##### 



Exhibit 99.(b)


|                                                   |                                   
|-------------------------------------------------- | ----------------------------------
|REPORT OFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM | HUNTINGTON BANCSHARES INCORPORATED

(DELOITTE LOGO)

To the Board of Directors and Shareholders of

Huntington Bancshares Incorporated


Columbus, Ohio


We have audited the accompanying consolidated
balance sheets of Huntington Bancshares Incorporated and
subsidiaries (the Company) as of December 31,
2005 and 2004, and the related consolidated statements of
income, changes in shareholders equity, and cash flows for
the years then ended. These consolidated financial statements
are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits. The consolidated financial
statements of the Company for the year ended December 31,
2003 were audited by other auditors whose report, dated
January 16, 2004 (except for Note 25, as to which the date
is January 27, 2004), expressed an unqualified opinion on
those financial statements and included an explanatory paragraph
that described the adoption of new accounting guidance for
variable interest entities in 2003.

We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated 2005 and 2004
financial statements present fairly, in all material respects,
the financial position of Huntington Bancshares Incorporated and
subsidiaries at December 31, 2005 and 2004, and the results
of their operations and their cash flows for the years then
ended in conformity with accounting principles generally
accepted in the United States of America.

We have also audited, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of the Companys
internal control over financial reporting as of
December 31, 2005, based on the criteria established in
Internal ControlIntegrated Frameworkissued by the
Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 14, 2006 expressed an
unqualified opinion on managements assessment of the
effectiveness of the Companys internal control over
financial reporting and an unqualified opinion on the
effectiveness of the Companys internal control over
financial reporting.

(DELOITTE & TOUCHE LLP)

Deloitte & Touche LLP


Columbus, Ohio


February 14, 2006


98



---



##### 





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

|                                                                        |                                                                                                                                                                  |                                        |            |            |            |   |            |            |            | 
|----------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | 
|                                                                        |                                                                                                                                                                  |                                       
|                                                                        |                                                                                                                                                                  | December 31,                           |           
|                                                                       
|                                                                       
|                                                                        |                                                                                                                                                                 
|(in thousands, except number of shares)                                 |                                                                                                                                                                  | 2005                                   |            |            | 2004       |  
|                                                                       
|Assets                                                                  |                                                                                                                                                                  |                                        |            |            |            |   |            |           
|Cash and due from banks                                                 |                                                                                                                                                                  | $                                      | 966,445    |            |            | $ | 877,320    |           
|Federal funds sold and securities purchased under
    resale agreements |                                                                                                                                                                  |                                        | 74,331     |            |            |   | 628,040    |           
|Interest bearing deposits in banks                                      |                                                                                                                                                                  |                                        | 22,391     |            |            |   | 22,398     |           
|Trading account securities                                              |                                                                                                                                                                  |                                        | 8,619      |            |            |   | 309,630    |           
|Loans held for sale                                                     |                                                                                                                                                                  |                                        | 294,344    |            |            |   | 223,469    |           
|Investment securities                                                   |                                                                                                                                                                  |                                        | 4,526,520  |            |            |   | 4,238,945  |           
|Loans and leases:                                                       |                                                                                                                                                                  |                                        |            |            |            |   |            |           
|                                                                        |                                                                                                                                                                  | Commercial and industrial loans        |            |            | 6,809,208  |   |            |            | 5,829,685  | 
|                                                                        |                                                                                                                                                                  | Commercial real estate loans           |            |            | 4,036,171  |   |            |            | 4,473,293  | 
|                                                                        |                                                                                                                                                                  | Automobile loans                       |            |            | 1,985,304  |   |            |            | 1,948,667  | 
|                                                                        |                                                                                                                                                                  | Automobile leases                      |            |            | 2,289,015  |   |            |            | 2,443,455  | 
|                                                                        |                                                                                                                                                                  | Home equity loans                      |            |            | 4,638,841  |   |            |            | 4,554,540  | 
|                                                                        |                                                                                                                                                                  | Residential mortgage loans             |            |            | 4,193,139  |   |            |            | 3,829,234  | 
|                                                                        |                                                                                                                                                                  | Other consumer loans                   |            |            | 520,488    |   |            |            | 481,403    | 
|                                                                       
|Loans and leases                                                        |                                                                                                                                                                  |                                        | 24,472,166 |            |            |   | 23,560,277 |           
|Allowance for loan and lease losses                                     |                                                                                                                                                                  |                                        | (268,347   | )          |            |   | (271,211   | )         
|                                                                       
|Net loans and leases                                                    |                                                                                                                                                                  |                                        | 24,203,819 |            |            |   | 23,289,066 |           
|                                                                       
|Bank owned life insurance                                               |                                                                                                                                                                  |                                        | 1,001,542  |            |            |   | 963,059    |           
|Premises and equipment                                                  |                                                                                                                                                                  |                                        | 360,677    |            |            |   | 355,115    |           
|Operating lease assets                                                  |                                                                                                                                                                  |                                        | 229,077    |            |            |   | 587,310    |           
|Goodwill and other intangible assets                                    |                                                                                                                                                                  |                                        | 217,486    |            |            |   | 215,807    |           
|Customers acceptance liability                                         |                                                                                                                                                                  |                                        | 4,536      |            |            |   | 11,299     |           
|Accrued income and other assets                                         |                                                                                                                                                                  |                                        | 855,018    |            |            |   | 844,039    |           
|                                                                       
|Total assets                                                            |                                                                                                                                                                  | $                                      | 32,764,805 |            |            | $ | 32,565,497 |           
|                                                                       
|Liabilities and shareholders
    equity                                |                                                                                                                                                                  |                                        |            |            |            |   |            |           
|Liabilities                                                             |                                                                                                                                                                  |                                        |            |            |            |   |            |           
|                                                                        | Deposits in domestic offices                                                                                                                                     |                                        |            |            |            |   |            |            |           
|                                                                        |                                                                                                                                                                  | Demand deposits  non-interest bearing |            | $          | 3,390,044  |   |            | $          | 3,392,123  | 
|                                                                        |                                                                                                                                                                  | Interest bearing                       |            |            | 18,548,943 |   |            |            | 16,935,091 | 
|                                                                        | Deposits in foreign offices                                                                                                                                      |                                        |            | 470,688    |            |   |            | 440,947    |           
|                                                                       
|                                                                        | Deposits                                                                                                                                                         |                                        |            | 22,409,675 |            |   |            | 20,768,161 |           
|                                                                        | Short-term borrowings                                                                                                                                            |                                        |            | 1,889,260  |            |   |            | 1,207,233  |           
|                                                                        | Federal Home Loan Bank advances                                                                                                                                  |                                        |            | 1,155,647  |            |   |            | 1,271,088  |           
|                                                                        | Other long-term debt                                                                                                                                             |                                        |            | 2,418,419  |            |   |            | 4,016,004  |           
|                                                                        | Subordinated notes                                                                                                                                               |                                        |            | 1,023,371  |            |   |            | 1,039,793  |           
|                                                                        | Deferred income tax liability                                                                                                                                    |                                        |            | 743,655    |            |   |            | 783,628    |           
|                                                                        | Allowance for unfunded loan commitments and
    letters of credit                                                                                                |                                        |            | 36,957     |            |   |            | 33,187     |           
|                                                                        | Bank acceptances outstanding                                                                                                                                     |                                        |            | 4,536      |            |   |            | 11,299     |           
|                                                                        | Accrued expenses and other liabilities                                                                                                                           |                                        |            | 525,784    |            |   |            | 897,466    |           
|                                                                       
|Total liabilities                                                       |                                                                                                                                                                  |                                        | 30,207,304 |            |            |   | 30,027,859 |           
|                                                                       
|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 224,106,172 and 231,605,281 shares, respectively |                                        |            | 2,491,326  |            |   |            | 2,484,204  |           
|                                                                        | Less 33,760,083 and 26,260,974 treasury shares,
    respectively                                                                                                 |                                        |            | (693,576   | )          |   |            | (499,259   | )         
|                                                                        | Accumulated other comprehensive loss                                                                                                                             |                                        |            | (22,093    | )          |   |            | (10,903    | )         
|                                                                        | Retained earnings                                                                                                                                                |                                        |            | 781,844    |            |   |            | 563,596    |           
|                                                                       
|Total shareholders equity                                              |                                                                                                                                                                  |                                        | 2,557,501  |            |            |   | 2,537,638  |           
|                                                                       
|Total liabilities and shareholders
    equity                          |                                                                                                                                                                  | $                                      | 32,764,805 |            |            | $ | 32,565,497 |           
|                                                                       

See Notes to Consolidated Financial
Statements.

99



---



##### 



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

|                                                                                |                                             |                         |           |         |           |   |           |         |           |   |           |         |           | 
|------------------------------------------------------------------------------- | ------------------------------------------- | ----------------------- | --------- | ------- | --------- | - | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|                                                                                |                                             |                        
|                                                                                |                                             | Year Ended December 31, |          
|                                                                               
|                                                                               
|                                                                                |                                            
|(in thousands, except per share amounts)                                        |                                             | 2005                    |           |         | 2004      |   |           | 2003    |          
|                                                                               
|Interest and fee income                                                         |                                             |                         |           |         |           |   |           |         |           |   |           |        
|                                                                                | Loans and leases                            |                         |           |         |           |   |           |         |           |   |           |         |          
|                                                                                |                                             | Taxable                 |           | $       | 1,428,371 |   |           | $       | 1,132,599 |   |           | $       | 1,096,750 | 
|                                                                                |                                             | Tax-exempt              |           |         | 1,466     |   |           |         | 1,474     |   |           |         | 1,674     | 
|                                                                                | Investment securities                       |                         |           |         |           |   |           |         |           |   |           |         |          
|                                                                                |                                             | Taxable                 |           |         | 158,741   |   |           |         | 171,709   |   |           |         | 159,590   | 
|                                                                                |                                             | Tax-exempt              |           |         | 19,865    |   |           |         | 17,884    |   |           |         | 15,067    | 
|                                                                                | Other                                       |                         |           | 33,322  |           |   |           | 23,649  |           |   |           | 32,675  |          
|                                                                               
|Total interest income                                                           |                                             |                         | 1,641,765 |         |           |   | 1,347,315 |         |           |   | 1,305,756 |        
|                                                                               
|Interest expense                                                                |                                             |                         |           |         |           |   |           |         |           |   |           |        
|                                                                                | Deposits                                    |                         |           | 446,919 |           |   |           | 257,099 |           |   |           | 288,271 |          
|                                                                                | Short-term borrowings                       |                         |           | 34,334  |           |   |           | 13,053  |           |   |           | 15,698  |          
|                                                                                | Federal Home Loan Bank advances             |                         |           | 34,647  |           |   |           | 33,253  |           |   |           | 24,394  |          
|                                                                                | Subordinated notes and other long-term debt |                         |           | 163,454 |           |   |           | 132,536 |           |   |           | 128,407 |          
|                                                                               
|Total interest expense                                                          |                                             |                         | 679,354   |         |           |   | 435,941   |         |           |   | 456,770   |        
|                                                                               
|Net interest income                                                             |                                             |                         | 962,411   |         |           |   | 911,374   |         |           |   | 848,986   |        
|Provision for credit losses                                                     |                                             |                         | 81,299    |         |           |   | 55,062    |         |           |   | 163,993   |        
|                                                                               
|Net interest income after provision for credit
    losses                       |                                             |                         | 881,112   |         |           |   | 856,312   |         |           |   | 684,993   |        
|                                                                               
|                                                                                | Service charges on deposit accounts         |                         |           | 167,834 |           |   |           | 171,115 |           |   |           | 167,840 |          
|                                                                                | Operating lease income                      |                         |           | 138,433 |           |   |           | 287,091 |           |   |           | 489,698 |          
|                                                                                | Trust services                              |                         |           | 77,405  |           |   |           | 67,410  |           |   |           | 61,649  |          
|                                                                                | Brokerage and insurance income              |                         |           | 53,619  |           |   |           | 54,799  |           |   |           | 57,844  |          
|                                                                                | Other service charges and fees              |                         |           | 44,348  |           |   |           | 41,574  |           |   |           | 41,446  |          
|                                                                                | Mortgage banking income                     |                         |           | 41,710  |           |   |           | 32,296  |           |   |           | 58,180  |          
|                                                                                | Bank owned life insurance income            |                         |           | 40,736  |           |   |           | 42,297  |           |   |           | 43,028  |          
|                                                                                | Gains on sales of automobile loans          |                         |           | 1,211   |           |   |           | 14,206  |           |   |           | 40,039  |          
|                                                                                | Gain on sale of branch offices              |                         |           |        |           |   |           |        |           |   |           | 13,112  |          
|                                                                                | Securities gains (losses), net              |                         |           | (8,055  | )         |   |           | 15,763  |           |   |           | 5,258   |          
|                                                                                | Other income                                |                         |           | 75,041  |           |   |           | 92,047  |           |   |           | 91,059  |          
|                                                                               
|Total non-interest income                                                       |                                             |                         | 632,282   |         |           |   | 818,598   |         |           |   | 1,069,153 |        
|                                                                               
|                                                                                | Personnel costs                             |                         |           | 481,658 |           |   |           | 485,806 |           |   |           | 447,263 |          
|                                                                                | Operating lease expense                     |                         |           | 108,376 |           |   |           | 236,478 |           |   |           | 393,270 |          
|                                                                                | Outside data processing and other services  |                         |           | 74,638  |           |   |           | 72,115  |           |   |           | 66,118  |          
|                                                                                | Net occupancy                               |                         |           | 71,092  |           |   |           | 75,941  |           |   |           | 62,481  |          
|                                                                                | Equipment                                   |                         |           | 63,124  |           |   |           | 63,342  |           |   |           | 65,921  |          
|                                                                                | Professional services                       |                         |           | 34,569  |           |   |           | 36,876  |           |   |           | 42,448  |          
|                                                                                | Marketing                                   |                         |           | 28,077  |           |   |           | 26,489  |           |   |           | 27,490  |          
|                                                                                | Telecommunications                          |                         |           | 18,648  |           |   |           | 19,787  |           |   |           | 21,979  |          
|                                                                                | Printing and supplies                       |                         |           | 12,573  |           |   |           | 12,463  |           |   |           | 13,009  |          
|                                                                                | Amortization of intangibles                 |                         |           | 829     |           |   |           | 817     |           |   |           | 816     |          
|                                                                                | Restructuring reserve releases              |                         |           |        |           |   |           | (1,151  | )         |   |           | (6,666  | )        
|                                                                                | Loss on early extinguishment of debt        |                         |           |        |           |   |           |        |           |   |           | 15,250  |          
|                                                                                | Other expense                               |                         |           | 76,236  |           |   |           | 93,281  |           |   |           | 80,780  |          
|                                                                               
|Total non-interest expense                                                      |                                             |                         | 969,820   |         |           |   | 1,122,244 |         |           |   | 1,230,159 |        
|                                                                               
|Income before income taxes                                                      |                                             |                         | 543,574   |         |           |   | 552,666   |         |           |   | 523,987   |        
|Provision for income taxes                                                      |                                             |                         | 131,483   |         |           |   | 153,741   |         |           |   | 138,294   |        
|                                                                               
|Income before cumulative effect of change in
    accounting principle           |                                             |                         | 412,091   |         |           |   | 398,925   |         |           |   | 385,693   |        
|Cumulative effect of change in accounting
    principle, net of tax             |                                             |                         |          |         |           |   |          |         |           |   | (13,330   | )      
|                                                                               
|Net income                                                                      |                                             | $                       | 412,091   |         |           | $ | 398,925   |         |           | $ | 372,363   |        
|                                                                               
|Average common shares  basic                                                   |                                             |                         | 230,142   |         |           |   | 229,913   |         |           |   | 229,401   |        
|Average common shares  diluted                                                 |                                             |                         | 233,475   |         |           |   | 233,856   |         |           |   | 231,582   |        
|Per common share                                                                |                                             |                         |           |         |           |   |           |         |           |   |           |        
|Income before cumulative effect of change in
    accounting principle  basic   |                                             | $                       | 1.79      |         |           | $ | 1.74      |         |           | $ | 1.68      |        
|Income before cumulative effect of change in
    accounting principle  diluted |                                             |                         | 1.77      |         |           |   | 1.71      |         |           |   | 1.67      |        
|Net income  basic                                                              |                                             |                         | 1.79      |         |           |   | 1.74      |         |           |   | 1.62      |        
|Net income  diluted                                                            |                                             |                         | 1.77      |         |           |   | 1.71      |         |           |   | 1.61      |        
|Cash dividends declared                                                         |                                             |                         | 0.845     |         |           |   | 0.750     |         |           |   | 0.670     |        
|                                                                               

See Notes to Consolidated Financial
Statements.

100



---



##### 



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

|                                |                                                                                                                                |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         |         |   |   |         |          |   |   |           |          |         | 
|------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -------------------------- | - | ------------ | ------------- | - | -------------- | -------- |  | ----------- | ------- |  |  | ------ | --------- | ----- | ------ |  | ------- | ------------- | - | - | -------- | -------- | - | ----- | ------- | ------- | - | - | ------- | -------- | - | - | --------- | -------- | ------- | 
|                               
|                               
|                                |                                                                                                                               
|                                |                                                                                                                                |                            |   |              |               |  
|                                |                                                                                                                                |                            |   | Common Stock |               |   | Treasury Stock |          |  | Accumulated |         |  | 
|                                |                                                                                                                                | Preferred Stock            |   |              |               |   |                | Other    |  |             |        
|                                |                                                                                                                                |                            |   |              |               |  
|                                |                                                                                                                                |                            |   |              |               |  
|                                |                                                                                                                                |                            |   |              | Comprehensive |   |                | Retained |  |             |        
|(in thousands)                  |                                                                                                                                | Shares                     |   |              | Amount        |   |                | Shares   |  |             | Amount  |  |  | Shares |           |       | Amount |  |         | Income (Loss) |   |   | Earnings |          |   | Total |        
|                                |                                                                                                                                |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        | 
|                               
|Balance  January 1, 2003       |                                                                                                                                |                            |  |              |               | $ |               |          |  |             | 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 losses on investment securities
    arising during the year, net of reclassification of net realized
    gains  |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (47,427 | ) |   |         |          |   |   |           | (47,427  | )      
|                                | Unrealized losses on cash flow hedging derivatives                                                                             |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (11,081 | ) |   |         |          |   |   |           | (11,081  | )      
|                                | Minimum pension liability adjustment                                                                                           |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (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 losses on investment securities
    arising during the year, net of reclassification of net realized
    gains  |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (22,112 | ) |   |         |          |   |   |           | (22,112  | )      
|                                | Unrealized gains on cash flow hedging derivatives                                                                              |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | 9,694   |   |   |         |          |   |   |           | 9,694    |        
|                                | Minimum pension liability adjustment                                                                                           |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (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 |         
|                               
|                                | Comprehensive income:                                                                                                          |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         |         |   |   |         |          |   |   |           |          |        
|                                | Net income                                                                                                                     |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         |         |   |   |         | 412,091  |   |   |           | 412,091  |        
|                                | Unrealized net losses on investment securities
    arising during the year, net of reclassification of net realized
    losses |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (21,333 | ) |   |         |          |   |   |           | (21,333  | )      
|                                | Unrealized gains on cash flow hedging
    derivatives                                                                          |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | 10,954  |   |   |         |          |   |   |           | 10,954   |        
|                                | Minimum pension liability adjustment                                                                                           |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         | (811    | ) |   |         |          |   |   |           | (811     | )      
|                                |                                                                                                                                |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |        
|                                |                                                                                                                                | Total comprehensive income |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         |         |   |   |         |          |   |   |           |          | 400,901 | 
|                                |                                                                                                                                |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |        
|                                | Cash dividends declared
    ($0.845 per share)                                                                                 |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         |               |   |   |          |          |   |       |         |         |   |   |         | (193,843 | ) |   |           | (193,843 | )      
|                                | Stock options exercised                                                                                                        |                            |   |              |               |   |                |          |  |             |         |  |  |        |           | 2,999 |        |  |         | 1,866         |   |   |          | 36,195   |   |       |         |         |   |   |         |          |   |   |           | 39,194   |        
|                                | Treasury shares purchased                                                                                                      |                            |   |              |               |   |                |          |  |             |         |  |  |        |           |       |        |  |         | (9,591        | ) |   |          | (231,656 | ) |       |         |         |   |   |         |          |   |   |           | (231,656 | )      
|                                | Other                                                                                                                          |                            |   |              |               |   |                |          |  |             |         |  |  |        |           | 4,123 |        |  |         | 226           |   |   |          | 1,144    |   |       |         |         |   |   |         |          |   |   |           | 5,267    |        
|                               
|Balance  December 31,
    2005 |                                                                                                                                |                            |  |              |               | $ |               |          |  |             | 257,866 |  |  | $      | 2,491,326 |       |        |  | (33,760 | )             |   | $ | (693,576 | )        |   | $     | (22,093 | )       |   | $ | 781,844 |          |   | $ | 2,557,501 |         
|                               

See Notes to Consolidated Financial
Statements.

