##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2005



Commission File No. 1-14473



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LOGO



Sky Financial Group, Inc.

(Exact Name of Registrant as Specified in its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Ohio                                                           |  | 34-1372535                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification Number)



|                                             |  |           
|-------------------------------------------- |  | ----------
|221 South Church Street, Bowling Green, Ohio |  | 43402     
|(Address of Principal Executive Offices)     |  | (Zip Code)



(419) 327-6300

(Registrants Telephone Number)



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Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange

Act)    Yes  x    No ̈



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.):    Yes ̈No  x



The number of shares outstanding of the Registrants common stock, without par value,
was 107,812,573 at October 24, 2005.



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



INDEX



|                              |  |                                                                                                                             |  |           
|----------------------------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ----------
|                              |  |                                                                                                                             |  | PageNumber
|PART I.
FINANCIAL INFORMATION
|                              |  |                                                                                                                            
|Item 1.                       |  | Financial Statements (Unaudited)                                                                                            |  |           
|                              |  | Condensed Consolidated Balance SheetsSeptember 30, 2005 and December 31, 2004                                               |  | 3         
|                              |  | Condensed Consolidated Statements of IncomeThree and nine months ended September 30, 2005 and 2004                          |  | 4         
|                              |  | Condensed Consolidated Statements of Changes in Shareholders EquityThree and nine months ended September 30, 2005 and 2004 |  | 5         
|                              |  | Condensed Consolidated Statements of Cash FlowsNine months ended September 30, 2005 and 2004                                |  | 6         
|                              |  |                                                                                                                            
|                              |  | Notes to Condensed Consolidated Financial Statements                                                                        |  | 7         
|                              |  |                                                                                                                            
|Item 2.                       |  | Managements Discussion and Analysis of FinancialCondition and Results of Operations                                        |  | 21        
|                              |  |                                                                                                                            
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  |  | 35        
|                              |  |                                                                                                                            
|Item 4.                       |  | Controls and Procedures                                                                                                     |  | 36        
|                             
|PART II.
OTHER INFORMATION   
|                              |  |                                                                                                                            
|Item 1.                       |  | Legal Proceedings                                                                                                           |  | 36        
|                              |  |                                                                                                                            
|Item 2.                       |  | Changes in Securities and Use of Proceeds                                                                                   |  | 38        
|                              |  |                                                                                                                            
|Item 3.                       |  | Defaults Upon Senior Securities                                                                                             |  | 38        
|                              |  |                                                                                                                            
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                                         |  | 38        
|                              |  |                                                                                                                            
|Item 5.                       |  | Other Information                                                                                                           |  | 38        
|                              |  |                                                                                                                            
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                                                            |  | 38        
|                              | 
|SIGNATURES                    |  | 40                                                                                                                         
|                              | 
|EXHIBIT INDEX                 |  | 41                                                                                                                         



2



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Condensed Financial Statements



SKY FINANCIAL GROUP, INC.



Condensed Consolidated Balance Sheets (Unaudited)



|                                                                                                         |  |                   |            |   |                  |   |            |  
|-------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ---------------- | - | ---------- | -
|(Dollars and shares in thousands)                                                                        |  | September 30,2005 |            |   | December 31,2004 |  
|Assets                                                                                                   |  |                   |            |   |                  |   |            |  
|Cash and due from banks                                                                                  |  | $                 | 289,089    |   |                  | $ | 232,407    |  
|Interest-earning deposits with financial institutions                                                    |  |                   | 14,196     |   |                  |   | 32,919     |  
|Loans held for sale                                                                                      |  |                   | 20,685     |   |                  |   | 9,433      |  
|Securities available for sale                                                                            |  |                   | 3,052,117  |   |                  |   | 3,091,813  |  
|                                                                                                         |  |                  
|Total loans                                                                                              |  |                   | 10,914,530 |   |                  |   | 10,616,118 |  
|Less allowance for loan and lease losses                                                                 |  |                   | (153,351   | ) |                  |   | (151,389   | )
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Net loans                                                                                                |  |                   | 10,761,179 |   |                  |   | 10,464,729 |  
|                                                                                                         |  |                  
|Premises and equipment, net                                                                              |  |                   | 165,517    |   |                  |   | 155,466    |  
|Goodwill                                                                                                 |  |                   | 514,970    |   |                  |   | 475,258    |  
|Core deposits and other intangibles, net                                                                 |  |                   | 67,828     |   |                  |   | 71,674     |  
|Accrued interest receivable and other assets                                                             |  |                   | 451,384    |   |                  |   | 410,724    |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Total assets                                                                                             |  | $                 | 15,336,965 |   |                  | $ | 14,944,423 |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Liabilities                                                                                              |  |                   |            |   |                  |   |            |  
|Deposits                                                                                                 |  |                   |            |   |                  |   |            |  
|Non-interest bearing deposits                                                                            |  | $                 | 1,722,735  |   |                  | $ | 1,592,510  |  
|Interest-bearing deposits                                                                                |  |                   | 9,132,059  |   |                  |   | 8,759,081  |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Total deposits                                                                                           |  |                   | 10,854,794 |   |                  |   | 10,351,591 |  
|Securities sold under repurchase agreements and federal funds purchased                                  |  |                   | 780,585    |   |                  |   | 1,041,361  |  
|Debt and Federal Home Loan Bank advances                                                                 |  |                   | 1,775,804  |   |                  |   | 1,735,282  |  
|Junior subordinated debentures owed to unconsolidated subsidiary trusts                                  |  |                   | 187,790    |   |                  |   | 189,558    |  
|Accrued interest payable and other liabilities                                                           |  |                   | 222,078    |   |                  |   | 155,676    |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Total Liabilities                                                                                        |  |                   | 13,821,051 |   |                  |   | 13,473,468 |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Shareholders Equity                                                                                     |  |                   |            |   |                  |   |            |  
|                                                                                                         |  |                  
|Serial preferred stock, $10.00 par value; 10,000 shares authorized; none issued                          |  |                   |           |   |                  |   |           |  
|Common stock, no par value; 350,000 shares authorized; 109,367 and106,952 shares issued in 2005 and 2004 |  |                   | 1,194,366  |   |                  |   | 1,136,681  |  
|Retained earnings                                                                                        |  |                   | 404,528    |   |                  |   | 343,541    |  
|Treasury stock; 1,897 and 113 shares in 2005 and 2004                                                    |  |                   | (51,227    | ) |                  |   | (2,330     | )
|Accumulated other comprehensive loss                                                                     |  |                   | (31,753    | ) |                  |   | (6,937     | )
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Total Shareholders Equity                                                                               |  |                   | 1,515,914  |   |                  |   | 1,470,955  |  
|                                                                                                         |  |                   |            |   |                  |   |            |  
|Total Liabilities and Shareholders Equity                                                               |  | $                 | 15,336,965 |   |                  | $ | 14,944,423 |  
|                                                                                                         |  |                   |            |   |                  |   |            |  



The accompanying notes are an integral
part of the unaudited condensed consolidated financial statements.



3



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



Condensed Consolidated Statements of Income (Unaudited)



|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|----------------------------------------------------------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                                                                                          |  | Three Months Ended September 30, |         | Nine Months Ended September 30,
|(Dollars and shares in thousands, except per share data)                                  |  | 2005                             |         | 2004                            |   | 2005    |  | 2004
|Interest Income                                                                           |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Loans, including fees                                                                     |  | $                                | 176,937 |                                 | $ | 145,447 |  | $    | 505,059 |  | $ | 389,943
|Securities                                                                                |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Taxable                                                                                   |  |                                  | 35,215  |                                 |   | 32,970  |  |      | 101,258 |  |   | 84,926 
|Non-taxable                                                                               |  |                                  | 62      |                                 |   | 201     |  |      | 177     |  |   | 607    
|Federal funds sold and other                                                              |  |                                  | 144     |                                 |   | 154     |  |      | 487     |  |   | 344    
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Total interest income                                                                     |  |                                  | 212,358 |                                 |   | 178,772 |  |      | 606,981 |  |   | 475,820
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Interest Expense                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Deposits                                                                                  |  |                                  | 55,242  |                                 |   | 37,179  |  |      | 148,212 |  |   | 101,281
|Borrowed funds                                                                            |  |                                  | 26,697  |                                 |   | 19,077  |  |      | 76,343  |  |   | 47,533 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Total interest expense                                                                    |  |                                  | 81,939  |                                 |   | 56,256  |  |      | 224,555 |  |   | 148,814
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Net Interest Income                                                                       |  |                                  | 130,419 |                                 |   | 122,516 |  |      | 382,426 |  |   | 327,006
|Provision for Credit Losses                                                               |  |                                  | 8,725   |                                 |   | 8,360   |  |      | 45,442  |  |   | 26,045 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Net interest income after provision for credit losses                                     |  |                                  | 121,694 |                                 |   | 114,156 |  |      | 336,984 |  |   | 300,961
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Non-Interest Income                                                                       |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Brokerage and insurance commissions                                                       |  |                                  | 13,896  |                                 |   | 14,703  |  |      | 44,654  |  |   | 42,462 
|Service charges and fees on deposit accounts                                              |  |                                  | 14,786  |                                 |   | 13,820  |  |      | 40,991  |  |   | 34,569 
|Trust services income                                                                     |  |                                  | 5,598   |                                 |   | 5,079   |  |      | 16,407  |  |   | 13,285 
|Mortgage banking income                                                                   |  |                                  | 7,681   |                                 |   | 6,845   |  |      | 19,360  |  |   | 19,169 
|Net securities gains                                                                      |  |                                  | 147     |                                 |   | 1,854   |  |      | 2,109   |  |   | 6,259  
|Other income                                                                              |  |                                  | 10,082  |                                 |   | 10,446  |  |      | 31,657  |  |   | 30,021 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Total non-interest income                                                                 |  |                                  | 52,190  |                                 |   | 52,747  |  |      | 155,178 |  |   | 145,765
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Non-Interest Expense                                                                      |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Salaries and employee benefits                                                            |  |                                  | 52,078  |                                 |   | 51,583  |  |      | 158,045 |  |   | 140,421
|Occupancy and equipment expense                                                           |  |                                  | 16,754  |                                 |   | 15,962  |  |      | 51,193  |  |   | 42,272 
|Merger, integration and restructuring expense                                             |  |                                  | 122     |                                 |   | 3,831   |  |      | 1,153   |  |   | 4,177  
|Amortization expense                                                                      |  |                                  | 3,814   |                                 |   | 3,553   |  |      | 10,978  |  |   | 7,403  
|Other operating expense                                                                   |  |                                  | 23,630  |                                 |   | 22,963  |  |      | 74,305  |  |   | 64,420 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Total non-interest expense                                                                |  |                                  | 96,398  |                                 |   | 97,892  |  |      | 295,674 |  |   | 258,693
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Income From Continuing Operations BeforeIncome Taxes                                      |  |                                  | 77,486  |                                 |   | 69,011  |  |      | 196,488 |  |   | 188,033
|Income Taxes From Continuing Operations                                                   |  |                                  | 26,463  |                                 |   | 22,863  |  |      | 65,519  |  |   | 61,732 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Income From Continuing Operations                                                         |  |                                  | 51,023  |                                 |   | 46,148  |  |      | 130,969 |  |   | 126,301
|                                                                                          |  |                                  |         |                                
|Income From Discontinued Operations, net of tax of $10,116 for the nine months ended 2004 |  |                                  |        |                                 |   |        |  |      |        |  |   | 18,725 
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Net Income                                                                                |  | $                                | 51,023  |                                 | $ | 46,148  |  | $    | 130,969 |  | $ | 145,026
|                                                                                          |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Income From Continuing Operations per Common Share                                        |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Basic                                                                                     |  | $                                | 0.48    |                                 | $ | 0.44    |  | $    | 1.23    |  | $ | 1.30   
|Diluted                                                                                   |  |                                  | 0.47    |                                 |   | 0.43    |  |      | 1.22    |  |   | 1.28   
|Income From Discontinued Operations per Common Share                                      |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Basic                                                                                     |  |                                  |        |                                 |   |        |  |      |        |  |   | 0.19   
|Diluted                                                                                   |  |                                  |        |                                 |   |        |  |      |        |  |   | 0.19   
|Income per Common Share                                                                   |  |                                  |         |                                 |   |         |  |      |         |  |   |        
|Basic                                                                                     |  |                                  | 0.48    |                                 |   | 0.44    |  |      | 1.23    |  |   | 1.49   
|Diluted                                                                                   |  |                                  | 0.47    |                                 |   | 0.43    |  |      | 1.22    |  |   | 1.47   



The accompanying notes are an integral
part of the unaudited condensed consolidated financial statements.



4



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



(Unaudited)



Condensed Consolidated Statements of

Changes in Shareholders Equity



|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|------------------------------------------------------ |  | -------------------------------- | --------- | - | ------------------------------- | - | --------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                       |  | Three Months Ended September 30, |           |   | Nine Months Ended September 30, |  
|(Dollars in thousands, except per share data)          |  | 2005                             |           |   | 2004                            |   |           | 2005 |  |   | 2004      |  
|Balance at beginning of period                         |  | $                                | 1,496,423 |   |                                 | $ | 1,040,208 |      |  | $ | 1,470,955 |   |  | $ | 998,576   |  
|                                                       |  |                                  |           |  
|Comprehensive income                                   |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|Net income                                             |  |                                  | 51,023    |   |                                 |   | 46,148    |      |  |   | 130,969   |   |  |   | 145,026   |  
|Other comprehensive income (loss)                      |  |                                  | (15,264   | ) |                                 |   | 41,750    |      |  |   | (24,816   | ) |  |   | (1,300    | )
|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|Total comprehensive income                             |  |                                  | 35,759    |   |                                 |   | 87,898    |      |  |   | 106,153   |   |  |   | 143,726   |  
|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|Common cash dividends                                  |  |                                  | (23,647   | ) |                                 |   | (22,170   | )    |  |   | (70,143   | ) |  |   | (61,320   | )
|Shares issued for stock option exercises               |  |                                  | 3,084     |   |                                 |   | 1,422     |      |  |   | 10,625    |   |  |   | 14,181    |  
|Treasury shares repurchased                            |  |                                  |          |   |                                 |   | (1,588    | )    |  |   | (52,407   | ) |  |   | (1,588    | )
|Restricted stock compensation                          |  |                                  | 315       |   |                                 |   |          |      |  |   | 816       |   |  |   |          |  
|Common shares issued to acquire Belmont Bancorp        |  |                                  | 80        |   |                                 |   |          |      |  |   | 49,689    |   |  |   |          |  
|Common shares issued to acquire Benefits Design Agency |  |                                  | 3,902     |   |                                 |   |           |      |  |   | 3,902     |   |  |   |           |  
|Common shares issued to acquire Second Bancorp         |  |                                  |          |   |                                 |   | 310,645   |      |  |   |          |   |  |   | 310,645   |  
|Common shares issued to acquire Spencer- Patterson     |  |                                  |          |   |                                 |   |          |      |  |   |          |   |  |   | 7,637     |  
|Common shares issued to acquire EOB, Inc.              |  |                                  |          |   |                                 |   |          |      |  |   | 336       |   |  |   | 4,558     |  
|Other items                                            |  |                                  | (2        | ) |                                 |   |          |      |  |   | (4,012    | ) |  |   |          |  
|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|Balance at end of period                               |  | $                                | 1,515,914 |   |                                 | $ | 1,416,415 |      |  | $ | 1,515,914 |   |  | $ | 1,416,415 |  
|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  
|Common cash dividend per share                         |  | $                                | .22       |   |                                 | $ | .21       |      |  | $ | .66       |   |  | $ | .63       |  
|                                                       |  |                                  |           |   |                                 |   |           |      |  |   |           |   |  |   |           |  



The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.



