**Exhibit 99.(a).****Part 1. Financial Information****Item 1. Financial Statements****Huntington Bancshares Incorporated****Condensed Consolidated Balance Sheets**               **March 31,** December 31, March 31,*(in thousands, except number of shares)* **2006** 2005 2005  ***(Unaudited)***     *(Unaudited)***Assets**            Cash and due from banks **$****797,258**  $966,445  $914,699 Federal funds sold and securities purchased under resale agreements  **349,098**   74,331   144,980 Interest bearing deposits in banks  **23,204**   22,391   29,551 Trading account securities  **111,208**   8,619   100,135 Loans held for sale  **311,138**   294,344   252,932 Investment securities  **5,034,359**   4,526,520   4,052,875 Loans and leases            Commercial and industrial loans  **6,940,649**   6,809,208   6,064,019 Commercial real estate loans  **4,877,382**   4,036,171   4,526,510 Automobile loans  **2,053,777**   1,985,304   2,066,264 Automobile leases  **2,154,883**   2,289,015   2,476,098 Home equity loans  **4,816,196**   4,638,841   4,594,586 Residential mortgage loans  **4,604,705**   4,193,139   3,995,769 Other consumer loans  **697,997**   520,488   483,219  Total loans and leases  **26,145,589**   24,472,166   24,206,465 Allowance for loan and lease losses  **(283,839****)**  (268,347)  (264,390) Net loans and leases  **25,861,750**   24,203,819   23,942,075  Operating lease assets  **174,839**   229,077   466,550 Bank owned life insurance  **1,060,305**   1,001,542   973,164 Premises and equipment  **375,740**   360,677   354,979 Goodwill  **579,246**   212,530   212,200 Other intangible assets  **60,563**   4,956   5,580 Accrued income and other assets  **927,201**   859,554   732,879  **Total assets** **$****35,665,909**  $32,764,805  $32,182,599               **Liabilities and shareholders’ equity**            **Liabilities**            Deposits in domestic offices            Demand deposits — non-interest bearing **$****3,776,790**  $3,390,044  $3,186,187 Interest bearing  **20,326,575**   18,548,943   18,182,951 Deposits in foreign offices  **451,798**   470,688   401,835  Total deposits  **24,555,163**   22,409,675   21,770,973 Short-term borrowings  **1,687,536**   1,889,260   1,033,496 Federal Home Loan Bank advances  **1,658,486**   1,155,647   903,871 Other long-term debt  **2,035,576**   2,418,419   3,138,626 Subordinated notes  **1,283,359**   1,023,371   1,025,612 Allowance for unfunded loan commitments and letters of credit  **39,301**   36,957   31,610 Deferred income tax liability  **685,559**   743,655   781,152 Accrued expenses and other liabilities  **640,749**   530,320   907,486  **Total liabilities**  **32,585,729**   30,207,304   29,592,826               **Shareholders’ equity**            Preferred stock — authorized 6,617,808 shares;none outstanding  **—**   —   — Common stock — without par value; authorized500,000,000 shares; issued 257,866,255 shares; outstanding245,183,441; 224,106,172 and 232,002,213 shares, respectively.  **2,548,185**   2,491,326   2,484,832 Less 12,682,814; 33,760,083 and 25,864,042 treasury shares respectively.  **(273,120****)**  (693,576)  (490,139)Accumulated other comprehensive loss  **(31,434****)**  (22,093)  (18,686)Retained earnings  **836,549**   781,844   613,766  **Total shareholders’ equity**  **3,080,180**   2,557,501   2,589,773               **Total liabilities and shareholders’ equity** **$****35,665,909**  $32,764,805  $32,182,599  *See notes to unaudited condensed consolidated financial statements*
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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Income****(Unaudited)**           Three Months Ended  March 31,*(in thousands, except per share amounts)* **2006** 2005 Interest and fee income        Loans and leases        Taxable **$****399,346**  $325,595 Tax-exempt  **509**   312 Investment securities        Taxable  **52,443**   38,235 Tax-exempt  **5,712**   4,307 Other  **6,777**   7,656  Total interest income  **464,787**   376,105  Interest expense        Deposits  **148,314**   89,168 Short-term borrowings  **14,665**   4,828 Federal Home Loan Bank advances  **14,488**   8,683 Subordinated notes and other long-term debt  **43,640**   38,228  Total interest expense  **221,107**   140,907  Net interest income  **243,680**   235,198 Provision for credit losses  **19,540**   19,874  **Net interest income after provision for credit losses**  **224,140**   215,324  Operating lease income  **19,390**   46,732 Service charges on deposit accounts  **41,222**   39,418 Trust services  **21,278**   18,196 Brokerage and insurance income  **15,193**   13,026 Bank owned life insurance income  **10,242**   10,104 Other service charges and fees  **11,509**   10,159 Mortgage banking income  **17,832**   12,061 Securities gains (losses), net  **(20****)**  957 Gains on sales of automobile loans  **448**   — Other income  **22,440**   17,397  **Total non-interest income**  **159,534**   168,050  Operating lease expense  **14,607**   37,948 Personnel costs  **131,557**   123,981 Net occupancy  **17,966**   19,242 Outside data processing and other services  **19,851**   18,770 Equipment  **16,503**   15,863 Professional services  **5,365**   9,459 Marketing  **7,798**   6,454 Telecommunications  **4,825**   4,882 Printing and supplies  **3,074**   3,094 Amortization of intangibles  **1,075**   204 Other expense  **15,794**   18,380  **Total non-interest expense**  **238,415**   258,277  Income before income taxes  **145,259**   125,097 Provision for income taxes  **40,803**   28,578  **Net income** **$****104,456**  $96,519           Average common shares — basic  **230,976**   231,824 Average common shares — diluted  **234,371**   235,053          **Per common share**        Net income — basic **$****0.45**  $0.42 Net income — diluted  **0.45**   0.41 Cash dividends declared  **0.25**   0.20 *See notes to unaudited condensed consolidated financial statements*