101



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##### 



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

|                                               |                                                                                       |                                                                     |            |            |            |      |            |            |            |   |            |            |            |  
|---------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------------------- | ---------- | ---------- | ---------- | ---- | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | -
|                                               |                                                                                       |                                                                    
|                                               |                                                                                       | Year Ended December 31,                                             |           
|                                              
|                                              
|                                               |                                                                                      
|(in thousands of dollars)                      |                                                                                       |                                                                     | 2005       |            |            | 2004 |            |            | 2003       |  
|                                              
|                                              
|                                               |                                                                                      
|Operating activities                           |                                                                                       |                                                                     |            |            |            |      |            |            |            |   |            |           
|                                               | Net income                                                                            |                                                                     | $          | 412,091    |            |      | $          | 398,925    |            |   | $          | 372,363    |           
|                                               | 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                                         |            |            | 81,299     |      |            |            | 55,062     |   |            |            | 163,993    |  
|                                               |                                                                                       | Depreciation on operating lease assets                              |            |            | 99,342     |      |            |            | 216,444    |   |            |            | 350,550    |  
|                                               |                                                                                       | Amortization of mortgage servicing rights                           |            |            | 18,359     |      |            |            | 19,019     |   |            |            | 25,966     |  
|                                               |                                                                                       | Other depreciation and amortization                                 |            |            | 73,635     |      |            |            | 89,669     |   |            |            | 126,530    |  
|                                               |                                                                                       | Mortgage servicing rights impairment recoveries                     |            |            | (4,371     | )    |            |            | (1,378     | ) |            |            | (14,957    | )
|                                               |                                                                                       | Deferred income tax (benefit) provision                             |            |            | (32,110    | )    |            |            | 140,962    |   |            |            | 258        |  
|                                               |                                                                                       | Decrease (increase) in trading account
    securities               |            |            | 275,765    |      |            |            | (302,041   | ) |            |            | (7,348     | )
|                                               |                                                                                       | Originations of loans held for sale                                 |            |            | (2,572,346 | )    |            |            | (1,858,262 | ) |            |            | (4,221,322 | )
|                                               |                                                                                       | Principal payments on and proceeds from loans
    held for sale     |            |            | 2,501,471  |      |            |            | 1,861,272  |   |            |            | 4,522,972  |  
|                                               |                                                                                       | Losses (gains) on sales of investment
    securities                |            |            | 8,055      |      |            |            | (15,763    | ) |            |            | (5,258     | )
|                                               |                                                                                       | Gains on sales/securitizations of loans                             |            |            | (1,211     | )    |            |            | (14,206    | ) |            |            | (45,610    | )
|                                               |                                                                                       | Gain on sale of branch offices                                      |            |            |           |      |            |            |           |   |            |            | (13,112    | )
|                                               |                                                                                       | Loss on early extinguishment of debt                                |            |            |           |      |            |            |           |   |            |            | 15,250     |  
|                                               |                                                                                       | Restructuring reserve releases                                      |            |            |           |      |            |            | (1,151     | ) |            |            | (6,666     | )
|                                               |                                                                                       | Increase of cash surrender value of bank owned
    life insurance   |            |            | (40,736    | )    |            |            | (42,297    | ) |            |            | (43,028    | )
|                                               |                                                                                       | (Decrease) increase in payable to investors in
    sold loans       |            |            | (119,352   | )    |            |            | 24,541     |   |            |            | 64,986     |  
|                                               |                                                                                       | Other, net                                                          |            |            | (25,192    | )    |            |            | (42,580    | ) |            |            | 40,373     |  
|                                              
|Net cash provided by operating
    activities  |                                                                                       |                                                                     | 674,699    |            |            |      | 528,216    |            |            |   | 1,339,270  |           
|                                              
|Investing activities                           |                                                                                       |                                                                     |            |            |            |      |            |            |            |   |            |           
|                                               | Decrease in interest bearing deposits in banks                                        |                                                                     |            | 7          |            |      |            | 11,229     |            |   |            | 3,673      |           
|                                               | Proceeds from:                                                                        |                                                                     |            |            |            |      |            |            |            |   |            |            |           
|                                               |                                                                                       | Maturities and calls of investment securities                       |            |            | 463,001    |      |            |            | 881,305    |   |            |            | 1,585,979  |  
|                                               |                                                                                       | Sales of investment securities                                      |            |            | 1,995,764  |      |            |            | 2,386,479  |   |            |            | 1,161,325  |  
|                                               | Purchases of investment securities                                                    |                                                                     |            | (2,832,258 | )          |      |            | (2,438,158 | )          |   |            | (4,341,946 | )         
|                                               | Proceeds from sales/securitizations of loans                                          |                                                                     |            |           |            |      |            | 1,534,395  |            |   |            | 2,576,869  |           
|                                               | Net loan and lease originations, excluding sales                                      |                                                                     |            | (1,012,345 | )          |      |            | (4,216,309 | )          |   |            | (4,506,843 | )         
|                                               | Purchases of equipment for operating lease assets                                     |                                                                     |            | (31,363    | )          |      |            | (14,666    | )          |   |            |           |           
|                                               | Proceeds from sale of operating lease assets                                          |                                                                     |            | 280,746    |            |      |            | 451,264    |            |   |            | 572,596    |           
|                                               | Sale of branch offices                                                                |                                                                     |            |           |            |      |            |           |            |   |            | (81,367    | )         
|                                               | Proceeds from sale of premises and equipment                                          |                                                                     |            | 1,164      |            |      |            | 1,188      |            |   |            | 7,382      |           
|                                               | Purchases of premises and equipment                                                   |                                                                     |            | (57,288    | )          |      |            | (56,531    | )          |   |            | (64,571    | )         
|                                               | Proceeds from sales of other real estate                                              |                                                                     |            | 50,614     |            |      |            | 16,388     |            |   |            | 14,083     |           
|                                               | Consolidation of cash of securitization trust                                         |                                                                     |            |           |            |      |            |           |            |   |            | 58,500     |           
|                                              
|Net cash used for investing
    activities     |                                                                                       |                                                                     | (1,141,958 | )          |            |      | (1,443,416 | )          |            |   | (3,014,320 | )         
|                                              
|Financing activities                           |                                                                                       |                                                                     |            |            |            |      |            |            |            |   |            |           
|                                               | Increase in deposits                                                                  |                                                                     |            | 1,655,736  |            |      |            | 2,273,046  |            |   |            | 1,177,324  |           
|                                               | Increase (decrease) in short-term borrowings                                          |                                                                     |            | 682,027    |            |      |            | (245,071   | )          |   |            | (688,712   | )         
|                                               | 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                                         |                                                                     |            | 809,589    |            |      |            | 1,088      |            |   |            | 270,000    |           
|                                               | Maturity of Federal Home Loan Bank advances                                           |                                                                     |            | (925,030   | )          |      |            | (3,000     | )          |   |            | (10,000    | )         
|                                               | Proceeds from issuance of long-term debt                                              |                                                                     |            |           |            |      |            | 925,000    |            |   |            | 2,075,000  |           
|                                               | Maturity of long-term debt                                                            |                                                                     |            | (1,719,403 | )          |      |            | (1,455,000 | )          |   |            | (895,250   | )         
|                                               | Purchase of minority interests in consolidated
    subsidiaries                       |                                                                     |            | (107,154   | )          |      |            |           |            |   |            |           |           
|                                               | Dividends paid on common stock                                                        |                                                                     |            | (200,628   | )          |      |            | (168,075   | )          |   |            | (151,023   | )         
|                                               | Repurchases of common stock                                                           |                                                                     |            | (231,656   | )          |      |            |           |            |   |            | (81,061    | )         
|                                               | Net proceeds from issuance of common stock                                            |                                                                     |            | 39,194     |            |      |            | 47,239     |            |   |            | 8,082      |           
|                                              
|Net cash provided by financing
    activities  |                                                                                       |                                                                     | 2,675      |            |            |      | 1,424,057  |            |            |   | 1,652,790  |           
|                                              
|Change in cash and cash equivalents            |                                                                                       |                                                                     | (464,584   | )          |            |      | 508,857    |            |            |   | (22,260    | )         
|Cash and cash equivalents at beginning of year |                                                                                       |                                                                     | 1,505,360  |            |            |      | 996,503    |            |            |   | 1,018,763  |           
|                                              
|Cash and cash equivalents at end of
    year   |                                                                                       | $                                                                   | 1,040,776  |            |            | $    | 1,505,360  |            |            | $ | 996,503    |           
|                                              
|Supplemental disclosures:                      |                                                                                       |                                                                     |            |            |            |      |            |            |            |   |            |           
|                                               | Income taxes paid                                                                     |                                                                     | $          | 230,186    |            |      | $          | 34,904     |            |   | $          | 72,128     |           
|                                               | Interest paid                                                                         |                                                                     |            | 640,679    |            |      |            | 422,060    |            |   |            | 469,331    |           
|                                               | Non-cash activities                                                                   |                                                                     |            |            |            |      |            |            |            |   |            |            |           
|                                               |                                                                                       | Mortgage loans exchanged for mortgage-backed
    securities         |            |            | 15,058     |      |            |            | 115,929    |   |            |            | 354,200    |  
|                                               |                                                                                       | Common stock dividends accrued, paid in
    subsequent year         |            |            | 28,877     |      |            |            | 35,662     |   |            |            | 31,113     |  

See Notes to Consolidated Financial
Statements.

102



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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 private mortgage, 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, North Carolina,
    Pennsylvania, South Carolina, and Tennessee. Huntington has
    foreign offices in the Cayman Islands and 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 or are a variable interest entity (VIE) in
    which Huntington absorbs the majority of expected losses are
    consolidated. VIEs in which Huntington does not absorb the
    majority of expected losses are not consolidated. For
    consolidated entities where Huntington holds less than a 100%
    interest, Huntington recognizes a minority interest liability
    (included in accrued expenses and other liabilities) for the
    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. Those investments in non-marketable
    securities 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 accrued income and other assets
    and Huntingtons proportional interest in the
    investments earnings are included in other non-interest
    income. Huntington evaluates VIEs in which it holds a beneficial
    interest for consolidation. VIEs, as defined by the Financial
    Accounting Standards Board (FASB) Interpretation
    (FIN) No. 46 (Revised 2003), 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 (Revised 2003) on July 1, 2003 and, therefore,
    consolidates these VIEs when it holds a majority of VIEs
    beneficial interests. The effect of adopting FIN 46
    (Revised 2003) in 2003 resulted in a cumulative effect of change
    in accounting of $13.3 million.



| |                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 account 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,
    prior to 2005, securities held to maturity. Unrealized gains or
    losses on investment securities designated as available for sale
    are reported as a separate component of accumulated other
    comprehensive income/loss 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 securities loss.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Securities transactions are recognized on the
    trade date (the date the order to buy or sell is executed). 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.                                                                                                                                                                                                                                                                                                                                                        
|
| | Non-marketable 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Statement of Financial Accounting Standards
    (Statement) No. 115, Accounting for Certain Investments
    in Debt and Equity Securities, Securities and Exchange
    Commission (SEC) Staff Accounting Bulletin (SAB) 59,
    Accounting for Noncurrent Marketable Equity Securities,
    FASB Staff Position (FSP) FAS 115-1 and FAS 124-1,
    The Meaning of Other-Than-Temporary Impairment and Its
    Application to Certain Investments,and EITF Issue
    No. 99-20, Recognition of Interest Income and Impairment
    on Purchased and Retained Beneficial Interests in Securitized
    Financial Assets,provide guidance on determining when an
    investment is other-than-temporarily impaired. Investments are
    reviewed quarterly for indicators of other-than-temporary

103



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##### 



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



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | impairment. This determination requires
    significant judgment. In making this judgment, Management
    evaluates, among other factors, the duration and extent to which
    the fair value of an investment is less than its cost and intent
    and ability to hold the investment. Investments with an
    indicator are further evaluated to determine the likelihood of a
    significant adverse effect on the fair value and amount of the
    impairment as necessary. If market or economic conditions
    change, future impairments may occur.



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 direct 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. One residual value
    insurance policy covers all vehicles leased between
    October 1, 2000 and April 30, 2002, and has an
    associated total payment cap of $50 million. Any losses
    above the cap result in additional depreciation expense. A
    second policy covers all originations from May 2002 through June
    2005, and does not have a cap. A third policy, similar in
    structure to the referenced second policy, went into effect
    July 1, 2005, and covers all originations for a period of
    one year. Leases covered by the last two policies qualify for
    the direct financing method of accounting. Leases covered by the
    first policy 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 other
    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 ALG Black Book valuations. This
    insurance, however, does not cover residual losses below ALG
    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 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. (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 with
    servicing retained, an asset is also recorded for the right to
    service the loans sold, 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 CREDIT
    LOSSES The allowance for
    credit losses (ACL) reflects Managements judgment as
    to the level of the ACL considered appropriate to absorb
    probable inherent credit losses. 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 ACL consists of two components, the
    transaction reserve, which includes a specific reserve in
    accordance with Statement No. 114, and the economic
    reserve. Loan and lease losses related to the transaction
    reserve are recognized and measured pursuant to Statement
    No. 5, Accounting for Contingencies,and Statement
    No. 114, while losses related to the economic reserve are
    recognized and measured pursuant to Statement No. 5. The
    two components are more fully described below.                                                                                                                                          

Transaction
Reserve

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | The transaction reserve component of the ACL
    includes both (a) an estimate of loss based on
    characteristics of each commercial and consumer loan, lease, or
    loan commitment in the portfolio and (b) an estimate of
    loss based on an impairment review of each loan greater than
    $500,000 that is considered to be impaired.                                                                                                                                                                                                                                                                                                         | 
|
| | For middle market commercial and industrial,
    middle market commercial real estate, and small business loans,
    the estimate of loss is based on characteristics of each loan
    through the use of a standardized loan grading system, which 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. | 
|
| | Management analyzes each middle market commercial
    and industrial, middle market commercial real estate, or small
    business loan over $500,000 for impairment when the loan is
    non-performing or has a grade of substandard or lower. The
    impairment tests are done in accordance with applicable
    accounting standards and regulations. For loans determined to be
    impaired, an estimate of loss is reserved for the amount of the
    impairment.                                                                                                                                                                                 | 
|
| | In the case of more homogeneous portfolios, such
    as consumer loans and leases, and residential mortgage loans,
    the determination of the transaction reserve 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.                                                                                                                                                                                                                                                                         | 

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| |                                                                                                                                                                                                                                                                                                                                    | 
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | Models and analyses are updated frequently to
    capture the recent behavioral characteristics of the subject
    portfolios, as well as any changes in loss mitigation or credit
    origination strategies. Adjustments to the reserve factors are
    made as needed based on observed results of the portfolio
    analytics. | 

Economic
Reserve

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | Changes in the economic environment are a
    significant judgmental factor Management considers in
    determining the appropriate level of the ACL. The economic
    reserve incorporates Managements determination of the
    impact on the portfolio of risks associated with the general
    economic environment. 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 ACL calculation, Management developed a revised methodology
    for calculating the economic reserve portion of the ACL 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 are 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. Other intangible
    assets are amortized on a straight-line basis over their
    estimated useful lives through 2011. Goodwill is not amortized,
    but is evaluated for impairment on an annual basis at
    September 30th of each year.
| 
| | MORTGAGE BANKING
    ACTIVITIES Loans held for
    sale include 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.
| 
| | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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| |                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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,
    are 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 one of its
    residual value insurance policies and whether it expects
    aggregate claims under such policies to exceed the cap. 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. 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. The reissuance of shares in
    treasury for acquisitions, stock option exercises, or for other
    corporate purposes, is recorded at 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 are
    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) |                                                      | 2005                    |       |       | 2004 |   |       | 2003  |  
|                                                  
|                                                  
|                                                   |                                                     
|Assumptions                                        |                                                      |                         |       |       |      |   |       |       |   |   |       |      
|                                                   | Risk-free interest rate                              |                         |       | 4.07  | %    |   |       | 3.78  | % |   |       | 4.45  | %
|                                                   | Expected dividend yield                              |                         |       | 3.34  |      |   |       | 3.20  |   |   |       | 3.11  |  
|                                                   | Expected volatility of Huntingtons common
    stock |                         |       | 26.3  |      |   |       | 30.9  |   |   |       | 33.8  |  
|                                                   | Expected option term (years)                         |                         |       | 6.0   |      |   |       | 6.0   |   |   |       | 6.0   |  
|                                                  
|Pro forma results                                  |                                                      |                         |       |       |      |   |       |       |   |   |       |      
|                                                   | Net income, as reported                              |                         | $     | 412.1 |      |   | $     | 398.9 |   |   | $     | 372.4 |  
|                                                   | Less pro forma expense related to options granted    |                         |       | (11.9 | )    |   |       | (14.4 | ) |   |       | (10.9 | )
|                                                  
|Pro forma net income                               |                                                      | $                       | 400.2 |       |      | $ | 384.5 |       |   | $ | 361.5 |      
|                                                  
|Net income per common share:                       |                                                      |                         |       |       |      |   |       |       |   |   |       |      
|                                                   | Basic, as reported                                   |                         | $     | 1.79  |      |   | $     | 1.74  |   |   | $     | 1.62  |  
|                                                   | Basic, pro forma                                     |                         |       | 1.74  |      |   |       | 1.67  |   |   |       | 1.58  |  
|                                                   | Diluted, as reported                                 |                         |       | 1.77  |      |   |       | 1.71  |   |   |       | 1.61  |  
|                                                   | Diluted, pro forma                                   |                         |       | 1.71  |      |   |       | 1.64  |   |   |       | 1.56  |  



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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. In 2005, the Capital Markets Group was
    removed from the Treasury/Other segment and combined with the
    Private Financial Group to form the Private Financial and
    Capital Markets Group segment. Since the Capital Markets Group
    is now managed through the Private Financial Group, combining
    these two segments better reflects the management accountability
    and decision making structure. Prior periods reflect this change.
| 
| | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

2. NEW ACCOUNTING
STANDARDS



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FASB INTERPRETATION NO. 47, Accounting
    for Conditional Asset Retirement Obligations(FIN 47) In March
    2005, the FASB issued FIN 47, which clarifies the term
    conditional asset retirement obligation as used in
    Statement No. 143, Accounting for Asset Retirement
    Obligations. FIN 47 refers to a legal obligation to
    perform an asset retirement activity in which the timing and/or
    method of settlement are conditional on a future event that may
    or may not be within the control of the entity. An entity is
    required to recognize a liability for the fair value of a
    conditional asset retirement obligation if the fair value of the
    liability can be reasonably estimated. The impact of adopting
    the provisions of FIN 47 in the fourth quarter of 2005 was
    not material.