5



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



Condensed Consolidated Statements of Cash Flows



(Unaudited)



|                                                                                  |  |                                 |          |   |      |   |            |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | -------- | - | ---- | - | ---------- | -
|                                                                                  |  | Nine Months Ended September 30, |         
|(Dollars in thousands, except share data)                                         |  | 2005                            |          |   | 2004 |  
|Operating Activities                                                              |  |                                 |          |   |      |   |            |  
|Net cash provided from continuing operations                                      |  | $                               | 222,066  |   |      | $ | 108,549    |  
|Net cash used for discontinued operations                                         |  |                                 |         |   |      |   | (3,560     | )
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net cash provided from operations                                                 |  |                                 | 222,066  |   |      |   | 104,989    |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Investing Activities                                                              |  |                                 |          |   |      |   |            |  
|Net (increase) decrease in interest bearing deposits in other banks               |  |                                 | 18,723   |   |      |   | (431       | )
|Net decrease in federal funds sold                                                |  |                                 | 13,480   |   |      |   |           |  
|Securities available for sale:                                                    |  |                                 |          |   |      |   |            |  
|Proceeds from maturities and payments                                             |  |                                 | 467,945  |   |      |   | 612,447    |  
|Proceeds from sales                                                               |  |                                 | 114,786  |   |      |   | 348,331    |  
|Purchases                                                                         |  |                                 | (488,431 | ) |      |   | (1,060,216 | )
|Proceeds from sales of non-mortgage loans                                         |  |                                 | 174,630  |   |      |   | 70,314     |  
|Net increase in loans                                                             |  |                                 | (379,706 | ) |      |   | (356,075   | )
|Purchases of premises and equipment                                               |  |                                 | (24,161  | ) |      |   | (2,251     | )
|Proceeds from sales of premises and equipment                                     |  |                                 | 5,256    |   |      |   | 986        |  
|Proceeds from sales of other real estate                                          |  |                                 | 16,790   |   |      |   | 5,178      |  
|Net cash (paid) received from acquisitions                                        |  |                                 | (5,961   | ) |      |   | 35,689     |  
|Proceeds from sale of discontinued operations, net of cash sold                   |  |                                 |         |   |      |   | 71,441     |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net cash used for investing activities from continuing operations                 |  |                                 | (86,649  | ) |      |   | (274,587   | )
|Net cash used for investing activities from discontinued operations               |  |                                 |         |   |      |   | (26,126    | )
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net cash used for investing activities                                            |  |                                 | (86,649  | ) |      |   | (300,713   | )
|                                                                                  |  |                                 |          |   |      |   |            |  
|Financing Activities                                                              |  |                                 |          |   |      |   |            |  
|Net increase in deposit accounts                                                  |  |                                 | 276,880  |   |      |   | 302,273    |  
|Net decrease in federal funds and repurchase agreements                           |  |                                 | (260,551 | ) |      |   | (211,029   | )
|Net decrease in borrowings under bank lines of credit                             |  |                                 |         |   |      |   | (60,216    | )
|Net increase (decrease) in short-term FHLB advances                               |  |                                 | 75,000   |   |      |   | (55,000    | )
|Proceeds from issuance of debt and long-term FHLB advances                        |  |                                 | 128,775  |   |      |   | 300,641    |  
|Repayment of debt and long-term FHLB advances                                     |  |                                 | (187,876 | ) |      |   | (89,305    | )
|Cash dividends and fractional shares paid                                         |  |                                 | (69,995  | ) |      |   | (61,320    | )
|Proceeds from issuance of common stock                                            |  |                                 | 10,623   |   |      |   | 14,181     |  
|Treasury stock repurchases                                                        |  |                                 | (52,407  | ) |      |   | (1,588     | )
|Other items                                                                       |  |                                 | 816      |   |      |   |           |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net cash provided from (used for) financing activities from continuing operations |  |                                 | (78,735  | ) |      |   | 138,637    |  
|Net cash provided from financing activities from discontinued operations          |  |                                 |         |   |      |   | 31,129     |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net cash provided from (used for) financing activities                            |  |                                 | (78,735  | ) |      |   | 169,766    |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Net increase (decrease) in cash and due from banks                                |  |                                 | 56,682   |   |      |   | (25,958    | )
|Cash and due from banks at beginning of period                                    |  |                                 | 232,407  |   |      |   | 264,778    |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Cash and due from banks at end of period                                          |  | $                               | 289,089  |   |      | $ | 238,820    |  
|                                                                                  |  |                                 |          |   |      |   |            |  
|Supplemental Disclosures                                                          |  |                                 |          |   |      |   |            |  
|Interest paid                                                                     |  | $                               | 220,823  |   |      | $ | 164,966    |  
|Income taxes paid                                                                 |  |                                 | 49,729   |   |      |   | 48,386     |  
|Non-cash transactions                                                             |  |                                 |          |   |      |   |            |  
|Common shares issued to acquire Belmont Bancorp                                   |  |                                 | 49,689   |   |      |   |           |  
|Common shares issued to acquire Benefits Design Agency                            |  |                                 | 3,902    |   |      |   |           |  
|Common shares issued to acquire Second Bancorp                                    |  |                                 |         |   |      |   | 310,645    |  
|Common shares issued to acquire Spencer-Patterson.                                |  |                                 |         |   |      |   | 7,637      |  
|Common shares issued to acquire EOB, Inc.                                         |  |                                 | 336      |   |      |   | 4,558      |  



The
accompanying notes are an integral part of the unaudited condensed consolidated financial statements.



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##### Table of Contents

SKY FINANCIAL GROUP, INC.



Notes to Condensed Consolidated Financial Statements (Unaudited)



(Dollars in thousands, except per share data)



1. Accounting Policies



Sky Financial
Group, Inc. (Sky Financial) is a financial holding company headquartered in Bowling Green, Ohio, that owns and operates Sky Bank which is primarily engaged in the commercial and consumer banking business in Ohio, southern Michigan, western
Pennsylvania, northern West Virginia and eastern Indiana. Sky Financial also operates businesses relating to insurance, trust and other related financial services.



The accounting and reporting policies followed by Sky Financial conform in all material respects to accounting principles generally accepted
in the United States of America (US GAAP) and to general practices within the financial services industry. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The allowance for credit losses and fair values of financial
instruments and mortgage servicing rights are particularly subject to change.



These condensed consolidated unaudited interim financial statements are prepared without an audit and reflect all adjustments of a normal recurring nature which, in the opinion of management, are necessary to present fairly the consolidated
financial position of Sky Financial at September 30, 2005, and its results of operations and cash flows for the periods presented. In accordance with US GAAP for interim financial information, these statements do not include certain
information and footnote disclosures required for complete annual financial statements. Sky Financials Annual Report for the year ended December 31, 2004, contains consolidated financial statements and related notes which should be read
in conjunction with the accompanying condensed consolidated financial statements. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year.



The condensed consolidated financial statements, notes to the condensed consolidated
financial statements and statistical information reflect the sale of Sky Financial Solutions, which was sold on March 31, 2004, in discontinued operations, unless otherwise noted.



New Accounting Pronouncements



In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123 (revised 2004), Share-Based Payment, which revises SFAS
No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. This Statement focuses primarily on accounting for transactions in which an entity
obtains employee services in share-based payment transactions. This Statement does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, Employers Accounting for Stock
Ownership Plans. This Statement requires an entity to recognize the cost of employee services received in share-based payment transactions and measure the cost on a grant-date fair value of the award. That cost will be recognized over the
period during which an employee is required to provide service in exchange for the award. The provisions of SFAS 123 (revised 2004) will be effective for the Companys financial statements issued for the first fiscal year beginning after
June 15, 2005. Sky Financial currently plans to adopt SFAS 123 (revised 2004) in the first quarter of 2006. The method for adoption of this statement is yet to be determined. See Note 2 for SFAS No. 123 pro forma disclosures.



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##### Table of Contents

2. Stock Based Compensation



Sky Financial applies Accounting Principles Board Opinion No. 25 in accounting for stock options and discloses the fair value of
options granted as permitted by SFAS No. 123. No stock-based employee compensation cost is reflected in net income for options, as all options granted under those plans had an exercise price equal to the market value of the common stock at date
of grant. Sky Financial adopted a restricted stock plan in 2004 and in the first quarter of 2005, 132,460 shares were issued under the plan. Compensation expense for restricted share awards is recognized ratably over the period of service, usually
the restricted period, based upon the fair value of the stock on the date of grant. Compensation expense reflected in net income for restricted shares for the three and nine months ended September 30, 2005 was $204 ($315 pre- tax) and $530
($816 pre-tax) respectively.



The following table summarizes the pro forma
effects assuming compensation cost for such awards had been recorded based upon the estimated fair value (in thousands, except per share data):



|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------- |  | - | -------
|                                                                                                                                            |  | Three Months EndedSeptember 30, |        | Nine Months EndedSeptember 30,
|                                                                                                                                            |  | 2005                            |        | 2004                           |   | 2005   |  | 2004
|Net income, as reported                                                                                                                     |  | $                               | 51,023 |                                | $ | 46,148 |  | $    | 130,969 |  | $ | 145,026
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effects                                  |  |                                 | 204    |                                |   |        |  |      | 530     |  |   |        
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                                 | 881    |                                |   | 630    |  |      | 2,648   |  |   | 1,890  
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Pro forma net income                                                                                                                        |  | $                               | 50,346 |                                | $ | 45,518 |  | $    | 128,851 |  | $ | 143,136
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Earnings per share:                                                                                                                         |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Basic  as reported                                                                                                                         |  | $                               | 0.48   |                                | $ | 0.44   |  | $    | 1.23    |  | $ | 1.49   
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Basic  pro forma                                                                                                                           |  | $                               | 0.47   |                                | $ | 0.43   |  | $    | 1.21    |  | $ | 1.47   
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Diluted  as reported                                                                                                                       |  | $                               | 0.47   |                                | $ | 0.43   |  | $    | 1.22    |  | $ | 1.47   
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Diluted  pro forma                                                                                                                         |  | $                               | 0.46   |                                | $ | 0.43   |  | $    | 1.20    |  | $ | 1.46   
|                                                                                                                                            |  |                                 |        |                                |   |        |  |      |         |  |   |        



3. Critical Accounting Policies



The accounting and reporting policies of Sky Financial are in accordance
with U.S. GAAP and conform to general practices within the financial services industry. Accounting and reporting policies for the allowance for credit losses and mortgage servicing rights are deemed critical since they involve the use of estimates
and require significant management judgments. Application of assumptions different than those used by management could result in material changes in Sky Financials financial position or results of operations. Note 1 (Summary of Significant
Accounting Policies), note 4 (Loans and Allowance for Credit Losses) and note 20 (Mortgage Banking Activities), of the 2004 Annual Report and Form 10-K, provide detail with regard to the Corporations accounting for the allowance for loan
losses and for mortgage servicing rights. There have been no significant changes in the application of accounting policies since December 31, 2004.



4. Mergers, Acquisitions and Divestitures



Community Banking



Falls Bank



On June 21, 2005, Sky Financial announced the execution of a definitive agreement to acquire Falls Bank, an $83.6 million bank that operates two full-service branches in the Akron, Ohio market.



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##### Table of Contents

Under the terms of the agreement, shareholders of Falls Bank will be entitled to elect to receive cash, shares of Sky
Financial Group, or a combination thereof. Cash consideration is valued at $17.50 per Falls Bank share and stock consideration will be set to give a value of $17.50 per Falls Bank share based on the average market price of Sky Financial for a
specified period just prior to the completion of the acquisition. The agreement further provides that, in the aggregate, 81% of the Falls Bank shares will be exchanged for Sky Financial common stock, with the remainder of Falls Bank shares exchanged
for cash.



The transaction is valued at $12.8 million. Sky Financial and Falls
Bank anticipate that the transaction will be completed in the fourth quarter of 2005, pending regulatory approvals, the approval of the shareholders of Falls Bank and completion of other customary closing conditions. Sky Financial anticipates that
Falls Bank will be combined with Sky Bank, its commercial banking affiliate, by the end of the year.



Belmont Bancorp



On June 1, 2005,
Sky Financial completed its acquisition of Belmont Bancorp (Belmont), a $297 million bank holding company headquartered in St. Clairsville, Ohio, and its wholly-owned subsidiary, Belmont National Bank. The aggregate purchase price was approximately
$68,450, including direct acquisition costs of $56. Belmont has offices located in Belmont, Harrison and Tuscarawas counties in Ohio, and Ohio County in West Virginia and expands Sky Financials community banking business further into
these markets. Belmont Bancorp shareholders received approximately 1,765 shares of Sky Financial common stock and cash of $18.7 million.



The total purchase cost for Belmont has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values. Such
allocations have not been finalized and as such, the allocation of the purchase consideration included in the accompanying Condensed Consolidated Balance Sheet at September 30, 2005, is preliminary.



Prospect Bancshares



On November 30, 2004, Sky Financial acquired Prospect Bancshares, Inc. (Prospect), a $202 million bank holding company headquartered in
Worthington, Ohio, and its wholly-owned subsidiary Prospect Bank by acquiring all of the outstanding capital stock of Prospect Bancshares for an aggregate purchase price of $46,754, including direct acquisition costs of $77. Prospect Bancshares
shareholders received approximately 1,139 shares of Sky Financial common stock and cash of $17.6 million.



The total purchase cost for Prospect has been allocated to the tangible and identifiable intangible assets and liabilities based upon their respective fair values. Such allocations have not been finalized and as such,
the allocation of the purchase consideration included in the accompanying Condensed Consolidated Balance Sheet at September 30, 2005, is preliminary.



Second Bancorp



On July 1, 2004, Sky Financial acquired Second Bancorp Incorporated (Second Bancorp), a $2.0 billion bank holding company headquartered in Warren, Ohio, and its wholly-owned subsidiary Second National Bank of
Warren by acquiring all of the outstanding capital stock of Second Bancorp for an aggregate purchase price of $312,738, including direct acquisition costs of $2,093. Second Bancorp shareholders received approximately 11,953 shares of Sky Financial
common stock.



The total purchase cost for Second Bancorp has been allocated to
the tangible and identifiable intangible assets and liabilities based upon their respective fair values.



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##### Table of Contents

Pro Forma Results



The following (unaudited) pro forma consolidated results of operations have been prepared as if the acquisitions of Belmont had occurred at the beginning of 2005 and the
acquisitions of Belmont, Prospect and Second Bancorp had occurred at the beginning of 2004.



|                                                        |  |                                |         |                                 |   |         |  |   |        
|------------------------------------------------------- |  | ------------------------------ | ------- | ------------------------------- | - | ------- |  | - | -------
|                                                        |  | Three MonthsEndedSeptember 30, |         | Nine Months Ended September 30,
|                                                        |  | 2004                           |         | 2005                            |   | 2004   
|Net interest income                                     |  | $                              | 126,744 |                                 | $ | 386,150 |  | $ | 363,814
|Income from continuing operations                       |  |                                | 46,736  |                                 |   | 130,853 |  |   | 108,928
|Earnings per share from continuing operations  Basic   |  |                                | 0.43    |                                 |   | 1.22    |  |   | 1.01   
|Earnings per share from continuing operations  Diluted |  |                                | 0.43    |                                 |   | 1.20    |  |   | 1.00   



The pro forma results for Belmont
include approximately $800 of merger costs recorded by Belmont in the second quarter of 2005



The pro forma information includes impairment charges related to Seconds marine portfolio of $19.1 million ($12.4 million after tax) as well as merger costs of approximately $16 million ($10.4 million after tax)
recorded by Second in the second quarter of 2004.



This pro forma information
is not necessarily indicative of the results that actually would have been obtained if the operations had been combined as of the beginning of the periods presented and is not intended to be a projection of future results.



Financial Service Affiliate Acquisitions



On October 4, 2005, Sky Financial announced the acquisition of Becker-McDowell
Agency, Inc. and Steiner Insurance Agency, Inc., both located in Wooster, Ohio.



On August 1, 2005, Sky completed the acquisition of B.K.M.s Benefit Design Agency of Ohio, Inc., located in Findlay, Ohio for 137 shares of Sky Financial common stock and $661 in cash.



On July 1, 2004, Sky Financial acquired Stouffer-Herzog Insurance Agency in conjunction
with the purchase of Second Bancorp, as previously discussed.



On April 1,
2004, Sky Financial acquired EOB, Inc., a group benefit insurance agency headquartered in Canton, Ohio for 177 shares of Sky Financial common stock and $516 in cash. During the second quarter of 2005, and additional 12 shares of Sky Financial common
stock was issued to the former owners of EOB as an additional payment related to a contingency related to the purchase.



On January 5, 2004, Sky Financial acquired Spencer-Patterson Insurance Agency, a full-service professional liability, personal and commercial agency headquartered in
Findlay, Ohio, for 297 shares of Sky Financial common stock and $793 in cash.



All of the purchases completed in 2005 and 2004 were recorded under the purchase method of accounting and the results of operations of the acquired businesses are included in Sky Financials operations from the effective dates of the
acquisitions. Disclosure of pro forma results of the acquisitions of the financial services affiliates are immaterial to Sky Financials condensed consolidated financial statements.



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##### Table of Contents

Discontinued Operations



On March 31, 2004, Sky Financial completed the sale of its dental financing affiliate,
Sky Financial Solutions. Sky Financial Solutions has been reported as a discontinued operation in the condensed consolidated financial statements. Sky Financial Solutions results of operations for the nine months ended September 30, 2004
included a pre-tax gain on the sale of Sky Financial Solutions of $30,578 ($19,876 after-tax).