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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Changes in Shareholders’ Equity**                                               **Accumulated**                      **Other**      **Common Stock** **Treasury Shares** **Comprehensive** **Retained**  *(in thousands)* **Shares** **Amount** **Shares** **Amount** **Income (Loss)** **Earnings** **Total** Three Months Ended March 31, 2005 (Unaudited):                            Balance, beginning of period  257,866  $2,484,204   (26,261) $(499,259) $(10,903) $563,596  $2,537,638 Comprehensive Income:                            Net income                      96,519   96,519 Unrealized net losses on investment securitiesarising during the period, net of reclassificationof net realized gains                  (20,789)      (20,789)Unrealized gains on cash flow hedging derivatives                  13,006       13,006                              Total comprehensive income                          88,736                              Cash dividends declared ($0.20 per share)                      (46,349)  (46,349)Stock options exercised      198   399   7,577           7,775 Other      430   188   1,543           1,973                               Balance, end of period (Unaudited)  257,866  $2,484,832   (25,674) $(490,139) $(18,686) $613,766  $2,589,773                               **Three Months Ended March 31, 2006 (Unaudited):**                            **Balance, beginning of period**  **257,866**  **$****2,491,326**   **(33,760****)** **$****(693,576****)** **$****(22,093****)** **$****781,844**  **$****2,557,501** **Comprehensive Income:**                            **Net income**                      **104,456**   **104,456** **Cumulative effect of change in accounting principlefor servicing financial assets, net of tax of $6,521**                      **12,110**   **12,110** **Unrealized net losses on investment securitiesarising during the period, net of reclassificationof net realized gains**                  **(18,694****)**      **(18,694****)****Unrealized gains on cash flow hedging derivatives**                  **9,353**       **9,353**                              **Total comprehensive income**                          **107,225**                              **Cash dividends declared ($0.25 per share)**                      **(61,861****)**  **(61,861****)****Shares issued pursuant to acquisition**      **53,366**   **25,350**   **522,390**           **575,756** **Stock based compensation expense,including related tax effects**      **4,273**                   **4,273** **Stock options exercised**      **(782****)**  **569**   **11,671**           **10,889** **Treasury shares purchased**          **(4,831****)**  **(113,326****)**          **(113,326****)****Other**      **2**   **(11****)**  **(279****)**          **(277****)**                              **Balance, end of period (Unaudited)**  **257,866**  **$****2,548,185**   **(12,683****)** **$****(273,120****)** **$****(31,434****)** **$****836,549**  **$****3,080,180**  *See notes to unaudited condensed consolidated financial statements.*
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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Cash Flows****(Unaudited)**           **Three Months Ended**  **March 31,**(in thousands of dollars) **2006** **2005** **Operating activities**        Net income **$****104,456**  $96,519 Adjustments to reconcile net income to net cash provided by operating activities:        Provision for credit losses  **19,540**   19,874 Depreciation on operating lease assets  **13,437**   34,703 Other depreciation and amortization  **18,177**   20,255 Mortgage servicing rights valuation adjustments, including amortization  **(5,681****)**  1,001 Stock-based compensation expense, net of related tax effects  **4,273**   — Deferred income tax (benefit) expense  **(59,449****)**  2,195 (Increase) decrease in trading account securities  **(23,845****)**  209,495 Originations of loans held for sale  **(616,943****)**  (418,494)Principal payments on and proceeds from loans held for sale  **600,149**   389,031 Losses (gains) on sales of investment securities  **20**   (957)Gains on sales of loans  **(448****)**  — Increase of cash surrender value of bank owned life insurance  **(10,242****)**  (10,104)(Decrease) increase in payable to investors in sold loans  **(7,134****)**  12,304 Other, net  **(11,056****)**  54,036  **Net cash provided by operating activities**  **25,254**   409,858           **Investing activities**        Decrease (increase) in interest bearing deposits in banks  **2,283**   (7,153)Net cashreceived for acquisition  **66,507**   — Proceeds from:        Maturities and calls of investment securities  **110,777**   110,100 Sales of investment securities  **61,687**   672,375 Purchases of investment securities  **(462,392****)**  (629,508)Net loan and lease originations, excluding sales  **(28,721****)**  (678,043)Purchases of equipment for operating lease assets  **(8,592****)**  (3,388)Proceeds from sale of operating lease assets  **47,952**   85,843 Proceeds from sale of premises and equipment  **1,692**   28 Purchases of premises and equipment  **(7,476****)**  (12,708)Proceeds from sales of other real estate  **2,311**   37,347  **Net cash used for investing activities**  **(213,972****)**  (425,107)          **Financing activities**        Increase in deposits  **449,778**   1,008,131 Decrease in short-term borrowings  **(280,864****)**  (173,737)Proceeds from issuance of subordinated notes  **250,000**   — Proceeds from Federal Home Loan Bank advances  **1,407,050**   7,789 Maturity of Federal Home Loan Bank advances  **(1,007,161****)**  (375,006)Maturity of long-term debt  **(380,390****)**  (860,000)Dividends paid on common stock  **(41,678****)**  (45,384)Repurchases of common stock  **(113,326****)**  — Net proceeds from issuance of common stock  **10,889**   7,775  **Net cash provided by (used for) financing activities**  **294,298**   (430,432) **Change in cash and cash equivalents**  **105,580**   (445,681)**Cash and cash equivalents at beginning of period**  **1,040,776**   1,505,360  **Cash and cash equivalents at end of period** **$****1,146,356**  $1,059,679           Supplemental disclosures:        Income taxes paid **$****45,874**  $14,239 Interest paid  **212,279**   123,706 Non-cash activities        Common stock dividends accrued, paid in subsequent quarter  **49,060**   36,804 Stock issued for purchase acquisition  **575,756**   — *See notes to unaudited condensed consolidated financial statements.*