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|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FINANCIAL ACCOUNTING STANDARDS BOARD
    (FASB) STATEMENT NO. 154, Accounting Changes and
    Error Corrections
    a replacement of APB Opinion No. 20 and FASB
    Statement No. 3(Statement
    No. 154)  In May 2005, the FASB issued
    Statement 154, which replaces APB Opinion No. 20,
    Accounting Changes, and Statement No. 3,
    Reporting Accounting Changes in Interim Financial
    Statements. Statement 154 changes the requirements for the
    accounting for and reporting of a change in accounting
    principle. Statement 154 is effective for accounting changes and
    corrections of errors made in fiscal years beginning after
    December 15, 2005. The impact of this new pronouncement is
    not expected to be material to Huntingtons financial
    condition, results of operations, or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| 
| | STATEMENT NO. 123 (REVISED 2004),
    Share-Based Payment(STATEMENT
    NO. 123R) Statement
    123R was issued in December 2004, 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 Statement No. 123, Accounting
    for Stock-Based Compensation(Statement 123), and supersedes
    Accounting Principles Board (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. Effective January 1, 2006,
    Huntington has adopted Statement 123R. The impact of adoption to
    Huntingtons results of operations is similar to the pro
    forma disclosures presented in Note 1. (See Note 1
    for the current accounting policy on share-based payments and
    Note 17 for the share-based payment disclosures).                                 
| 
| | STAFF ACCOUNTING BULLETIN NO. 107,
    Share Based Payments(SAB 107) On
    March 29, 2005, the SEC issued SAB 107 to provide
    public companies additional guidance in applying the provisions
    of Statement No. 123R. Among other things, SAB 107
    describes the SEC staffs expectations in determining the
    assumptions that underlie the fair value estimates and discusses
    the interaction of Statement 123R with certain existing SEC
    guidance. Huntington has adopted the provisions of SAB 107
    in conjunction with the adoption of Statement 123R beginning
    January 1, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| | PROPOSED INTERPRETATION OF STATEMENT
    NO. 109, Accounting for Uncertain Tax
    Positions In July
    2005, the FASB issued an exposure draft of a proposed
    interpretation on accounting for uncertain tax positions under
    Statement No. 109, Accounting for Income Taxes. The
    exposure draft contains proposed guidance on the recognition and
    measurement of uncertain tax positions. If adopted as proposed,
    the Company would be required to recognize, in its financial
    statements, the best estimate of the impact of a tax position,
    only if that tax position is probable of being sustained on
    audit based solely on the technical merits of the position. The
    proposed effective date for the interpretation was originally
    scheduled for December 31, 2005, with a cumulative effect
    of a change in accounting principle to be recorded upon the
    initial adoption. In January 2006, FASB decided to make
    forthcoming rules on certain tax positions effective in 2007.
    FASB also moved to a view that such recognition should be
    changed from the tax position being probable of being
    sustained on audit based solely on the technical merits of the
    position to a less stringent benchmark of more
    likely than not that the position would be sustained on
    audit or final resolution through legal action or settlement.
    FASB expects to publish the planned rules on uncertain tax
    positions in March or April of 2006. Huntington is currently
    evaluating the impact this proposed interpretation will have on
    its consolidated financial statements.
| 
| | PROPOSED FASB AMENDMENT TO STATEMENT NO. 140,
    Servicing Rights In
    August 2005, the FASB issued an exposure draft, Accounting
    for Servicing of Financial Assets, an amendment of FASB
    Statement No. 140. This exposure draft would amend
    Statement No. 140, Accounting for Transfers and
    Servicing of Financial Assets and Extinguishments of
    Liabilities, and would require that all separately
    recognized servicing rights be initially measured at fair value,
    if practicable. For each class of separately recognized
    servicing assets and liabilities, this exposure draft would
    permit Huntington to choose either to report servicing assets
    and liabilities at fair value or at amortized cost. Under the
    fair value approach, servicing assets and liabilities will be
    recorded at fair value at each reporting date with changes in
    fair value recorded in earnings in the period in which the
    changes occur. Under the amortized cost method, servicing assets
    and liabilities are amortized in proportion to and over the
    period of estimated net servicing income or net servicing loss
    and are assessed for impairment based on fair value at each
    reporting date. The statement would be effective for fiscal
    years beginning after September 15, 2006, and allows early
    adoption as of the beginning of a fiscal year for which the
    entity has not previously issued interim financial statements.                                                                                                                                                          

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

3. INVESTMENT
SECURITIES

Investment securities at December 31 were as
follows:


|                            |                            |                |           |            |             |   |        |              |  |   |            |         |   |   |           |           | 
|--------------------------- | -------------------------- | -------------- | --------- | ---------- | ----------- | - | ------ | ------------ |  | - | ---------- | ------- | - | - | --------- | --------- | 
|                            |                            |                |           |            |             |  
|                            |                            |                |           | Unrealized |             |   |       
|                            |                            |                |           |            |             |  
|                            |                            |                |           |            |             |  
|                            |                            |                |           |            |             |   |       
|(in thousands of dollars)   |                            | Amortized Cost |           |            | Gross Gains |   |        | Gross Losses |  |   | Fair Value |        
|                           
|2005                        |                            |                |           |            |             |   |        |              |  |   |            |         |   |   |           |          
|U.S. Treasury               |                            | $              | 24,199    |            |             | $ | 131    |              |  | $ | (655       | )       |   | $ | 23,675    |          
|Federal agencies            |                            |                |           |            |             |   |        |              |  |   |            |         |   |   |           |          
|                            | Mortgage-backed securities |                |           | 1,309,598  |             |   |        | 680          |  |   |            | (31,256 | ) |   |           | 1,279,022 | 
|                            | Other agencies             |                |           | 349,385    |             |   |        | 115          |  |   |            | (13,034 | ) |   |           | 336,466   | 
|                           
|Total Federal agencies      |                            |                | 1,658,983 |            |             |   | 795    |              |  |   | (44,290    | )       |   |   | 1,615,488 |          
|Asset-backed securities     |                            |                | 1,788,694 |            |             |   | 4,990  |              |  |   | (4,904     | )       |   |   | 1,788,780 |          
|Municipal securities        |                            |                | 544,781   |            |             |   | 5,003  |              |  |   | (4,934     | )       |   |   | 544,850   |          
|Private label CMO           |                            |                | 402,959   |            |             |   | 171    |              |  |   | (9,561     | )       |   |   | 393,569   |          
|Other securities            |                            |                | 159,522   |            |             |   | 751    |              |  |   | (115       | )       |   |   | 160,158   |          
|                           
|Total investment securities |                            | $              | 4,579,138 |            |             | $ | 11,841 |              |  | $ | (64,459    | )       |   | $ | 4,526,520 |          
|                           

|                            |                            |                |           |            |             |   |        |              |  |   |            |         |   |   |           |         | 
|--------------------------- | -------------------------- | -------------- | --------- | ---------- | ----------- | - | ------ | ------------ |  | - | ---------- | ------- | - | - | --------- | ------- | 
|                            |                            |                |           |            |             |  
|                            |                            |                |           | 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 Federal agencies      |                            |                | 1,972,800 |            |             |   | 1,370  |              |  |   | (28,408    | )       |   |   | 1,945,762 |        
|Asset-backed securities     |                            |                | 1,198,296 |            |             |   | 2,690  |              |  |   | (1,004     | )       |   |   | 1,199,982 |        
|Municipal securities        |                            |                | 410,614   |            |             |   | 7,404  |              |  |   | (1,794     | )       |   |   | 416,224   |        
|Private label CMO           |                            |                | 462,394   |            |             |   | 866    |              |  |   | (5,233     | )       |   |   | 458,027   |        
|Other securities            |                            |                | 189,513   |            |             |   | 4,962  |              |  |   | (661       | )       |   |   | 193,814   |        
|                           
|Total investment securities |                            | $              | 4,258,604 |            |             | $ | 17,654 |              |  | $ | (37,313    | )       |   | $ | 4,238,945 |        
|                           

There were no securities classified as held to
maturity at December 31, 2005. Included in investment
securities at December 31, 2004, were $2.0 million of
municipal securities classified as held to maturity. These
securities were accounted for at their historical cost. In the
first quarter of 2005, Huntington sold $1.5 million of the
securities classified as held to maturity and transferred the
remaining securities to available for sale. At the time of the
transfer, a nominal unrealized gain on the transferred
securities was recognized in other comprehensive income.

Other securities include Federal Home Loan Bank
and Federal Reserve Bank stock, corporate debt and marketable
equity securities.

Contractual maturities of investment securities
as of December 31 were:

|                                 |  |                |           |  |            |   |           |                |  |   |            |  |  |   |           | 
|-------------------------------- |  | -------------- | --------- |  | ---------- | - | --------- | -------------- |  | - | ---------- |  |  | - | --------- | 
|                                 |  |                |           | 
|                                 |  | 2005           |           |  | 2004       |  
|                                
|                                
|                                 | 
|(in thousands of dollars)        |  | Amortized Cost |           |  | Fair Value |   |           | Amortized Cost |  |   | Fair Value | 
|                                
|Under 1 year                     |  | $              | 1,765     |  |            | $ | 1,765     |                |  | $ | 8,597      |  |  | $ | 8,653     | 
|1-5 years                        |  |                | 394,254   |  |            |   | 382,549   |                |  |   | 610,189    |  |  |   | 606,140   | 
|6-10 years                       |  |                | 199,670   |  |            |   | 196,154   |                |  |   | 584,619    |  |  |   | 575,399   | 
|Over 10 years                    |  |                | 3,838,730 |  |            |   | 3,800,751 |                |  |   | 2,964,917  |  |  |   | 2,957,796 | 
|Non-marketable equity securities |  |                | 89,661    |  |            |   | 89,661    |                |  |   | 84,756     |  |  |   | 84,756    | 
|Marketable equity securities     |  |                | 55,058    |  |            |   | 55,640    |                |  |   | 5,526      |  |  |   | 6,201     | 
|                                
|Total investment securities      |  | $              | 4,579,138 |  |            | $ | 4,526,520 |                |  | $ | 4,258,604  |  |  | $ | 4,238,945 | 
|                                

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

At December 31, 2005, 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
$1.4 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,
2005.

The following table provides the gross unrealized
losses and fair value of temporarily impaired securities,
aggregated by investment category and length of time the
individual securities have been in a continuous loss position,
at December 31, 2005.

|                                          |                            |                     |           |            |                |   |         |            |            |   |           |         |  |            |         |         |        |   |           |           |  |   |         |         |  
|----------------------------------------- | -------------------------- | ------------------- | --------- | ---------- | -------------- | - | ------- | ---------- | ---------- | - | --------- | ------- |  | ---------- | ------- | ------- | ------ | - | --------- | --------- |  | - | ------- | ------- | -
|                                          |                            |                     |           |            |                |  
|                                          |                            | Less than 12 Months |           |            | Over 12 Months |   |         | Total      |           
|                                          |                            |                     |           |            |                |   |         |            |           
|                                          |                            |                     |           | Unrealized |                |   |         |            | Unrealized |   |           |         |  | Unrealized |        
|(in thousands of dollars)                 |                            | Fair Value          |           |            | Losses         |   |         | Fair Value |            |   | Losses    |         |  | Fair Value |         |         | Losses |  
|                                         
|U.S. Treasury                             |                            | $                   |          |            |                | $ |        |            |            | $ | 19,857    |         |  | $          | (655    | )       |        | $ | 19,857    |           |  | $ | (655    | )      
|Federal agencies                          |                            |                     |           |            |                |   |         |            |            |   |           |         |  |            |         |         |        |   |           |           |  |   |         |        
|                                          | Mortgage-backed securities |                     |           | 658,407    |                |   |         | (13,536    | )          |   |           | 431,877 |  |            |         | (17,720 | )      |   |           | 1,090,284 |  |   |         | (31,256 | )
|                                          | Other agencies             |                     |           |           |                |   |         |           |            |   |           | 334,051 |  |            |         | (13,034 | )      |   |           | 334,051   |  |   |         | (13,034 | )
|                                         
|Total Federal agencies                    |                            |                     | 658,407   |            |                |   | (13,536 | )          |            |   | 765,928   |         |  |            | (30,754 | )       |        |   | 1,424,335 |           |  |   | (44,290 | )      
|Asset-backed securities                   |                            |                     | 725,215   |            |                |   | (4,739  | )          |            |   | 87,379    |         |  |            | (165    | )       |        |   | 812,594   |           |  |   | (4,904  | )      
|Municipal securities                      |                            |                     | 214,634   |            |                |   | (2,976  | )          |            |   | 51,334    |         |  |            | (1,958  | )       |        |   | 265,968   |           |  |   | (4,934  | )      
|Private label CMO                         |                            |                     | 42,501    |            |                |   | (750    | )          |            |   | 336,309   |         |  |            | (8,811  | )       |        |   | 378,810   |           |  |   | (9,561  | )      
|Other securities                          |                            |                     | 3,219     |            |                |   | (32     | )          |            |   | 2,540     |         |  |            | (83     | )       |        |   | 5,759     |           |  |   | (115    | )      
|                                         
|Total temporarily impaired
    securities |                            | $                   | 1,643,976 |            |                | $ | (22,033 | )          |            | $ | 1,263,347 |         |  | $          | (42,426 | )       |        | $ | 2,907,323 |           |  | $ | (64,459 | )      
|                                         

As of December 31, 2005, Management has
evaluated these investment securities with unrealized losses and
all non-marketable securities for impairment. The unrealized
losses were caused by interest rate increases. The contractual
terms and/or cash flows of the investments do not permit the
issuer to settle the securities at a price less than the
amortized cost. Huntington has the intent and ability to hold
these investment securities until the fair value is recovered,
which may be maturity, and therefore, does not consider them to
be other-than-temporarily impaired at December 31, 2005.

In 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
2004 as non-interest income. There were no other-than-temporary
impairments of any securities recognized in 2005 or 2003.

Gross gains from sales of securities of
$8.5 million, $34.7 million, and $14.5 million,
were realized in 2005, 2004, and 2003, respectively. Gross
losses totaled $16.6 million in 2005, $19.0 million in
2004, and $9.2 million in 2003.

4. LOANS AND
LEASES

At December 31, 2005, $2.4 billion of
commercial and industrial loans were pledged to secure potential
discount window borrowings from the Federal Reserve Bank. At
this same date, $4.2 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.


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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

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)                                          |                                           | 2005            |           |           | 2004 |  
|                                                                  
|Commercial and industrial                                          |                                           |                 |           |           |      |   |           |          
|                                                                   | Lease payments receivable                 |                 | $         | 486,488   |      |   | $         | 389,177   | 
|                                                                   | Estimated residual value of leased assets |                 |           | 39,570    |      |   |           | 37,704    | 
|                                                                  
|Gross investment in commercial lease financing
    receivables     |                                           |                 | 526,058   |           |      |   | 426,881   |          
|Deferred origination fees and costs                                |                                           |                 | 3,125     |           |      |   | 1,980     |          
|Unearned income                                                    |                                           |                 | (58,476   | )         |      |   | (39,414   | )        
|                                                                  
|Total net investment in commercial lease
    financing receivables |                                           | $               | 470,707   |           |      | $ | 389,447   |          
|                                                                  
|Consumer                                                           |                                           |                 |           |           |      |   |           |          
|                                                                   | Lease payments receivable                 |                 | $         | 1,209,088 |      |   | $         | 1,453,909 | 
|                                                                   | Estimated residual value of leased assets |                 |           | 1,296,303 |      |   |           | 1,258,160 | 
|                                                                  
|Gross investment in consumer lease financing
    receivables       |                                           |                 | 2,505,391 |           |      |   | 2,712,069 |          
|Deferred origination fees and costs                                |                                           |                 | (565      | )         |      |   | (2,130    | )        
|Unearned income                                                    |                                           |                 | (215,811  | )         |      |   | (266,484  | )        
|                                                                  
|Total net investment in consumer lease
    financing receivables   |                                           | $               | 2,289,015 |           |      | $ | 2,443,455 |          
|                                                                  

The future lease rental payments due from
customers on direct financing leases at December 31, 2005,
totaled $1.2 billion and were as follows: $0.5 billion
in 2006; $0.4 billion in 2007; $0.2 billion in 2008;
$0.1 billion in 2009, and less than $0.1 billion
thereafter. Included in the estimated residual value of leased
consumer assets was a valuation reserve of $5.1 million and
$4.2 million at December 31, 2005 and 2004,
respectively, for expected residual value impairment not covered
by residual value insurance.