5. Securities Available for Sale



The
unrealized gains and losses and estimated fair values at September 30, 2005 and December 31, 2004 are as follows:



|                                                |  |                     |           |                      |   |                       |  |   |         |  
|----------------------------------------------- |  | ------------------- | --------- | -------------------- | - | --------------------- |  | - | ------- | -
|September 30, 2005                              |  | EstimatedFair Value |           | GrossUnrealizedGains |   | GrossUnrealizedLosses | 
|U.S. Treasury                                   |  | $                   | 302       |                      | $ | 3                     |  | $ |        |  
|U.S. government agencies and corporations       |  |                     | 192,361   |                      |   | 141                   |  |   | (3,044  | )
|Obligations of state and political subdivisions |  |                     | 17,265    |                      |   | 104                   |  |   | (2      | )
|Corporate and other securities                  |  |                     | 38,002    |                      |   | 838                   |  |   | (98     | )
|Mortgage-backed securities                      |  |                     | 2,631,441 |                      |   | 746                   |  |   | (46,050 | )
|                                                |  |                     |           |                      |   |                       |  |   |         |  
|Total debt securities available for sale        |  |                     | 2,879,371 |                      |   | 1,832                 |  |   | (49,194 | )
|Marketable equity securities                    |  |                     | 31,625    |                      |   | 1,068                 |  |   | (1,383  | )
|FHLB, FRB and Bankers Bank Stock               |  |                     | 141,121   |                      |   |                      |  |   |        |  
|                                                |  |                     |           |                      |   |                       |  |   |         |  
|Total securities available for sale             |  | $                   | 3,052,117 |                      | $ | 2,900                 |  | $ | (50,577 | )
|                                                |  |                     |           |                      |   |                       |  |   |         |  



|                                                |  |                     |           |                      |   |                       |  |   |         |  
|----------------------------------------------- |  | ------------------- | --------- | -------------------- | - | --------------------- |  | - | ------- | -
|December 31, 2004                               |  | EstimatedFair Value |           | GrossUnrealizedGains |   | GrossUnrealizedLosses | 
|U.S. Treasury                                   |  | $                   | 207       |                      | $ |                      |  | $ |        |  
|U.S. government agencies and corporations       |  |                     | 152,266   |                      |   | 565                   |  |   | (1,068  | )
|Obligations of state and political subdivisions |  |                     | 16,561    |                      |   | 128                   |  |   | (12     | )
|Corporate and other securities                  |  |                     | 51,699    |                      |   | 1,776                 |  |   | (205    | )
|Mortgage-backed securities                      |  |                     | 2,706,552 |                      |   | 10,331                |  |   | (23,200 | )
|                                                |  |                     |           |                      |   |                       |  |   |         |  
|Total debt securities available for sale        |  |                     | 2,927,285 |                      |   | 12,807                |  |   | (24,485 | )
|Marketable equity securities                    |  |                     | 29,865    |                      |   | 1,420                 |  |   | (78     | )
|FHLB, FRB and Bankers Bank Stock               |  |                     | 134,663   |                      |   |                      |  |   |        |  
|                                                |  |                     |           |                      |   |                       |  |   |         |  
|Total securities available for sale             |  | $                   | 3,091,813 |                      | $ | 14,227                |  | $ | (24,563 | )
|                                                |  |                     |           |                      |   |                       |  |   |         |  



Corporate and other securities include
$10,299 and $11,705 in investment securities classified as non-performing at September 30, 2005 and December 31, 2004, respectively. Sky Financial is not accruing income on these investments.



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##### Table of Contents

6. Loans



The loan portfolios are as follows:



|                                       |  |                   |            |                  |   |           
|-------------------------------------- |  | ----------------- | ---------- | ---------------- | - | ----------
|                                       |  | September 30,2005 |            | December 31,2004
|Real estate loans:                     |  |                   |            |                  |   |           
|Construction                           |  | $                 | 936,679    |                  | $ | 848,072   
|Residential mortgage                   |  |                   | 2,897,429  |                  |   | 2,898,875 
|Non-residential mortgage               |  |                   | 3,447,804  |                  |   | 3,498,746 
|Commercial, financial and agricultural |  |                   | 2,896,255  |                  |   | 2,562,738 
|Installment and credit card loans      |  |                   | 736,363    |                  |   | 807,687   
|                                       |  |                   |            |                  |   |           
|Total loans                            |  | $                 | 10,914,530 |                  | $ | 10,616,118
|                                       |  |                   |            |                  |   |           



The
following table presents the aggregate amounts of non-performing loans on the dates indicated:



|                           |  |                   |         |                  |   |        
|-------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                           |  | September 30,2005 |         | December 31,2004
|Non-accrual loans          |  | $                 | 126,131 |                  | $ | 143,207
|Restructured loans         |  |                   | 495     |                  |   | 541    
|                           |  |                   |         |                  |   |        
|Total non-performing loans |  | $                 | 126,626 |                  | $ | 143,748
|                           |  |                   |         |                  |   |        



Non-accrual loans include $29,877 of
loans at September 30, 2005 that are secured by pools of commercial leases for which payment is over 90 days past due. See Note 15 Commitments and Contingencies for additional discussion.



In conjunction with the Belmont acquisition on June 1, 2005, Sky Financial acquired
loans approximating $165,018. Belmonts allowance for loan losses at the acquisition date of June 1, 2005 was approximately $2,694. Sky Financial applied the guidance required under SOP 03-3 and determined that certain loans acquired in
the Belmont acquisition had evidence of deterioration of credit quality since origination and it was probable that all contractual required payments would not be collected on these loans. Sky Financial determined that eleven loans with a book value
totaling approximately $1,960 and with a fair value of $1,627 were within the guidelines set forth under SOP 03-3. These loans have been recorded by Sky Financial at their fair value and the allowance for loan losses was reduced by $333.
Accordingly, Sky Financial recorded $2,361 of allowance for loan losses on loans not subject to SOP 03-3.



7. Borrowings



Sky Financials
debt, Federal Home Loan Bank (FHLB) advances and junior subordinated debentures owed to unconsolidated subsidiary trusts are comprised of the following:



|                                                                         |  |                   |           |                  |   |          
|------------------------------------------------------------------------ |  | ----------------- | --------- | ---------------- | - | ---------
|                                                                         |  | September 30,2005 |           | December 31,2004
|Borrowings under FHLB lines of credit                                    |  | $                 | 1,610,186 |                  | $ | 1,569,556
|Subordinated note, due April 2013 at 5.35%                               |  |                   | 50,000    |                  |   | 50,000   
|Subordinated note, due October 2012 at 6.125%                            |  |                   | 65,000    |                  |   | 65,000   
|Subordinated note, due January 2008 at 7.08%                             |  |                   | 50,000    |                  |   | 50,000   
|Junior subordinated debentures owed to unconsolidated subsidiary trusts: |  |                   |           |                  |   |          
|Due February 2027 at 9.875%                                              |  |                   | 26,595    |                  |   | 27,616   
|Due June 2027 at 10.20%                                                  |  |                   | 24,781    |                  |   | 24,983   
|Due May 2030 at 9.34%                                                    |  |                   | 65,645    |                  |   | 65,872   
|Due December 2031 at 9.00%                                               |  |                   | 33,540    |                  |   | 33,729   
|Due April 2033 5.32% (variable)                                          |  |                   | 6,301     |                  |   | 6,430    
|Due October 2033 at 5.02% (variable)                                     |  |                   | 30,928    |                  |   | 30,928   
|Capital lease obligation                                                 |  |                   | 618       |                  |   | 726      
|                                                                         |  |                   |           |                  |   |          
|Total borrowings                                                         |  | $                 | 1,963,594 |                  | $ | 1,924,840
|                                                                         |  |                   |           |                  |   |          



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##### Table of Contents

The amount of junior subordinated debentures owed to unconsolidated subsidiary trusts represent the par value adjusted
for any unamortized discount or other basis adjustments related to hedging the debt with derivative instruments. These hedging relationships exchange the fixed interest rate on the borrowings to a variable rate based on LIBOR plus a spread,
resulting in a lower effective rate paid on the borrowings. See Note 13 for further discussion of derivative instruments.



8. Other Comprehensive Income (Loss)



Other comprehensive income (loss) consisted of the following:



|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ------------------ | ------- | - | ----------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | Three Months Ended |         |   | Nine Months Ended |  
|                                                           |  | September 30,      |         |   | September 30,     |  
|                                                           |  | 2005               |         |   | 2004              |   |         | 2005 |  |   | 2004    |  
|Securities available for sale:                             |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Unrealized securities gains (losses) arising during period |  | $                  | (23,592 | ) |                   | $ | 89,918  |      |  | $ | (35,232 | ) |  | $ | 43,505  |  
|Reclassification adjustment for gains included in income   |  |                    | (147    | ) |                   |   | (1,854  | )    |  |   | (2,109  | ) |  |   | (6,259  | )
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|                                                           |  |                    | (23,739 | ) |                   |   | 88,064  |      |  |   | (37,341 | ) |  |   | 37,246  |  
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Cash flow hedge derivatives                                |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Change in fair value of cash flow hedge derivatives        |  |                    | 252     |   |                   |   | (23,833 | )    |  |   | 127     |   |  |   | (39,862 | )
|Amounts reclassified to interest expense                   |  |                    |        |   |                   |   |        |      |  |   |        |   |  |   | 616     |  
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|                                                           |  |                    | 252     |   |                   |   | (23,833 | )    |  |   | 127     |   |  |   | (39,246 | )
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Minimum pension liability                                  |  |                    |        |   |                   |   |        |      |  |   | (1,009  | ) |  |   |        |  
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Other comprehensive income (loss) before income taxes      |  |                    | (23,487 | ) |                   |   | 64,231  |      |  |   | (38,223 | ) |  |   | (2,000  | )
|Tax effect                                                 |  |                    | 8,223   |   |                   |   | (22,481 | )    |  |   | 13,407  |   |  |   | 700     |  
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  
|Total other comprehensive income (loss)                    |  | $                  | (15,264 | ) |                   | $ | 41,750  |      |  | $ | (24,816 | ) |  | $ | (1,300  | )
|                                                           |  |                    |         |   |                   |   |         |      |  |   |         |   |  |   |         |  



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9. Earnings Per Share



Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding less the weighted average unvested restricted shares
outstanding during the period. Diluted earnings per share is computed using the weighted average number of shares determined for the basic computation in addition to the dilutive effect of potential common shares issuable under stock options and the
restricted shares. For the three months ended September 30, 2005 and 2004, 24 and 1,387 weighted average shares, respectively, under option were excluded from the diluted earnings per share calculation as they were anti-dilutive. For the nine
months ended September 30, 2005 and 2004, 377 and 1,381 weighted average shares, respectively, under option were excluded from the diluted earnings per share calculation as they were anti-dilutive.



|                                                     |  |                    |         |                   |   |         |  |      |         |  |   |        
|---------------------------------------------------- |  | ------------------ | ------- | ----------------- | - | ------- |  | ---- | ------- |  | - | -------
|                                                     |  | Three Months Ended |         | Nine Months Ended
|                                                     |  | September 30,      |         | September 30,    
|                                                     |  | 2005               |         | 2004              |   | 2005    |  | 2004
|Numerator:                                           |  |                    |         |                   |   |         |  |      |         |  |   |        
|Income From Continuing Operations                    |  | $                  | 51,023  |                   | $ | 46,148  |  | $    | 130,969 |  | $ | 126,301
|Income From Discontinued Operations                  |  |                    |        |                   |   |        |  |      |        |  |   | 18,725 
|                                                     |  |                    |         |                   |   |         |  |      |         |  |   |        
|Net income                                           |  | $                  | 51,023  |                   | $ | 46,148  |  | $    | 130,969 |  | $ | 145,026
|                                                     |  |                    |         |                   |   |         |  |      |         |  |   |        
|Denominator:                                         |  |                    |         |                   |   |         |  |      |         |  |   |        
|Weighted-average common shares outstanding (basic)   |  |                    | 107,236 |                   |   | 105,479 |  |      | 106,443 |  |   | 97,298 
|Effect of non-vested restricted shares               |  |                    | 15      |                   |   |        |  |      | 11      |  |   |       
|Effect of stock options                              |  |                    | 1,180   |                   |   | 929     |  |      | 1,166   |  |   | 999    
|                                                     |  |                    |         |                   |   |         |  |      |         |  |   |        
|Weighted-average common shares outstanding (diluted) |  |                    | 108,431 |                   |   | 106,408 |  |      | 107,620 |  |   | 98,297 
|                                                     |  |                    |         |                   |   |         |  |      |         |  |   |        
|                                                     |  |                    |         |                  
|Earnings per share from Continuing Operations:       |  |                    |         |                   |   |         |  |      |         |  |   |        
|Basic                                                |  | $                  | 0.48    |                   | $ | 0.44    |  | $    | 1.23    |  | $ | 1.30   
|Diluted                                              |  |                    | 0.47    |                   |   | 0.43    |  |      | 1.22    |  |   | 1.28   
|Earnings per share from Discontinued Operations:    
|
|Basic                                                |  |                    |        |                   |   |        |  |      |        |  |   | 0.19   
|Diluted                                              |  |                    |        |                   |   |        |  |      |        |  |   | 0.19   
|                                                     |  |                    |         |                  
|Earnings per share:                                  |  |                    |         |                   |   |         |  |      |         |  |   |        
|Basic                                                |  | $                  | 0.48    |                   | $ | 0.44    |  | $    | 1.23    |  | $ | 1.49   
|Diluted                                              |  |                    | 0.47    |                   |   | 0.43    |  |      | 1.22    |  |   | 1.47   



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10. Capital Resources



The Federal Reserve Board (FRB) has established risk-based capital guidelines that must be observed by financial holding companies and banks. Failure to meet specified
minimum capital requirements can result in certain mandatory actions by primary regulators of Sky Financial and its bank subsidiary that could have a material effect on Sky Financials financial condition or results of operations. Under capital
adequacy guidelines, Sky Financial and its bank subsidiary must meet specific quantitative measures of their assets, liabilities and certain off-balance sheet items as determined under regulatory accounting practices. Sky Financials and its
banks capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Management believes, as of September 30, 2005, that Sky Financial and its bank meet
all capital adequacy requirements to which they are subject.



Sky Financial and
its bank have been notified by their respective regulators that, as of the most recent regulatory examinations, each is regarded as well capitalized under the regulatory framework for prompt corrective action. Such determinations have been made
evaluating Sky Financial and its bank under Tier I, total capital, and leverage ratios. There are no conditions or events since these notifications that management believes have changed any of the well capitalized categorizations of Sky Financial
and its bank subsidiary.



Under the Federal Reserve Boards regulatory
framework, certain capital securities offered by wholly-owned unconsolidated trust preferred entities of Sky Financial are currently included as Tier I regulatory capital. The Federal Reserve Board issued their final regulations on
March 30, 2005 after evaluating whether these capital securities will continue as Tier I capital as a result of their deconsolidation under generally accepted accounting principals. The Federal Reserve Board has determined that these securities
will continue to qualify as Tier I capital with specific limitations. The management of Sky Financial has evaluated these limitations and does not believe they will have a material effect on Sky Financial or Sky Banks Tier I capital.



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##### Table of Contents

Sky Financials and Sky Banks capital ratios are presented in the following
table:



|                                       |  |        |                                                                            |       |      |   |        |   |         |  |     |        |  |       |           |  |      |  
|-------------------------------------- |  | ------ | -------------------------------------------------------------------------- | ----- | ---- | - | ------ | - | ------- |  | --- | ------ |  | ----- | --------- |  | ---- | -
|                                       |  |        | Required to be Well Capitalized Under Prompt Corrective Action Regulations |      
|                                       |  |        | Minimum Required For Capital AdequacyPurposes                              |       |     
|                                       |  | Actual |                                                                            |       |     
|September 30, 2005                     |  | Amount |                                                                            | Ratio |      |   | Amount |   | Ratio   |  |     | Amount |  | Ratio |          
|Total capital to risk-weighted assets  |  |        |                                                                            |       |      |   |        |   |         |  |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,424,714                                                                  |       | 11.4 | % |        | $ | 995,926 |  | 8.0 | %      |  | $     | 1,244,907 |  | 10.0 | %
|Sky Bank                               |  |        | 1,339,272                                                                  |       | 11.1 |   |        |   | 969,687 |  | 8.0 |        |  |       | 1,212,109 |  | 10.0 |  
|                                       |  |        |                                                                            |       |      |  
|Tier 1 capital to risk-weighted assets |  |        |                                                                            |       |      |   |        |   |         |  |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,136,084                                                                  |       | 9.1  | % |        | $ | 497,963 |  | 4.0 | %      |  | $     | 746,944   |  | 6.0  | %
|Sky Bank                               |  |        | 1,116,132                                                                  |       | 9.2  |   |        |   | 484,844 |  | 4.0 |        |  |       | 727,265   |  | 6.0  |  
|                                       |  |        |                                                                            |       |      |  
|Tier 1 capital to average assets       |  |        |                                                                            |       |      |   |        |   |         |  |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,136,084                                                                  |       | 7.8  | % |        | $ | 585,895 |  | 4.0 | %      |  | $     | 732,369   |  | 5.0  | %
|Sky Bank                               |  |        | 1,116,132                                                                  |       | 7.7  |   |        |   | 579,905 |  | 4.0 |        |  |       | 724,882   |  | 5.0  |  



|                                       |  |        |           |       |                   |   |                            |                    |         |                                                        |     |        |  |       |           |  |      |  
|-------------------------------------- |  | ------ | --------- | ----- | ----------------- | - | -------------------------- | ------------------ | ------- | ------------------------------------------------------ | --- | ------ |  | ----- | --------- |  | ---- | -
|                                       |  |        |           |       |                   |   | MinimumRequired ForCapital |                    |         | Required to be Well CapitalizedUnder Prompt Corrective |    
|                                       |  | Actual |           |       | Adequacy Purposes |   |                            | Action Regulations |        
|December 31, 2004                      |  | Amount |           | Ratio |                   |   | Amount                     |                    | Ratio   |                                                        |     | Amount |  | Ratio |          
|Total capital to risk-weighted assets  |  |        |           |       |                   |   |                            |                    |         |                                                        |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,386,672 |       | 11.7              | % |                            | $                  | 946,057 |                                                        | 8.0 | %      |  | $     | 1,182,571 |  | 10.0 | %
|Sky Bank                               |  |        | 1,247,822 |       | 10.8              |   |                            |                    | 920,487 |                                                        | 8.0 |        |  |       | 1,150,608 |  | 10.0 |  
|                                       |  |        |           |       |                   |  
|Tier 1 capital to risk-weighted assets |  |        |           |       |                   |   |                            |                    |         |                                                        |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,096,089 |       | 9.3               | % |                            | $                  | 473,028 |                                                        | 4.0 | %      |  | $     | 709,542   |  | 6.0  | %
|Sky Bank                               |  |        | 1,027,903 |       | 8.9               |   |                            |                    | 460,243 |                                                        | 4.0 |        |  |       | 690,365   |  | 6.0  |  
|                                       |  |        |           |       |                   |  
|Tier 1 capital to average assets       |  |        |           |       |                   |   |                            |                    |         |                                                        |     |        |  |       |           |  |      |  
|Sky Financial                          |  | $      | 1,096,089 |       | 7.7               | % |                            | $                  | 567,992 |                                                        | 4.0 | %      |  | $     | 709,991   |  | 5.0  | %
|Sky Bank                               |  |        | 1,027,903 |       | 7.3               |   |                            |                    | 561,811 |                                                        | 4.0 |        |  |       | 702,264   |  | 5.0  |  



11. Goodwill and Intangible Assets



Goodwill at September 30, 2005 and December 31, 2004 was
$514,970 and $475,258 respectively. Goodwill is reviewed annually for impairment. Sky Financial completed this review during the second quarter of 2005 and determined that goodwill was not impaired. During the second and third quarters of 2005,
$37,678 of goodwill was recorded for the acquisition of Belmont and $4,766 for the acquisition of Benefit Design Agency. As these amounts were based on preliminary allocations of the assets and liabilities of Belmont and Benefit Design Agency, they
are subject to change as the purchase price allocations are continued to be finalized.