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**Notes to Unaudited Condensed Consolidated Financial Statements****Note 1 — Basis of Presentation**     The accompanying unaudited condensed consolidated financial statements of HuntingtonBancshares Incorporated (Huntington or the Company) reflect all adjustments consisting of normalrecurring accruals, which are, in the opinion of Management, necessary for a fair presentation ofthe consolidated financial position, the results of operations, and cash flows for the periodspresented. These unaudited condensed consolidated financial statements have been preparedaccording to the rules and regulations of the Securities and Exchange Commission (SEC orCommission) and, therefore, certain information and footnote disclosures normally included infinancial statements prepared in accordance with accounting principles generally accepted in theUnited States (GAAP) have been omitted. The Notes to the Consolidated Financial Statementsappearing in Huntington’s 2005 Annual Report on Form 10-K (2005 Form 10-K), which includedescriptions of significant accounting policies, as updated by the information contained in thisreport, should be read in conjunction with these interim financial statements.     Certain amounts in the prior-year’s financial statements have been reclassified to conform tothe 2006 presentation.     For statement of cash flows purposes, cash and cash equivalents are defined as the sum of“Cash and due from banks” and “Federal funds sold and securities purchased under resaleagreements.”**Note 2 — New Accounting Pronouncements****Financial Accounting Standards Board (FASB) Statement No. 123 (revised 2004),*****Share-Based Payment******(Statement No. 123R)**- Statement 123R was issued in December 2004, requiring that the compensationcost relating to share-based payment transactions be recognized in the financial statements. Thatcost will be measured based on the fair value of the equity or liability instruments issued.Statement 123R covers a wide range of share-based compensation arrangements including shareoptions, restricted share plans, performance-based awards, share appreciation rights, and employeeshare purchase plans. Statement 123R replaces FASB Statement No. 123, *Accounting for Stock-BasedCompensation**(Statement 123)*, and supersedes Accounting Principles Board (APB) Opinion No. 25,*Accounting for Stock Issued to Employees*(APB 25). Statement 123, as originally issued in 1995,established as preferable a fair-value-based method of accounting for share-based paymenttransactions with employees. However, that Statement permitted entities the option of continuingto apply the guidance in APB 25, as long as the footnotes to financial statements disclosed proforma net income under the preferable fair-value-based method. Effective January 1, 2006,Huntington has adopted Statement 123R. The impact of adoption to Huntington’s results ofoperations is presented in Note 10.**Financial Accounting Standards Board (FASB) Statement No. 154,*****Accounting Changes and ErrorCorrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3 (Statement No. 154)***- InMay 2005, the FASB issued Statement No. 154, which replaces APB Opinion No. 20, *Accounting Changes*,and Statement No. 3, *Reporting Accounting Changes in Interim Financial Statements*. Statement No.154 changes the requirements for the accounting for and reporting of a change in accountingprinciple. Statement No. 154 is effective for accounting changes and corrections of errors made infiscal years beginning after December 15, 2005. The impact of this new pronouncement was notmaterial to Huntington’s financial condition, results of operations, or cash flows.**FASB Statement No. 155,*****Accounting for Certain Hybrid Financial Instruments, an amendment of FASBStatements No. 133 and 140 (Statement No. 155)***- On February 16, 2006, the FASB issued StatementNo. 155. Statement No. 155 amends Statement No. 133 to simplify the accounting for certainderivatives embedded in other financial instruments (hybrid financial instruments) by permittingfair value remeasurement for any hybrid financial instrument that contains an embedded derivativethat otherwise required bifurcation, provided that the entire hybrid financial instrument isaccounted for on a fair value basis. Statement No. 155 also establishes the requirement to evaluateinterests in securitized financial assets to identify interests that are freestanding derivativesor that are hybrid financial instruments that contain an embedded derivative requiring bifurcation,which replaces the interim guidance in Derivative Instrument Group Issue D1, *Recognition andMeasurement of Derivatives: Application of Statement 133 to Beneficial Interests in SecuritizedFinancial Assets*. Statement No. 155 amends Statement No. 140, *Accounting for Transfers andServicing of Financial Assets and Extinguishment of Liabilities—a replacement of FASB Statement 125*(Statement No. 140), to allow a qualifying special-purpose entity to hold a derivative financialinstrument that pertains to beneficial interests other than another derivative financialinstrument. Statement No. 155 is effective for all financial instruments acquired or issuedafter the beginning of the first fiscal year that begins after September 15, 2006, with earlieradoption allowed. Huntington adopted Statement No. 155 effective January 1, 2006, with no impactto reported financial results.
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**FASB Statement No. 156,*****Accounting for Servicing of Financial Assets — an amendment of FASBStatement No. 140***(***Statement No. 156)***- In March 2006, the FASB issued Statement No. 156, anamendment of Statement No. 140. The Statement requires all separately recognized servicing rightsbe initially measured at fair value, if practicable. For each class of separately recognizedservicing assets and liabilities, this statement permits Huntington to choose either to reportservicing assets and liabilities at fair value or at amortized cost. Under the fair value approach,servicing assets and liabilities are recorded at fair value at each reporting date with changes infair value recorded in earnings in the period in which the changes occur. Under the amortized costmethod, servicing assets and liabilities are amortized in proportion to and over the period ofestimated net servicing income or net servicing loss and are assessed for impairment based on fairvalue at each reporting date. The statement is effective for fiscal years beginning after September15, 2006, and allows early adoption as of the beginning of a fiscal year for which the entity hasnot previously issued interim financial statements. Huntington elected to adopt the provisions ofStatement No. 156 for mortgage servicing rights effective January 1, 2006 and has recordedmortgage servicing assets using the fair value provision of the standard. The adoption ofStatement No. 156 resulted in an $18.6 million increase in the carrying value of mortgage servicingright assets as of January 1, 2006. The cumulative effect of this change was $12.1 million, net oftaxes, which is reflected as an increase in retained earnings in the Condensed ConsolidatedStatement of Shareholders’ Equity. *(See Note 5).