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 for the year ended December 31 are summarized as
follows:


|                           |                                                               |      |        |          |  
|-------------------------- | ------------------------------------------------------------- | ---- | ------ | -------- | -
|(in thousands of dollars)  |                                                               | 2005 |       
|                          
|Balance, beginning of year |                                                               | $    | 89,177 |         
|                           | Loans made                                                    |      |        | 219,728  |  
|                           | Repayments                                                    |      |        | (231,814 | )
|                           | Changes due to status of executive officers and
    directors |      |        | (603     | )
|                          
|Balance, end of year       |                                                               | $    | 76,488 |         
|                          

NON-PERFORMING ASSETS AND PAST DUE
LOANS

At December 31, 2005 and 2004, 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)                   |  | 2005            |         |  | 2004 |  
|                                           
|Commercial and industrial                   |  | $               | 55,273  |  |      | $ | 34,692  | 
|Commercial real estate                      |  |                 | 18,309  |  |      |   | 8,670   | 
|Residential mortgage                        |  |                 | 17,613  |  |      |   | 13,545  | 
|Home equity                                 |  |                 | 10,720  |  |      |   | 7,055   | 
|                                           
|Total non-performing loans                  |  |                 | 101,915 |  |      |   | 63,962  | 
|Other real estate, net                      |  |                 | 15,240  |  |      |   | 44,606  | 
|                                           
|Total non-performing assets                 |  | $               | 117,155 |  |      | $ | 108,568 | 
|                                           
|Accruing loans past due 90 days or
    more |  | $               | 56,138  |  |      | $ | 54,283  | 

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

The amount of interest that would have been
recorded under the original terms for total loans classified as
non-accrual or renegotiated was $7.7 million for 2005,
$3.3 million for 2004, and $6.3 million for 2003.
Amounts actually collected and recorded as interest income for
these loans totaled $1.9 million, $1.9 million, and
$3.0 million for 2005, 2004, and 2003, respectively.

5. LOAN SALES AND
SECURITIZATIONS

AUTOMOBILE LOANS

Huntington sold $0.4 billion,
$1.5 billion and $2.1 billion of automobile loans in
2005, 2004 and 2003, respectively. Pre-tax gains from the sales
of automobile loans totaled $1.2 million,
$14.2 million and $40.0 million in 2005, 2004 and
2003, respectively.


During 2005, Huntington used the following
assumptions to measure fair value of retained servicing rights
at the time of the sale: estimated servicing income of 0.55%,
requires adequate compensation for servicing of approximately
0.62%, receives other ancillary fees of approximately 0.33%,
applies a discount rate of 10% and receives an estimated return
on payments prior to remittance to investors. The servicing
asset is then amortized against servicing income. 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.

Changes in the carrying value of automobile loan
servicing rights for the three years ended December 31,
2005, and the fair value at the end of each period were as
follows:

|                                  |  |                         |         |   |      |   |         |      |  |   |         |  
|--------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                  |  |                        
|                                  |  | Year Ended December 31, |        
|                                 
|                                 
|                                  | 
|(in thousands of dollars)         |  | 2005                    |         |   | 2004 |   |         | 2003 | 
|                                  |  |                         |         |   |      |  
|                                 
|Carrying value, beginning of year |  | $                       | 20,286  |   |      | $ | 17,662  |      |  | $ | 12,676  |  
|New servicing assets              |  |                         | 2,113   |   |      |   | 16,249  |      |  |   | 25,106  |  
|Amortization                      |  |                         | (11,528 | ) |      |   | (13,625 | )    |  |   | (8,434  | )
|Impairment charges                |  |                         | (66     | ) |      |   |        |      |  |   |        |  
|Adoption of FIN 46                |  |                         |        |   |      |   |        |      |  |   | (11,686 | )
|                                 
|Carrying value, end of year       |  | $                       | 10,805  |   |      | $ | 20,286  |      |  | $ | 17,662  |  
|                                 
|Fair value, end of year           |  | $                       | 11,658  |   |      | $ | 21,361  |      |  | $ | 18,501  |  

Huntington has retained servicing
responsibilities and receives annual servicing fees from 0.55%
to 1.00% of the outstanding loan balances. Servicing income, net
of amortization of capitalized servicing assets, included in
other non-interest income amounted to $12.5 million in
2005, $10.1 million in 2004, and $4.3 million in 2003.
The unpaid principal balance of automobile loans serviced for
third parties was $1.7 billion, $2.3 billion, and
$1.8 billion at December 31, 2005, 2004, and 2003,
respectively.

There were no automobile loan securitizations in
2005 or 2004. As a result of adopting FIN 46 (subsequently
amended as FIN 46R) 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. 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. There were no
impairment charges related to Huntingtons retained
interest in automobile loans during 2004 and 2003.

RESIDENTIAL MORTGAGE LOANS

There were no sales of residential mortgage loans
held for investment in 2005 and 2003. 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. Huntington also exchanged for federal agency
mortgage-backed securities $15.1 million,
$115.9 million and $354.2 million of residential
mortgage loans in 2005, 2004 and 2003, respectively, and
retained all of the resulting securities. Accordingly, these
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.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

The unpaid principal balance of residential
mortgage loans serviced for third parties was $7.3 billion,
$6.9 billion, and $6.4 billion at December 31,
2005, 2004, and 2003, respectively.

A summary of loans serviced at December 31,
2005 and for the year ended, were as follows:

|                                          |  |                      |  |                   |         | 
|----------------------------------------- |  | -------------------- |  | ----------------- | ------- | 
|                                          |  |                      |  | Year Ended        |        
|(in millions of dollars)                  |  | At December 31, 2005 |  | December 31, 2005 |        
|                                         
|                                         
|                                          | 
|                                          |  | Principal Balance    |  | Average Balance   |        
|                                         
|Loans serviced for others                 |  | $ 7,276              |  |                   | $ 7,013 | 
|Loans held in portfolio and held for sale |  | 4,306                |  |                   | 4,227   | 
|                                         
|Loans serviced                            |  | $11,582              |  |                   | $11,240 | 
|                                         

Changes in the carrying value of mortgage
servicing rights and the associated valuation allowance for the
three years ended December 31, 2005, and the fair value at
the end of each period were as follows:

|                           |  |                         |         |   |      |   |         |      |  |   |         |  
|-------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                           |  |                        
|                           |  | Year Ended December 31, |        
|                          
|                          
|                           | 
|(in thousands of dollars)  |  | 2005                    |         |   | 2004 |   |         | 2003 | 
|                          
|Balance, beginning of year |  | $                       | 77,107  |   |      | $ | 71,087  |      |  | $ | 29,271  |  
|New servicing assets       |  |                         | 28,260  |   |      |   | 23,738  |      |  |   | 52,896  |  
|Amortization               |  |                         | (18,359 | ) |      |   | (19,019 | )    |  |   | (25,966 | )
|Impairment recovery        |  |                         | 4,371   |   |      |   | 1,378   |      |  |   | 14,957  |  
|Sales                      |  |                         | (120    | ) |      |   | (77     | )    |  |   | (71     | )
|                          
|Balance, end of year       |  | $                       | 91,259  |   |      | $ | 77,107  |      |  | $ | 71,087  |  
|                          
|Fair value, end of year    |  | $                       | 109,560 |   |      | $ | 84,084  |      |  | $ | 74,684  |  

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. No other-than-temporary impairment was
recognized in the three years ended December 31, 2005.
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 mortgage banking
income, which is reflected in non-interest income in
Huntingtons consolidated income statement.

Changes in the impairment allowance for mortgage
servicing rights for the three years ended December 31,
2005, were as follows:

|                           |  |                          |         |   |      |   |         |      |  |   |         |  
|-------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                           |  |                         
|                           |  | Year Ending December 31, |        
|                          
|                          
|                           | 
|(in thousands of dollars)  |  | 2005                     |         |   | 2004 |   |         | 2003 | 
|                           |  |                          |         |   |      |  
|                          
|Balance, beginning of year |  | $                        | (4,775  | ) |      | $ | (6,153  | )    |  | $ | (21,110 | )
|Impairment charges         |  |                          | (15,814 | ) |      |   | (18,110 | )    |  |   | (10,713 | )
|Impairment recovery        |  |                          | 20,185  |   |      |   | 19,488  |      |  |   | 25,670  |  
|                          
|Balance, end of year       |  | $                        | (404    | ) |      | $ | (4,775  | )    |  | $ | (6,153  | )
|                          

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

At December 31, 2005, 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 thousands of dollars) |  | Actual |       |                 | change |   |         | change | 
|                         
|Constant pre-payment rate |  |        | 12.76 | %               |        | $ | (4,900  | )      |  | $ | (9,500 | )
|Discount rate             |  |        | 9.42  |                 |        |   | (3,900  | )      |  |   | (7,600 | )

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). During 2005, the economic reserve
associated with unfunded loan commitments was transferred from
the ALLL to the AULC. This transfer had no impact on net income.
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)                                                                   |                                                                       | 2005                    |          |        | 2004 |   |          | 2003   | 
|                                                                                           
|Allowance for loan and leases losses,
    beginning of year (ALLL)                          |                                                                       | $                       | 271,211  |        |      | $ | 299,732  |        |  | $ | 300,503  |       
|Loan and lease losses                                                                       |                                                                       |                         | (115,848 | )      |      |   | (126,115 | )      |  |   | (201,534 | )     
|Recoveries of loans previously charged off                                                  |                                                                       |                         | 35,791   |        |      |   | 47,580   |        |  |   | 39,725   |       
|                                                                                           
|Net loan and lease losses                                                                   |                                                                       |                         | (80,057  | )      |      |   | (78,535  | )      |  |   | (161,809 | )     
|                                                                                           
|Provision for loan and lease losses                                                         |                                                                       |                         | 83,782   |        |      |   | 57,397   |        |  |   | 164,616  |       
|Economic reserve transfer                                                                   |                                                                       |                         | (6,253   | )      |      |   |         |        |  |   |         |       
|Allowance for assets sold and
    securitized(1)                                            |                                                                       |                         | (336     | )      |      |   | (7,383   | )      |  |   | (3,578   | )     
|                                                                                           
|Allowance for loan and lease losses, end of
    year                                        |                                                                       | $                       | 268,347  |        |      | $ | 271,211  |        |  | $ | 299,732  |       
|                                                                                           
|Allowance for unfunded loan commitments and
    letters of credit, beginning of year (AULC) |                                                                       | $                       | 33,187   |        |      | $ | 35,522   |        |  | $ | 36,145   |       
|Provision for unfunded loan commitments and
    letters of credit losses                    |                                                                       |                         | (2,483   | )      |      |   | (2,335   | )      |  |   | (623     | )     
|Economic reserve transfer                                                                   |                                                                       |                         | 6,253    |        |      |   |         |        |  |   |         |       
|                                                                                           
|Allowance for unfunded loan commitments and
    letters of credit, end of year              |                                                                       | $                       | 36,957   |        |      | $ | 33,187   |        |  | $ | 35,522   |       
|                                                                                           
|Total allowances for credit losses
    (ACL)                                                |                                                                       | $                       | 305,304  |        |      | $ | 304,398  |        |  | $ | 335,254  |       
|                                                                                           
|                                                                                           
|Recorded balance of impaired loans, at end of
    year(2):                                  |                                                                       |                         |          |        |      |   |          |        |  |   |          |       
|                                                                                            | With specific reserves assigned to the loan and
    lease balances    |                         | $        | 41,525 |      |   | $        | 51,875 |  |   | $        | 54,853 | 
|                                                                                            | With no specific reserves assigned to the loan
    and lease balances |                         |          | 14,032 |      |   |          | 29,296 |  |   |          |       | 
|                                                                                           
|Total                                                                                       |                                                                       | $                       | 55,557   |        |      | $ | 81,171   |        |  | $ | 54,853   |       
|                                                                                           
|Average balance of impaired loans for the
    year(2)                                       |                                                                       | $                       | 29,441   |        |      | $ | 54,445   |        |  | $ | 33,970   |       
|Allowance for loan and lease losses on impaired
    loans(2)                                |                                                                       |                         | 14,526   |        |      |   | 23,447   |        |  |   | 26,249   |       



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In conjunction with the automobile loan sales and
    securitizations in 2005, 2004, and 2003, 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.                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(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 2005 and 2004 on impaired loans while
    they were considered impaired was less than $0.1 million
    and $1.1 million, respectively. There was no interest
    recognized in 2003 on impaired loans while they were considered
    impaired.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

There is a potential for loan products to contain
contractual terms that give rise to a concentration of credit
risk that may increase a lending institutions exposure to
risk of nonpayment or realization. Examples of these contractual
terms include loans that permit negative amortization, a
loan-to-value of greater than 100%, and option adjustable-rate
mortgages. Huntington does not offer mortgage loan products that
contain these terms. Huntington does offer a home equity loan
product that is interest only with an introductory rate that is
below the market interest rate for the initial period of the
loan term and increases when that period ends. Home equity loans
totaled $4.6 billion, or 19%, of total loans at
December 31, 2005 and 2004. From a credit risk perspective,
87% of the home equity loans had a loan to value ratio of less
than 90% at December 31, 2005. The charge-off policy for
home equity loans is described in Note 1.

7. OPERATING LEASE
ASSETS

For periods before May 2002, Huntington purchased
vehicles, primarily automobiles, for lease to consumers under
operating lease arrangements. Starting in 2004, Huntington also
began purchasing equipment for lease to customers under similar
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. The
vehicles and equipment, net of accumulated depreciation, are
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. The assets are
depreciated over the term of the lease to the estimated fair
value at the end of the lease. The depreciation of these assets
is reported as a component of non-interest expense. At the end
of the lease, the asset 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)                                                                             |  | 2005            |          |   | 2004 |  
|                                                                                                     
|Cost of operating lease assets (including
    residual values of $159,070 and $406,965, respectively) |  | $               | 506,445  |   |      | $ | 1,173,616 |  
|Deferred origination fees and costs                                                                   |  |                 | (272     | ) |      |   | (1,138    | )
|Accumulated depreciation                                                                              |  |                 | (277,096 | ) |      |   | (585,168  | )
|                                                                                                     
|Total                                                                                                 |  | $               | 229,077  |   |      | $ | 587,310   |  
|                                                                                                     

The future lease rental payments due from
customers on operating lease assets at December 31, 2005,
totaled $101.5 million and are due as follows:
$63.8 million in 2006; $17.6 million in 2007;
$7.4 million in 2008; $5.6 million in 2009,
$3.3 million in 2010, and $3.4 million thereafter.
Depreciation expense for each of the years ended
December 31, 2005, 2004, and 2003 was $99.3 million,
$216.4 million, and $350.6 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)                      |                            |                 | 2005     |         |  | 2004 |         
|                                              
|                                               | Land and land improvements |                 | $        | 67,787  |  |      | $        | 63,406  | 
|                                               | Buildings                  |                 |          | 246,745 |  |      |          | 237,071 | 
|                                               | Leasehold improvements     |                 |          | 149,466 |  |      |          | 142,764 | 
|                                               | Equipment                  |                 |          | 477,192 |  |      |          | 467,674 | 
|                                              
|Total premises and equipment                   |                            |                 | 941,190  |         |  |      | 910,915  |        
|Less accumulated depreciation and amortization |                            |                 | (580,513 | )       |  |      | (555,800 | )      
|                                              
|Net premises and equipment                     |                            | $               | 360,677  |         |  | $    | 355,115  |        
|                                              

Depreciation and amortization charged to expense
and rental income credited to occupancy expense for the three
years ended December 31, 2005 were:

|                                                                  |  |                         |        |  |      |   |        |      |  |   |        | 
|----------------------------------------------------------------- |  | ----------------------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ | 
|                                                                  |  |                        
|                                                                  |  | Year Ended December 31, |       
|                                                                 
|                                                                 
|                                                                  | 
|(in thousands of dollars)                                         |  | 2005                    |        |  | 2004 |   |        | 2003 | 
|                                                                 
|Total depreciation and amortization of premises
    and equipment |  | $                       | 50,355 |  |      | $ | 50,097 |      |  | $ | 46,746 | 
|Rental income credited to occupancy expense                       |  |                         | 11,010 |  |      |   | 13,081 |      |  |   | 14,837 | 

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

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) |  | 2005            |         |  | 2004 |  
|                         
|Goodwill                  |  | $               | 212,530 |  |      | $ | 210,155 | 
|Other intangibles         |  |                 | 4,956   |  |      |   | 5,652   | 
|                         
|Balance, end of period    |  | $               | 217,486 |  |      | $ | 215,807 | 
|                         

At December 31, 2005, 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, 2005 and 2004, were as follows:

|                           |  |          |         |  |        |   |   |       |  |           |        |   |            |              |       |   |  |   |         |  
|-------------------------- |  | -------- | ------- |  | ------ | - | - | ----- |  | --------- | ------ | - | ---------- | ------------ | ----- | - |  | - | ------- | -
|                           |  | Regional |         |  | Dealer |   |   |       |  | Treasury/ |        |   | Huntington |             
|(in thousands of dollars)  |  | Banking  |         |  | Sales  |   |   | PFCMG |  |           | Other  |   |            | Consolidated |      
|                          
|Balance, January 1, 2004   |  | $        | 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 |  
|Additions                  |  |          | 2,378   |  |        |   |  |       |  |           | 130    |   |            |              |      |   |  |   | 2,508   |  
|Amortization               |  |          |        |  |        |   |  |       |  |           | (13    | ) |            |              | (816  | ) |  |   | (829    | )
|                          
|Balance, December 31, 2005 |  | $        | 199,971 |  |        | $ |  |       |  | $         | 12,679 |   |            | $            | 4,836 |   |  | $ | 217,486 |  
|                          

During 2005 Huntington purchased certain trust
relationships for $0.1 million. Also included in 2005 is
$2.4 million primarily relating to the finalization of the
settlement of a purchase price contingency of the LeaseNet
acquisition in 2002.

The $0.4 million adjustment in 2004 relates
to goodwill recorded as part of the Haberer Registered
Investment Advisor, Inc. acquisition in 2002. No impairment of
goodwill was required in accordance with Statement No. 142
in 2005, 2004 or 2003. For the years 2006 through 2010,
amortization expense associated with the other intangibles 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)                      |  | 2005            |           |  | 2004 |  
|                                              
|Federal funds purchased                        |  | $               | 931,097   |  |      | $ | 30,620    | 
|Securities sold under agreements to repurchase |  |                 | 888,985   |  |      |   | 1,093,247 | 
|Commercial paper                               |  |                 | 2,480     |  |      |   | 1,928     | 
|Other borrowings                               |  |                 | 66,698    |  |      |   | 81,438    | 
|                                              
|Total short-term borrowings                    |  | $               | 1,889,260 |  |      | $ | 1,207,233 | 
|                                              

Other borrowings consist of borrowings from the
U.S. Treasury, funds held as collateral from swap
counterparties, and other notes payable.