Net other intangible assets at September 30, 2005 and December 31, 2004 were $67,828 and $71,674, respectively. These assets consist primarily of core deposit intangibles and are being amortized in accordance with Sky
Financials policy. Amortization expense on finitelived intangible assets is expected to be $15,001, $14,459, $13,432, $12,304 and $9,532 in 2005, 2006, 2007, 2008, and 2009 respectively. These charges are exclusive of any changes in
amortization due to future acquisitions.



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##### Table of Contents

12. Line of Business Reporting



Sky Financial manages and operates two major lines of business: community banking and financial services. Community banking includes lending
and related services to businesses and consumers, mortgage banking and deposit-gathering. Other financial services consist of non-banking companies engaged in trust and wealth management, insurance and other financial-related services.



The reported line of business results reflect the underlying core operating performance
within the business units. Parent and Other is comprised of the parent company and several smaller business units. It includes the net funding cost of the parent company and intercompany eliminations. Expenses for centrally provided services and
support are allocated based principally upon estimated usage of services. All merger, integration and restructuring charges company-wide are included in Parent and Other. Substantially all of Sky Financials assets are part of the community
banking line of business.



Selected segment information for the three and nine
months ended September 30, 2005 and 2004 is included in the following tables:



|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|----------------------------------------------------- |  | ---------------- | ---------- | --------------------------- | - | --------------- |  | - | ------- | - |  | - | ----------
|Three months ended September 30, 2005                 |  | CommunityBanking |            | FinancialServicesAffiliates |   | ParentAnd Other |  |   | Total  
|Net interest income (expense)                         |  | $                | 132,353    |                             | $ | 108             |  | $ | (2,042  | ) |  | $ | 130,419   
|Provision for credit losses                           |  |                  | 8,725      |                             |   |                |  |   |        |   |  |   | 8,725     
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net interest income (loss) after provision            |  |                  | 123,628    |                             |   | 108             |  |   | (2,042  | ) |  |   | 121,694   
|Non-interest income                                   |  |                  | 34,184     |                             |   | 18,085          |  |   | (79     | ) |  |   | 52,190    
|Non-interest expense                                  |  |                  | 81,730     |                             |   | 14,032          |  |   | 636     |   |  |   | 96,398    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Income from continuing operations before income taxes |  |                  | 76,082     |                             |   | 4,161           |  |   | (2,757  | ) |  |   | 77,486    
|Income taxes from continuing operations               |  |                  | 26,109     |                             |   | 1,791           |  |   | (1,437  | ) |  |   | 26,463    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net income from continuing operations                 |  | $                | 49,973     |                             | $ | 2,370           |  | $ | (1,320  | ) |  | $ | 51,023    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at July 1, 2005                              |  | $                | 457,891    |                             | $ | 47,453          |  | $ |        |   |  | $ | 505,344   
|Net activity                                          |  |                  | 4,860      |                             |   | 4,766           |  |   |        |   |  |   | 9,626     
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at September 30, 2005                        |  | $                | 462,751    |                             | $ | 52,219          |  | $ |        |   |  | $ | 514,970   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Average assets                                        |  | $                | 14,988,159 |                             | $ | 87,720          |  | $ | 121,625 |   |  | $ | 15,197,504
|Depreciation and amortization                         |  |                  | 8,206      |                             |   | 152             |  |   | 344     |   |  |   | 8,702     



|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|----------------------------------------------------- |  | ---------------- | ---------- | --------------------------- | - | --------------- |  | - | ------- | - |  | - | ----------
|Three months ended September 30, 2004                 |  | CommunityBanking |            | FinancialServicesAffiliates |   | ParentAnd Other |  |   | Total  
|Net interest income                                   |  | $                | 123,430    |                             | $ | 146             |  | $ | (1,060  | ) |  | $ | 122,516   
|Provision for credit losses                           |  |                  | 8,300      |                             |   | 60              |  |   |        |   |  |   | 8,360     
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net interest income after provision                   |  |                  | 115,130    |                             |   | 86              |  |   | (1,060  | ) |  |   | 114,156   
|Non-interest income                                   |  |                  | 34,395     |                             |   | 19,006          |  |   | (654    | ) |  |   | 52,747    
|Non-interest expense                                  |  |                  | 78,722     |                             |   | 14,328          |  |   | 4,842   |   |  |   | 97,892    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Income from continuing operations before income taxes |  |                  | 70,803     |                             |   | 4,764           |  |   | (6,556  | ) |  |   | 69,011    
|Income taxes from continuing operations               |  |                  | 23,700     |                             |   | 1,816           |  |   | (2,653  | ) |  |   | 22,863    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net income from continuing operations                 |  | $                | 47,103     |                             | $ | 2,948           |  | $ | (3,903  | ) |  | $ | 46,148    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at July 1, 2004                              |  | $                | 152,214    |                             | $ | 46,108          |  | $ |        |   |  | $ | 198,322   
|Net activity                                          |  |                  | 247,984    |                             |   | 50              |  |   |        |   |  |   | 248,034   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at September 30, 2004                        |  | $                | 400,198    |                             | $ | 46,158          |  | $ |        |   |  | $ | 446,356   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Average assets                                        |  | $                | 14,306,087 |                             | $ | 101,724         |  | $ | 115,338 |   |  | $ | 14,523,149
|Depreciation and amortization                         |  |                  | 7,224      |                             |   | 394             |  |   | 167     |   |  |   | 7,785     



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|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|----------------------------------------------------- |  | ---------------- | ---------- | --------------------------- | - | --------------- |  | - | ------- | - |  | - | ----------
|Nine months ended September 30, 2005                  |  | CommunityBanking |            | FinancialServicesAffiliates |   | ParentAnd Other |  |   | Total  
|Net interest income (expense)                         |  | $                | 387,688    |                             | $ | 293             |  | $ | (5,555  | ) |  | $ | 382,426   
|Provision for credit losses                           |  |                  | 45,442     |                             |   |                |  |   |        |   |  |   | 45,442    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net interest income (loss) after provision            |  |                  | 342,246    |                             |   | 293             |  |   | (5,555  | ) |  |   | 336,984   
|Non-interest income                                   |  |                  | 97,267     |                             |   | 56,975          |  |   | 936     |   |  |   | 155,178   
|Non-interest expense                                  |  |                  | 248,249    |                             |   | 42,501          |  |   | 4,924   |   |  |   | 295,674   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Income from continuing operations before income taxes |  |                  | 191,264    |                             |   | 14,767          |  |   | (9,543  | ) |  |   | 196,488   
|Income taxes from continuing operations               |  |                  | 64,504     |                             |   | 6,154           |  |   | (5,139  | ) |  |   | 65,519    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net income from continuing operations                 |  | $                | 126,760    |                             | $ | 8,613           |  | $ | (4,404  | ) |  | $ | 130,969   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at January 1, 2005                           |  | $                | 428,502    |                             | $ | 46,756          |  | $ |        |   |  | $ | 475,258   
|Net activity                                          |  |                  | 34,249     |                             |   | 5,463           |  |   |        |   |  |   | 39,712    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at September 30, 2005                        |  | $                | 462,751    |                             | $ | 52,219          |  | $ |        |   |  | $ | 514,970   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Average assets                                        |  | $                | 14,871,513 |                             | $ | 85,637          |  | $ | 116,924 |   |  | $ | 15,074,074
|Depreciation and amortization                         |  |                  | 25,292     |                             |   | 525             |  |   | 1,069   |   |  |   | 26,886    



|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|----------------------------------------------------- |  | ---------------- | ---------- | --------------------------- | - | --------------- |  | - | ------- | - |  | - | ----------
|Nine Months Ended September 30, 2004                  |  | CommunityBanking |            | FinancialServicesAffiliates |   | ParentAnd Other |  |   | Total  
|Net interest income                                   |  | $                | 329,255    |                             | $ | 441             |  | $ | (2,690  | ) |  | $ | 327,006   
|Provision for credit                                  |  |                  | 25,810     |                             |   | 235             |  |   |        |   |  |   | 26,045    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net interest income after provision                   |  |                  | 303,445    |                             |   | 206             |  |   | (2,690  | ) |  |   | 300,961   
|Non-interest income                                   |  |                  | 91,508     |                             |   | 53,009          |  |   | 1,248   |   |  |   | 145,765   
|Non-interest expense                                  |  |                  | 213,804    |                             |   | 39,839          |  |   | 5,050   |   |  |   | 258,693   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Income from continuing operations before income taxes |  |                  | 181,149    |                             |   | 13,376          |  |   | (6,492  | ) |  |   | 188,033   
|Income taxes from continuing operations               |  |                  | 60,904     |                             |   | 5,305           |  |   | (4,477  | ) |  |   | 61,732    
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Net income from continuing operations                 |  | $                | 120,245    |                             | $ | 8,071           |  | $ | (2,015  | ) |  | $ | 126,301   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at January 1, 2004                           |  | $                | 152,214    |                             | $ | 33,645          |  | $ |        |   |  | $ | 185,859   
|Net activity                                          |  |                  | 247,984    |                             |   | 12,513          |  |   |        |   |  |   | 260,497   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Goodwill at September 30, 2004                        |  | $                | 400,198    |                             | $ | 46,158          |  | $ |        |   |  | $ | 446,356   
|                                                      |  |                  |            |                             |   |                 |  |   |         |   |  |   |           
|Average assets                                        |  | $                | 12,656,260 |                             | $ | 97,010          |  | $ | 117,536 |   |  | $ | 12,870,806
|Depreciation and amortization                         |  |                  | 17,771     |                             |   | 918             |  |   | 549     |   |  |   | 19,238    



13. Derivative Instruments and
Hedging Activities



Sky Financials hedging policies permit the use
of interest rate swaps, caps and floors to manage interest rate risk or to hedge specified assets and liabilities. Sky Financial uses derivative instruments, primarily interest rate swaps, to manage interest rate risk on certain liabilities by
hedging the fair value of certain fixed-rate debt, which converts the debt to variable rates, and by hedging the cash flow variability associated with certain variable rate debt by converting the debt to fixed rates.



18



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##### Table of Contents

All of the derivative instruments and hedging relationships below have been designated and qualify as either fair value
or cash flow hedges. To qualify for hedge accounting under SFAS No. 133, as amended, the effectiveness of each hedging relationship is assessed both at hedge inception and at each reporting period thereafter. Also at the end of each reporting
period, ineffectiveness in the hedging relationships is measured as the difference between the change in fair value of the derivative instruments and the change in fair value of the hedged items (fair value hedges) or expected cash flows (cash flow
hedges). Ineffectiveness, if any, is recorded in interest expense.



Fair Value Hedges



Sky Financial uses
interest rate swap agreements to hedge a portion of its fixed rate borrowings. The interest rate swaps effectively convert the fixed rate of interest on $108,600 of the junior subordinated debentures owed to unconsolidated subsidiary trusts and
$235,000 of advances to the Federal Home Loan Bank of Cincinnati to variable rates based on LIBOR plus a spread as defined in the agreements. Sky Financial also uses interest rate swap agreements to hedge long-term fixed rate commercial loans. At
September 30, 2005, Sky Financial had $3,493 of such agreements. The commercial loan swaps effectively convert the fixed rate of interest on these commercial loans to a variable rate based on LIBOR plus a spread as defined in the agreements.



The interest rate swaps involve no exchange of principal either at inception
or maturity and have maturities and call options identical to the trust preferred security agreements, FHLB advance agreements or commercial loans. The arrangements have been designated as fair value hedges and both the change in the fair value of
the hedges and the hedged transactions are reflected in earnings. Because the hedging arrangements are considered highly effective, changes in the fair value of the interest rate swaps exactly offset the corresponding changes in the hedged items
and, as a result, the changes in the fair value do not result in an impact on net income.



Cash Flow Hedges



At September 30, 2005, Sky Financial had an amortizing interest rate swap to fix the rate on $20,000 of variable rate advances with the Federal Home Loan Bank of
Cincinnati. Under the terms of the arrangement, Sky Financial pays a fixed rate of interest and receives a variable rate based on LIBOR. The swap is considered to be highly effective. Accordingly, any change in the swaps fair value is recorded
in other comprehensive income, net of tax.



Interest Rate Caps



During 2002, Sky Financial entered into
two interest rate cap arrangements, and paid $1,456 to hedge its interest risk on $48,600 of federal funds purchased. The interest rate caps are designed to offset the impact of changes in the federal fund purchased rate above the weighted average
stated rate of 5.90%, and, as such, are considered to be highly effective. Any changes in the intrinsic values are recorded in other comprehensive income. Changes in the time value of the interest rate caps, which are excluded from the assessment of
hedge effectiveness, increased interest expense by $164 and $165 in the first nine months of 2005 and 2004, respectively. No deferred gains or losses in accumulated other comprehensive income at September 30, 2005 are expected to be
reclassified to earnings in 2005.



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The following table presents the contract/notional and fair value amounts of derivative transactions that are part of Sky
Financials hedging program at September 30, 2005 and December 31, 2004:



|                       |  |                       |         |            |                   |       |                       |  |            |         |  |   |        |  
|---------------------- |  | --------------------- | ------- | ---------- | ----------------- | ----- | --------------------- |  | ---------- | ------- |  | - | ------ | -
|                       |  | September 30, 2005    |         |            | December 31, 2004 |      
|                       |  | Contractual/ Notional |         | Fair Value |                   |       | Contractual/ Notional |  | Fair Value |        
|Interest rate swaps    |  |                       |         |            |                   |       |                       |  |            |         |  |   |        |  
|Fair value hedges      |  | $                     | 347,093 |            | $                 | 1,328 |                       |  | $          | 323,600 |  | $ | 8,912  |  
|Cash flow hedges       |  |                       | 20,000  |            |                   | (128  | )                     |  |            | 40,000  |  |   | (1,186 | )
|Interest rate caps     |  |                       | 48,600  |            |                   | 165   |                       |  |            | 48,600  |  |   | 263    |  
|                       |  |                       |         |            |                   |       |                       |  |            |         |  |   |        |  
|Derivative instruments |  | $                     | 415,693 |            | $                 | 1,365 |                       |  | $          | 412,200 |  | $ | 7,989  |  
|                       |  |                       |         |            |                   |       |                       |  |            |         |  |   |        |  



Interest Rate Swaps on Behalf of Customers



During the first
nine months of 2005, Sky Financial entered into several commercial loan swaps in order to provide commercial loan customers the ability to swap from variable to fixed interest rates. Under these agreements, Sky Financial enters into a variable rate
loan agreement with a customer in addition to a swap agreement. This swap agreement effectively swaps the customers variable rate loan into a fixed rate loan. Sky Financial then enters into a corresponding swap agreement with a third party in order
to swap its exposure on the variable to fixed rate swap on the commercial loan. At September 30, 2005, Sky Financial had $57,622 of notional amount of such agreements.



