |          | 3,212    |         |   | 
|                                                        |                                                                                       |                                                        
|Net Cash Used for Financing Activities                  |                                                                                       |                                                         | (222,377 | )        |         |   | (165,546 | )        |          |   | (587,822 | )        |         |  
|                                                        |                                                                                       |                                                        
|Change in Cash and Cash Equivalents                     |                                                                                       |                                                         | 197,812  |          |         |   | (114,265 | )        |          |   | 391,279  |          |         |  
|Cash and Cash Equivalents at beginning
    of year      |                                                                                       |                                                         | 432,632  |          |         |   | 546,897  |          |          |   | 155,618  |          |         |  
|                                                        |                                                                                       |                                                        
|Cash and Cash Equivalents at end of year                |                                                                                       | $                                                       | 630,444  |          |         | $ | 432,632  |          |          | $ | 546,897  |          |         |  
|                                                        |                                                                                       |                                                        
|Supplemental disclosure:                                |                                                                                       |                                                         |          |          |         |   |          |          |          |   |          |          |         |  
|                                                        | Interest paid                                                                         |                                                         | $        | 18,495   |         |   | $        | 13,157   |          |   | $        | 20,779   |         |   | 
|                                                        | Common stock issued in purchase acquisitions                                          |                                                         |          |         |         |   |          |         |          |   |          | 19,151   |         |   | 

26. RESTRUCTURING
RESERVES

On a quarterly basis, Huntington assesses its
remaining restructuring reserves, primarily related to lease
obligations, and makes adjustments to those reserves as
necessary. During 2004, Huntington released $1.2 million of
restructuring reserves through a credit to the restructuring
charges line of non-interest expense in the accompanying
consolidated income statement. As of December 31, 2004,
Huntington had remaining reserves for restructuring of
$5.3 million. Huntington expects that the reserves will be
adequate to fund the estimated cash outlays necessary to
complete the exit activities.


27. ACQUISITIONS AND
DIVESTITURES

ACQUISITIONS

On January 27, 2004, Huntington announced
the signing of a definitive agreement to acquire Unizan
Financial Corp. (Unizan), a financial holding company based in
Canton, Ohio. On June 16, 2004, Huntington announced that
the closing of the Unizan merger would be delayed beyond the
early July 2004 targeted date as the FRBC had informed the
Company it was extending its merger application review period to
coordinate further with the staff of the SEC regarding the
SECs formal investigation and to complete its review of
the Community Reinvestment Act aspects of the merger. On
November 3, 2004, Huntington announced that it was
negotiating a one-year extension of its pending merger agreement
with Unizan. It was also announced that Huntington was
withdrawing its current application with the FRBC to acquire
Unizan and intends to resubmit the application for regulatory
approval of the merger once Huntington has successfully resolved
the pending SEC and banking regulatory concerns. On
November 11, 2004, Huntington and Unizan jointly announced
they had entered into an amendment to their January 26,
2004 merger agreement. The amendment extends the term of the
agreement for one year from January 27, 2005 to
January 27, 2006.


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Management remains in active dialogue with the
SEC and banking regulators concerning these and related matters
and is working diligently to resolve them in a full and
comprehensive manner. No assurances, however, can be provided as
to the ultimate timing or outcome of these matters.

DIVESTITURES

During 2003, Huntington sold four banking offices
located in eastern West Virginia. This sale included
approximately $50 million of loans and $130 million of
deposits. Huntingtons pre-tax gain from this sale was
$13.1 million in 2003 and is reflected as a separate
component of non-interest income.


During 2002, Huntington announced the
restructuring of its investment in Huntington Merchant Services
LLC, the Companys merchant services business. Huntington
sold its Florida-related merchant business and decreased its
equity investment in Huntington Merchant Services. As a result
of the transaction, Huntington recorded a pre-tax gain of
$24.6 million in 2002 which is reflected as a separate
component of non-interest income.

During 2002, Huntington completed the sale of its
Florida insurance operations to members of The J. Rolfe Davis
Insurance Agency, Inc. management. Though the sale affected
selected non-interest income and non-interest expense
categories, it had no material gain or impact on net income.