Information concerning securities sold under
agreements to repurchase for the years ended December 31 is
summarized as follows:

|                                          |  |                         |           |   |      |   |           |  
|----------------------------------------- |  | ----------------------- | --------- | - | ---- | - | --------- | -
|                                          |  |                        
|                                          |  | Year Ended December 31, |          
|                                         
|                                         
|                                          | 
|(in thousands of dollars)                 |  | 2005                    |           |   | 2004 |  
|                                         
|Average balance during the year           |  | $                       | 1,125,159 |   |      | $ | 1,410,174 |  
|Average interest rate during the year     |  |                         | 2.17      | % |      |   | 0.93      | %
|Maximum month-end balance during the year |  | $                       | 1,356,733 |   |      | $ | 1,500,267 |  

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

117



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##### 



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

11. FEDERAL HOME LOAN
BANK ADVANCES

Huntingtons long-term advances from the
Federal Home Loan Bank had weighted average interest rates of
4.37% and 2.32% at December 31, 2005 and 2004,
respectively. These advances, which predominantly had variable
interest rates, were collateralized by qualifying real estate
loans. As of December 31, 2005 and 2004, Huntingtons
maximum borrowing capacity was $1.7 billion and
$1.5 billion, respectively. The advances outstanding at
December 31, 2005 of $1.2 billion mature as follows:
$0.2 billion in 2006; $0.6 billion in 2007;
$0.4 billion in 2008; and less than $0.1 billion
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, 2005,
Huntington was in compliance with all such covenants.


12. SUBORDINATED
NOTES

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


|                              |                                                      |                 |           |         |      |   |           |         | 
|----------------------------- | ---------------------------------------------------- | --------------- | --------- | ------- | ---- | - | --------- | ------- | 
|                              |                                                      |                
|                              |                                                      | At December 31, |          
|                             
|                             
|                              |                                                     
|(in thousands of dollars)     |                                                      | 2005            |           |         | 2004 |  
|                              |                                                      |                 |           |        
|                             
|Parent company:               |                                                      |                 |           |         |      |   |           |        
|                              | 4.94% junior subordinated debentures due
    2027(1) |                 | $         | 206,186 |      |   | $         | 206,186 | 
|                              | 5.12% junior subordinated debentures due
    2028(2) |                 |           | 103,093 |      |   |           | 103,093 | 
|The Huntington National Bank: |                                                      |                 |           |         |      |   |           |        
|                              | 8.00% subordinated notes due 2010                    |                 |           | 158,620 |      |   |           | 160,692 | 
|                              | 4.90% subordinated notes due 2014                    |                 |           | 193,361 |      |   |           | 199,136 | 
|                              | 6.60% subordinated notes due 2018                    |                 |           | 214,277 |      |   |           | 219,505 | 
|                              | 5.375% subordinated notes due 2019                   |                 |           | 147,834 |      |   |           | 151,181 | 
|                             
|Total subordinated notes      |                                                      | $               | 1,023,371 |         |      | $ | 1,039,793 |        
|                             



|    |                                                                                      
|--- | -------------------------------------------------------------------------------------
|(1) | Variable effective rate at December 31,
    2005, based on three month LIBOR + 0.70. 
|   
|(2) | Variable effective rate at December 31,
    2005, based on three month LIBOR + 0.625.

The weighted-average interest rate for
subordinated notes was 5.84% and 5.16% at December 31, 2005
and 2004, respectively.

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 21
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)  |                                                                        | 2005            |           |           | 2004 |  
|                           |                                                                        |                 |           |          
|                          
|                           | The Huntington National Bank                                           |                 | $         | 1,576,033 |      |   | $         | 3,006,004 | 
|                           | Parent company (matured in December 2005)                              |                 |           |          |      |   |           | 100,000   | 
|                           | 4.69% Securitization trust note payable due
    2012(1)                |                 |           | 792,386   |      |   |           | 860,000   | 
|                           | 7.88% Class C preferred securities of REIT
    subsidiary, no maturity |                 |           | 50,000    |      |   |           | 50,000    | 
|                          
|Total other long-term debt |                                                                        | $               | 2,418,419 |           |      | $ | 4,016,004 |          
|                          



|    |                                                                                   
|--- | ----------------------------------------------------------------------------------
|(1) | Variable effective rate at December 31,
    2005, based on one month LIBOR + 0.33.

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 21 for more information regarding such
financial instruments.

The weighted-average interest rate for other
long-term debt was 4.34% and 2.86% at December 31, 2005 and
2004, respectively. At December 31, 2005, Huntingtons
other long-term debt included $50 million of secured
borrowings, which had a variable rate of 4.13% based, in part,
on three-month LIBOR. The secured borrowings matured in January
2006.

The securitization trust note payable is
collateralized by $855 million in automobile loans held in
the automobile trust. The terms of the other long-term debt
obligations contain various restrictive covenants including
limitations on the acquisition of additional

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

debt in excess of specified levels, dividend
payments, and the disposition of subsidiaries. As of
December 31, 2005, Huntington was in compliance with all
such covenants.

Other long-term debt maturities for the next five
years are as follows: $0.8 billion in 2006;
$0.1 billion in 2007; $0.2 billion in 2008;
$0.2 billion in 2009; $0.3 billion in 2010; and
$0.8 billion in 2011 and thereafter. These maturities are
based upon the par values of long-term debt.

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)                                                                                                                |                               | 2005                    |         |         | 2004 |   |         | 2003    |  
|                                                                                                                                        
|Unrealized losses on investment securities
    arising during the year:                                                                  |                               |                         |         |         |      |   |         |         |   |   |         |        
|                                                                                                                                         | Unrealized net losses         |                         | $       | (41,014 | )    |   | $       | (18,555 | ) |   | $       | (67,520 | )
|                                                                                                                                         | Related tax benefit           |                         |         | 14,445  |      |   |         | 6,689   |   |   |         | 23,511  |  
|                                                                                                                                        
|Net                                                                                                                                      |                               |                         | (26,569 | )       |      |   | (11,866 | )       |   |   | (44,009 | )      
|                                                                                                                                        
|Less: Reclassification of net realized losses
    (gains) from sales of investment securities during the year:                           |                               |                         |         |         |      |   |         |         |   |   |         |        
|                                                                                                                                         | Realized net losses (gains)   |                         |         | 8,055   |      |   |         | (15,763 | ) |   |         | (5,258  | )
|                                                                                                                                         | Related tax (benefit) expense |                         |         | (2,819  | )    |   |         | 5,517   |   |   |         | 1,840   |  
|                                                                                                                                        
|Net                                                                                                                                      |                               |                         | 5,236   |         |      |   | (10,246 | )       |   |   | (3,418  | )      
|                                                                                                                                        
|Total unrealized losses on investment securities
    arising during the year, net of reclassification of net realized
    losses (gains) |                               |                         | (21,333 | )       |      |   | (22,112 | )       |   |   | (47,427 | )      
|                                                                                                                                        
|Unrealized gains (losses) on cash flow hedging
    derivatives arising during the year:                                                  |                               |                         |         |         |      |   |         |         |   |   |         |        
|                                                                                                                                         | Unrealized net gains (losses) |                         |         | 16,852  |      |   |         | 14,914  |   |   |         | (17,048 | )
|                                                                                                                                         | Related tax (expense) benefit |                         |         | (5,898  | )    |   |         | (5,220  | ) |   |         | 5,967   |  
|                                                                                                                                        
|Net                                                                                                                                      |                               |                         | 10,954  |         |      |   | 9,694   |         |   |   | (11,081 | )      
|                                                                                                                                        
|Minimum pension liability adjustment:                                                                                                    |                               |                         |         |         |      |   |         |         |   |   |         |        
|                                                                                                                                         | Unrealized net loss           |                         |         | (1,248  | )    |   |         | (1,789  | ) |   |         | (1,714  | )
|                                                                                                                                         | Related tax benefit           |                         |         | 437     |      |   |         | 626     |   |   |         | 600     |  
|                                                                                                                                        
|Net                                                                                                                                      |                               |                         | (811    | )       |      |   | (1,163  | )       |   |   | (1,114  | )      
|                                                                                                                                        
|Total other comprehensive loss                                                                                                           |                               | $                       | (11,190 | )       |      | $ | (13,581 | )       |   | $ | (59,622 | )      
|                                                                                                                                        

Activity in accumulated other comprehensive
income for the three years ended December 31, 2005 was as
follows:

|                           |  |                       |         |                  |                   |   |         |           |  |   |        |   |  |   |         |  
|-------------------------- |  | --------------------- | ------- | ---------------- | ----------------- | - | ------- | --------- |  | - | ------ | - |  | - | ------- | -
|                           |  |                       |         | Unrealized gains |                   |   |         |           | 
|                           |  | Unrealized gains      |         |                  | and losses on     |   |         | Minimum   |  |   |       
|                           |  | and losses on         |         |                  | cash flow hedging |   |         | pension   |  |   |       
|(in thousands of dollars)  |  | investment securities |         |                  | derivatives       |   |         | liability |  |   | Total  |  
|                          
|Balance, January 1, 2003   |  | $                     | 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 | )
|Current period change      |  |                       | (21,333 | )                |                   |   | 10,954  |           |  |   | (811   | ) |  |   | (11,190 | )
|                          
|Balance, December 31, 2005 |  | $                     | (34,016 | )                |                   | $ | 15,206  |           |  | $ | (3,283 | ) |  | $ | (22,093 | )
|                          

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

15. SHAREHOLDERS
EQUITY

Effective April 27, 2004, the board of
directors authorized a new share repurchase program (the 2004
Repurchase Program) which cancelled the prior 2003 share
repurchase program and authorized Management to repurchase not
more than 7.5 million shares of Huntington common stock. On
June 9, 2005, Huntington reactivated its share repurchase
program upon settlement of the SEC formal investigation.


On October 18, 2005, the Company announced
that the board of directors authorized a new program for the
repurchase of up to 15 million shares of our common stock
(the 2005 Repurchase Program). The 2005 Repurchase Program does
not have an expiration date. The 2004 Repurchase Program, with
3.1 million shares remaining, was cancelled and replaced by
the 2005 Repurchase Program. The Company expects to repurchase
the shares from time to time in the open market or through
privately negotiated transactions, depending on market
conditions.

Listed below is the share repurchase activity for
the year ended December 31, 2005:

|                                 |  |           |           |  |          |  |        | 
|-------------------------------- |  | --------- | --------- |  | -------- |  | ------ | 
|                                 |  | Total     |           |  | Average  | 
|                                 |  | Number    |           |  | Price    | 
|                                 |  | of Shares |           |  | Paid Per | 
|Repurchase Programs              |  | Purchased |           |  | Share    | 
|                                
|The 2004 Repurchase Program      |  |           | 4,415,700 |  |          |  | $24.58 | 
|The 2005 Repurchase Program      |  |           | 5,175,000 |  |          |  | 23.76  | 
|                                
|Total Shares Repurchased in 2005 |  |           | 9,590,700 |  |          |  | $24.13 | 
|                                

16. 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 was as follows:


|                                                                    |         |                                                          |         |   |      |   |         |      |      |   |         |   |      | 
|------------------------------------------------------------------- | ------- | -------------------------------------------------------- | ------- | - | ---- | - | ------- | ---- | ---- | - | ------- | - | ---- | 
|                                                                    |         |                                                         
|                                                                    |         | Year ended December 31,                                  |        
|                                                                   
|                                                                   
|                                                                    |        
|(in thousands, except per share amounts)                            |         | 2005                                                     |         |   | 2004 |   |         | 2003 |     
|                                                                   
|                                                                   
|                                                                    |        
|Income before cumulative effect of accounting
    change            |         | $                                                        | 412,091 |   |      | $ | 398,925 |      |      | $ | 385,693 |  
|Cumulative effect of change in accounting
    principle, net of tax |         |                                                          |        |   |      |   |        |      |      |   | (13,330 | )
|                                                                   
|Net income                                                          |         | $                                                        | 412,091 |   |      | $ | 398,925 |      |      | $ | 372,363 |  
|                                                                   
|Average common shares outstanding                                   |         |                                                          | 230,142 |   |      |   | 229,913 |      |      |   | 229,401 |  
|Dilutive potential common shares                                    |         |                                                          | 3,333   |   |      |   | 3,943   |      |      |   | 2,181   |  
|                                                                   
|Diluted average common shares outstanding                           |         |                                                          | 233,475 |   |      |   | 233,856 |      |      |   | 231,582 |  
|                                                                   
|Earnings Per Share                                                  |         |                                                          |         |   |      |   |         |      |      |   |         |  
|                                                                    | Basic   |                                                          |         |   |      |   |         |      |      |   |         |   |     
|                                                                    |         | Income before cumulative effect of accounting
    change |         | $ | 1.79 |   |         | $    | 1.74 |   |         | $ | 1.68 | 
|                                                                    |         | Net income                                               |         |   | 1.79 |   |         |      | 1.74 |   |         |   | 1.62 | 
|                                                                    | Diluted |                                                          |         |   |      |   |         |      |      |   |         |   |     
|                                                                    |         | Income before cumulative effect of accounting
    change |         |   | 1.77 |   |         |      | 1.71 |   |         |   | 1.67 | 
|                                                                    |         | Net income                                               |         |   | 1.77 |   |         |      | 1.71 |   |         |   | 1.61 | 

The average market price of Huntingtons
common stock for the period was used in determining the dilutive
effect of outstanding stock options. Dilutive potential common
shares include stock options and options held in deferred
compensation plans. Dilutive potential common shares are
computed based on the number of shares subject to options that
have an exercise price less than the average market price of
Huntingtons common stock for the period.

Approximately 5.7 million, 2.6 million,
and 2.8 million options to purchase shares of common stock
outstanding at the end of 2005, 2004, and 2003, 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 $25.68 per share,
$26.96 per share, and $26.74 per share at the end of the same
respective periods.

120



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

On January 7, 2005, Huntington released from
escrow 86,118 shares of Huntington common stock, which were
previously issued in September 2002, to former shareholders of
LeaseNet, Inc. 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.

17. STOCK-BASED
COMPENSATION

Huntington sponsors nonqualified and incentive
stock option plans. These plans provide for the granting of
stock options to officers, directors and other employees at the
market price on the date of the grant. 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. Of the 26.5 million options to
purchase shares of common stock authorized for issuance under
the plans at December 31, 2005, 21.0 million are
outstanding and 5.5 million were available for future
grants. Options granted since 1997 vest ratably over three years
or when other conditions are met while those granted in 1994
through 1997 vested ratably over four years. Options granted
prior to May 2004 have a maximum term of ten years. All options
granted beginning in May 2004 have a maximum term of seven years.


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 was as follows:

|                                                                             |  |           |        |   |       |           |         |         |       |           |         |        |        |       |  |       
|---------------------------------------------------------------------------- |  | --------- | ------ | - | ----- | --------- | ------- | ------- | ----- | --------- | ------- | ------ | ------ | ----- |  | ------
|                                                                             |  |           |        |   |       |          
|                                                                             |  | 2005      |        |   | 2004  |           |         | 2003   
|                                                                            
|                                                                            
|                                                                             | 
|                                                                             |  | 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                                             |  |           | 20,017 |   |       | $20.25    |         | 19,997  |       | $19.40    |         |        | 18,024 |       |  | $18.93
|Granted                                                                      |  |           | 3,645  |   |       | 24.32     |         | 3,200   |       | 23.05     |         |        | 3,659  |       |  | 20.38 
|Exercised                                                                    |  |           | (1,842 | ) |       | 17.89     |         | (2,478) |       | 17.05     |         |        | (788   | )     |  | 14.40 
|Forfeited/expired                                                            |  |           | (816   | ) |       | 21.70     |         | (702)   |       | 20.02     |         |        | (898   | )     |  | 19.32 
|                                                                            
|Outstanding at end of year                                                   |  |           | 21,004 |   |       | $21.11    |         | 20,017  |       | $20.25    |         |        | 19,997 |       |  | $19.40
|                                                                            
|Exercisable at end of year                                                   |  |           | 13,048 |   |       | $20.13    |         | 11,984  |       | $19.68    |         |        | 9,649  |       |  | $19.60
|Weighted-average fair value per share of options
    granted during the year |  | $ 5.28    |        |   |       | $ 5.78    |         |         |       |           |         | $ 5.64

Additional information regarding options
outstanding as of December 31, 2005, was as follows:

|                                         |  |                     |  |              |  |                     |  |           |        |  |       |       
|---------------------------------------- |  | ------------------- |  | ------------ |  | ------------------- |  | --------- | ------ |  | ----- | ------
|                                         |  |                     |  |              |  |                    
|                                         |  | Options Outstanding |  |              |  | Exercisable Options
|                                        
|                                        
|                                         | 
|                                         |  | Weighted-           |  |             
|                                         |  | Average             |  | Weighted-    |  |                     |  | Weighted-
|                                         |  | Remaining           |  | Average      |  |                     |  | Average  
|                                         |  | Contractual         |  | Exercise     |  |                     |  | Exercise 
|(in thousands, except per share amounts) |  | Shares              |  | Life (Years) |  | Price               |  | Shares    |        |  | Price
|                                        
|Range of Exercise Prices                 |  |                     |  |              |  |                     |  |           |        |  |       |       
|$11.09 to $15.00                         |  | 968                 |  | 3.8          |  | $14.84              |  |           | 968    |  |       | $14.84
|$15.01 to $20.00                         |  | 8,017               |  | 5.5          |  | 18.14               |  |           | 6,540  |  |       | 17.73 
|$20.01 to $25.00                         |  | 9,731               |  | 6.4          |  | 22.74               |  |           | 3,270  |  |       | 21.55 
|$25.01 to $28.35                         |  | 2,288               |  | 3.1          |  | 27.22               |  |           | 2,270  |  |       | 27.24 
|                                        
|Total                                    |  | 21,004              |  | 5.6          |  | $21.11              |  |           | 13,048 |  |       | $20.13
|                                        

On August 27, 2002, common stock options
were granted, with certain specified exceptions, to 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,
2005, 1.5 million shares under option remain unvested.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

18. INCOME TAXES

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

|                                           |         |                 |         |         |      |   |         |         |  |   |         |         | 
|------------------------------------------ | ------- | --------------- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                           |         |                
|                                           |         | At December 31, |        
|                                          
|                                          
|                                           |        
|(in thousands of dollars)                  |         | 2005            |         |         | 2004 |   |         | 2003    | 
|                                          
|                                          
|                                           |        
|Current tax provision                      |         |                 |         |         |      |   |         |         |  |   |         |        
|                                           | Federal |                 | $       | 163,383 |      |   | $       | 12,779  |  |   | $       | 138,036 | 
|                                           | State   |                 |         | 210     |      |   |         |        |  |   |         |        | 
|                                          
|Total current tax provision                |         |                 | 163,593 |         |      |   | 12,779  |         |  |   | 138,036 |        
|                                          
|Deferred tax (benefit) provision           |         |                 |         |         |      |   |         |         |  |   |         |        
|                                           | Federal |                 |         | (32,681 | )    |   |         | 140,962 |  |   |         | 258     | 
|                                           | State   |                 |         | 571     |      |   |         |        |  |   |         |        | 
|                                          
|Total deferred tax
    (benefit) provision |         |                 | (32,110 | )       |      |   | 140,962 |         |  |   | 258     |        
|                                          
|Provision for income taxes                 |         | $               | 131,483 |         |      | $ | 153,741 |         |  | $ | 138,294 |        
|                                          