14. Merger, Integration and Restructuring Expense



The following is a summary of activity in the merger, integration and restructuring liability for the nine months ended September 30,
2005:



|                                    |  |                                 |        |   |                 |   |      |                           |  |   |                             |   |  |       |      |   |  |   |        |  
|----------------------------------- |  | ------------------------------- | ------ | - | --------------- | - | ---- | ------------------------- |  | - | --------------------------- | - |  | ----- | ---- | - |  | - | ------ | -
|                                    |  | EmployeeSeveranceandTermination |        |   | ConversionCosts |   |      | Lease/ContractTermination |  |   | ProfessionalFees/OtherCosts |   |  | Total |     
|Balance as of January 1, 2005       |  | $                               | 2,504  |   |                 | $ |     |                           |  | $ | 690                         |   |  | $     | 130  |   |  | $ | 3,324  |  
|Accruals charged to expense         |  |                                 | 401    |   |                 |   | 222  |                           |  |   | 82                          |   |  |       | 448  |   |  |   | 1,153  |  
|Accruals from purchase accounting   |  |                                 | 1,704  |   |                 |   |      |                           |  |   | 626                         |   |  |       | 15   |   |  |   | 2,345  |  
|Cash payments and other adjustments |  |                                 | (3,783 | ) |                 |   | (180 | )                         |  |   | (235                        | ) |  |       | (461 | ) |  |   | (4,659 | )
|                                    |  |                                 |        |   |                 |   |      |                           |  |   |                             |   |  |       |      |   |  |   |        |  
|Balance as of September 30, 2005    |  | $                               | 826    |   |                 | $ | 42   |                           |  | $ | 1,163                       |   |  | $     | 132  |   |  | $ | 2,163  |  
|                                    |  |                                 |        |   |                 |   |      |                           |  |   |                             |   |  |       |      |   |  |   |        |  



The $1,153 ($749 after tax) of merger,
integration and restructuring expense recorded in the first nine months of 2005 related to $122 ($79 after tax) of expense recorded in the third quarter of 2005 related to the pending acquisition of Falls Bank and additional Belmont acquisition
costs and $1,031 ($670 after tax) of expense recorded in the second quarter of 2005 related to the acquisition of Belmont.



Sky Financial recorded $4,177 ($2,715 after tax) of merger, integration and restructuring expense during the nine month period ended September 30, 2004, of which
$3,831 ($2,490 after tax) was recorded in the third quarter primarily related to the acquisition of Second Bancorp, and $346 ($225 after tax) was recorded in the first quarter for the sale of Sky Financial Solutions.



15. Commitments and Contingencies



Sky Financial is involved in litigation with three insurance companies who issued surety
bonds on insurance policies as security for four related loans aggregating $29,877 at September 30, 2005. The subject loans are secured by



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pools of commercial leases, the payments under which are guaranteed by the surety bonds or insurance policies. Sky Financial is engaged in litigation with
these insurance companies to enforce the payment obligations, as are a number of other banks nationwide. After consultation with its counsel as to the strength of its position, Sky Financial believes that the credits are well secured and that the
prospects for recovery of its unpaid balance is probable. However, the entire portfolio has been placed on non-accrual status pending outcome of the litigation. During the first nine months of 2005, Sky Financial collected cash payments
totaling $3,999 related to these loans.



In October, 2004, Sky Financial was
one of the named defendant lenders in a purported class action complaint seeking remedies related to the financing of watercraft by Second National Bank of Warren, a predecessor of Sky Bank. In the acquisition, Sky Financial assumed a portfolio of
indirect boat loans originated through National Marine, Inc. In October, 2005, the parties to the litigation and Skys insurer reached an agreement in principle to settle the purported class action, including a full release of Sky. Sky does not
believe that it has any material remaining contingent liability exposure associated with this matter. As part of the settlement, the plaintiffs agreed to assign to Sky their claims against National Marine and its insurers. Furthermore, Sky has
submitted insurance claims against its insurer under policies with an aggregate limit of liability of $20 million for any amounts paid or released under these settlements as well as losses incurred on account of loans originated by National Marine
not otherwise involved in the purported class action. In September, one of National Marines insurance carriers filed a declaratory judgment action regarding coverage relevant to the assigned claims.



Due to the uncertainty of realization of such insurance claims, no asset related to any
potential claim for recovery has been recorded in the accompanying condensed consolidated financial statements. Any future insurance proceeds realized upon settlement of such claims will be recorded as non-interest income.



A schedule of significant commitments at September 30,
2005 follows:



|                             |  |   |          
|---------------------------- |  | - | ---------
|Commitments to extend credit |  | $ | 3,722,719
|Standby letters of credit    |  |   | 277,050  
|Letters of credit            |  |   | 33,054   



The Sky Financial Solutions sales
agreement contains a contingency based upon future charge-offs between Sky Financial and the acquirer that may result in an adjustment to increase or decrease the sales price in future periods. Based on historical experience and expected future
performance, management does not believe that this provision will have a significant impact on future earnings, cash flows, or financial position.



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



(Dollars in thousands, except per share data)



Three Months Ended September 30, 2005 and 2004



Overview



For the third quarter of 2005, net income for Sky Financial was $51,023, or $0.47 per diluted share, up from $46,148 or $0.43 per diluted share for the third quarter of 2004. Sky Financials results of operations
for the third quarter of 2005 reflected continued improvements in net interest margin and efficiency which contributed to the increased earnings over the third quarter of 2004.



For the third quarter of 2005, net interest income increased $7,903 over the third quarter of 2004, mainly due to the growth in assets
attributable to organic growth and acquisitions, as well as an improved net interest margin. Non-interest revenues for the third quarter of 2005 were down $557 from the third quarter of 2005. This decline is principally attributed to a $1,707
decrease in gains on securities transactions and an $807 decrease in brokerage and insurance business. These decreases were mostly offset by a $966 increase in service charges and fees on deposit accounts, an $836 increase in mortgage banking
revenue and a $519 increase in trust services income. The provision for credit losses increased $365, primarily due to a 4.5% increase in average interest earning assets, partially offset by lower net charge-offs during the quarter. Non-interest
expenses decreased for the third quarter of 2005 by $1,494 from the third quarter of 2004 mainly due to higher merger, integration and restructuring expenses



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in the third quarter of 2004 from the acquisition of Second Bancorp. The decrease in merger, integration and restructuring expenses was partially offset by
higher expenses as a result of the acquisitions of Belmont Bancorp in the second quarter of 2005 and Prospect Bancshares in the fourth quarter of 2004, along with the impact of five new financial centers over the last twelve months.



Business Line Results



Sky Financials two major lines of business include community banking and financial services. Community banking includes lending and
related services to businesses and consumers, mortgage banking and deposit-gathering. Financial services consists of non-banking companies engaged in trust and wealth management, insurance and other financial-related services. Sky Financials
business line results for the third quarter ended September 30, 2005 and 2004 are summarized in the table below.



|                              |  |                   |        |   |      |   |        |  
|----------------------------- |  | ----------------- | ------ | - | ---- | - | ------ | -
|                              |  | Net Income (Loss) |       
|Quarter Ended September 30,   |  | 2005              |        |   | 2004 |  
|Community Banking             |  | $                 | 49,973 |   |      | $ | 47,103 |  
|Financial Services Affiliates |  |                   | 2,596  |   |      |   | 2,948  |  
|Parent and Other              |  |                   | (1,546 | ) |      |   | (3,903 | )
|                              |  |                   |        |   |      |   |        |  
|Consolidated Total            |  | $                 | 51,023 |   |      | $ | 46,148 |  
|                              |  |                   |        |   |      |   |        |  



The higher community banking net
income in the third quarter of 2005 as compared to the same period of the previous year is mainly due to the impact of acquisitions and organic growth as well as an improved net interest margin. Partially offsetting the higher net interest income
was higher non-interest expense in the third quarter of 2005, principally as a result of the acquisition of Belmont in the second quarter of 2005 and Prospect in the fourth quarter of 2004, and by slightly lower non-interest income. The lower
non-interest income was primarily the result of a decrease in gains on sales of securities, offset by higher income from service charges and fees on deposits and higher mortgage banking income. The efficiency ratio for the community banking segment
was 48.82% for the third quarter of 2005 compared to 49.60% in the third quarter of 2004. The efficiency ratio is defined as non-interest expense divided by the sum of fully taxable equivalent net interest income plus non-interest income. The 2005
community banking results reflect a ROE of 13.16% and a ROA of 1.32% compared to 13.89% and 1.28%, respectively, in the third quarter of 2004.



The financial service affiliates net income decreased as compared to 2004 as a result of lower income from brokerage and insurance commissions, primarily as a
result of softer market conditions. This decrease was partially offset by higher trust services income.



Parent and other include the net funding costs of the parent company and intercompany billings to other affiliates for shared services. The lower net loss for parent and other results of operations from the prior year
third quarter relate primarily to lower merger, integration and restructuring expenses retained by the parent in the third quarter of 2005.



Net Interest Income



Net interest income for the third quarter of 2005 was $130,419, an increase of $7,903 or 6.5% from $122,516 in the third quarter of 2004. Net interest income, the difference between interest income earned on
interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of Sky Financials earnings. Net interest income is affected by changes in the volumes, rates and composition of
interest-earning assets and interest-bearing liabilities. Average earning assets increased 4.5% from the third quarter last year from a combination of organic growth and acquisitions. Average loans for the quarter increased 6.4% over 2004s
volume during the same quarter, with organic growth contributing 4.2% in addition to the acquisitions. Sky Financials net interest margin for the three months ended September 30, 2005 and 2004 was 3.75 and 3.69%, respectively. The
increase in the net interest margin reflects the benefits from rising short-term interest rates and pricing disciplines, despite the negative effects of a flattened yield curve and increasingly competitive markets.



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##### Table of Contents

The following table reflects the components of Sky Financials net interest income for the three months ended
September 30, 2005 and 2004. Rates are computed on a tax equivalent basis and non-accrual loans have been included in the average balances.



|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|------------------------------------------------------------------------------------------------ |  | ------------------------------------- | ---------- | ---------------------- | ------------------------------------- | ------- |  | ---- | -------------- |  | ---------------------- | ---------- | ---- | - | ------- |  | ---- | -
|                                                                                                 |  | Three Months Ended September 30, 2005 |            |                        | Three Months Ended September 30, 2004 |        
|                                                                                                 |  | AverageBalance                        |            | InterestIncome/Expense |                                       | Rate    |  |      | AverageBalance |  | InterestIncome/Expense |            | Rate |  
|                                                                                                 |  | (Dollars in thousands)                |           
|Assets                                                                                           |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-earning assets:                                                                         |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-bearing deposits in banks                                                               |  | $                                     | 30,680     |                        | $                                     | 137     |  | 1.77 | %              |  | $                      | 42,017     |      | $ | 149     |  | 1.41 | %
|Federal funds sold                                                                               |  |                                       | 1,033      |                        |                                       | 8       |  | 3.07 |                |  |                        | 2,065      |      |   | 6       |  | 1.16 |  
|Securities                                                                                       |  |                                       | 3,042,872  |                        |                                       | 33,950  |  | 4.43 |                |  |                        | 3,078,861  |      |   | 34,074  |  | 4.40 |  
|Loans and loans held for sale                                                                    |  |                                       | 10,819,022 |                        |                                       | 179,128 |  | 6.57 |                |  |                        | 10,169,939 |      |   | 145,446 |  | 5.69 |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-earning assets                                                                    |  |                                       | 13,893,607 |                        |                                       | 213,223 |  | 6.09 |                |  |                        | 13,292,882 |      |   | 179,675 |  | 5.38 |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Noninterest-earning assets                                                                       |  |                                       | 1,303,897  |                        |                                       |         |  |      |                |  |                        | 1,230,267  |      |   |         |  |      |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total assets                                                                                     |  | $                                     | 15,197,504 |                        |                                       |         |  |      |                |  | $                      | 14,523,149 |      |   |         |  |      |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Liabilities and Shareholders Equity                                                             |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-bearing liabilities:                                                                    |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Demand deposits                                                                                  |  | $                                     | 1,490,071  |                        |                                       | 1,478   |  | 0.39 |                |  | $                      | 353,368    |      |   | 696     |  | 0.78 |  
|Savings deposits                                                                                 |  |                                       | 2,561,953  |                        |                                       | 12,294  |  | 1.90 |                |  |                        | 4,014,051  |      |   | 7,670   |  | 0.76 |  
|Time deposits                                                                                    |  |                                       | 5,031,124  |                        |                                       | 41,470  |  | 3.27 |                |  |                        | 4,337,033  |      |   | 28,814  |  | 2.64 |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-bearing deposits                                                                  |  |                                       | 9,083,148  |                        |                                       | 55,242  |  | 2.41 |                |  |                        | 8,704,452  |      |   | 37,180  |  | 1.70 |  
|Short-term borrowings                                                                            |  |                                       | 794,554    |                        |                                       | 6,488   |  | 3.24 |                |  |                        | 867,547    |      |   | 4,110   |  | 1.88 |  
|Junior Subordinated Debentures/ Trust Preferred Securities                                       |  |                                       | 189,509    |                        |                                       | 3,138   |  | 6.57 |                |  |                        | 182,288    |      |   | 2,308   |  | 5.04 |  
|Debt and FHLB advances                                                                           |  |                                       | 1,791,472  |                        |                                       | 17,071  |  | 3.78 |                |  |                        | 1,734,164  |      |   | 12,658  |  | 2.90 |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-bearing liabilities                                                               |  |                                       | 11,858,683 |                        |                                       | 81,939  |  | 2.74 |                |  |                        | 11,488,451 |      |   | 56,256  |  | 1.95 |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Noninterest-bearing liabilities                                                                  |  |                                       | 1,826,040  |                        |                                       |         |  |      |                |  |                        | 1,644,685  |      |   |         |  |      |  
|Shareholders equity                                                                             |  |                                       | 1,512,781  |                        |                                       |         |  |      |                |  |                        | 1,390,013  |      |   |         |  |      |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total liabilities and equity                                                                     |  | $                                     | 15,197,504 |                        |                                       |         |  |      |                |  | $                      | 14,523,149 |      |   |         |  |      |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest income (tax equivalent basis)                                                       |  |                                       |            |                        | $                                     | 131,284 |  |      |                |  |                        |            |      | $ | 123,419 |  |      |  
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest rate spread (tax equivalent basis)                                                  |  |                                       |            |                        |                                       |         |  | 3.35 | %              |  |                        |            |      |   |         |  | 3.43 | %
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest margin, (net interest income, taxable equivalent basis, to interest earning assets) |  |                                       |            |                        |                                       |         |  | 3.75 | %              |  |                        |            |      |   |         |  | 3.69 | %
|                                                                                                 |  |                                       |            |                        |                                       |         |  |      |                |  |                        |            |      |   |         |  |      |  



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Provision for Credit Losses



The provision for credit losses represents the charge to income necessary to adjust the allowance for loan losses and the allowance for
unfunded loan commitments and letters of credit to an amount that represents managements assessment of the estimated probable credit losses inherent in Sky Financials loan portfolio which have been incurred at each balance sheet date.
The provision for credit losses increased $365 or 4.4% to $8,725 in the third quarter of 2005 compared to $8,360 in the third quarter of 2004. The higher provision for credit losses in the third quarter of 2005 was primarily due to a 4.5% increase
in average interest earning assets, partially offset by lower net charge-offs during the quarter. Net charge-offs were $7,997 or 0.29% (annualized) of average loans during the three months ended September 30, 2005, compared to $8,106 or 0.32%
(annualized) for the same period in 2004.



|                                                                  |  |                   |   |  |                  |   |  |                   |  
|----------------------------------------------------------------- |  | ----------------- | - |  | ---------------- | - |  | ----------------- | -
|                                                                  |  | September 30,2005 |   |  | December 31,2004 |   |  | September 30,2004 |  
|Allowance for loan losses as a percentage of loans                |  | 1.41              | % |  | 1.43             | % |  | 1.44              | %
|Allowance for loan losses as a percentage of non-performing loans |  | 121.11            | % |  | 105.32           | % |  | 120.29            | %



See section titled
Non-Performing Assets of managements discussion and analysis regarding $29,877 of non-performing loans backed by sureties.



Non-Interest Income



Non-interest income for the third quarter of 2005 was $52,190, a decrease of $557 or 1.1% from $52,747 for the third quarter of 2004. The change in non-interest income reflects the impact of a decrease in net
securities gains and brokerage and insurance commissions, partially offset by an increase in service charges and fees on deposit accounts, trust services income and mortgage banking income.



Non-interest income growth areas were led by service charges, which recorded revenues of
$14,786 during the third quarter of 2005, an increase of $966 or 7.0% from the same period in 2004, reflecting deposit growth from acquisitions. Trust services income for the third quarter of 2005 was $5,598, up $519 or 10.2% over the third quarter
of 2004, primarily from organic growth. The assets under trust management have grown to $4.7 billion at September 30, 2005 from $4.0 billion at September 30, 2004. Brokerage and insurance commissions for the third quarter of 2005 were
$13,896, down $807 or 5.5% from the third quarter of 2004 due to softer market conditions. Other income was down $364, or 3.5% from the third quarter of 2004 due to lower merchant processing income and lower income from bank owned life insurance
policies, partially offset by higher check card fee income.