***Proposed Interpretation of Statement No. 109,*****Accounting for Uncertain Tax Positions***- In July2005, the FASB issued an exposure draft of a proposed interpretation on accounting for uncertaintax positions under Statement No. 109, *Accounting for Income Taxes*. The exposure draft containsproposed guidance on the recognition and measurement of uncertain tax positions. If adopted asproposed, the Company would be required to recognize, in its financial statements, the bestestimate of the impact of a tax position, only if that tax position is probable of being sustainedon audit based solely on the technical merits of the position. The proposed effective date for theinterpretation was originally scheduled for December 31, 2005, with a cumulative effect of a changein accounting principle to be recorded upon the initial adoption. In January 2006, FASB decided tomake forthcoming rules on certain tax positions effective in 2007. FASB also moved to a view thatsuch recognition should be changed from the tax position being ''probable of being sustained onaudit based solely on the technical merits of the position’’ to a less stringent benchmark of''more likely than not’’ that the position would be sustained on audit or final resolution throughlegal action or settlement. FASB expects to publish the planned rules on uncertain tax positions in2006. Huntington is currently evaluating the impact this proposed interpretation will have on itsconsolidated financial statements.**Proposed FASB amendment to FAS 128,*****Earnings Per Share***- In September 2005, the FASB issued anExposure Draft, *Earnings Per Share, an amendment of FASB Statement No. 128*. This Exposure Draftwould amend FASB Statement No. 128, *Earnings Per Share*, to clarify guidance for mandatorilyconvertible instruments, the treasury stock method, contracts that may be settled in cash or sharesand contingently issuable shares. The proposed Exposure Draft as currently drafted would beeffective for interim and annual periods ending after June 15, 2006. Retrospective applicationwould be required for all changes to FASB Statement No. 128, except that retrospective applicationwould be prohibited for contracts that were either settled in cash prior to adoption or modifiedprior to adoption to require cash settlement. Huntington does not expect adoption of this Statementto have a material effect on the calculation of basic or diluted earnings per share.**Proposed FASB amendment to FAS 132,*****Employer’s Accounting for Defined Benefit Pension and OtherPostretirement Plans — an amendment of FASB Statements No. 87, 88, 106 and 132R***- In March 2006,the FASB issued an Exposure Draft, “Employers’ Accounting for Defined Benefit Pension and OtherPostretirement Plans”. This Exposure Draft would amend the FASB Statements No. 87, 88, 106 and132R. The intent of the Exposure Draft is to require an employer to recognize in its statement offinancial position the overfunded or underfunded status of its defined benefit plans and torecognize as a component of other comprehensive income, net of tax, the actuarial gains and lossesand prior service costs and credits that arise during the period. The comment deadline on thisExposure Draft is May 31, 2006, with a planned effective date for fiscal years ending afterDecember 31, 2006. The Company is reviewing the Exposure Draft and evaluating the impact on itsconsolidated financial statements. Management estimates that, based on the provisions of theexposure draft, that, based on the carrying value of its net pension asset at December 31, 2005,the proposed standard would result in a write-down of its pensionasset by $155.7 million whichwould decrease other comprehensive income by $101.2 million in the period that the standard isadopted.
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**Note 3 — Formal Regulatory Supervisory Agreements**     On March 1, 2005, Huntington announced that it had entered into a formal written agreementwith the Federal Reserve Bank of Cleveland (FRBC), and the Bank had entered into a formal writtenagreement with the Office of the Comptroller of the Currency (OCC), providing for a comprehensiveaction plan designed to enhance corporate governance, internal audit, risk management, accountingpolicies and procedures, and financial and regulatory reporting. The agreements called forindependent third-party reviews, as well as the submission of written plans and progress reports byManagement and would remain in effect until terminated by the banking regulators.     On October 6, 2005, Huntington announced that the OCC had lifted its formal written agreementwith the Bank dated February 28, 2005, and that the FRBC written agreement remained in effect.Huntington was verbally advised that it was in full compliance with the financial holding companyand financial subsidiary requirements under the Gramm-Leach-Bliley Act (GLB Act). Thisnotification reflected that Huntington and the Bank met both the “well-capitalized” and“well-managed” criteria under the GLB Act. Management believes that the changes it has alreadymade, and is in the process of making, will address the FRBC issues fully and comprehensively.**Note 4 —  Business Combination**     On March 1, 2006, Huntington completed its merger with Canton, Ohio-based Unizan FinancialCorp. (Unizan). Unizan operated 42 banking offices in five metropolitan markets in Ohio: Canton,Columbus, Dayton, Newark and Zanesville.     Under the terms of the merger agreement announced January 27, 2004 and amended November 11,2004, Unizan shareholders of record as of the close of trading on February 28, 2006, received1.1424 shares of Huntington common stock for each share of Unizan. The assets and liabilities ofthe acquired entity were recorded on the Company’s balance sheet at their fair values as of theacquisition date. Unizan’s results of operations have been included in the Company’s consolidatedstatement of income since the acquisition date.     The following table shows the excess purchase price over carrying value of net assetsacquired, preliminary purchase price allocation, and resulting goodwill:     *(in thousands)* **March 1, 2006** Purchase price **$****575,793** Carrying value of net assets acquired  **(194,996****)** Excess of purchase price over carrying value of net assets acquired  **380,797**      Purchase accounting adjustments:    Loans and leases  **16,870** Premises and equipment  **322** Accrued income and other assets  **1,148** Deposits  **748** Subordinated notes  **2,845** Deferred federal income tax liability  **11,838** Accrued expenses and other liabilities  **8,830**  Goodwill and other intangible assets  **423,398** Less other intangible assets  ** ******Core deposit intangible  **(45,000****)**Other identifiable intangible assets  **(11,682****)** Other intangible assets  **(56,682****)** Goodwill **$****366,716**       Huntingtonhas not formalized its determination of the fair value of acquired assets andliabilities and will adjust goodwill upon completion of the valuation process.     Of the $56.7 million of acquired intangible assets, $45.0 million was assigned to core depositintangible and $11.7 million was assigned to customer relationship intangibles. The core depositand customer relationship intangibles have a weighted average useful life of 10 years and 15years, respectively.