The following is a reconcilement of provision for
income taxes to the amount computed at the statutory rate of 35%:

|                                                              |                                             |        |         |         |      |  |      |        |   |   |         |         |   |        |      |      |      |   |         |         |   |  |      |      |  
|------------------------------------------------------------- | ------------------------------------------- | ------ | ------- | ------- | ---- |  | ---- | ------ | - | - | ------- | ------- | - | ------ | ---- | ---- | ---- | - | ------- | ------- | - |  | ---- | ---- | -
|                                                              |                                             |        |         |         |      | 
|                                                              |                                             | 2005   |         |         | 2004 |  |      | 2003   |  
|                                                             
|                                                             
|                                                              |                                            
|(in thousands of dollars)                                     |                                             | Amount |         |         | Rate |  |      | Amount |   |   | Rate    |         |   | Amount |      |      | Rate |  
|                                                             
|                                                             
|                                                              |                                            
|Provision for income taxes computed at the
    statutory rate |                                             | $      | 190,251 |         |      |  | 35.0 | %      |   | $ | 193,433 |         |   |        | 35.0 | %    |      | $ | 183,396 |         |   |  | 35.0 | %   
|Increases (decreases):                                        |                                             |        |         |         |      |  |      |        |   |   |         |         |   |        |      |      |      |   |         |         |   |  |      |     
|                                                              | Tax-exempt interest income                  |        |         | (8,741  | )    |  |      | (1.6   | ) |   |         | (7,640  | ) |        |      | (1.4 | )    |   |         | (6,381  | ) |  |      | (1.2 | )
|                                                              | Tax-exempt bank owned life insurance income |        |         | (14,257 | )    |  |      | (2.6   | ) |   |         | (14,804 | ) |        |      | (2.7 | )    |   |         | (15,060 | ) |  |      | (2.9 | )
|                                                              | Asset securitization activities             |        |         | (6,651  | )    |  |      | (1.2   | ) |   |         | (6,278  | ) |        |      | (1.1 | )    |   |         | (5,211  | ) |  |      | (1.0 | )
|                                                              | Federal tax loss carryback                  |        |         | (28,705 | )    |  |      | (5.3   | ) |   |         |        |   |        |      |     |      |   |         |        |   |  |      |     |  
|                                                              | General business credits                    |        |         | (6,878  | )    |  |      | (1.3   | ) |   |         | (7,768  | ) |        |      | (1.4 | )    |   |         | (11,176 | ) |  |      | (2.1 | )
|                                                              | Repatriation of foreign earnings            |        |         | 5,741   |      |  |      | 1.1    |   |   |         |        |   |        |      |     |      |   |         |        |   |  |      |     |  
|                                                              | Other, net                                  |        |         | 723     |      |  |      | 0.1    |   |   |         | (3,202  | ) |        |      | (0.6 | )    |   |         | (7,274  | ) |  |      | (1.4 | )
|                                                             
|Provision for income taxes                                    |                                             | $      | 131,483 |         |      |  | 24.2 | %      |   | $ | 153,741 |         |   |        | 27.8 | %    |      | $ | 138,294 |         |   |  | 26.4 | %   
|                                                             

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

|                                                         |                                          |                 |         |         |      |   |           |         | 
|-------------------------------------------------------- | ---------------------------------------- | --------------- | ------- | ------- | ---- | - | --------- | ------- | 
|                                                         |                                          |                
|                                                         |                                          | At December 31, |        
|                                                        
|                                                        
|                                                         |                                         
|(in thousands of dollars)                                |                                          | 2005            |         |         | 2004 |  
|                                                        
|                                                        
|                                                         |                                         
|Deferred tax assets:                                     |                                          |                 |         |         |      |   |           |        
|                                                         | Allowance for credit losses              |                 | $       | 123,934 |      |   | $         | 122,926 | 
|                                                         | Net operating loss & other carryforwards |                 |         | 54,457  |      |   |           | 22,936  | 
|                                                         | Fair value adjustments                   |                 |         | 14,082  |      |   |           | 6,791   | 
|                                                         | Other                                    |                 |         | 74,020  |      |   |           | 95,527  | 
|                                                        
|Total deferred tax assets before valuation
    allowance |                                          |                 | 266,493 |         |      |   | 248,180   |        
|Valuation allowance                                      |                                          |                 | (40,955 | )       |      |   |          |        
|                                                        
|Net deferred tax assets                                  |                                          |                 | 225,538 |         |      |   | 248,180   |        
|                                                        
|Deferred tax liabilities:                                |                                          |                 |         |         |      |   |           |        
|                                                         | Lease financing                          |                 |         | 830,303 |      |   |           | 861,273 | 
|                                                         | Pension and other employee benefits      |                 |         | 41,409  |      |   |           | 31,822  | 
|                                                         | Mortgage servicing rights                |                 |         | 26,375  |      |   |           | 32,947  | 
|                                                         | Other                                    |                 |         | 71,106  |      |   |           | 105,766 | 
|                                                        
|Total deferred tax liability                             |                                          |                 | 969,193 |         |      |   | 1,031,808 |        
|                                                        
|Net deferred tax liability                               |                                          | $               | 743,655 |         |      | $ | 783,628   |        
|                                                        

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|                                       |                                   
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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

At December 31, 2005, Huntingtons
deferred tax asset related to net operating loss and other
credit carry-forwards was $54.5 million. This was comprised
of a charitable contribution carry-forward of $4.4 million
(expires in 2009) and a net operating loss and other
carry-forwards of $9.1 million for U.S. federal tax
purposes, which will begin expiring in 2023, and a capital loss
carry-forward of $41.0 million which will expire in 2010. A
valuation allowance in the amount of $41.0 million has been
established for the capital loss carry-forward. A valuation
allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized. In
Managements opinion the results of future operations will
generate sufficient taxable income to realize the net operating
loss and charitable contribution carry-forwards. Consequently,
Management has determined that a valuation allowance for
deferred tax assets related to these carry-forwards was not
required as of December 31, 2005 or 2004.

19. 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 health-care 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.

The following table shows the weighted-average
assumptions used to determine the benefit obligation at
December 31, 2005 and 2004, and the net periodic benefit
cost for the years then ended. Huntington selected
September 30, 2005 as the measurement date for all
calculations and contracted an actuary to provide measurement
services.

|                                                                                                                 |                                |                  |  |                 |          |  |  |      |   |  |      |      |   |  |  |      |  
|---------------------------------------------------------------------------------------------------------------- | ------------------------------ | ---------------- |  | --------------- | -------- |  |  | ---- | - |  | ---- | ---- | - |  |  | ---- | -
|                                                                                                                 |                                |                  |  |                 |          | 
|                                                                                                                 |                                |                  |  | Post-Retirement |         
|                                                                                                                 |                                | Pension Benefits |  |                 | Benefits | 
|                                                                                                                
|                                                                                                                
|                                                                                                                 |                               
|                                                                                                                 |                                | 2005             |  |                 | 2004     |  |  | 2005 |   |  | 2004 |     
|                                                                                                                
|                                                                                                                
|                                                                                                                 |                               
|Weighted-average assumptions used to determine
    benefit obligations at December 31                           
|                                                                                                                 | Discount rate                  |                  |  | 5.43            | %        |  |  | 5.81 | % |  |      | 5.43 | % |  |  | 5.81 | %
|                                                                                                                 | 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                  |                  |  | 5.81            | %        |  |  | 6.00 | % |  |      | 5.81 | % |  |  | 6.00 | %
|                                                                                                                 | Expected return on plan assets |                  |  | 7.00            |          |  |  | 7.00 |   |  |      | N/A  |   |  |  | N/A  |  
|                                                                                                                 | Rate of compensation increase  |                  |  | 5.00            |          |  |  | 5.00 |   |  |      | N/A  |   |  |  | N/A  |  

N/ A, Not Applicable

The expected long-term rate of return on plan
assets is an assumption reflecting the average rate of earnings
expected on the funds invested or to be invested to provide for
the benefits included in the projected benefit obligation. The
expected long-term rate of return is established at the
beginning of the plan year based upon historical returns and
projected returns on the underlying mix of invested assets. The
long-term rate of return assumption to determine the net
periodic benefit cost will be 8.00% for the year ending
December 31, 2006. The rate was raised one percentage point
due to favorable historical and expected future results.

In 2005, Huntington lowered its assumptions for
the discount rate from 5.81% to 5.43%. The 5.43% 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 future pension expense.

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, 2005,
Plan assets were invested 71.5% in equity investments and 28.5%
in bonds, with an average duration of 3.4 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.

123



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

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)                                                        |                                            |                  | 2005    |                 |          | 2004 |         |        | 2005 |   |         | 2004    |  
|                                                                                
|                                                                                
|                                                                                 |                                           
|Projected benefit obligation at beginning of
    measurement year (September 30) |                                            | $                | 336,007 |                 |          | $    | 299,028 |        |      | $ | 55,504  |         |   | $ | 55,490 |       
|Changes due to:                                                                  |                                            |                  |         |                 |          |      |         |        |      |   |         |         |   |   |        |       
|                                                                                 | Service cost                               |                  |         | 13,936          |          |      |         | 11,819 |      |   |         | 1,377   |   |   |        | 1,302  |  
|                                                                                 | Interest cost                              |                  |         | 19,016          |          |      |         | 17,482 |      |   |         | 2,903   |   |   |        | 3,209  |  
|                                                                                 | Benefits paid                              |                  |         | (6,897          | )        |      |         | (6,900 | )    |   |         | (3,738  | ) |   |        | (2,986 | )
|                                                                                 | Settlements                                |                  |         | (9,375          | )        |      |         | (8,977 | )    |   |         |        |   |   |        |       |  
|                                                                                 | Actuarial assumptions and gains and losses |                  |         | 65,404          |          |      |         | 23,555 |      |   |         | (12,430 | ) |   |        | (1,511 | )
|                                                                                
|Total changes                                                                    |                                            |                  | 82,084  |                 |          |      | 36,979  |        |      |   | (11,888 | )       |   |   | 14     |       
|                                                                                
|Projected benefit obligation at end of
    measurement year (September 30)       |                                            | $                | 418,091 |                 |          | $    | 336,007 |        |      | $ | 43,616  |         |   | $ | 55,504 |       
|                                                                                

Changes to certain actuarial assumptions,
including a lower discount rate, a decrease in the expected
retirement age and the use of an updated mortality table
increased the pension benefit obligation at September 30,
2005 by $65.4 million.

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 measurement date:

|                                                                              |                              |                  |         |        |   |      |         |        |  
|----------------------------------------------------------------------------- | ---------------------------- | ---------------- | ------- | ------ | - | ---- | ------- | ------ | -
|                                                                              |                              |                 
|                                                                              |                              | Pension Benefits |        
|                                                                             
|                                                                             
|                                                                              |                             
|(in thousands of dollars)                                                     |                              |                  | 2005    |        |   | 2004 |        
|                                                                             
|                                                                             
|                                                                              |                             
|Fair value of plan assets at beginning of
    measurement year (September 30) |                              | $                | 353,222 |        |   | $    | 288,569 |       
|Changes due to:                                                               |                              |                  |         |        |   |      |         |       
|                                                                              | Actual return on plan assets |                  |         | 40,798 |   |      |         | 35,962 |  
|                                                                              | Employer contributions       |                  |         | 63,600 |   |      |         | 44,667 |  
|                                                                              | Settlements                  |                  |         | (9,936 | ) |      |         | (9,076 | )
|                                                                              | Benefits paid                |                  |         | (6,897 | ) |      |         | (6,900 | )
|                                                                             
|Total changes                                                                 |                              |                  | 87,565  |        |   |      | 64,653  |       
|                                                                             
|Fair value of plan assets at end of
    measurement year (September 30)       |                              | $                | 440,787 |        |   | $    | 353,222 |       
|                                                                             

Huntingtons accumulated benefit obligation
under the Plan was $372 million and $294 million at
September 30, 2005 and 2004, 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)                                |                                                                  |                  | 2005    |                 |          | 2004 |         |         | 2005 |   |         | 2004    |  
|                                                        
|                                                        
|                                                         |                                                                 
|                                                         | Projected benefit obligation less
    (greater) than plan assets |                  | $       | 22,696          |          |      | $       | 17,215  |      |   | $       | (43,616 | ) |   | $       | (55,504 | )
|                                                         | Unrecognized net actuarial loss (gain)                           |                  |         | 153,308         |          |      |         | 116,744 |      |   |         | (11,586 | ) |   |         | 718     |  
|                                                         | Unrecognized prior service cost                                  |                  |         | 1,788           |          |      |         | 1,789   |      |   |         | 3,476   |   |   |         | 3,856   |  
|                                                         | Unrecognized transition liability, net of
    amortization       |                  |         | 6               |          |      |         |        |      |   |         | 7,728   |   |   |         | 8,831   |  
|                                                        
|Prepaid (accrued) benefit costs, at measurement
    date |                                                                  |                  | 177,798 |                 |          |      | 135,748 |         |      |   | (43,998 | )       |   |   | (42,099 | )      
|Contribution made after measurement date                 |                                                                  |                  |        |                 |          |      |        |         |      |   | 1,018   |         |   |   | 766     |        
|                                                        
|Prepaid (accrued) benefit costs                          |                                                                  | $                | 177,798 |                 |          | $    | 135,748 |         |      | $ | (42,980 | )       |   | $ | (41,333 | )      
|                                                        

124



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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

The following table shows the components of net
periodic benefit cost recognized in the three years ended
December 31, 2005:

|                                   |  |                  |         |   |                          |   |         |      |  |   |         |   |  |      |       |   |      |   |       |  |  |   |       | 
|---------------------------------- |  | ---------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | ---- | ----- | - | ---- | - | ----- |  |  | - | ----- | 
|                                   |  |                  |         |  
|                                   |  | Pension Benefits |         |   | Post-Retirement Benefits |  
|                                  
|                                  
|                                   | 
|(in thousands of dollars)          |  | 2005             |         |   | 2004                     |   |         | 2003 |  |   | 2005    |   |  | 2004 |       |   | 2003 |  
|                                  
|                                  
|                                   | 
|Service cost                       |  | $                | 14,186  |   |                          | $ | 12,159  |      |  | $ | 9,817   |   |  | $    | 1,378 |   |      | $ | 1,302 |  |  | $ | 1,121 | 
|Interest cost                      |  |                  | 19,016  |   |                          |   | 17,482  |      |  |   | 16,647  |   |  |      | 2,903 |   |      |   | 3,209 |  |  |   | 3,479 | 
|Expected return on plan assets     |  |                  | (25,979 | ) |                          |   | (21,530 | )    |  |   | (25,138 | ) |  |      |      |   |      |   |      |  |  |   |      | 
|Amortization of transition asset   |  |                  | (4      | ) |                          |   | 1       |      |  |   | (251    | ) |  |      | 1,104 |   |      |   | 1,104 |  |  |   | 1,104 | 
|Amortization of prior service cost |  |                  | 1       |   |                          |   | 1       |      |  |   |        |   |  |      | 379   |   |      |   | 583   |  |  |   | 605   | 
|Amortization of gain               |  |                  |        |   |                          |   |        |      |  |   |        |   |  |      | (126  | ) |      |   |      |  |  |   |      | 
|Settlements                        |  |                  | 3,642   |   |                          |   | 3,151   |      |  |   | 4,354   |   |  |      |      |   |      |   |      |  |  |   |      | 
|Recognized net actuarial loss      |  |                  | 10,689  |   |                          |   | 7,936   |      |  |   | 1,774   |   |  |      |      |   |      |   |      |  |  |   |      | 
|                                  
|Benefit cost                       |  | $                | 21,551  |   |                          | $ | 19,200  |      |  | $ | 7,203   |   |  | $    | 5,638 |   |      | $ | 6,198 |  |  | $ | 6,309 | 
|                                  

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, 2005. It is
Huntingtons policy to recognize settlement gains and
losses as incurred. Management expects net periodic pension cost
to approximate $23.9 million and net periodic
post-retirement benefits cost to approximate $4.3 million
for 2006.

In December 2003, a law was enacted 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
post-retirement benefit plans providing prescription drug
coverage. Huntington has registered for the Medicare subsidy and
a $15.5 million reduction in the post-retirement obligation
is being recognized over a 10-year period beginning
October 1, 2005.

At September 30, 2005 and 2004, The
Huntington National Bank, as trustee, held all Plan assets. The
Plan assets consisted of investments in a variety of Huntington
mutual funds and Huntington common stock as follows:

|                                             |  |         |         |  |      |  |     |         |  |   |         |  |  |  |     |  
|-------------------------------------------- |  | ------- | ------- |  | ---- |  | --- | ------- |  | - | ------- |  |  |  | --- | -
|                                             |  |         |         | 
|                                             |  | 2005    |         |  | 2004 | 
|                                            
|                                            
|                                             | 
|(in thousands of dollars)                    |  | Balance |         |  | %    |  |     | Balance |  |   | %       | 
|                                            
|                                            
|                                             | 
|Cash                                         |  | $       |        |  |      |  |    | %       |  | $ | 300     |  |  |  |    | %
|Huntington funds  money market              |  |         | 164     |  |      |  |    |         |  |   | 500     |  |  |  |    |  
|Huntington funds  equity funds              |  |         | 300,080 |  |      |  | 68  |         |  |   | 240,456 |  |  |  | 68  |  
|Huntington funds  fixed income funds        |  |         | 125,971 |  |      |  | 29  |         |  |   | 95,837  |  |  |  | 27  |  
|Huntington common stock                      |  |         | 14,572  |  |      |  | 3   |         |  |   | 16,129  |  |  |  | 5   |  
|                                            
|Fair value of plan assets (September
    30) |  | $       | 440,787 |  |      |  | 100 | %       |  | $ | 353,222 |  |  |  | 100 | %
|                                            

The number of shares of Huntington common stock
held by the Plan was 642,364 at December 31, 2005 and 2004.
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.

Dividends and interest received by the Plan
during 2005 and 2004 were $18.9 million and
$11.0 million, respectively.

At December 31, 2005, the following table
shows when benefit payments, which include expected future
service, as appropriate, were expected to be paid:

|                          |  |          |         |  |                 |        
|------------------------- |  | -------- | ------- |  | --------------- | -------
|                          |  | Pension  |         |  | Post-Retirement
|(in thousands of dollars) |  | Benefits |         |  | Benefits       
|                         
|                         
|                         
|2006                      |  | $        | 19,204  |  |                 | $ 4,088
|2007                      |  |          | 21,704  |  |                 | 4,211  
|2008                      |  |          | 23,763  |  |                 | 4,295  
|2009                      |  |          | 25,374  |  |                 | 4,387  
|2010                      |  |          | 27,593  |  |                 | 4,500  
|2011 through 2015         |  |          | 162,219 |  |                 | 23,802 

Although not legally required, Huntington made a
discretionary contribution to the Plan of $63.6 million in
April 2005. There is no expected minimum contribution for 2006
to the Plan. However, Huntington may choose to make a
contribution to the Plan

125



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

up to the maximum deductible limit in the 2006
plan year. Expected contributions for 2006 to the
post-retirement benefit plan are $3.3 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 less than
$0.1 million and $2.8 million, respectively. A
one-percentage point decrease would reduce service and interest
costs by less than $0.1 million and the post-retirement
benefit obligation by $0.9 million. The 2006 health-care
cost trend rate was projected to be 9.78% for pre-65
participants and 9.46% for post-65 participants compared with an
estimate of 10.99% for pre-65 participants and 10.86% for
post-65 participants in 2005. 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 current and 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, 2005 and 2004, the accrued pension
liability for these plans totaled $26.6 million and
$25.1 million, respectively. Pension expense for the plans
was $2.3 million, $2.1 million, and $1.7 million
in 2005, 2004, and 2003, respectively. Huntington recorded a
$0.8 million and $1.1 million, net of tax, minimum
pension liability adjustment within other comprehensive income
associated with these unfunded plans in 2005 and 2004,
respectively.