Mortgage banking
income was $7,681 during the third quarter of 2005, an increase of $836 or 12.2%, due primarily to higher recapture of impairment charges as compared to the same period of 2004. The components of mortgage banking income for the third quarter of 2005
and 2004 are as follows:



|                                |  |                                  |        |   |                                 |   |        |  
|------------------------------- |  | -------------------------------- | ------ | - | ------------------------------- | - | ------ | -
|                                |  | Three Months Ended September 30, |        |   | Three Months EndedSeptember 30, |  
|                                |  | 2005                             |        |   | 2004                            |  
|Origination and sales revenue   |  | $                                | 6,449  |   |                                 | $ | 6,436  |  
|Mortgage loan servicing income  |  |                                  | 3,841  |   |                                 |   | 4,037  |  
|Amortization expense            |  |                                  | (3,684 | ) |                                 |   | (3,213 | )
|Impairment (charges) recoveries |  |                                  | 1,075  |   |                                 |   | (415   | )
|                                |  |                                  |        |   |                                 |   |        |  
|Total                           |  | $                                | 7,681  |   |                                 | $ | 6,845  |  
|                                |  |                                  |        |   |                                 |   |        |  



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Non-Interest Expense



The decrease in non-interest expense is primarily attributed to higher merger, integration and restructuring expenses in the prior year third quarter as a result of the
acquisition of Second Bancorp. Partially offsetting the decreased merger, integration and restructuring costs were additional costs incurred in 2005 as a result of the Belmont Bancorp acquisition in the second quarter of 2005 and Prospect Bancshares
acquisition in the fourth quarter of 2004. Non-interest expense for the third quarter of 2005 was $96,398, a decrease of $1,494 or 1.5%, from $97,892 reported for the same quarter of 2004. Salary and other employee costs were $52,078, up $495 or
1.0% as compared to the third quarter of 2004 due to an increase in full time equivalent employees, mostly from acquisitions. Occupancy and equipment costs were $16,754, up $792 or 5.0% compared to the same period of 2004 and other operating
expenses were $23,630, up $667 or 2.9% as compared to the third quarter of 2004, both due primarily to acquisitions. Amortization expense increased $261, or 7.3% from the third quarter of 2004 due to the additional intangible assets acquired from
recent acquisitions. Merger, integration and restructuring charges of $122 were recognized in the third quarter of 2005 related to the pending acquisition of Falls Bank. Charges of $3,831 were recognized in the third quarter of 2004 related to the
acquisition of Second Bancorp. The efficiency ratio was 52.54% for the third quarter of 2005, down from 55.57% for the same quarter last year. The efficiency ratio is defined as non-interest expense divided by the sum of fully taxable equivalent net
interest income plus non-interest income.



Nine Months Ended
September 30, 2005 and 2004



Overview



Income from continuing operations for the first nine months of 2005 was $130,969 or $1.22
per diluted share, versus $126,301 or $1.28 per diluted share in the first nine months of 2004. Sky Financials results from continuing operations for the first nine months of 2005 reflected higher net interest income as a result of increased
assets from both acquisitions and organic growth and an increased net interest margin over the prior year period. Partially offsetting this increase was higher provision for credit losses, which totaled $45,442 compared to $26,045 in the first nine
months of 2004. Sky Financial experienced higher credit losses in the first quarter of 2005; however, credit losses returned to lower levels during the second and third quarters of 2005. Sky Financial expects credit losses to be more consistent with
prior historical levels in future quarters and does not believe that the first quarter credit losses were indicative of any systemic credit issue.



For the first nine months of 2005, net income for Sky Financial was $130,969, or $1.22 per diluted share, down from $145,026 or $1.47 per diluted share for the first nine
months of 2004. The first nine months of 2004 net income was increased by the after-tax net income from discontinued operations of $18,725, or $0.19 per diluted share, which included a gain from Sky Financials sale of its dental finance unit
as discussed further below.



For the first nine months of 2005, net interest
income increased $55,420 over the first nine months of 2004, mainly due to the growth in assets attributable to organic growth and acquisitions, as well as an increase in the net interest margin of 3 basis points as compared to the prior year
period. With the expansion from acquisitions throughout 2004 and 2005 and the growth of fee-based businesses, non-interest income increased $9,413. The major components of the increase in non-interest income included a $6,422 increase in service
charges and fees on deposit accounts, a $3,122 increase in trust services income and a $2,192 increase in insurance commissions. The increases were partially offset by decreases in net securities gains. The provision for credit losses increased
$19,397, primarily due to higher net charge-offs, primarily from two large commercial credits and the sale of a group of non-performing consumer loans in the first quarter. Non-interest expenses increased for the first nine months of 2005 by $36,981
over the first nine months of 2004 mainly due to the acquisitions of Belmont Bancorp in the second quarter of 2005 and Second Bancorp, Prospect Bancshares and two insurance agencies in 2004, along with the impact of five new financial centers over
the last twelve months.



Sky Financial sold Sky Financial Solutions, its dental
finance operation during the first quarter of 2004. The operating results of Sky Financial Solutions have been presented as income from discontinued operations for the first nine months of 2004. Income from discontinued operations, including the
gain on the sale, resulted in earnings of $0.19 per diluted share during the first nine months of 2004.



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##### Table of Contents

Business Line Results



Sky Financials two major lines of business include community banking and financial services. Community banking includes lending and related services to businesses
and consumers, mortgage banking and deposit-gathering. Financial services consists of non-banking companies engaged in trust and wealth management, insurance and other financial-related services. Sky Financials business line results for the
nine months ended September 30, 2005 and 2004 are summarized in the table below.



|                                |  |                   |         |   |      |   |         |  
|------------------------------- |  | ----------------- | ------- | - | ---- | - | ------- | -
|                                |  | Net Income (Loss) |        
|Nine Months Ended September 30, |  | 2005              |         |   | 2004 |  
|Community Banking               |  | $                 | 126,760 |   |      | $ | 120,245 |  
|Financial Services Affiliates   |  |                   | 8,839   |   |      |   | 8,071   |  
|Parent and Other                |  |                   | (4,630  | ) |      |   | (2,015  | )
|                                |  |                   |         |   |      |   |         |  
|Consolidated Total              |  | $                 | 130,969 |   |      | $ | 126,301 |  
|                                |  |                   |         |   |      |   |         |  



The higher community banking net
income in the first nine months of 2005 as compared to the same period of the previous year is mainly due to higher net interest income as a result of the impact of acquisitions and organic growth and a higher net interest margin, partially offset
by higher provision for credit losses. Higher non-interest income over 2004 was primarily the result of higher service charges and fees on deposits and increased other income. These increases were partially offset by a decrease in gains on sales of
securities. Operating expenses increased over the prior year period as a result of the acquisitions. The efficiency ratio for the community banking segment was 50.93% for the first nine months of 2005 compared to 50.81% in the first nine months of
2004. The efficiency ratio is defined as non-interest expense divided by the sum of fully taxable equivalent net interest income plus non-interest income. The 2005 community banking results reflect a ROE of 11.61% and a ROA of 1.14% compared to
14.77% and 1.24%, respectively, in the first nine months of 2004.



The
financial service affiliates net income increased as compared to 2004 from acquisitions in brokerage and insurance commissions and acquisitions and growth in the trust services area.



Parent and other includes the net funding costs of the parent company and intercompany
billings to other affiliates for shared services. The higher net loss for parent and other results of operations from the prior year first nine months relate primarily to higher interest expenses retained by the parent.



Net Interest Income



Net interest income for the first nine months of 2005 was $382,426, an increase of $55,420 or 16.9% from $327,006 in the first nine months
of 2004. Net interest income, the difference between interest income earned on interest-earning assets and interest expense incurred on interest-bearing liabilities, is the most significant component of Sky Financials earnings. Net interest
income is affected by changes in the volumes, rates and composition of interest-earning assets and interest-bearing liabilities. Average earning assets increased 16.0% from the first nine months last year from a combination of organic growth and
acquisitions. Average loans for the first nine months increased 17.0% over 2004s volume during the same period, as a result of both organic growth and acquisitions. Sky Financials net interest margin for the nine months ended
September 30, 2005 and 2004 was 3.72% and 3.69%, respectively.



26



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##### Table of Contents

The following table reflects the components of Sky Financials net interest income for the nine months ended
September 30, 2005 and 2004. Rates are computed on a tax equivalent basis and non-accrual loans have been included in the average balances.



|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|------------------------------------------------------------------------------------------------ |  | ------------------------------------ | ---------- | ---------------------- | ------------------------------------ | ------- |  | ---- | -------------- |  | ---------------------- | ---------- | ---- | - | ------- |  | ---- | -
|                                                                                                 |  | Nine Months Ended September 30, 2005 |            |                        | Nine Months Ended September 30, 2004 |        
|                                                                                                 |  | AverageBalance                       |            | InterestIncome/Expense |                                      | Rate    |  |      | AverageBalance |  | InterestIncome/Expense |            | Rate |  
|                                                                                                 |  | (Dollars in thousands)               |           
|Assets                                                                                           |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-earning assets:                                                                         |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-bearing deposits in banks                                                               |  | $                                    | 34,429     |                        | $                                    | 471     |  | 1.83 | %              |  | $                      | 37,418     |      | $ | 324     |  | 1.16 | %
|Federal funds sold                                                                               |  |                                      | 1,403      |                        |                                      | 17      |  | 1.62 |                |  |                        | 2,703      |      |   | 20      |  | 0.99 |  
|Securities                                                                                       |  |                                      | 3,058,160  |                        |                                      | 101,736 |  | 4.45 |                |  |                        | 2,701,042  |      |   | 88,100  |  | 4.36 |  
|Loans and loans held for sale                                                                    |  |                                      | 10,730,126 |                        |                                      | 507,250 |  | 6.32 |                |  |                        | 9,178,960  |      |   | 389,942 |  | 5.67 |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-earning assets                                                                    |  |                                      | 13,824,118 |                        |                                      | 609,474 |  | 5.89 |                |  |                        | 11,920,123 |      |   | 478,386 |  | 5.36 |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Assets of discontinued operations                                                                |  |                                      |           |                        |                                      |         |  |      |                |  |                        | 432,839    |      |   |         |  |      |  
|Noninterest-earning assets                                                                       |  |                                      | 1,249,956  |                        |                                      |         |  |      |                |  |                        | 827,719    |      |   |         |  |      |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total assets                                                                                     |  | $                                    | 15,074,074 |                        |                                      |         |  |      |                |  | $                      | 13,180,681 |      |   |         |  |      |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Liabilities and Shareholders Equity                                                             |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Interest-bearing liabilities:                                                                    |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Demand deposits                                                                                  |  | $                                    | 1,457,426  |                        |                                      | 3,742   |  | 0.34 |                |  | $                      | 277,384    |      |   | 1,429   |  | 0.69 |  
|Savings deposits                                                                                 |  |                                      | 2,671,271  |                        |                                      | 32,989  |  | 1.65 |                |  |                        | 3,710,157  |      |   | 19,991  |  | 0.72 |  
|Time deposits                                                                                    |  |                                      | 4,818,002  |                        |                                      | 111,481 |  | 3.09 |                |  |                        | 3,905,584  |      |   | 79,860  |  | 2.73 |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-bearing deposits                                                                  |  |                                      | 8,946,699  |                        |                                      | 148,212 |  | 2.21 |                |  |                        | 7,893,125  |      |   | 101,280 |  | 1.71 |  
|Short-term borrowings                                                                            |  |                                      | 867,071    |                        |                                      | 19,134  |  | 2.95 |                |  |                        | 881,539    |      |   | 13,394  |  | 2.03 |  
|Junior Subordinated Debentures/Trust Preferred Securities                                        |  |                                      | 189,678    |                        |                                      | 8,809   |  | 6.21 |                |  |                        | 170,261    |      |   | 6,147   |  | 4.82 |  
|Debt and FHLB advances                                                                           |  |                                      | 1,834,531  |                        |                                      | 48,400  |  | 3.53 |                |  |                        | 1,322,456  |      |   | 27,993  |  | 2.83 |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total interest-bearing liabilities                                                               |  |                                      | 11,837,979 |                        |                                      | 224,555 |  | 2.53 |                |  |                        | 10,267,381 |      |   | 148,814 |  | 1.94 |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Liabilities of discontinued operations                                                           |  |                                      |           |                        |                                      |         |  |      |                |  |                        | 405,903    |      |   |         |  |      |  
|Noninterest-bearing liabilities                                                                  |  |                                      | 1,764,210  |                        |                                      |         |  |      |                |  |                        | 1,345,186  |      |   |         |  |      |  
|Shareholders equity                                                                             |  |                                      | 1,471,885  |                        |                                      |         |  |      |                |  |                        | 1,162,211  |      |   |         |  |      |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Total liabilities and equity                                                                     |  | $                                    | 15,074,074 |                        |                                      |         |  |      |                |  | $                      | 13,180,681 |      |   |         |  |      |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest income (tax equivalent basis)                                                       |  |                                      |            |                        | $                                    | 384,919 |  |      |                |  |                        |            |      | $ | 329,572 |  |      |  
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest rate spread (tax equivalent basis)                                                  |  |                                      |            |                        |                                      |         |  | 3.36 | %              |  |                        |            |      |   |         |  | 3.42 | %
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  
|Net interest margin, (net interest income, taxable equivalent basis, to interest earning assets) |  |                                      |            |                        |                                      |         |  | 3.72 | %              |  |                        |            |      |   |         |  | 3.69 | %
|                                                                                                 |  |                                      |            |                        |                                      |         |  |      |                |  |                        |            |      |   |         |  |      |  



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##### Table of Contents

Provision for Credit Losses



The provision for credit losses represents the charge to income necessary to adjust the allowance for loan losses and the allowance for
unfunded loan commitments and letters of credit to an amount that represents managements assessment of the estimated probable credit losses inherent in Sky Financials loan portfolio which have been incurred at each balance sheet date.
The provision for credit losses increased $19,397 or 74.5% to $45,442 in the first nine months of 2005 compared to $26,045 in the first nine months of 2004. The higher provision for credit losses in the first nine months of 2005 was due to higher
net charge-offs in the first quarter of 2005, primarily from two large commercial credits and the sale of a group of non-performing consumer loans which totaled $15,700. Net charge-offs were $45,562 or 0.57% (annualized) of average loans during the
nine months ended September 30, 2005, compared to $25,073 or 0.37% (annualized) for the same period in 2004. Sky Financial experienced higher credit losses in the first quarter of 2005; however, credit losses returned to lower levels during the
second and third quarters of 2005. Sky Financial expects credit losses to be more consistent with prior historical levels in future quarters and does not believe that the first quarter credit losses were indicative of any systemic credit issues. For
the last quarter of 2005, Sky Financial expects net charge offs to be below 0.35% and for the full year to be below 0.55% of total average loans.



See section titled Non-Performing Assets of managements discussion and analysis regarding $29,877 of non-performing loans backed by sureties.



Non-Interest Income



The change in non-interest income reflects the impact of acquisitions and the emphasis of
Sky Financial on expanding its profitable fee-based businesses partially offset by a decrease in net securities gains. Non-interest income for the first nine months of 2005 was $155,178, an increase of $9,413 or 6.5% from $145,765 for the first nine
months of 2004.



Non-interest income growth was most significant in service
charges, which recorded revenues of $40,991 during the first nine months of 2005, an increase of $6,422 or 18.6% from the same period in 2004, reflecting deposit growth from acquisitions. Trust services income for the first nine months of 2005 was
$16,407, up $3,122 or 23.5% over the first nine months of 2004, primarily from organic growth. The assets under trust management have grown to $4.7 billion at September 30, 2005 from $4.0 billion at September 30, 2004. Brokerage and
insurance commissions for the first nine months of 2005 were $44,654, up $2,192 or 5.2% from the first nine months of 2004 due mostly from acquisitions. Other income increased $1,636, or 5.4% from the first nine months of 2004 due to higher income
from check card and ATM fees as well as higher income from bank owned life insurance premiums. These increases were partially offset by lower gains on sales of SBA and other commercial loans in 2004 and lower merchant processing income in 2005.



Mortgage banking income was $19,360 during the first nine months of 2005, an
increase of $191 or 1.0%, due primarily to higher recapture of impairment charges and higher loan servicing income. These increases were mostly offset by decreased volumes as compared to the same period of 2004. The components of mortgage banking
income for the first nine months of 2005 and 2004 are as follows:



|                                |  |                                 |         |   |                               |   |        |  
|------------------------------- |  | ------------------------------- | ------- | - | ----------------------------- | - | ------ | -
|                                |  | Nine Months Ended September 30, |         |   | Nine Months EndedSeptember 30 |  
|                                |  | 2005                            |         |   | 2004                          |  
|Origination and sales revenue   |  | $                               | 17,648  |   |                               | $ | 19,153 |  
|Mortgage loan servicing income  |  |                                 | 11,424  |   |                               |   | 9,948  |  
|Amortization expense            |  |                                 | (10,694 | ) |                               |   | (9,629 | )
|Impairment (charges) recoveries |  |                                 | 982     |   |                               |   | (303   | )
|                                |  |                                 |         |   |                               |   |        |  
|Total                           |  | $                               | 19,360  |   |                               | $ | 19,169 |  
|                                |  |                                 |         |   |                               |   |        |  



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##### Table of Contents

Non-Interest Expense



The change in non-interest expense is primarily attributed to additional costs as a result of the Belmont Bancorp acquisition in the second quarter of 2005 and the Second
Bancorp and Prospect Bancshares acquisitions in the second half of 2004. Non-interest expense for the first nine months of 2005 was $295,674, an increase of $36,981 or 14.3%, from $258,693 reported for the same period of 2004. Salary and other
employee costs were $158,045, up $17,624 or 12.6% as compared to the first nine months of 2004 due to an increase in full time equivalent employees, mostly from acquisitions. Occupancy and equipment costs were $51,193, up $8,921 or 21.1% compared to
the same period of 2004 and other operating expenses were $74,305, up $9,885 or 15.3% as compared to the first nine months of 2004, both due primarily to acquisitions. Amortization expense increased $3,575, or 48.3% from the first nine months of
2004 due to the additional intangible assets acquired from recent acquisitions. Merger, integration and restructuring charges of $1,153 were recognized in the first nine months of 2005 related to the pending acquisition of Falls Bank and the
acquisition of Belmont Bancorp. Charges of $4,177 were recognized in the first nine months of 2004 due to the acquisition of Second Bancorp and the sale of Sky Financial Solutions. The efficiency ratio was 54.74% for the first nine months of 2005,
up from 54.42% for the same period last year. The efficiency ratio is defined as non-interest expense divided by the sum of fully taxable equivalent net interest income plus non-interest income.