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     Goodwill resulting from the transaction totaled $366.7 million and was assigned toRegional Banking and the Private Financial and Capital Markets Group in the amount of $348.7 millionand $18.0 million, respectively.     The following table summarizes the estimated fair value of the net assets acquired on March 1,2006 related to the acquisition of Unizan:     *(in thousands)* **March 1, 2006** Assets    Cash and due from banks **$****66,544** Interest bearing deposits in banks  **3,096** Investment securities  **300,416** Loans and leases  **1,665,602** Allowance for loan and lease losses  **(22,187****)** Net loans and leases  **1,643,415**  Bank owned life insurance  **48,521** Premises and equipment  **21,079** Goodwill  **366,716** Other intangible assets  **56,682** Accrued income and other assets  **21,121**  Total assets  **2,527,590**      Liabilities    Deposits  **1,696,124** Short-term borrowings  **79,140** Federal Home Loan Bank advances  **102,950** Subordinated notes  **23,464** Deferred federal income tax liability  **11,838** Accrued expenses and other liabilities  **38,281**  Total liabilities  **1,951,797**  **Purchase price** **$****575,793**       Huntington’s consolidated financial statements include the results of operations of Unizanonly since March 1, 2006, the date of acquisition. The following unaudited summary informationpresents the consolidated results of operations of Huntington on a pro forma basis, as if theUnizan acquisition had occurred at the beginning of 2006 and 2005.           **Three Months Ended**  **March 31,***(in thousands, except per share amounts)* **2006** 2005Net interest income **$****255,282**  $251,971 Provision for credit losses  **(19,912****)**  (21,169)     Net interest income after provision for credit losses  **235,370**   230,802      Non-interest income  **163,360**   175,054 Non-interest expense  **(246,879****)**  (276,080)     Income before income taxes  **151,851**   129,776 Provision for income taxes  **(42,800****)**  (30,380)     Net income **$****109,051**  $99,396               Net income per common share        Basic **$****0.44**  $0.39 Diluted  **0.43**   0.38          Average common shares outstanding        Basic  **247,869**   257,058 Diluted  **251,264**   260,414      The pro forma results include amortization of fair value adjustments on loans, deposits, anddebt, and amortization of newly created intangibles and post-merger acquisition related charges.The pro forma number of average common shares
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outstanding includes adjustments for sharesissued for the acquisition and the impact of additional dilutive securities but does not assume anyincremental share repurchases. The pro forma results presented do not reflect cost savings, orrevenue enhancements anticipated from the acquisition, and are not necessarily indicative of whatactually would have occurred if the acquisition had been completed as of the beginning of theperiods presented, nor are they necessarily indicative of future consolidated results.**Note 5— Loan Sales and Securitizations*****Automobile loans***     Huntington sold $169.8 million of automobile loans in the first quarter of 2006, resulting inpre-tax gains of $0.4 million. There were no automobile loan sales in the first quarter of 2005.     A servicing asset is established at an initial carrying value based on the relative fair valueat the time of the sale. The servicing asset is then amortized against servicing income.Impairment, if any, is recognized when carrying value exceeds the fair value as determined bycalculating the present value of expected net future cash flows. The primary risk characteristicfor measuring servicing assets is payoff rates of the underlying loan pools. Valuationcalculations rely on the predicted payoff assumption, and if actual payoff is quicker thanexpected, then future value would be impaired.     Changes in the carrying value of automobile loan servicing rights for the three months endedMarch 31, 2006 and 2005, and the fair value at the end of each period were as follows:           Three Months Ended  March 31,*(in thousands)* **2006** 2005 Carrying value, beginning of period **$****10,805**  $20,286 New servicing assets  **998**   **—** Amortization  **(2,193****)**  (3,240) Carrying value, end of period **$****9,610**  $17,046           Fair value, end of period **$****11,086**  $17,844       Huntington has retained servicing responsibilities and receives annual servicing feesfrom 0.55% to 1.00% of the outstanding loan balances. Servicing income, net of amortization ofcapitalized servicing assets, amounted to $3.4 million and $2.4 million for the three months endedMarch 31, 2006 and 2005, respectively.***Residential Mortgage Loans***     A mortgage servicing right (MSR) is established only when the servicing is contractuallyseparated from the underlying mortgage loans by sale or securitization of the loans with servicingrights retained. Effective January 1, 2006, the Company early adopted Statement No. 156. The samerisk management practices are applied to all MSRs and, accordingly, MSRs were identified as asingle asset class and were re-measured to fair value as of January 1, 2006 with an adjustment toretained earnings.     At initial recognition, the MSR asset is established at its fair value using assumptions thatare consistent with assumptions used at the time to estimate the fair value of the total MSRportfolio. Subsequent to initial capitalization, MSR assets are carried at fair value and areincluded in other assets. Any increase or decrease in fair value during the period is recorded asan increase or decrease in servicing income, which is reflected in non-interest income in theconsolidated income statement.