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 $9.6 million in 2005, $9.2 million in 2004,
and $8.6 million in 2003. The number of shares of
Huntington common stock held by this plan was 7,333,165 at
December 31, 2005, and 7,851,365 at the end of the prior
year. The market value of these shares was $174.2 million
and $194.2 million at the same respective dates. Dividends
received by the plan were $13.9 million during 2005 and
$10.1 million during 2004.

20. 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:

|                          |                                       |          |   |             |            |  |          |             |   |  |            |             |   |  |   |             |  
|------------------------- | ------------------------------------- | -------- | - | ----------- | ---------- |  | -------- | ----------- | - |  | ---------- | ----------- | - |  | - | ----------- | -
|                          |                                       |          |   |            
|                          |                                       | 2005     |   |             | 2004       | 
|                         
|                         
|                          |                                      
|                          |                                       | Carrying |   |             |            |  | Carrying |             |   | 
|(in thousands of dollars) |                                       | Amount   |   |             | Fair Value |  |          | Amount      |   |  | Fair Value |            
|                         
|                         
|                          |                                      
|Financial assets:         |                                       |          |   |             |            |  |          |             |   |  |            |             |   |  |   |            
|                          | Cash and short-term assets            |          | $ | 1,063,167   |            |  | $        | 1,063,167   |   |  | $          | 1,527,758   |   |  | $ | 1,527,758   |  
|                          | Trading account securities            |          |   | 8,619       |            |  |          | 8,619       |   |  |            | 309,630     |   |  |   | 309,630     |  
|                          | Loans held for sale                   |          |   | 294,344     |            |  |          | 294,344     |   |  |            | 223,469     |   |  |   | 223,469     |  
|                          | Investment securities                 |          |   | 4,526,520   |            |  |          | 4,526,520   |   |  |            | 4,238,945   |   |  |   | 4,238,945   |  
|                          | Net loans and direct financing leases |          |   | 24,203,819  |            |  |          | 24,222,819  |   |  |            | 23,289,066  |   |  |   | 23,528,066  |  
|                          | Customers acceptance liability       |          |   | 4,536       |            |  |          | 4,536       |   |  |            | 11,299      |   |  |   | 11,299      |  
|                          | Derivatives                           |          |   | 30,274      |            |  |          | 30,274      |   |  |            | 41,809      |   |  |   | 41,809      |  
|Financial liabilities:    |                                       |          |   |             |            |  |          |             |   |  |            |             |   |  |   |            
|                          | Deposits                              |          |   | (22,409,675 | )          |  |          | (21,338,675 | ) |  |            | (20,768,161 | ) |  |   | (19,915,161 | )
|                          | Short-term borrowings                 |          |   | (1,889,260  | )          |  |          | (1,889,260  | ) |  |            | (1,207,233  | ) |  |   | (1,207,233  | )
|                          | Bank acceptances outstanding          |          |   | (4,536      | )          |  |          | (4,536      | ) |  |            | (11,299     | ) |  |   | (11,299     | )
|                          | Federal Home Loan Bank advances       |          |   | (1,155,647  | )          |  |          | (1,155,647  | ) |  |            | (1,271,088  | ) |  |   | (1,271,088  | )
|                          | Subordinated notes                    |          |   | (1,023,371  | )          |  |          | (1,023,371  | ) |  |            | (1,039,793  | ) |  |   | (1,039,793  | )
|                          | Other long-term debt                  |          |   | (2,418,419  | )          |  |          | (2,479,419  | ) |  |            | (4,016,004  | ) |  |   | (4,094,004  | )
|                          | Derivatives                           |          |   | (27,427     | )          |  |          | (27,427     | ) |  |            | (4,903      | ) |  |   | (4,903      | )

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-

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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:



|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | LOANS 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.                                                                                                                                                                                                                                                                                                                                  

21. 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. All derivatives
are reflected at fair value in the consolidated balance sheet.


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 for 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


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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 not effective, 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 mortgage banking activities,
can be settled 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 2005, 2004, and 2003
were insignificant. No amounts were excluded from the assessment
of effectiveness during 2005, 2004, or 2003 for derivatives
designated as fair value hedges.

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 2005, 2004, and 2003, 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 2005, 2004, and 2003 for derivatives designated as cash
flow hedges.

Derivatives used to manage Huntingtons
interest rate risk at December 31, 2005, 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   |          |     | 2.3   |                       | $       | (8,782  | ) |  |      | 3.41 | % |  |      | 4.27 | %
|Liability conversion swaps       |                              |          |           |           |          |     |       |                       |         |         |   |  |      |      |   |  |      |     
|                                 | Receive fixed  generic      |          |           | 1,575,250 |          |     | 5.4   |                       |         | (15,960 | ) |  |      | 4.21 | % |  |      | 4.47 | %
|                                 | Receive fixed  callable     |          |           | 665,000   |          |     | 7.2   |                       |         | (19,348 | ) |  |      | 4.39 | % |  |      | 4.22 | %
|                                 | Pay fixed  generic          |          |           | 1,301,000 |          |     | 2.1   |                       |         | 28,119  |   |  |      | 4.29 | % |  |      | 3.33 | %
|                                 | Pay fixed  forward starting |          |           | 200,000   |          |     | N/A   |                       |         | 2,100   |   |  |      | N/A  |   |  |      | N/A  |  
|                                
|Total liability conversion swaps |                              |          | 3,741,250 |           |          | 4.5 |       |                       | (5,089  | )       |   |  | 4.27 | %    |   |  | 4.00 | %   
|                                
|Total swap portfolio             |                              | $        | 4,091,250 |           |          | 4.3 |       | $                     | (13,871 | )       |   |  | 4.20 | %    |   |  | 4.03 | %   
|                                

N/A, not applicable

At December 31, 2004, the fair value of the
swap portfolio used for asset and liability management was an
asset of $17.9 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.

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The following table represents the gross notional
value of derivatives used to manage interest rate risk at
December 31, 2005, 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           |            | $         |        |           |        | $         | 25,000  |       |   | $         | 25,000    | 
|                                              | Loans                           |            |           |        |           |        |           | 325,000 |       |   |           | 325,000   | 
|                                              | Deposits                        |            |           | 790,250 |           |        |           |        |       |   |           | 790,250   | 
|                                              | Federal Home Loan Bank advances |            |           |        |           |        |           | 726,000 |       |   |           | 726,000   | 
|                                              | Subordinated notes              |            |           | 500,000 |           |        |           |        |       |   |           | 500,000   | 
|                                              | Other long-term debt            |            |           | 950,000 |           |        |           | 775,000 |       |   |           | 1,725,000 | 
|                                             
|Total notional value at December 31,
    2005 |                                 | $          | 2,240,250 |         |           | $      | 1,851,000 |         |       | $ | 4,091,250 |          
|                                             

A total of $8.4 million of the unrealized
net gain on cash flow hedges is expected to be recognized in
2006.

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, 2005 and 2004,
aggregate credit risk associated with these derivatives, net of
collateral that has been pledged by the counterparty, was
$26.2 million and $12.3 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 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
$23.6 million, $24.0 million, and $51.6 million
in 2005, 2004, and 2003, respectively.

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 and the related interest rate lock commitments 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)            |                               | 2005            |        |        | 2004 |  
|                                    
|Derivative assets:                   |                               |                 |        |        |      |   |        |     
|                                     | Interest rate lock agreements |                 | $      | 669    |      |   | $      | 479  |  
|                                     | Forward trades                |                 |        | 172    |      |   |        | 853  |  
|                                    
|Total derivative assets              |                               |                 | 841    |        |      |   | 1,332  |     
|                                    
|Derivative liabilities:              |                               |                 |        |        |      |   |        |     
|                                     | Interest rate lock agreements |                 |        | (328   | )    |   |        | (993 | )
|                                     | Forward trades                |                 |        | (1,947 | )    |   |        | (334 | )
|                                    
|Total derivative liabilities         |                               |                 | (2,275 | )      |      |   | (1,327 | )   
|                                    
|Net derivative
    (liability) asset |                               | $               | (1,434 | )      |      | $ | 5      |     
|                                    

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 2005 and 2004 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


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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 $8.3 million in 2005, $8.8 million
in 2004, and $10.3 million in 2003. 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 $4.2 billion at the end of
2005 and $4.5 billion at the end of the prior year.
Huntingtons credit risk from interest rate swaps used for
trading purposes was $44.3 million and $53.8 million
at the same dates.

In connection with its securitization activities,
interest rate caps were purchased with a notional value totaling
$0.9 billion. These purchased caps were assigned to the
securitization trust for the benefit of the security holders.
Interest rate caps were also sold totaling $0.9 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.

22. 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)     |                        | 2005            |       |       | 2004 | 
|                            
|Commitments to extend credit |                        |                 |       |       |      |  |     |      
|                             | Commercial             |                 | $     | 3,316 |      |  | $   | 3,453 | 
|                             | Consumer               |                 |       | 3,046 |      |  |     | 2,779 | 
|                             | Commercial real estate |                 |       | 1,567 |      |  |     | 854   | 
|Standby letters of credit    |                        |                 | 1,079 |       |      |  | 945 |      
|Commercial letters of credit |                        |                 | 47    |       |      |  | 72  |      

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, 2005,
approximately 48% of standby letters of credit are
collateralized and most are expected to expire without being
drawn upon. The carrying amount of deferred revenue associated
with these guarantees was $4.0 million and
$4.1 million at December 31, 2005 and 2004,
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 enters into forward contracts relating
to its mortgage banking business. At December 31, 2005 and
2004, Huntington had commitments to sell residential real estate
loans of $348.3 million and $311.3 million,
respectively. These contracts mature in less than one year.


During the 2005 second quarter, Huntington
entered into a two-year agreement to sell a minimum of 50% of
monthly automobile loan production at the cost of such loans,
subject to certain limitations, provided the production meets
certain

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pricing, asset quality, and volume parameters. At
December 31, 2005, approximately $51.6 million of
automobile loans related to this commitment were classified as
held for sale.

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, results of operations, or cash
flows.


COMMITMENTS UNDER CAPITAL AND OPERATING LEASE
OBLIGATIONS

At December 31, 2005, 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, 2005,
were $31.5 million in 2006, $30.4 million in 2007,
$28.6 million in 2008, $27.4 million in 2009,
$25.2 million in 2010, and $158.4 million thereafter.
At December 31, 2005, total minimum lease payments have not
been reduced by minimum sublease rentals of $77.8 million
due in the future under noncancelable subleases. At
December 31, 2005, the future minimum sublease rental
payments that Huntington expects to receive are
$16.7 million in 2006; $14.2 million in 2007;
$13.1 million in 2008; $12.5 million in 2009;
$9.3 million in 2010; and $12.0 million thereafter.
The rental expense for all operating leases was
$34.0 million, $40.4 million, and $36.1 million
for 2005, 2004, and 2003, respectively. Huntington had no
material obligations under capital leases.

SECURITIES AND EXCHANGE COMMISSION FORMAL
INVESTIGATION

On June 2, 2005, Huntington filed a
Form 8-K announcing that the Commission approved the
settlement of its previously announced formal investigation into
certain financial accounting matters. Huntington consented to
pay a penalty of $7.5 million. This civil money penalty had
no 2005 financial impact on Huntingtons results, as
reserves for this amount were established and expensed in 2004.


23. FORMAL REGULATORY
SUPERVISORY AGREEMENTS AND OTHER REGULATORY MATTERS

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

On October 6, 2005, Huntington announced
that the OCC had terminated its formal written agreement with
the Bank dated February 28, 2005, and that the FRBC written
agreement remained in effect. Huntington was verbally advised
that it was in full compliance with the financial holding
company and financial subsidiary requirement under the
Gramm-Leach-Bliley Act (GLB Act). This notification reflected
that Huntington and the Bank met both the
well-capitalized and well-managed
criteria under the GLB Act. Management believes that the changes
it has already made, and is in the process of making, will
address the FRBC issues fully and comprehensively.

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.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

As of December 31, 2005, 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)           |        | 2005   |   |       | 2004          |  |   | 2005            |   |  | 2004 |       |   | 2005 |   |       | 2004 | 
|                                  
|Huntington Bancshares Incorporated |        |        |   |       |               |  |   |                 |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |      
|                                   | Amount |        | $ | 2,701 |               |  | $ | 2,683           |   |  | $    | 3,678 |   |      | $ | 3,687 |      |  | $ | 2,701 |   |  | $ | 2,683 |  
|                                   | Ratio  |        |   | 9.13  | %             |  |   | 9.08            | % |  |      | 12.42 | % |      |   | 12.48 | %    |  |   | 8.34  | % |  |   | 8.42  | %
|The Huntington National Bank       |        |        |   |       |               |  |   |                 |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |      
|                                   | Amount |        | $ | 1,902 |               |  | $ | 1,770           |   |  | $    | 3,087 |   |      | $ | 2,955 |      |  | $ | 1,902 |   |  | $ | 1,770 |  
|                                   | Ratio  |        |   | 6.82  | %             |  |   | 6.08            | % |  |      | 10.55 | % |      |   | 10.16 | %    |  |   | 6.21  | % |  |   | 5.66  | %

Tier 1 Risk-based Capital consists of total
equity plus qualifying capital securities and minority interest,
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 2005
and 2004, 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 2005
and 2004, the average balance of these deposits were
$57.6 million and $70.4 million, respectively.

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, 2005, the Bank could lend $308.7 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 2006 of
approximately $197.0 million plus an additional amount
equal to its net income through the date of declaration in 2006.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

24. 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)                      |                                                                | 2005         |           |           | 2004 |  
|                                              
|                                              
|                                               |                                                               
|ASSETS                                         |                                                                |              |           |           |      |   |           |          
|                                               | Cash and cash equivalents                                      |              | $         | 227,115   |      |   | $         | 630,444   | 
|                                               | Due from The Huntington National Bank                          |              |           | 250,771   |      |   |           | 250,771   | 
|                                               | Due from non-bank subsidiaries                                 |              |           | 205,208   |      |   |           | 204,976   | 
|                                               | Investment in The Huntington National Bank                     |              |           | 1,660,905 |      |   |           | 1,472,357 | 
|                                               | Investment in non-bank subsidiaries                            |              |           | 574,382   |      |   |           | 595,233   | 
|                                               | Goodwill                                                       |              |           | 9,877     |      |   |           | 9,877     | 
|                                               | Accrued interest receivable and other assets                   |              |           | 128,303   |      |   |           | 141,284   | 
|                                              
|Total assets                                   |                                                                | $            | 3,056,561 |           |      | $ | 3,304,942 |          
|                                              
|LIABILITIES AND SHAREHOLDERS
    EQUITY       |                                                                |              |           |           |      |   |           |          
|                                               | Short-term borrowings                                          |              | $         | 3,034     |      |   | $         |          | 
|                                               | Long-term borrowings                                           |              |           | 309,279   |      |   |           | 411,750   | 
|                                               | Dividends payable, accrued expenses, and other
    liabilities |              |           | 186,747   |      |   |           | 355,554   | 
|                                              
|Total liabilities                              |                                                                |              | 499,060   |           |      |   | 767,304   |          
|                                              
|Shareholders equity                           |                                                                |              | 2,557,501 |           |      |   | 2,537,638 |          
|                                              
|Total liabilities and shareholders
    equity |                                                                | $            | 3,056,561 |           |      | $ | 3,304,942 |          
|                                              

The parent company had a $25 million line of
credit to one of its non-bank subsidiaries at December 31,
2005. This was reduced from $100 million at the end of the
prior year. Of the total line of credit available,
$0.5 million remained outstanding at December 31, 2005.