During 2002, Huntington completed the sale of its
Florida operations to SunTrust Banks, Inc. Included in the sale
were $4.8 billion of deposits and other liabilities and
$2.8 billion of loans and other assets. Huntington received
a deposit premium of 15%, or $711.9 million. The total net
pre-tax gain from the sale was $182.5 million and is
reflected in non-interest income. The after-tax gain was
$61.4 million, or $0.25 per share. Income taxes related to
this transaction were $121.0 million, an amount higher than
the tax impact at the statutory rate of 35%, because most
of the goodwill relating to the Florida operations was
non-deductible for tax purposes.

28. SEGMENT
REPORTING

Huntington has three distinct lines of business:
Regional Banking, Dealer Sales, and the Private Financial Group
(PFG). A fourth segment includes Huntingtons Treasury
function and other unallocated assets, liabilities, revenue, and
expense. Line of business results are determined based upon
Huntingtons management reporting system, which assigns
balance sheet and income statement items to each of the business
segments. The process is designed around Huntingtons
organizational and management structure and, accordingly, the
results below are not necessarily comparable with similar
information published by other financial institutions. During
2002, the previously reported segments, Retail Banking and
Corporate Banking, were combined and renamed Regional Banking.
Since this segment is managed through seven geographically
defined regions where each regions management has
responsibility for both retail and corporate banking business
development, combining these two previously separate segments
better reflects the management accountability and decision
making structure. In addition, changes were made to the
methodologies utilized for certain balance sheet and income
statement allocations from Huntingtons management
reporting system.


Management relies on operating earnings for
review of performance trends and for critical decision making
purposes. Operating earnings exclude the impact of the
significant items listed in the reconciliation table below. See
Note 26 to the consolidated financial statements for
further discussions regarding restructuring reserves and
Note 27 regarding the sale of Huntingtons Florida
banking and insurance operations. The financial information that
follows is inclusive of the above adjustments on an after-tax
basis to reflect the reconciliation to reported net income.

The following provides a brief description of the
four operating segments of Huntington:

Regional Banking:This segment provides products and
services to consumer, small business, and commercial customers.
These products and services are offered in seven operating
regions within the five states of Ohio, Michigan, West Virginia,
Indiana, and Kentucky through the Companys banking network
of 334 branches, over 700 ATMs, plus Internet and telephone
banking channels. Each region is further divided into Retail and
Commercial Banking units. Retail products and services include
home equity loans and lines of credit, first mortgage loans,
direct installment loans, business loans, personal and business
deposit products, as well as sales of investment and insurance
services. Retail products and services comprise 59% and 80%, of
total regional banking loans and deposits, respectively.
Commercial Banking serves middle market and large commercial
banking relationships, which use a variety of banking products
and services including, but not limited to, commercial loans,
international trade, cash management, leasing, interest rate
protection products, capital market alternatives, 401(k) plans,
and mezzanine investment capabilities.

Dealer Sales:This
segment serves more than 3,500 automotive dealerships within
Huntingtons primary banking markets, as well as in
Arizona, Florida, Georgia, Pennsylvania, and Tennessee. The
segment finances the purchase of automobiles by customers of the
automotive dealerships, purchases automobiles from dealers and
simultaneously leases the automobiles to consumers under
long-term

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operating or direct finance leases, finances the
dealerships floor plan inventories, real estate, or
working capital needs, and provides other banking services to
the automotive dealerships and their owners.

Private Financial Group:This segment provides products and
services designed to meet the needs of the Companys higher
net worth customers. Revenue is derived through trust, asset
management, investment advisory, brokerage, insurance, and
private banking products and services. As of December 31,
2004, the trust division provides fiduciary services to more
than 11,000 accounts with assets totaling $42.8 billion,
with $9.8 billion managed by PFG, including approximately
$600 million in assets managed by Haberer Registered
Investment Advisor, which provides investment management
services to nearly 400 customers.

Treasury/Other:This
segment includes revenue and expense related to assets,
liabilities, and equity that are not directly assigned or
allocated to one of the other three business segments. Assets
included in this segment include investment securities, bank
owned life insurance, and mezzanine loans originated through
Huntington Capital Markets.