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     A summary of the changes in MSR fair value during the quarter follows:       Three Months Ended  March 31,*(in thousands)* **2006** Carrying value at December 31, 2005 **$****91,259** Cumulative effect in change in accounting principle  **18,631**  Fair value after cumulative effect in change in accounting principle  **109,890** New servicing assets created  **5,777** Servicing assets acquired  **1,909** Change in fair value during the period  **5,681**  **Fair value at March 31, 2006** **$****123,257**       MSRs do not trade in an active, open market with readily observable prices. While salesof MSRs occur, the precise terms and conditions are typically not readily available. Therefore,the fair value of MSRs is estimated using a discounted future cash flow model. The model considersportfolio characteristics, contractually specified servicing fees and assumptions related toprepayments, delinquency rates, late charges, other ancillary revenues, costs to service, and othereconomic factors. Changes in the assumptions used may have a significant impact on the valuationof MSRs.     A summary of key assumptions and the sensitivity of the MSR value at March 31, 2006 to changesin these assumptions follows:                   Decline in fair value      due to      10% 20%      adverse adverse*(in thousands)* Actual change change Constant pre-payment rate  11.48      % $(5,145) $(9,820)Discount rate  9.37   (4,543)  (8,764)     MSR values are very sensitive to movements in interest rates as expected future netservicing income depends on the projected outstanding principal balances of the underlying loans,which can be greatly impacted by the level of prepayments. The Company hedges against changes inMSR fair value attributable to changes in interest rates through a combination of derivativeinstruments and trading securities.     Prior to 2006,servicing rights were evaluated quarterly for impairment based on the fair valueof those rights, using a disaggregated approach. The fair value ofthe servicing rights wasdetermined by estimating the present value offuture net cash flows, taking into consideration market loan prepayment speeds, discountrates, servicing costs, and other economic factors. Temporaryimpairment was recognized in avaluation allowance against the mortgage servicing rights.     Changes in the impairment allowance of mortgage servicing rights for the three months endedMarch 31, 2005, were as follows:       Three Months Ended  March 31,*(in thousands)* 2005 Balance, beginning of period $(4,775)Impairment charges  (1,180)Impairment recovery  4,940  Balance, end of period $(1,015)      A summary of servicing fee income earned during the three months ended March 31, 2006 and2005 was as follows:           Three Months Ended  March 31,*(in thousands)* **2006** 2005 Servicing fees **$****5,924**  $5,394 Late fees  **610**   505 Ancillary fees  **253**   126  Total fee income **$****6,787**  $6,025  
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**Note 6 — Investment Securities**     Listed below are the contractual maturities (under 1 year, 1-5 years, 6-10 years and over 10years) of investmentsecurities at March 31, 2006, December 31, 2005, and March 31, 2005:                           **March 31, 2006** December 31, 2005 March 31, 2005  **Amortized**     Amortized     Amortized  *(in thousands)* **Cost** **Fair Value** Cost Fair Value Cost Fair Value U.S. Treasury                        Under 1 year **$****—**  **$****—**  $—  $—  $—  $— 1-5 years  **21,253**   **20,466**   23,446   22,893   24,739   24,376 6-10 years  **2,946**   **3,014**   753   782   248   260 Over 10 years  **—**   **—**   —   —   —   —  **Total U.S. Treasury**  **24,199**   **23,480**   24,199   23,675   24,987   24,636  Federal agencies                        Mortgage backed securities                        Under 1 year  **—**   **—**   —   —   —   — 1-5 years  **29,853**   **28,698**   31,058   30,047   17,649   17,296 6-10 years  **—**   **—**   —   —   20,835   20,442 Over 10 years  **1,244,278**   **1,197,187**   1,278,540   1,248,975   644,058   625,922  **Total mortgage-backed Federal agencies**  **1,274,131**   **1,225,885**   1,309,598   1,279,022   682,542   663,660  Other agencies                        Under 1 year  **45,099**   **44,247**   —   —   —   — 1-5 years  **252,770**   **241,958**   296,945   286,754   535,760   522,427 6-10 years  **51,048**   **47,467**   52,440   49,712   450,231   430,329 Over 10 years  **—**   **—**   —   —   —   —  **Total other Federal agencies**  **348,917**   **333,672**   349,385   336,466   985,991   952,756                           **Total Federal agencies**  **1,623,048**   **1,559,557**   1,658,983   1,615,488   1,668,533   1,616,416                           Municipal securities                        Under 1 year  **65**   **65**   65   65   63   63 1-5 years  **145**   **145**   145   145   361   362 6-10 years  **154,741**   **151,982**   144,415   143,597   82,923   81,932 Over 10 years  **393,470**   **390,206**   400,156   401,043   309,063   309,442  **Total municipal securities**  **548,421**   **542,398**   544,781   544,850   392,410   391,799  Private label CMO                        Under 1 year  **—**   **—**   —   —   —   — 1-5 years  **—**   **—**   —   —   —   — 6-10 years  **—**   **—**   —   —   —   — Over 10 years  **663,447**   **651,017**   402,959   393,569   435,931   428,839  **Total private label CMO**  **663,447**   **651,017**   402,959   393,569   435,931   428,839  Asset backed securities                        Under 1 year  **—**   **—**   —   —   —   — 1-5 years  **30,503**   **30,445**   31,663   31,659   30,000   30,000 6-10 years  **—**   **—**   —   —   6,385   6,419 Over 10 years  **2,071,020**   **2,071,735**   1,757,031   1,757,121   1,404,743   1,409,855  **Total asset backed securities**  **2,101,523**   **2,102,180**   1,788,694   1,788,780   1,441,128   1,446,274  Other                        Under 1 year  **2,400**   **2,400**   1,700   1,700   2,100   2,109 1-5 years  **9,800**   **9,808**   10,997   11,051   11,005   11,219 6-10 years  **1,252**   **1,186**   2,062   2,063   2,655   2,622 Over 10 years  **44**   **43**   44   43   35,149   37,922 Non-marketable equity securities  **136,123**   **136,123**   89,661   89,661   85,568   85,568 Marketable equity securities  **5,271**   **6,167**   55,058   55,640   5,190   5,471  **Total other**  **154,890**   **155,727**   159,522   160,158   141,667   144,911                           **Total investment securities** **$****5,115,528**  **$****5,034,359**  $4,579,138  $4,526,520  $4,104,656  $4,052,875  Duration in years (1)      **2.8**       2.8       2.8  (1) The average duration assumes a market driven pre-payment rate on securities subject to pre-payment.