Income Taxes



The provision for income taxes for the first nine months of 2005 increased $3,787 to $65,519 from $61,732 for the same period in 2004. The
effective tax rate for the nine months ended September 30, 2005 was 33.3% as compared to 32.8% for the nine months ended September 30, 2005 and the year ended December 31, 2004. The increase in the effective rate was mainly due to
higher pretax earnings from continuing operations in 2005 which resulted in a smaller impact of permanent differences on the reduction of the effective rate from the statutory rate.



Balance Sheet



At September 30, 2005, total assets were $15,336,965, an increase of $392,542 from December 31, 2004, due primarily to the acquisition of Belmont Bancorp on
June 1, 2005. Belmont Bancorp is the holding company of Belmont National Bank, a $297,000 bank headquartered in St. Clairsville, Ohio. In addition to the assets provided by the acquisition, loans increased by approximately $133,000 due to
organic growth. The increase from the acquisition and loan growth was partially offset by decreases in securities available for sale of $39,696.



The net growth in assets was funded partially by growth in total deposits, up $503,203, of which approximately $229,000 related to acquisitions and the remaining $274,000
due to organic growth. Debt decreased $222,022, due to payments on repurchase agreements and federal funds purchased, partially offset by increases on FHLB advances.



Shareholders equity totaled $1,515,914 at September 30, 2005, increasing $44,959 from December 31, 2004. Common stock
increased $57,685, due mostly to shares issued to acquire Belmont Bancorp and Benefits Design Agency and due to stock option exercises. Treasury stock increased by $48,897, mainly due to the repurchase of shares during the first nine months of 2005.
Net retained earnings (net income less cash dividends) at September 30, 2005 totaled $404,528 as compared to $343,541 at December 31, 2004. The increase is due to the net income for the first nine months, less dividends paid. Accumulated
other comprehensive income (loss) decreased by $24,816, primarily due to a decrease in the market value of securities available for sale.



29



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##### Table of Contents

Non-Performing Assets



The following table presents the aggregate amounts of non-performing assets and respective ratios on the dates indicated.



|                                                                     |  |               |         |   |              |   |         |               |  |   |         |  
|-------------------------------------------------------------------- |  | ------------- | ------- | - | ------------ | - | ------- | ------------- |  | - | ------- | -
|                                                                     |  | September 30, |         |   | December 31, |   |         | September 30, | 
|                                                                     |  | 2005          |         |   | 2004         |   |         | 2004          | 
|Non-accrual loans                                                    |  | $             | 126,131 |   |              | $ | 143,207 |               |  | $ | 122,050 |  
|Restructured loans                                                   |  |               | 495     |   |              |   | 541     |               |  |   | 556     |  
|                                                                     |  |               |         |   |              |   |         |               |  |   |         |  
|Total non-performing loans                                           |  |               | 126,626 |   |              |   | 143,748 |               |  |   | 122,606 |  
|Other real estate owned                                              |  |               | 14,700  |   |              |   | 10,055  |               |  |   | 11,924  |  
|Non-performing investments                                           |  |               | 10,299  |   |              |   | 11,705  |               |  |   | 11,705  |  
|                                                                     |  |               |         |   |              |   |         |               |  |   |         |  
|Total non-performing assets                                          |  | $             | 151,625 |   |              | $ | 165,508 |               |  | $ | 146,235 |  
|                                                                     |  |               |         |   |              |   |         |               |  |   |         |  
|Loans 90 days or more past due and still accruing interest           |  | $             | 24,424  |   |              | $ | 16,243  |               |  | $ | 17,183  |  
|Non-performing loans to total loans                                  |  |               | 1.16    | % |              |   | 1.35    | %             |  |   | 1.19    | %
|Non-performing assets to total loans plus other real estate owned    |  |               | 1.39    |   |              |   | 1.56    |               |  |   | 1.42    |  
|Allowance for loan losses to total non-performing loans              |  |               | 121.11  |   |              |   | 105.32  |               |  |   | 120.29  |  
|Loans 90 days or more past due and not on non-accrual to total loans |  |               | .22     |   |              |   | .15     |               |  |   | .17     |  



Performing loans where some concerns
exist as to the ability of the borrower to comply with present loan repayment terms, excluding non-performing loans, approximated $157,818 and $159,157 at September 30, 2005 and December 31, 2004, respectively, and are being closely
monitored by management and the Boards of Directors of the subsidiaries. The amounts included in these loans resulted from an evaluation, on a loan-by-loan basis, of loans classified as doubtful and substandard but are not
included in the non-performing loan category. The classification of these loans, however, does not imply that management expects losses on each of these loans, but believes that a higher level of scrutiny is prudent under the circumstances. These
loans require close monitoring despite the fact that they are currently performing. Such classifications relate to specific concerns relating to each individual borrower and do not relate to any concentrated risk elements common to all loans in this
group.



For the nine months ended September 30, 2005, the amount of
interest income that would have been recorded under the original loan terms for total loans classified as non-accrual and restructured was $7,931. The amount actually collected and recorded, as interest income for these loans, was $752.



Included in nonaccrual loans are $29,877 at September 30, 2005 and $34,400 at
December 31, 2004 of loans that are secured by pools of commercial leases for which payment is over 90 days past due. These loans are guaranteed by surety bonds or insurance policies. Sky Financial is engaged in litigation with the insurance
companies to enforce their payment obligations, as are a number of other banks nationwide. These non-accrual loans are currently reflected in the consolidated balance sheet at the amount of the unpaid balance, under contractual terms. After
consultation with its counsel as to the strength of its position, Sky Financial believes that the credits are well secured and that the prospects for recovery of its unpaid balance is probable.



Investment securities aggregating $10,299 were classified as nonperforming. Sky
Financial is not accruing income on these securities.



30



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##### Table of Contents

Allowance for Credit Losses



The table below summarizes the changes in the allowance for credit losses:



|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                           |  | Three Months EndedSeptember 30, |         |   | Nine Months EndedSeptember 30, |  
|                                                                           |  | 2005                            |         |   | 2004                           |   |         | 2005 |  |   | 2004    |  
|Balance of allowance at beginning of period                                |  | $                               | 152,543 |   |                                | $ | 125,661 |      |  | $ | 151,389 |   |  | $ | 124,943 |  
|                                                                           |  |                                 |         |  
|Loans charged-off:                                                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Real estate                                                                |  |                                 | (3,331  | ) |                                |   | (2,144  | )    |  |   | (15,803 | ) |  |   | (6,542  | )
|Commercial and agricultural                                                |  |                                 | (2,394  | ) |                                |   | (3,209  | )    |  |   | (22,949 | ) |  |   | (10,169 | )
|Installment and credit card                                                |  |                                 | (4,943  | ) |                                |   | (4,799  | )    |  |   | (14,266 | ) |  |   | (14,239 | )
|Other loans                                                                |  |                                 | (49     | ) |                                |   | (23     | )    |  |   | (214    | ) |  |   | (70     | )
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total loans charged-off                                                    |  |                                 | (10,717 | ) |                                |   | (10,175 | )    |  |   | (53,232 | ) |  |   | (31,020 | )
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Recoveries                                                                 |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Real estate                                                                |  |                                 | 275     |   |                                |   | 698     |      |  |   | 1,774   |   |  |   | 1,567   |  
|Commercial and agricultural                                                |  |                                 | 1,047   |   |                                |   | 248     |      |  |   | 1,702   |   |  |   | 991     |  
|Installment and credit card                                                |  |                                 | 1,331   |   |                                |   | 1,123   |      |  |   | 3,931   |   |  |   | 3,389   |  
|Other loans                                                                |  |                                 | 67      |   |                                |   |        |      |  |   | 263     |   |  |   |        |  
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total recoveries                                                           |  |                                 | 2,720   |   |                                |   | 2,069   |      |  |   | 7,670   |   |  |   | 5,947   |  
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Net loans charged-off                                                      |  |                                 | (7,997  | ) |                                |   | (8,106  | )    |  |   | (45,562 | ) |  |   | (25,073 | )
|Provision for credit losses                                                |  |                                 | 8,725   |   |                                |   | 8,360   |      |  |   | 45,442  |   |  |   | 26,045  |  
|Reserve of acquired institution                                            |  |                                 |        |   |                                |   | 21,564  |      |  |   | 2,361   |   |  |   | 21,564  |  
|Transfer (to) from allowance for unfunded commitments andletters of credit |  |                                 | 80      |   |                                |   |        |      |  |   | (279    | ) |  |   |        |  
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Balance of allowance at end of period                                      |  | $                               | 153,351 |   |                                | $ | 147,479 |      |  | $ | 153,351 |   |  | $ | 147,479 |  
|                                                                           |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Ratio of net charge-offs to average loans outstanding                      |  |                                 | 0.29    | % |                                |   | 0.32    | %    |  |   | 0.57    | % |  |   | 0.37    | %



At September 30, 2005, an
allowance for unfunded commitments and letters of credit of $279 was included in accrued interest payable and other liabilities.



As a result of the acquisition of Belmont Bancorp in the second quarter of 2005, Sky Financial transferred $2,361 of allowance for credit losses related to loans that
were not subject to the guidance provided under SOP 03-3.



Sky Financial
maintains an allowance for credit losses at a level adequate to absorb managements estimate of probable losses inherent in the loan portfolio. The allowance is comprised of a general allowance, a specific allowance for identified problem loans
and an unallocated allowance.



The general allowance is determined by applying
estimated loss factors to the credit exposures from outstanding loans. For construction, commercial and commercial real estate loans, loss factors are applied based on internal risk grades of these loans. For residential real estate, installment,
credit card and other loans, loss factors are applied on a portfolio basis. Loss factors are based on Sky Financials historical loss experience and are reviewed for revision by management and the board of directors on a quarterly basis, along
with other factors affecting the collectibility of the loan portfolio.



Specific allowances are established for all criticized and classified loans, where management has determined that, due to identified significant conditions, the probability that a loss has been incurred exceeds the general allowance loss
factor determination for those loans.



The unallocated allowance recognizes the
estimation risk associated with the allocated general and specific allowances and incorporates managements evaluation of existing conditions that are not included in the allocated allowance determinations. These conditions are reviewed
quarterly by management and include general economic conditions, macro credit quality trends, and internal loan review and regulatory examination findings.



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##### Table of Contents

The following table sets forth Sky Financials allocation of the allowance for credit losses as of
September 30, 2005 and December 31, 2004 (certain amounts from prior year have been reclassified to conform to current year presentation).



|                                       |  |               |         |             |   |        
|-------------------------------------- |  | ------------- | ------- | ----------- | - | -------
|                                       |  | September 30, |         | December 31
|                                       |  | 2005          |         | 2004       
|Specific:                              |  |               |         |             |   |        
|Real estate                            |  | $             | 3,825   |             | $ | 3,860  
|Commercial, financial and agricultural |  |               | 9,777   |             |   | 4,054  
|Construction                           |  |               | 240     |             |   |       
|                                       |  |               |         |             |   |        
|Sub-total                              |  |               | 13,842  |             |   | 7,914  
|General                                |  |               |         |             |   |        
|Construction                           |  |               | 5,281   |             |   | 4,720  
|Real estate                            |  |               | 54,410  |             |   | 55,332 
|Commercial, financial and agricultural |  |               | 45,578  |             |   | 46,441 
|Installment and credit card            |  |               | 22,568  |             |   | 26,437 
|                                       |  |               |         |             |   |        
|Sub-total                              |  |               | 127,837 |             |   | 132,930
|                                       |  |               |         |             |   |        
|Total allocated                        |  |               | 141,679 |             |   | 140,844
|Unallocated                            |  |               | 11,672  |             |   | 10,545 
|                                       |  |               |         |             |   |        
|Total                                  |  | $             | 153,351 |             | $ | 151,389
|                                       |  |               |         |             |   |        



The
following table gives the percent of loans in each category to total loans:



|                                       |  |               |   |  |              |  
|-------------------------------------- |  | ------------- | - |  | ------------ | -
|                                       |  | September 30, |   |  | December 31, |  
|                                       |  | 2005          |   |  | 2004         |  
|Construction                           |  | 8.6           | % |  | 8.0          | %
|Real estate                            |  | 58.1          |   |  | 60.3         |  
|Commercial, financial and agricultural |  | 26.5          |   |  | 24.1         |  
|Installment and credit card            |  | 6.8           |   |  | 7.6          |  
|                                       |  |               |   |  |              |  
|Total                                  |  | 100.0         | % |  | 100.0        | %
|                                       |  |               |   |  |              |  



As part of its commercial loan
portfolio, Sky Financial engages in financing pools of loans with a specialty consumer finance company. Sky Financial currently has over 300 pools in this portfolio type. These pools are made up of almost exclusively 1-4 family residential mortgage
loans located throughout the country that have some type of impairment associated with them.



The risk associated with this type of loan pool is mitigated through a discounted purchase, a higher coupon rate and typically a strong element of recent payments for a period of time, prior to purchase.



The outstanding loans in this portfolio are less than 10% of Skys total loan
portfolio. These loan pools have been a quality source of Sky Financials core loan business for a number of years, and Sky Financial expects to continue this financing arrangement.



Discontinued Operations



Net income from discontinued operations was $18,725 during the first nine months of 2004 due primarily to the gain recognized from the sale of Sky Financial Solutions.
The Sky Financial Solutions sales agreement contains a contingency based upon future charge-offs between Sky Financial and the acquirer that may result in an adjustment to increase or decrease the sales price in future periods. Based on historical
experience and expected future performance, management does not believe that this contingency will have a significant impact on future earnings, cash flows, or financial position.



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##### Table of Contents

Banking System Upgrade



During the fourth quarter of 2005, Sky Financial will be installing an upgraded version of its Fiserv Comprehensive Banking System (CBS), its core processing system.
The upgraded software will provide product support enhancements that will allow Sky Financial to be more competitive in product offerings while increasing the efficiency of the support process. These positive changes include a major rewrite of the
dealer reserve functionality used by indirect lending, a step rate certificate product, and expanded service charge functionality that will increase the flexibility in our commercial checking analysis options. In addition, many smaller changes allow
more efficient access to data, reduction of manual tasks, and an increase in system performance.



Liquidity and Capital Resources



Management of liquidity is of growing importance to the banking industry. The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits and to take advantage of interest
rate market opportunities. The ability of a financial institution to meet its current financial obligations is a function of balance sheet structure, the ability to liquidate assets, and the availability of alternative sources of funds. To meet the
needs of the clients and to manage the risk of the bank, financial institutions have developed innovative ways to meet clients needs while at the same time manage both liquidity and interest rate risk. This is being done through liquidity management
and the balance of deposit growth and alternative sources of borrowing.



Certificates of deposit provide Sky Financial with a dependable source of funding. However, market pricing can be highly competitive and this source of funds must be prudently managed. As of September 30, 2005, a total of $3,436,503 of
contractual time deposits would mature in the next twelve months. The maturities are reasonably disbursed across the year and there are no unusual concentrations of individual clients. At Sky Financial, time deposit maturities are monitored through
the corporate Asset/ Liability Committee (ALCO). Maturing balances are summarized by month, original term and existing rate within each of the eight regional market areas. Heavy maturity periods are monitored closely and proactive marketing plans
are created that address both the client and Sky Financials needs and preferences. Regional management along with funds management meets weekly to discuss general economic and market conditions. During this meeting, each region reports the
results of the prior weeks pricing and promotional efforts. Each region then determines its rates for the coming week. Regional pricing allows Sky Financial to attract deposits at the most efficient cost available. Retained time deposits are
monitored and the percent retained is reported monthly to ALCO.



Management of
Sky Financial expects that a significant portion of the scheduled maturities will be retained throughout 2005 and into the second quarter of 2006. In the unlikely event that these are not retained by Sky Financial, a minimum liquidity ratio has been
established at 10% of non-collateralized liabilities. This 10% ratio consists of readily marketable securities and unused borrowing capacity. In addition, Sky Financial has a standing contingent liquidity management plan that prioritizes the steps
needed to compensate for temporary disruptions in liquidity.



In addition to
maintaining a stable core deposit base, Sky Financials banking subsidiary maintains adequate liquidity primarily through the use of investment securities and unused borrowing capacity. At September 30, 2005, securities and other short
term investments with maturities of one year or less totaled $15,734. In addition, the mortgage-backed securities provide an estimated cash flow of approximately $604,182 over a twelve-month timeframe. The banking subsidiary is a member of the
Federal Home Loan Bank (FHLB). The FHLB provides a reliable source of funds over and above retail deposits. As of September 30, 2005, the banking subsidiary had total credit availability with the FHLB of $1,849,239 of which it had outstanding
borrowings of $1,610,186.