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Listed below is certain operating basis financial
information reconciled to Huntingtons 2004, 2003, and 2002
reported results by line of business:

|                                                   |  |          |          |   |        |   |          |     |  |           |          |   |            |              |         |   |  |   |            |  
|-------------------------------------------------- |  | -------- | -------- | - | ------ | - | -------- | --- |  | --------- | -------- | - | ---------- | ------------ | ------- | - |  | - | ---------- | -
|                                                   |  | Regional |          |   | Dealer |   |          |     |  | Treasury/ |          |   | Huntington |             
|INCOME STATEMENTS (in thousands of dollars)        |  | Banking  |          |   | Sales  |   |          | PFG |  |           | Other    |   |            | Consolidated |        
|                                                  
|                                                  
|                                                   | 
|2004                                               |  |          |          |   |        |   |          |     |  |           |          |   |            |              |         |   |  |   |            |  
|Net interest income                                |  | $        | 642,140  |   |        | $ | 149,251  |     |  | $         | 46,575   |   |            | $            | 73,408  |   |  | $ | 911,374    |  
|Provision for credit losses                        |  |          | (7,565   | ) |        |   | (44,692  | )   |  |           | (2,299   | ) |            |              | (506    | ) |  |   | (55,062    | )
|Non-Interest income                                |  |          | 307,119  |   |        |   | 320,434  |     |  |           | 111,630  |   |            |              | 65,209  |   |  |   | 804,392    |  
|Non-Interest expense                               |  |          | (588,111 | ) |        |   | (324,240 | )   |  |           | (113,672 | ) |            |              | (97,372 | ) |  |   | (1,123,395 | )
|Income taxes                                       |  |          | (123,755 | ) |        |   | (35,264  | )   |  |           | (14,782  | ) |            |              | 25,435  |   |  |   | (148,366   | )
|                                                  
|Operating earnings                                 |  |          | 229,828  |   |        |   | 65,489   |     |  |           | 27,452   |   |            |              | 66,174  |   |  |   | 388,943    |  
|Restructuring releases, net
    of taxes           |  |          |         |   |        |   |         |     |  |           |         |   |            |              | 748     |   |  |   | 748        |  
|Gain on sale of automobile loans,
    net of taxes |  |          |         |   |        |   | 8,598    |     |  |           |         |   |            |              | 636     |   |  |   | 9,234      |  
|                                                  
|Net income                                         |  | $        | 229,828  |   |        | $ | 74,087   |     |  | $         | 27,452   |   |            | $            | 67,558  |   |  | $ | 398,925    |  
|                                                  