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     Based upon its assessment, Management does not believe any individual unrealized loss atMarch 31, 2006, represents an other-than-temporary impairment. In addition, Huntington has theability to hold these securities for a time necessary, including to maturity, to recover theamortized cost. There were no securities classified as held to maturity at March 31, 2006.     Other securities include Federal Home Loan Bank and Federal Reserve Bank stock, corporate debtand marketable equity securities.**Note 7— Other Comprehensive Income**The components of Huntington’s other comprehensive income in the three months ended March 31, wereas follows:           Three Months Ended   March 31, *(in thousands)* **2006**  2005  Unrealized losses on investment securities arising during the period:        Unrealized net losses **$****(28,571****)** $(31,165)Related tax benefit  **9,864**   10,998  Net  **(18,707****)**  (20,167)          Reclassification adjustment for net losses (gains) from sales of investmentsecurities realized during the period:        Realized net losses (gains)  **20**   (957)Related tax (benefit) expense  **(7****)**  335  Net  **13**   (622)          Total unrealized net losses on investment securities arising during theperiod, net of reclassification ofnet realized gains and losses  **(18,694****)**  (20,789)          Unrealized gains on cash flow hedging derivatives arising during the period:        Unrealized net gains  **14,389**   20,009 Related tax expense  **(5,036****)**  (7,003) Net  **9,353**   13,006           **Total other comprehensive (loss) income** **$****(9,341****)** $(7,783)      Activity in accumulated other comprehensive income for the three months ended March 31,2006 and 2005 was as follows:                   Unrealized losses  Unrealized gains on  Minimum      on investment  cash flow hedging  pension    *(in thousands)* securities  derivatives  liability  Total  Balance, December 31, 2004 $(12,683) $4,252  $(2,472) $(10,903)Period change  (20,789)  13,006   —   (7,783) Balance, March 31, 2005 $(33,472) $17,258  $(2,472) $(18,686)                  Balance, December 31, 2005 $(34,016) $15,206  $(3,283) $(22,093)Period change  (18,694)  9,353   —   (9,341) **Balance, March 31, 2006** **$****(52,710****)** **$****24,559**  **$****(3,283****)** **$****(31,434****)** 
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**Note 8— Earnings per Share**     Basic earnings per share is the amount of earnings available to each share of common stockoutstanding during the reporting period. Diluted earnings per share is the amount of earningsavailable to each share of common stock outstanding during the reporting period adjusted for thepotential issuance of common shares for dilutive stock options. The calculation of basic anddiluted earnings per share for each of the three months ended March 31 is as follows:           Three Months Ended  March 31,*(in thousands, except per share amounts)* **2006** 2005 **Net income** **$****104,456**  $96,519          Average common shares outstanding  **230,976**   231,824 Dilutive potential common shares  **3,395**   3,229  **Diluted average common shares outstanding** **$****234,371**  $235,053           **Earnings per share**        Basic **$****0.45**  $0.42 Diluted  **0.45**   0.41      The average market price of Huntington’s common stock for the period was used indetermining the dilutive effect of outstanding stock options. Dilutive potential common sharesinclude stock options and options held in deferred compensation plans. Dilutive potential commonshares are computed based on the number of shares subject to options that have an exercise priceless than the average market price of Huntington’s common stock for the period.     Options on approximately 5.7 million and 2.6 million shares were outstanding at March 31, 2006and 2005, respectively, but were not included in the computation of diluted earnings per sharebecause the effect would be antidilutive. The weighted average exercise price for these options was$25.68 per share and $26.96 per share at the end of the same respective periods.**Note 9— Stock-Based Compensation**     Huntington sponsors nonqualified and incentive stock option plans. These plans provide for thegranting of stock options to officers, directors and other employees at the market price on thedate of the grant. Huntington’s board of directors has approved all of the plans. Shareholders haveapproved each of the plans, except for the broad-based Employee Stock Incentive Plan. Of the 26.5million options to purchase shares of common stock authorized for issuance under the plans at March31, 2006, 21.0 million were outstanding and 5.5 million were available for future grants. Optionsvest ratably over three years or when other conditions are met. Options granted prior to May 2004have a maximum term of ten years. All options granted beginning in May 2004 have a maximum term ofseven years.     OnJanuary 1, 2006, Huntington adopted the fair value recognitionprovisions of Statement No. 123Rrelating to its stock-based compensation plans. Prior to January 1, 2006, Huntington had accountedfor stock-based compensation plans under the intrinsic value method promulgated by APB Opinion 25,*Accounting for Stock Issued to Employees*, and related interpretations. In accordance with APB 25,compensation expense for employee stock options was generally not recognized for options grantedthat had an exercise price equal to the market value of the underlying common stock on the date ofgrant.     Underthe modified prospective method of Statement No. 123R, compensation expense was recognizedduring the three months ended March 31, 2006, for all unvested stock options, based on the grantdate fair value estimated in accordance with the original provisionsof Statement No. 123 and for allstock based payments granted after January 1, 2006, based on the grant date fair value estimated inaccordance with the provisions of Statement No. 123R. Stock-based compensation expense was recorded inpersonnel costs in the consolidated statements of income. Huntington’s financial results for theprior periods have not been restated.
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     The following table represents the impact of adoption of Statement 123R on Huntington’s incomebefore income taxes, net income and basic and diluted earnings per share for the three months endedMarch 31, 2006.       Stock-based  compensation*(inmillions, except per share amounts)* expense**Income before income taxes** $4.3 **Net income**  2.8 **Earnings per share**    Basic $0.01 Diluted  0.01      Prior to the adoption of Statement 123R, Huntington presented all tax benefits ofdeductions resulting from the exercise of stock options as operating cash flows in the consolidatedstatements of cash flows. Statement 123R requires the cash flows resulting from tax benefitsresulting from tax deductions in excess of compensation costs recognized for those options (excesstax benefits) to be classified as financing cash flows. As a result, the benefits of tax deductionsin excess of recognized compensation cost included in net financing cash flows was not significant.     Consistent with the valuation method used for the disclosure only provisions of Statement No.123, Huntington is using the Black-Scholes option-pricing model to value stock-based compensationexpense. This model assumes that the estimated fair value of options is amortized over the options’vesting periods and the compensation costs would be included in personnel costs on the consolidatedstatements of income. Forfeitures are estimated at the date of grant based on historical rates andreduce the compensation expense recognized. The risk-free interest rate is based on the U.S.Treasury yield curve in effect at the date of grant. Expected volatility is based on the historicalvolatility of Huntington’s stock. The expected term of options granted is derived from historicaldata on employee exercises. The expected dividend yield is based on the dividend rate and stockprice on the date of the grant. The following table illustrates the weighted-average assumptionsused in the option-pricing model for options granted in each of the periods presented.           