During the second quarter of 2005, Sky Financial
renegotiated an agreement with non-affiliated financial institutions which enabled Sky Financial to borrow up to $100,000 through May 26, 2006. At September 30, 2005, Sky Financial had no outstanding borrowings under this agreement.



Sky Financial enters into derivative contracts under which it is required to
either receive cash or pay cash to counterparties depending on changes in interest rates. Derivative contracts are carried at their fair value on the consolidated balance sheet with the fair value representing the net present value of expected
future cash receipts or payments based on market interest rates as of the balance sheet date. The contracts are primarily interest rate swaps and cash is settled quarterly.



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##### Table of Contents

A schedule of significant commitments at September 30, 2005 follows:



|                             |  |           
|---------------------------- |  | ----------
|Commitments to extend credit |  | $3,722,719
|Standby letters of credit    |  | 277,050   
|Letters of credit            |  | 33,054    



During September 2004, Sky
Financials Board of Directors authorized the company to repurchase up to two million shares of common stock in the open market for a twelve month period. Sky Financial has purchased 1,784,000 in the nine months ended September 30, 2005.
As of September 30, 2005, Sky Financial has 103,000 remaining under the authorization to repurchase shares.



Since Sky Financial is a holding company and does not conduct operations, its primary sources of liquidity are dividends paid to it by its banking subsidiary and
borrowings from outside sources. For the banking subsidiary, regulatory approval is required in order to pay dividends in excess of the subsidiarys earnings retained for the current year plus retained net profits for the prior two years. As a
result of these restrictions, dividends that could be paid to Sky Financial by its bank subsidiary, without prior regulatory approval, were limited to $227,091 at September 30, 2005.



Asset/Liability Management



Closely related to liquidity management is the management of interest rate risk. Sky Financial manages its rate sensitivity position to avoid wide swings in its net
interest margin due to changes in market rates. At September 30, 2005, Sky Financials gap position, the difference between the dollar value of interest rate sensitive assets and interest rate sensitive liabilities, was a positive 106.3%
for six months and a slightly negative at 98.7% for one year and remained within Sky Financials Asset/Liability Committee (ALCO) guidelines. Therefore Sky Financial does not expect to experience any significant fluctuations in its net interest
margin as a consequence of changes in market rates. See also Item. 3, Quantitative and Qualitative Disclosures About Market Risk.



Forward-Looking Statements



This report includes forward-looking statements by Sky Financial relating to such matters as anticipated operating results, credit quality expectations, prospects for new
lines of business, technological developments, economic trends (including interest rates), acquisition, reorganization and divestiture transactions and similar matters. Such statements are based upon the current beliefs and expectations of Sky
Financials management and are subject to risks and uncertainties. While Sky Financial believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could prove to be inaccurate,
and accordingly, actual results and experience could differ materially from the anticipated results or other expectations expressed by Sky Financial in its forward-looking statements. Factors that could cause actual results or experience to differ
from results discussed in the forward-looking statements include, but are not limited to: economic conditions; volatility and direction of market interest rates; capital investment in and operating results of non-banking business ventures of Sky
Financial; governmental legislation and regulation; material unforeseen changes in the financial condition or results of operations of Sky Financials customers; customer reaction to and unforeseen complications with respect to Sky
Financials integration of acquisitions; difficulties in realizing expected cost savings from acquisitions; difficulties associated with data conversions in acquisitions; and other risks identified from time-to-time in Sky Financials
other public documents on file with the Securities and Exchange Commission. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements, and the purpose of this paragraph is to secure the use of the
safe harbor provisions.



Sarbanes-Oxley Act of 2002



The Sarbanes-Oxley Act of 2002 contains important new requirements for public companies in
the area of financial disclosure, internal controls and corporate governance. In accordance with the requirements of the Sarbanes-Oxley Act, written certifications for this quarterly report on Form 10-Q by the chief executive officer and the chief
financial officer accompany this report as filed with the SEC. See Controls and Procedures for Sky Financials evaluation of disclosure controls and procedures.



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##### Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk



Market risk is the risk that a financial institutions earnings and capital, or its ability to meet its business objectives, will be adversely affected by movements in market rates or prices such as interest
rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices. Within Sky Financial, the dominant market risk exposure is changes in interest rates. The negative effect of this exposure is felt through the net interest margin,
mortgage banking revenues and the market value of various assets and liabilities.



Sky Financial manages market risk through its Asset/Liability Committee (ALCO) at the consolidated level. This committee monitors interest rate risk through sensitivity analysis, whereby it measures potential changes in future earnings and
the fair market values of financial instruments that may result from one or more hypothetical changes in interest rates. This analysis is performed by estimating the expected cash flows of Sky Financials financial instruments using interest
rates in effect at September 30, 2005 and December 31, 2004. For the fair value estimates, the cash flows are then discounted to year end to arrive at an estimated present value of Sky Financials financial instruments. Hypothetical
changes in interest rates are then applied to the financial instruments, and the cash flows and fair values are again estimated using these hypothetical rates. For the net interest income estimates, the hypothetical rates are applied to the
financial instruments based on the assumed cash flows. Sky Financial applied these interest rate shocks to its financial instruments up 300, 200 and 100 basis points and down 100 and 200 basis points. Down 300 basis points was not measured due to
the low probability of such a decline.



The following table presents the
potential ratio of Sky Financials interest rate sensitive assets (i.e. assets that will mature or reprice within a specific time period) divided by its interest rate sensitive liabilities (i.e. liabilities that will mature or reprice within a
specific time period), commonly referred to as the interest rate sensitivity gap or gap, over a six-month time period and a twelve-month time period.



|             |  |               |   |  |                 |   |  |     |  
|------------ |  | ------------- | - |  | --------------- | - |  | --- | -
|             |  | September 30, |   |  | ALCO Guidelines |  
|             |  | 2005          |   |  | Max             |   |  | Min |  
|Six Month    |  | 106.3         | % |  | 125             | % |  | 95  | %
|Twelve Month |  | 98.7          | % |  | 125             | % |  | 95  | %



The following table presents an
analysis of Sky Financials sensitivity to changes in market rates based on annual net interest income and the economic value of equity (EVE) due to sudden and sustained changes in market rates.



|                         |  |               |   |  |              |   |  |            |  
|------------------------ |  | ------------- | - |  | ------------ | - |  | ---------- | -
|                         |  | September 30, |   |  | December 31, |   |  | ALCO       |  
|                         |  | 2005          |   |  | 2004         |   |  | Guidelines |  
|One Year Net Interest    |  |               |   |  |              |   |  |            |  
|Income Change            |  |               |   |  |              |   |  |            |  
|+300 Basis points        |  | 2.8           | % |  | 3.3          | % |  |           | %
|+200 Basis points        |  | 2.0           |   |  | 2.6          |   |  | (10.0      | )
|+100 Basis points        |  | 0.9           |   |  | 1.4          |   |  | (5.0       | )
|-100 Basis points        |  | (2.5          | ) |  | (2.3         | ) |  | (5.0       | )
|-200 Basis points        |  | (7.0          | ) |  | N/A          |   |  | (10.0      | )
|                         |  |               |  
|Economic Value of Equity |  |               |   |  |              |   |  |            |  
|+300 Basis points        |  | (17.0         | ) |  | (14.6        | ) |  |           |  
|+200 Basis points        |  | (10.7         | ) |  | (8.7         | ) |  | (15.0      | )
|+100 Basis points        |  | (4.8          | ) |  | (3.8         | ) |  | (10.0      | )
|-100 Basis points        |  | 2.7           |   |  | 1.1          |   |  | (10.0      | )
|-200 Basis points        |  | 2.5           |   |  | N/A          |   |  | (15.0      | )



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##### Table of Contents

The projected volatility of net interest income and the economic value of equity at September 30, 2005 and
December 31, 2004 fall within the ALCO guidelines.



The preceding analysis
is based on numerous assumptions, including relative levels of market interest rates, loan prepayments and reactions of depositors to changes in interest rates, and should not be relied upon as being indicative of actual results. Further, the
analysis does not necessarily contemplate all actions Sky Financial may undertake in response to changes in interest rates.



Sky Financial also utilizes interest rate swaps and caps to effectively manage its interest rate risk. At September 30, 2005, the fair values of Sky Financials
derivative arrangements aggregated $1,365 on contracts with notional amounts of $415,693.



Item 4. Controls and Procedures



Sky
Financial maintains disclosure controls and procedures designed to ensure that the information Sky Financial must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized and reported accurately and on a
timely basis. Sky Financials management carried out an evaluation, under the supervision and with the participation of the chief executive officer and the chief financial officer, of the effectiveness of the design and operation of Sky
Financials disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2005, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the chief
executive officer along with the chief financial officer concluded that Sky Financials disclosure controls and procedures as of September 30, 2005, are effective in timely alerting them to material information relating to Sky Financial
(including its consolidated subsidiaries) required to be included in Sky Financials periodic filings under the Exchange Act.



Changes in Internal Control over Financial Reporting



There have not been any changes in Sky Financials internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred
during Sky Financials most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, Sky Financials internal control over financial reporting.



PART II. OTHER INFORMATION



Item 1. Legal Proceedings



In re
Commercial Money Center, Inc. Equipment Lease Litigationin the U. S. District Court for the Northern District of Ohio, Eastern Division, MDL Case No. 1:02-CV-16000



Between August 2000 and December 2001, Sky Bank and two of its predecessor banks provided financing to a commercial borrower and its
affiliated entities for the purchase of six separate portfolios of commercial lease pools, and a warehouse line of credit to finance lease pools. These loans, with a current outstanding balance of $29.8 million, are secured by assignments of the
payment streams from the underlying leases, surety bonds or insurance policies, and a limited guarantee from the sole member of the commercial borrower.



Upon default of these commercial loans, Sky Bank (and its predecessors) made demand for payment from Illinois Union Insurance Company (IU), RLI Insurance
Company (RLI), and Royal Indemnity Company (Royal) under the relevant surety bonds and insurance policies. IU, RLI, and Royal (collectively, the Sureties) have failed to make the payments required under the surety
bonds and insurance policies. As a result, in the spring of 2002, Sky and its predecessors filed suit against each of the Sureties seeking to enforce Sky Banks rights under the surety bonds and insurance policies issued by the Sureties in
connection with the commercial lease pools. Skys complaints claim breach of contract, bad faith and allege that the Sureties are liable for the payments due to Sky under the terms of the bonds and are estopped from asserting fraud as a defense
to paying any claims under the bonds. In October, 2002, the suits were consolidated for pretrial purposes with more than 35 other lawsuits involving similar claims in the United States District Court for the Northern District of Ohio, Eastern
Division, under the Federal Multi-district Litigation (MDL) Rules.



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##### Table of Contents

The key defense of the Sureties in denying Sky Banks claims under the surety bonds is that they were fraudulently
induced by the originator of the commercial leases to issue the surety bonds in the first instance. The Sureties have also asserted related defenses that the underlying equipment leases are invalid, usurious, or otherwise unenforceable. Sky Bank
believes that none of these defenses can defeat Sky Banks claims under the surety bonds, which, in the view of Sky Bank, provide for absolute and unconditional guarantees of payment. Moreover, Sky Bank believes that the Sureties are
responsible to Sky Bank, as the Obligee or Named Insured under the bonds, for the underwriting of the lessees and leases, including all issues of fraud, and that the Sureties waived any defense of fraud to claims under the bonds.



On January 31, 2003, Sky Bank and the other Claimants in the MDL Proceeding (MDL
02CV16000, Docket No. 1490) filed a consolidated Motion for Judgment on the Pleadings (the Motion) seeking a determination that the Sureties are liable, as a matter of law, under the relevant surety bonds and insurance policies. On
August 19, 2005, the MDL Court issued two orders relating to the Motions. The first order granted the Motion with respect to Sky Banks insurance policies with IU, finding that the bank is the obligee under the contracts and that IU is
precluded from asserting the defense of fraudulent inducement. The current outstanding balance of loans secured by IU policies is $5.1 million, and the amount owned by IU under the IU policies, including prejudgment interest, is $9.0 million. Sky
expects to move for entry of a partial final judgment on this order. The second order denied the banks Motion with respect to the surety bonds issued by Royal and RLI, indicating that the resolution of the claims requires examination of evidence
beyond the limited materials the MDL Court is permitted to consider in the Motion. The current outstanding balance of the loans secured by Royal and RLI surety bonds is $24.8 million. Sky expects to proceed with amending its complaint and preparing
for trial. Following the issuance of the orders, the case has been temporarily stayed pending the issuance of a revised scheduling order, and the MDL Court is referring the parties to mediation.



Sky Financial has reviewed the relevant matters of fact and law with its special counsel and
believes that it has substantial and meritorious claims against the Sureties. Sky Financial has and will continue to vigorously assert all the rights and remedies available to it to obtain payment under the bonds. While the ultimate outcome of this
matter cannot be determined at this time, Sky Financial management does not believe that the outcome of these pending legal proceedings will materially affect the consolidated financial position or results of operations of Sky Financial.



******



Sky Financial and its affiliates are, from time to time, involved in various lawsuits and claims which arise in the normal course of
business. Some of these proceedings seek relief or damages that are substantial, and in some instances are filed as class actions. Nonetheless, based upon the advice of counsel, management is of the opinion that any liabilities that may result from
these lawsuits and claims will not have a material adverse effect on the consolidated financial condition or results of operations of Sky Financial.



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##### Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



| | (a) | Not applicable
| | --- | --------------



| | (b) | Not applicable
| | --- | --------------



| | (c) | Purchases of Equity Securities by the Issuer and Affiliated Purchasers
| | --- | ----------------------------------------------------------------------



|                                       |  |                                |  |                             |       |                                                                               |           |                                                                                |        
|-------------------------------------- |  | ------------------------------ |  | --------------------------- | ----- | ----------------------------------------------------------------------------- | --------- | ------------------------------------------------------------------------------ | -------
|Period                                 |  | Total Numberof SharesPurchased |  | Average PricePaid Per share |       | Total Number ofShares Purchased asPart of PubliclyAnnounced Plans orPrograms* |           | Maximum Number of Shares that May YetBe Purchased Under thePlans or Programs *
|August 1, 2005  August 31, 2005       |  | 870                            |  | $                           | 23.87 |                                                                               | 1,897,106 |                                                                                | 102,894
|September 1, 2005  September 30, 2005 |  | 115                            |  |                             | 23.43 |                                                                               | 1,897,221 |                                                                                | 102,779
|                                       |  |                                |  |                             |       |                                                                               |           |                                                                                |        
|Total                                  |  | 985                            |  | $                           | 23.82 |                                                                               | 1,897,221 |                                                                                | 102,779
|                                       |  |                                |  |                             |       |                                                                               |           |                                                                                |        

---

|* | During September 2004, the Board of Directors of Sky Financial Group, Inc. authorized the company to purchase up to two millions shares of common stock in the open market for a
period of twelve months.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 3. Defaults Upon Senior Securities



Not applicable.



Item 4. Submission of Matters to a Vote of Security Holders



None



Item 5. Other Informat
ion



Not applicable.



Item 6. Exhibits and Reports on Form 8-K



| | (a) | Exhibits
| | --- | --------



|            |  |                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                               
|(11.1)      |  | Statement Re Computation of Earnings Per Common Share                                                                                                                                                     
|            |  | The information required by this exhibit is incorporated herein by reference from the information contained in Note 9 Earnings Per Share on page 14 of Sky Financials Form 10-Q
for September 30, 2005.
|            | 
|(31.1)      |  | Rule 13a - 14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                       
|            | 
|(31.2)      |  | Rule 13a - 14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                       
|            | 
|(32.1)*     |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                    
|            | 
|(32.2)*     |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                    



38



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##### Table of Contents

|(b) | Reports on Form 8-K
|--- | -------------------



On July 19, 2005, the registrant filed a current report on Form 8-K dated July 19, 2005, announcing its earnings for the three and six month
periods ended June 30, 2005.



On September, 2005, the
registrant filed a current report on Form 8-K dated September 15, 2005 providing an investor presentation and announcing that Marty Adams, Chairman, President and Chief Executive Officer and Kevin Thompson, Chief Financial Officer, presented at
the Lehman Brothers Financial Services Conference in New York City on September 15, 2005.

---

|* | This exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any
filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



39



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



|                                                  
|--------------------------------------------------
|SKY FINANCIAL GROUP, INC.                         
|                                                  
|/s/ Kevin T. Thompson                             
|Kevin T. Thompson                                 
|Executive Vice President / Chief Financial Officer
|                                                  
|DATE: October 28, 2005                            
|SKY FINANCIAL GROUP, INC.                         
|                                                  



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##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                               
|(11.1)      |  | Statement Re Computation of Earnings Per Common Share                                                                                                                                                     
|            |  | The information required by this exhibit is incorporated herein by reference from the information contained in Note 9 Earnings Per Share on page 14 of Sky Financials Form 10-Q
for September 30, 2005.
|            | 
|(31.1)      |  | Rule 13a - 14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                       
|            | 
|(31.2)      |  | Rule 13a - 14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                       
|            | 
|(32.1)*     |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                    
|            | 
|(32.2)*     |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                    

---

|* | This exhibit shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any
filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41