|                                                                      |  |   |          |   |  |   |          |   |  |   |          |   |  |   |         |   |  |   |            |  
|--------------------------------------------------------------------- |  | - | -------- | - |  | - | -------- | - |  | - | -------- | - |  | - | ------- | - |  | - | ---------- | -
|2003                                                                  |  |   |          |   |  |   |          |   |  |   |          |   |  |   |         |   |  |   |            |  
|Net interest income                                                   |  | $ | 605,378  |   |  | $ | 107,242  |   |  | $ | 41,876   |   |  | $ | 94,490  |   |  | $ | 848,986    |  
|Provision for credit losses                                           |  |   | (94,004  | ) |  |   | (59,469  | ) |  |   | (4,781   | ) |  |   | (5,739  | ) |  |   | (163,993   | )
|Non-Interest income                                                   |  |   | 317,687  |   |  |   | 525,987  |   |  |   | 107,951  |   |  |   | 64,377  |   |  |   | 1,016,002  |  
|Non-Interest expense                                                  |  |   | (563,099 | ) |  |   | (481,354 | ) |  |   | (105,153 | ) |  |   | (71,969 | ) |  |   | (1,221,575 | )
|Income taxes                                                          |  |   | (93,086  | ) |  |   | (32,343  | ) |  |   | (13,963  | ) |  |   | 16,697  |   |  |   | (122,695   | )
|                                                                     
|Operating earnings                                                    |  |   | 172,876  |   |  |   | 60,063   |   |  |   | 25,930   |   |  |   | 97,856  |   |  |   | 356,725    |  
|Restructuring releases, net of tax                                    |  |   |         |   |  |   |         |   |  |   |         |   |  |   | 4,333   |   |  |   | 4,333      |  
|Gain on sale of automobile loans, net of tax                          |  |   |         |   |  |   | 13,493   |   |  |   |         |   |  |   | 12,532  |   |  |   | 26,025     |  
|Cumulative effect of change in accounting
    principle, net of taxes |  |   |         |   |  |   | (10,888  | ) |  |   |         |   |  |   | (2,442  | ) |  |   | (13,330    | )
|Gain on sale of branch offices, net of tax                            |  |   |         |   |  |   |         |   |  |   |         |   |  |   | 8,523   |   |  |   | 8,523      |  
|Long-term debt extinguishment, net of tax                             |  |   |         |   |  |   |         |   |  |   |         |   |  |   | (9,913  | ) |  |   | (9,913     | )
|                                                                     
|Net income                                                            |  | $ | 172,876  |   |  | $ | 62,668   |   |  | $ | 25,930   |   |  | $ | 110,889 |   |  | $ | 372,363    |  
|                                                                     
|                                                                     
|2002                                                                  |  |   |          |   |  |   |          |   |  |   |          |   |  |   |         |   |  |   |            |  
|Net interest income                                                   |  | $ | 583,999  |   |  | $ | 5,404    |   |  | $ | 35,773   |   |  | $ | 114,674 |   |  | $ | 739,850    |  
|Provision for credit losses                                           |  |   | (133,907 | ) |  |   | (46,335  | ) |  |   | (3,468   | ) |  |   | (5,530  | ) |  |   | (189,240   | )
|Non-Interest income                                                   |  |   | 264,026  |   |  |   | 687,557  |   |  |   | 108,948  |   |  |   | 60,810  |   |  |   | 1,121,341  |  
|Non-Interest expense                                                  |  |   | (539,992 | ) |  |   | (609,833 | ) |  |   | (103,110 | ) |  |   | (52,029 | ) |  |   | (1,304,964 | )
|Income taxes                                                          |  |   | (60,944  | ) |  |   | (12,878  | ) |  |   | (13,350  | ) |  |   | (106    | ) |  |   | (87,278    | )
|                                                                     
|Operating earnings                                                    |  |   | 113,182  |   |  |   | 23,915   |   |  |   | 24,793   |   |  |   | 117,819 |   |  |   | 279,709    |  
|Restructuring charges, net of tax                                     |  |   |         |   |  |   |         |   |  |   | (3,429   | ) |  |   | (28,403 | ) |  |   | (31,832    | )
|Florida operations sold, net of tax                                   |  |   | 1,270    |   |  |   | 790      |   |  |   | 1,428    |   |  |   | (5,013  | ) |  |   | (1,525     | )
|Gain on sale of Florida operations, net
    of tax                    |  |   |         |   |  |   |         |   |  |   |         |   |  |   | 61,422  |   |  |   | 61,422     |  
|Merchant Services restructuring gain, net
    of tax                  |  |   |         |   |  |   |         |   |  |   |         |   |  |   | 15,957  |   |  |   | 15,957     |  
|                                                                     
|Net income                                                            |  | $ | 114,452  |   |  | $ | 24,705   |   |  | $ | 22,792   |   |  | $ | 161,782 |   |  | $ | 323,731    |  
|                                                                     

|                                        |       |                 |        |        |                 |   |        |        |  |   |        |        |  |      |        |        |      |   |        |        |  |   |        |        | 
|--------------------------------------- | ----- | --------------- | ------ | ------ | --------------- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                                        |       |                 |        |       
|                                        |       | Assets          |        |        | Deposits        |  
|                                        |       | At December 31, |        |        | At December 31, |  
|                                        |       |                 |        |       
|                                        |       |                 |        |       
|                                        |       |                 |        |        |                 |  
|BALANCE SHEETS (in millions of dollars) |       | 2004            |        |        | 2003            |   |        | 2002   |  |   | 2004   |        |  | 2003 |        |        | 2002 |  
|                                       
|                                       
|                                        |      
|Regional Banking                        |       | $               | 17,809 |        |                 | $ | 14,970 |        |  | $ | 13,947 |        |  | $    | 17,424 |        |      | $ | 15,539 |        |  | $ | 15,296 |       
|Dealer Sales                            |       |                 | 6,133  |        |                 |   | 7,454  |        |  |   | 7,285  |        |  |      | 76     |        |      |   | 77     |        |  |   | 61     |       
|PFG                                     |       |                 | 1,649  |        |                 |   | 1,461  |        |  |   | 1,203  |        |  |      | 1,172  |        |      |   | 1,164  |        |  |   | 939    |       
|Treasury / Other                        |       |                 | 6,974  |        |                 |   | 6,634  |        |  |   | 5,105  |        |  |      | 2,096  |        |      |   | 1,707  |        |  |   | 1,203  |       
|                                       
|                                        | Total |                 | $      | 32,565 |                 |   | $      | 30,519 |  |   | $      | 27,540 |  |      | $      | 20,768 |      |   | $      | 18,487 |  |   | $      | 17,499 | 
|                                       

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29. QUARTERLY RESULTS OF
OPERATIONS (UNAUDITED)