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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

|                                                                                                                                 |                                   |                              |         |        |         |   |         |        |         |   |         |        |         | 
|-------------------------------------------------------------------------------------------------------------------------------- | --------------------------------- | ---------------------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                                                                                                                 |                                   |                             
|Statements of Income                                                                                                             |                                   | Year Ended December 31,      |        
|                                                                                                                                
|                                                                                                                                
|                                                                                                                                 |                                  
|(in thousands of dollars)                                                                                                        |                                   | 2005                         |         |        | 2004    |   |         | 2003   |        
|                                                                                                                                
|                                                                                                                                
|                                                                                                                                 |                                  
|Income                                                                                                                           |                                   |                              |         |        |         |   |         |        |         |   |         |       
|                                                                                                                                 | Dividends from                    |                              |         |        |         |   |         |        |         |   |         |        |        
|                                                                                                                                 |                                   | The Huntington National Bank |         | $      | 180,000 |   |         | $      | 400,000 |   |         | $      | 150,533 | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 3,800   |   |         |        | 8,202   |   |         |        | 3,000   | 
|                                                                                                                                 | Interest from                     |                              |         |        |         |   |         |        |         |   |         |        |        
|                                                                                                                                 |                                   | The Huntington National Bank |         |        | 35,253  |   |         |        | 13,417  |   |         |        | 20,098  | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 8,770   |   |         |        | 7,638   |   |         |        | 7,356   | 
|                                                                                                                                 | Management fees from subsidiaries |                              |         | 30,539 |         |   |         | 34,603 |         |   |         | 34,129 |        
|                                                                                                                                 | Other                             |                              |         | 406    |         |   |         | (810   | )       |   |         | 3,214  |        
|                                                                                                                                
|Total income                                                                                                                     |                                   |                              | 258,768 |        |         |   | 463,050 |        |         |   | 218,330 |       
|                                                                                                                                
|Expense                                                                                                                          |                                   |                              |         |        |         |   |         |        |         |   |         |       
|                                                                                                                                 |                                   | Personnel costs              |         |        | 25,060  |   |         |        | 32,227  |   |         |        | 18,608  | 
|                                                                                                                                 |                                   | Interest on borrowings       |         |        | 22,772  |   |         |        | 4,317   |   |         |        | 12,976  | 
|                                                                                                                                 |                                   | Other                        |         |        | 24,741  |   |         |        | 36,738  |   |         |        | 27,347  | 
|                                                                                                                                
|Total expense                                                                                                                    |                                   |                              | 72,573  |        |         |   | 73,282  |        |         |   | 58,931  |       
|                                                                                                                                
|Income before income taxes and equity in
    undistributed net income of subsidiaries                                            |                                   |                              | 186,195 |        |         |   | 389,768 |        |         |   | 159,399 |       
|Income taxes                                                                                                                     |                                   |                              | (2,499  | )      |         |   | (4,223  | )      |         |   | (5,130  | )     
|                                                                                                                                
|Income before equity in undistributed net income
    of subsidiaries and cumulative effect of change in accounting
    principle |                                   |                              | 188,694 |        |         |   | 393,991 |        |         |   | 164,529 |       
|Cumulative effect of change in accounting
    principle net of tax of $1,315                                                     |                                   |                              |        |        |         |   |        |        |         |   | (2,442  | )     
|                                                                                                                                
|Income before equity in undistributed net income
    of subsidiaries                                                             |                                   |                              | 188,694 |        |         |   | 393,991 |        |         |   | 162,087 |       
|Increase (decrease) in undistributed net income
    of:                                                                          |                                   |                              |         |        |         |   |         |        |         |   |         |       
|                                                                                                                                 |                                   | The Huntington National Bank |         |        | 208,061 |   |         |        | (9,073  | ) |         |        | 196,659 | 
|                                                                                                                                 |                                   | Non-bank subsidiaries        |         |        | 15,336  |   |         |        | 14,007  |   |         |        | 13,617  | 
|                                                                                                                                
|Net income                                                                                                                       |                                   | $                            | 412,091 |        |         | $ | 398,925 |        |         | $ | 372,363 |       
|                                                                                                                                

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|                                                        |               |                                                                                       |                                                         |        |          |          |          |        |          |         |          |        |          |          |  
|------------------------------------------------------- | ------------- | ------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------ | -------- | -------- | -------- | ------ | -------- | ------- | -------- | ------ | -------- | -------- | -
|                                                        |               |                                                                                      
|Statements of Cash Flows                                |               | Year Ended December 31,                                                               |                                                        
|                                                       
|                                                       
|                                                        |              
|(in thousands of dollars)                               |               | 2005                                                                                  |                                                         |        | 2004     |          |          | 2003   |         
|                                                       
|                                                       
|                                                        |              
|Operating activities                                    |               |                                                                                       |                                                         |        |          |          |          |        |          |         |          |       
|                                                        |               | Net income                                                                            |                                                         | $      | 412,091  |          |          | $      | 398,925  |         |          | $      | 372,363  |         
|                                                        |               | 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      |        |          | (223,397 | )        |        |          | (4,934  | )        |        |          | (210,275 | )
|                                                        |               |                                                                                       | Depreciation and amortization                           |        |          | 2,674    |          |        |          | 2,690   |          |        |          | 2,211    |  
|                                                        |               |                                                                                       | Gain on sales of securities available for sale          |        |          |         |          |        |          |        |          |        |          | (5       | )
|                                                        |               |                                                                                       | Change in other, net                                    |        |          | (49,557  | )        |        |          | (13,609 | )        |        |          | (67,852  | )
|                                                       
|Net cash provided by operating
    activities           |               |                                                                                       | 141,811                                                 |        |          |          | 383,072  |        |          |         | 98,884   |       
|                                                       
|Investing activities                                    |               |                                                                                       |                                                         |        |          |          |          |        |          |         |          |       
|                                                        |               | Repayments from subsidiaries                                                          |                                                         |        | 154,152  |          |          |        | 117,314  |         |          |        | 27,001   |         
|                                                        |               | Advances to subsidiaries                                                              |                                                         |        | (206,765 | )        |          |        | (80,197  | )       |          |        | (74,650  | )       
|                                                        |               | Proceeds from sale of securities available for
    sale                               |                                                         |        |         |          |          |        |         |         |          |        | 46       |         
|                                                       
|Net cash provided by (used in) investing
    activities |               |                                                                                       | (52,613                                                 | )      |          |          | 37,117   |        |          |         | (47,603  | )     
|                                                       
|Financing activities                                    |               |                                                                                       |                                                         |        |          |          |          |        |          |         |          |       
|                                                        |               | Proceeds from issuance of long-term borrowings                                        |                                                         |        |         |          |          |        |         |         |          |        | 100,000  |         
|                                                        |               | Payment of borrowings                                                                 |                                                         |        | (99,437  | )        |          |        | (101,541 | )       |          |        | (41,544  | )       
|                                                        |               | Dividends paid on common stock                                                        |                                                         |        | (200,628 | )        |          |        | (168,075 | )       |          |        | (151,023 | )       
|                                                        |               | Acquisition of treasury stock                                                         |                                                         |        | (231,656 | )        |          |        |         |         |          |        | (81,061  | )       
|                                                        |               | Proceeds from issuance of common stock                                                |                                                         |        | 39,194   |          |          |        | 47,239   |         |          |        | 8,082    |         
|                                                       
|Net cash used for financing
    activities              |               |                                                                                       | (492,527                                                | )      |          |          | (222,377 | )      |          |         | (165,546 | )     
|                                                       
|Change in cash and cash equivalents                     |               |                                                                                       | (403,329                                                | )      |          |          | 197,812  |        |          |         | (114,265 | )     
|Cash and cash equivalents at beginning of year          |               |                                                                                       | 630,444                                                 |        |          |          | 432,632  |        |          |         | 546,897  |       
|                                                       
|Cash and cash equivalents at end of
    year            |               | $                                                                                     | 227,115                                                 |        |          | $        | 630,444  |        |          | $       | 432,632  |       
|                                                       
|                                                       
|Supplemental disclosure:                                |               |                                                                                       |                                                         |        |          |          |          |        |          |         |          |       
|                                                        | Interest paid |                                                                                       | $                                                       | 22,754 |          |          | $        | 18,495 |          |         | $        | 13,157 |         

25. 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 November 12, 2004, Huntington and Unizan
jointly announced entering into an amendment to their
January 26, 2004 merger agreement extending the term of the
agreement for one year from January 27, 2005 to
January 27, 2006. On the same date, Huntington also
announced that it withdrew its application with the FRBC to
acquire Unizan. On October 24, 2005, Huntington announced
that after consultation with the FRBC, it had re-filed its
application to acquire Unizan. On January 26, 2006,
Huntington announced that the Federal Reserve Board had approved
its merger application. The merger is scheduled to close
March 1, 2006.

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.


26. SEGMENT
REPORTING

Huntington has three distinct lines of business:
Regional Banking, Dealer Sales, and the Private Financial and
Capital Markets Group (PFCMG). A fourth segment includes the
Companys Treasury function and other unallocated assets,
liabilities, revenue, and expense. Lines of business results are
determined based upon the Company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

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information published by other financial
institutions. During the second quarter of 2005, the Capital
Markets Group was removed from the Treasury/Other segment and
combined with the Private Financial Group to form the Private
Financial and Capital Markets Group segment. Since the Capital
Markets Group is now managed through the Private Financial
Group, combining these two segments better reflects the
management accountability and decision making structure. Prior
periods reflect this change. An overview of this system is
provided below, along with a description of each segment and
discussion of financial results.

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

Regional Banking:This segment provides traditional
banking products and services to consumer, small business, and
commercial customers located in its seven operating regions
within the five states of Ohio, Michigan, West Virginia,
Indiana, and Kentucky. It provides these services through a
banking network of 344 branches, over 900 ATMs, plus on-line 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, small business loans,
personal and business deposit products, as well as sales of
investment and insurance services. Retail Banking accounts for
60% and 79% of total Regional Banking loans and deposits,
respectively. Commercial Banking serves middle market 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 provides a variety of banking products and services to
more than 3,500 automotive dealerships within our primary
banking markets, as well as in Arizona, Florida, Georgia, North
Carolina, Pennsylvania, South Carolina and Tennessee. We have
been in this business for more than 50 years. Dealer Sales
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 leases, finances the dealerships floor plan
inventories, real estate, or working capital needs, and provides
other banking services to the automotive dealerships and their
owners. Dealer Sales is directly impacted by general automotive
sales, including programs initiated by manufacturers to enhance
and increase sales directly. Competition from the financing
divisions of automobile manufacturers and from other financial
institutions is intense.

Private Financial and Capital Markets Group
(PFCMG):This segment provides
products and services designed to meet the needs of our higher
net worth customers. Revenue is derived through the sale of
trust, asset management, investment advisory, brokerage,
insurance, and private banking products and services. It also
focuses on financial solutions for corporate and institutional
customers that include investment banking, sales and trading of
securities, mezzanine capital financing, and risk management
products. To serve our customers, a unique distribution model is
used that employs a single, unified sales force to deliver
products and services mainly through Regional Banking
distribution channels. PFCMG provides investment management and
custodial services to our 29 proprietary mutual funds, including
ten variable annuity funds. The Huntington Investment Company
offers brokerage and investment advisory services to both
Regional Banking and PFCMG customers through more than 100
licensed investment sales representatives and nearly 700
licensed personal bankers. PFCMGs insurance entities
provide a complete array of insurance products including
individual life insurance products ranging from basic term life
insurance, to estate planning, group life and health insurance,
property and casualty insurance, mortgage title insurance, and
reinsurance for payment protection products. Income and related
expenses from the sale of brokerage and insurance products is
shared with the line of business that generated the sale or
provided the customer referral, most notably Regional Banking.

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

USE OF OPERATING EARNINGS TO MEASURE SEGMENT
PERFORMANCE

Management uses earnings on an operating basis,
rather than on a GAAP basis, to measure underlying performance
trends for each business segment. Operating earnings represent
GAAP earnings adjusted to exclude the impact of certain items
listed in the reconciliation table below. Analyzing earnings on
an operating basis is very helpful in assessing underlying
performance trends, a critical factor used to determine the
success of strategies and future earnings capabilities. For the
year ending December 31, 2005, operating earnings were the
same as reported GAAP earnings.


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|NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS | HUNTINGTON BANCSHARES INCORPORATED

Listed below is certain operating basis financial
information reconciled to Huntingtons 2005, 2004, and 2003
reported results by line of business:

|                                                                    |  |          |          |   |        |   |          |       |  |           |          |   |            |              |         |   |  |   |            |  
|------------------------------------------------------------------- |  | -------- | -------- | - | ------ | - | -------- | ----- |  | --------- | -------- | - | ---------- | ------------ | ------- | - |  | - | ---------- | -
|                                                                    |  | Regional |          |   | Dealer |   |          |       |  | Treasury/ |          |   | Huntington |             
|INCOME STATEMENTS(in thousands of dollars)                          |  | Banking  |          |   | Sales  |   |          | PFCMG |  |           | Other    |   |            | Consolidated |        
|                                                                    |  |          |          |   |        |   |          |       |  |          
|                                                                   
|2005                                                                |  |          |          |   |        |   |          |       |  |           |          |   |            |              |         |   |  |   |            |  
|Net interest income                                                 |  | $        | 780,072  |   |        | $ | 145,578  |       |  | $         | 72,886   |   |            | $            | (36,125 | ) |  | $ | 962,411    |  
|Provision for credit losses                                         |  |          | (51,061  | ) |        |   | (26,073  | )     |  |           | (4,165   | ) |            |              |        |   |  |   | (81,299    | )
|Non-interest income                                                 |  |          | 311,244  |   |        |   | 169,792  |       |  |           | 135,102  |   |            |              | 16,144  |   |  |   | 632,282    |  
|Non-interest expense                                                |  |          | (593,137 | ) |        |   | (185,936 | )     |  |           | (131,195 | ) |            |              | (59,552 | ) |  |   | (969,820   | )
|Income taxes                                                        |  |          | (156,491 | ) |        |   | (36,177  | )     |  |           | (25,420  | ) |            |              | 86,605  |   |  |   | (131,483   | )
|                                                                   
|Operating earnings and net income as
    reported                   |  | $        | 290,627  |   |        | $ | 67,184   |       |  | $         | 47,208   |   |            | $            | 7,072   |   |  | $ | 412,091    |  
|                                                                   
|                                                                   
|2004                                                                |  |          |          |   |        |   |          |       |  |           |          |   |            |              |         |   |  |   |            |  
|Net interest income                                                 |  | $        | 678,288  |   |        | $ | 149,791  |       |  | $         | 61,763   |   |            | $            | 21,532  |   |  | $ | 911,374    |  
|Provision for credit losses                                         |  |          | (7,664   | ) |        |   | (44,733  | )     |  |           | (2,665   | ) |            |              |        |   |  |   | (55,062    | )
|Non-interest income                                                 |  |          | 308,493  |   |        |   | 320,154  |       |  |           | 134,005  |   |            |              | 41,740  |   |  |   | 804,392    |  
|Non-interest expense                                                |  |          | (593,861 | ) |        |   | (324,229 | )     |  |           | (124,441 | ) |            |              | (80,864 | ) |  |   | (1,123,395 | )
|Income taxes                                                        |  |          | (134,841 | ) |        |   | (35,344  | )     |  |           | (24,032  | ) |            |              | 45,851  |   |  |   | (148,366   | )
|                                                                   
|Operating earnings                                                  |  |          | 250,415  |   |        |   | 65,639   |       |  |           | 44,630   |   |            |              | 28,259  |   |  |   | 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                                                          |  | $        | 250,415  |   |        | $ | 74,237   |       |  | $         | 44,630   |   |            | $            | 29,643  |   |  | $ | 398,925    |  
|                                                                   
|                                                                   
|2003                                                                |  |          |          |   |        |   |          |       |  |           |          |   |            |              |         |   |  |   |            |  
|Net interest income                                                 |  | $        | 605,311  |   |        | $ | 107,223  |       |  | $         | 50,667   |   |            | $            | 85,785  |   |  | $ | 848,986    |  
|Provision for credit losses                                         |  |          | (96,735  | ) |        |   | (56,612  | )     |  |           | (10,646  | ) |            |              |        |   |  |   | (163,993   | )
|Non-interest income                                                 |  |          | 317,771  |   |        |   | 525,957  |       |  |           | 123,219  |   |            |              | 49,055  |   |  |   | 1,016,002  |  
|Non-interest expense                                                |  |          | (562,909 | ) |        |   | (481,543 | )     |  |           | (116,872 | ) |            |              | (60,251 | ) |  |   | (1,221,575 | )
|Income taxes                                                        |  |          | (92,203  | ) |        |   | (33,259  | )     |  |           | (16,229  | ) |            |              | 18,996  |   |  |   | (122,695   | )
|                                                                   
|Operating earnings                                                  |  |          | 171,235  |   |        |   | 61,766   |       |  |           | 30,139   |   |            |              | 93,585  |   |  |   | 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 tax |  |          |         |   |        |   | (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                                                          |  | $        | 171,235  |   |        | $ | 64,371   |       |  | $         | 30,139   |   |            | $            | 106,618 |   |  | $ | 372,363    |  
|                                                                   

|                                       |  |                 |        |  |                 |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |        | 
|-------------------------------------- |  | --------------- | ------ |  | --------------- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|                                       |  |                 |        | 
|                                       |  | Assets          |        |  | Deposits        |  
|                                       |  | At December 31, |        |  | At December 31, |  
|                                       |  |                 |        |  |                 |  
|BALANCE SHEETS(in millions of dollars) |  | 2005            |        |  | 2004            |   |        | 2003 |  |   | 2005   |  |  | 2004 |        |  | 2003 |  
|                                      
|Regional Banking                       |  | $               | 18,863 |  |                 | $ | 17,864 |      |  | $ | 15,042 |  |  | $    | 17,968 |  |      | $ | 17,411 |  |  | $ | 15,473 | 
|Dealer Sales                           |  |                 | 5,612  |  |                 |   | 6,100  |      |  |   | 7,336  |  |  |      | 65     |  |      |   | 75     |  |  |   | 77     | 
|PFCMG                                  |  |                 | 2,005  |  |                 |   | 1,959  |      |  |   | 1,722  |  |  |      | 1,169  |  |      |   | 1,176  |  |  |   | 1,165  | 
|Treasury/Other                         |  |                 | 6,285  |  |                 |   | 6,642  |      |  |   | 6,419  |  |  |      | 3,208  |  |      |   | 2,106  |  |  |   | 1,772  | 
|                                      
|Total                                  |  | $               | 32,765 |  |                 | $ | 32,565 |      |  | $ | 30,519 |  |  | $    | 22,410 |  |      | $ | 20,768 |  |  | $ | 18,487 | 
|                                      

137



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##### 



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

27. QUARTERLY RESULTS OF
OPERATIONS (UNAUDITED)

The following is a summary of the unaudited
quarterly results of operations, for the years ended
December 31, 2005 and 2004:

|                                                 |                  |        |          |          |       |   |          |          |   |   |          |          |   |   |          |          |  
|------------------------------------------------ | ---------------- | ------ | -------- | -------- | ----- | - | -------- | -------- | - | - | -------- | -------- | - | - | -------- | -------- | -
|                                                 |                  |       
|2005                                             |                 
|                                                
|                                                 |                 
|(in thousands of dollars, except per share data) |                  | Fourth |          |          | Third |   |          | Second   |   |   | First    |         
|                                                
|                                                
|                                                 |                 
|                                                 | Interest income  |        | $        | 442,476  |       |   | $        | 420,858  |   |   | $        | 402,326  |   |   | $        | 376,105  |  
|                                                 | Interest expense |        |          | (198,800 | )     |   |          | (179,221 | ) |   |          | (160,426 | ) |   |          | (140,907 | )
|                                                
|Net interest income                              |                  |        | 243,676  |          |       |   | 241,637  |          |   |   | 241,900  |          |   |   | 235,198  |         
|                                                
|Provision for credit losses                      |                  |        | (30,831  | )        |       |   | (17,699  | )        |   |   | (12,895  | )        |   |   | (19,874  | )       
|Non-interest income                              |                  |        | 147,322  |          |       |   | 160,740  |          |   |   | 156,170  |          |   |   | 168,050  |         
|Non-interest expense                             |                  |        | (230,355 | )        |       |   | (233,052 | )        |   |   | (248,136 | )        |   |   | (258,277 | )       
|                                                
|Income before income taxes                       |                  |        | 129,812  |          |       |   | 151,626  |          |   |   | 137,039  |          |   |   | 125,097  |         
|Provision for income taxes                       |                  |        | (29,239  | )        |       |   | (43,052  | )        |   |   | (30,614  | )        |   |   | (28,578  | )       
|                                                
|Net income                                       |                  | $      | 100,573  |          |       | $ | 108,574  |          |   | $ | 106,425  |          |   | $ | 96,519   |         
|                                                
|Net income per common share 
    Basic          |                  |        | $0.44    |          |       |   | $0.47    |          |   |   | $0.46    |          |   |   | $0.42    |         
|Net income per common share 
    Diluted        |                  |        | 0.44     |          |       |   | 0.47     |          |   |   | 0.45     |          |   |   | 0.41     |         

|                                                 |                  |        |          |          |       |   |          |          |   |   |          |          |   |   |          |          |  
|------------------------------------------------ | ---------------- | ------ | -------- | -------- | ----- | - | -------- | -------- | - | - | -------- | -------- | - | - | -------- | -------- | -
|                                                 |                  |       
|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  |         
|Provision for 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     |         

138