The following is a summary of the unaudited
quarterly results of operations, for the years ended
December 31, 2004 and 2003:


|                                                 |  |        |          |   |       |   |          |        |  |   |          |   |  |   |          |  
|------------------------------------------------ |  | ------ | -------- | - | ----- | - | -------- | ------ |  | - | -------- | - |  | - | -------- | -
|                                                 |  |       
|2004                                             | 
|                                                
|                                                 | 
|(in thousands of dollars, except per share data) |  | Fourth |          |   | Third |   |          | Second |  |   | First    |  
|                                                
|                                                
|                                                 | 
|Interest income                                  |  | $      | 359,215  |   |       | $ | 338,002  |        |  | $ | 324,167  |   |  | $ | 325,931  |  
|Interest expense                                 |  |        | (120,147 | ) |       |   | (110,944 | )      |  |   | (101,604 | ) |  |   | (103,246 | )
|                                                
|Net interest income                              |  |        | 239,068  |   |       |   | 227,058  |        |  |   | 222,563  |   |  |   | 222,685  |  
|                                                
|Provision for credit losses                      |  |        | (12,654  | ) |       |   | (11,785  | )      |  |   | (5,027   | ) |  |   | (25,596  | )
|Non-interest income                              |  |        | 182,940  |   |       |   | 189,891  |        |  |   | 218,128  |   |  |   | 227,639  |  
|Non-interest expense                             |  |        | (281,014 | ) |       |   | (273,423 | )      |  |   | (282,153 | ) |  |   | (285,654 | )
|                                                
|Income before income taxes                       |  |        | 128,340  |   |       |   | 131,741  |        |  |   | 153,511  |   |  |   | 139,074  |  
|Income taxes                                     |  |        | (37,201  | ) |       |   | (38,255  | )      |  |   | (43,384  | ) |  |   | (34,901  | )
|                                                
|Net income                                       |  | $      | 91,139   |   |       | $ | 93,486   |        |  | $ | 110,127  |   |  | $ | 104,173  |  
|                                                
|Net income per common share  Basic              |  |        | $0.39    |   |       |   | $0.41    |        |  |   | $0.48    |   |  |   | $0.45    |  
|Net income per common share  Diluted            |  |        | 0.39     |   |       |   | 0.40     |        |  |   | 0.47     |   |  |   | 0.45     |  

|                                                                                                     |  |        |          |   |       |   |          |        |  |   |          |   |  |   |          |  
|---------------------------------------------------------------------------------------------------- |  | ------ | -------- | - | ----- | - | -------- | ------ |  | - | -------- | - |  | - | -------- | -
|                                                                                                     |  |       
|2003                                                                                                 | 
|                                                                                                    
|                                                                                                     | 
|(in thousands of dollars, except per share data)                                                     |  | Fourth |          |   | Third |   |          | Second |  |   | First    |  
|                                                                                                    
|                                                                                                    
|                                                                                                     | 
|Interest income                                                                                      |  | $      | 335,097  |   |       | $ | 333,320  |        |  | $ | 317,325  |   |  | $ | 320,014  |  
|Interest expense                                                                                     |  |        | (110,782 | ) |       |   | (112,849 | )      |  |   | (114,884 | ) |  |   | (118,255 | )
|                                                                                                    
|Net interest income                                                                                  |  |        | 224,315  |   |       |   | 220,471  |        |  |   | 202,441  |   |  |   | 201,759  |  
|                                                                                                    
|Provision for credit losses                                                                          |  |        | (26,341  | ) |       |   | (51,615  | )      |  |   | (49,193  | ) |  |   | (36,844  | )
|Non-interest income                                                                                  |  |        | 246,510  |   |       |   | 272,768  |        |  |   | 276,951  |   |  |   | 272,924  |  
|Non-interest expense                                                                                 |  |        | (317,465 | ) |       |   | (300,182 | )      |  |   | (297,033 | ) |  |   | (315,479 | )
|                                                                                                    
|Income before income taxes                                                                           |  |        | 127,019  |   |       |   | 141,442  |        |  |   | 133,166  |   |  |   | 122,360  |  
|Income taxes                                                                                         |  |        | (33,758  | ) |       |   | (37,230  | )      |  |   | (36,676  | ) |  |   | (30,630  | )
|                                                                                                    
|Income before cumulative effect of change in
    accounting principle                                |  |        | 93,261   |   |       |   | 104,212  |        |  |   | 96,490   |   |  |   | 91,730   |  
|Cumulative effect of change in accounting
    principle, net of tax                                  |  |        |         |   |       |   | (13,330  | )      |  |   |         |   |  |   |         |  
|                                                                                                    
|Net income                                                                                           |  | $      | 93,261   |   |       | $ | 90,882   |        |  | $ | 96,490   |   |  | $ | 91,730   |  
|                                                                                                    
|Income per common share before cumulative effect
    of change
    in accounting principle  Basic   |  |        | $0.41    |   |       |   | $0.46    |        |  |   | $0.42    |   |  |   | $0.40    |  
|Net income per common share  Basic                                                                  |  |        | 0.41     |   |       |   | 0.40     |        |  |   | 0.42     |   |  |   | 0.40     |  
|                                                                                                    
|Income per common share before cumulative effect
    of change
    in accounting principle  Diluted |  |        | 0.40     |   |       |   | 0.45     |        |  |   | 0.42     |   |  |   | 0.39     |  
|Net income per common share  Diluted                                                                |  |        | 0.40     |   |       |   | 0.39     |        |  |   | 0.42     |   |  |   | 0.39     |  

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30. RESTATEMENT OF
CONSOLIDATED STATEMENTS OF CASH FLOWS

The Company restated its consolidated statement
of cash flows for the year ended December 31, 2003 to
correct the presentation of activity related to the 2003 sale of
banking offices. The results of this restatement are reflected
in the consolidated statements of cash flows for 2003, included
in this report. The impact of this restatement had no effect on
net income, shareholders equity or the balance of cash and
cash equivalents. The following table reflects the previously
reported amounts before the restatement, as well as the impact
of this restatement by financial statement line in
Huntingtons consolidated statements of cash flows for the
three years ended December 31, 2004:


|                          |                                                      |                                           |   |            |            |   |   |            |            |  
|------------------------- | ---------------------------------------------------- | ----------------------------------------- | - | ---------- | ---------- | - | - | ---------- | ---------- | -
|                          |                                                      |                                          
|                          |                                                      | Twelve Months Ended December 31, 2003     |  
|                         
|                         
|                          |                                                     
|(in thousands of dollars) |                                                      | Previously Reported                       |   |            | Restated   |  
|                         
|                         
|                          |                                                     
|Operating activities      |                                                      |                                           |   |            |            |   |   |           
|                          | Other, net                                           |                                           | $ | 61,467     |            |   | $ | 62,331     |           
|                          |                                                      | Net cash provided by operating activities |   |            | 1,338,406  |   |   |            | 1,339,270  |  
|                         
|Investing Activities      |                                                      |                                           |   |            |            |   |   |           
|                          | Net loan and lease originations,
    excluding sales |                                           |   | (4,408,975 | )          |   |   | (4,506,843 | )         
|                          | Proceeds from the sale of branch offices             |                                           |   | 81,367     |            |   |   | (81,367    | )         
|                          | Purchases of premises and equipment                  |                                           |   | (62,503    | )          |   |   | (64,571    | )         
|                          |                                                      | Net cash used for investing activities    |   |            | (2,751,650 | ) |   |            | (3,014,320 | )
|                         
|Financing Activities      |                                                      |                                           |   |            |            |   |   |           
|                          | Increase in total deposits                           |                                           |   | 915,518    |            |   |   | 1,177,324  |           
|                          |                                                      | Net cash provided by financing activities |   |            | 1,390,984  |   |   |            | 1,652,790  |  

In addition to this restatement, the Company also
reclassified components of other net operating activities to
captions within the reconciliation of net income to net cash
provided by operating activities. The impact on other net
operating activities for the year ended December 31, 2003
is as follows:

|                                              |                                                                   |  |  |  |  |   |        |         |  
|--------------------------------------------- | ----------------------------------------------------------------- |  |  |  |  | - | ------ | ------- | -
|(in thousands of dollars)                     |                                                                   |  |  | 
|                                             
|                                             
|                                              |                                                                  
|Other operating activities  as
    restated  |                                                                   |  |  |  |  | $ | 62,331 |        
|                                              | Increase of cash surrender value of bank owned
    life insurance |  |  |  |  |   |        | 43,028  |  
|                                              | Increase in payable to investors in securitized
    loans         |  |  |  |  |   |        | (64,986 | )
|                                             
|Other operating activities  as
    presented |                                                                   |  |  |  |  | $ | 40,373 |        
|                                             

136