Three Months Ended  March 31,  **2006** 2005 **Assumptions**        Risk-free interest rate  **4.47**%  4.13%Expected dividend yield  **4.32**   3.47 Expected volatility of Huntington’s common stock  **22.2**   26.3 Expected option term (years)  **6.0**   6.0      The weighted-average fair value of each option granted for the three months ended March31, 2006 and 2005 was $4.33 per share and $4.85 per share, respectively.     The following pro forma disclosures for net income and earnings per diluted common share forthe three months ended March 31, 2005 are presented as if Huntington had applied the fair valuemethod of accounting of Statement No. 123 in measuring compensation costs for stock options.       Three Months Ended*(in millions, except per share amounts)* March 31, 2005 **Pro forma results**    Net income, as reported $96.5 Pro forma expense, net of tax  (2.9) **Pro forma net income** $93.6       **Net income per common share:**    Basic, as reported $0.42 Basic, pro forma  0.40 Diluted, as reported  0.41 Diluted, pro forma  0.40 
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     Huntington’s stock option activity and related information for the three months ended March31, 2006 was as follows:                           Weighted-          Weighted-  Average          Average  Remaining  Aggregate       Exercise  Contractual  Intrinsic *(in thousands, except per share amounts)* Options  Price  Life *(Years)*  Value  Outstanding at January 1, 2006  21,004  $21.11         Granted  10   23.39         Acquired (1)  655   16.56         Exercised  (613)  16.74         Forfeited/expired  (111)  21.95                           **Outstanding at March 31, 2006**  **20,945**   **21.09**   **5.4**   **72,454**                   **Exercisable at March 31, 2006**  **13,116**  **$****20.11**   **5.0**  **$****59,879**  (1) Relates to option plans acquired from the merger with Unizan.     The aggregate intrinsic value represents the amount by which the fair value of underlyingstock exceeds the option exercise price. The total intrinsic value of stock options exercisedduring the three months ended March 31, 2006 was $4.5 million.     Huntington issues shares to fulfill stock option exercises from available shares held intreasury. At March 31, 2006, the Company believes there are adequate shares in treasury to satisfyanticipated stock option exercises in 2006.     The following table summarizes the status of Huntington’s nonvested options for the threemonths ended March 31, 2006:               Weighted-       Average       Grant Date *(in thousands, except per share amounts)* Options  Fair Value  Nonvested at January 1, 2006  **7,956**  **$****5.53** Granted  **10**   **4.33** Acquired (1)  **19**   **4.61** Vested  **(51****)**  **5.19** Forfeited  **(105****)**  **5.58**  **Nonvested at March 31, 2006**  **7,829**  **$****5.52**  (1) Relates to option plans acquired from the merger with Unizan.     As of March 31, 2006, the total compensation cost related to nonvested awards not yetrecognized was $25.4 million with a weighted-average expense recognition period of 1.8 years. Thetotal fair value of options vested during the three months ended March 31, 2006 was $0.3 million.     Additional information regarding options outstanding as of March 31, 2006, is as follows:                     *(in thousands, except per share amounts)* Options Outstanding  Exercisable Options       Weighted-                 Average  Weighted-      Weighted-       Remaining  Average      Average Range of     Contractual  Exercise      Exercise Exercise Prices Shares  Life *(Years)*  Price  Shares  Price  $11.03 to $15.00  805   5.0  $14.26   805  $14.26 $15.01 to $20.00  8,109   5.3   18.06   6,680   17.66 $20.01 to $25.00  9,749   6.2   22.74   3,367   21.57 $25.01 to $28.35  2,282   2.8   27.22   2,264   27.24                       **Total**  **20,945**   **5.4**  **$****21.09**   **13,116**  **$****20.11**  
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**Note10 — Benefit Plans**     Huntington sponsors the Huntington Bancshares Retirement Plan (the Plan), a non-contributorydefined benefit pension plan covering substantially all employees. The Plan provides benefits basedupon length of service and compensation levels. The funding policy of Huntington is to contributean annual amount that is at least equal to the minimum funding requirements but not more than thatdeductible under the Internal Revenue Code. In addition, Huntington has an unfunded, definedbenefit post-retirement plan (Post-Retirement Benefit Plan) that provides certain healthcare andlife insurance benefits to retired employees who have attained the age of 55 and have at least 10years of vesting service under this plan. For any employee retiring on or after January 1, 1993,post-retirement healthcare benefits are based upon the employee’s number of months of service andare limited to the actual cost of coverage. Life insurance benefits are a percentage of theemployee’s base salary at the time of retirement, with a maximum of $50,000 of coverage.     The following table shows the components of net periodic benefit expense of the Plan and thePost-Retirement Benefit Plan:                   Pension Benefits Post Retirement Benefits  Three Months Ended Three Months Ended  March 31, March 31,*(in thousands)* **2006** 2005 **2006** 2005 Service cost **$****4,309**  $3,545  **$****337**  $353 Interest cost  **5,539**   4,753   **565**   778 Expected return on plan assets  **(8,220****)**  (6,096)  **—**   **—** Amortization of transition asset  **—**   (1)  **276**   276 Amortization of prior service cost  **1**   1   **95**   94 Settlements  **1,000**   750   **—**   **—** Recognized net actuarial loss  **4,377**   2,673   **(181****)**  **—**                   **Benefit expense** **$****7,006**  $5,625  **$****1,092**  $1,501       There is no expected minimum contribution for 2006 to the Plan.     Huntington also sponsors other retirement plans, the most significant being the SupplementalExecutive Retirement Plan and the Supplemental Retirement Income Plan. These plans are nonqualifiedplans that provide certain former officers and directors of Huntington and its subsidiaries withdefined pension benefits in excess of limits imposed by federal tax law. The cost of providingthese plans was $0.7 million and $0.6 million for the three-month periods ended March 31, 2006 and2005, respectively.     Huntington has a defined contribution plan that is available to eligible employees. Matchingcontributions by Huntington equal 100% on the first 3%, then 50% on the next 2%, of participantelective deferrals. The cost of providing this plan was $2.6 million and $2.5 million for the threemonths ended March 31, 2006 and 2005, respectively.
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**Note11 — Commitments and Contingent Liabilities*****Commitments to extend credit****:*     In the ordinary course of business, Huntington makes various commitments to extend credit thatare not reflected in the financial statements. The contract amounts of these financial agreementsat March 31, 2006, December 31, 2005, and March 31, 2005, were as follows:               **March 31,** December 31, March 31,*(in millions)* **2006** 2005 2005 **Contract amount represents credit risk**            Commitments to extend credit            Commercial **$****3,295**  $3,316  $4,253 Consumer  **3,410**   3,046   2,942 Commercial real estate  **1,648**   1,567   880 Standby letters of credit  **1,095**   1,079   956 Commercial letters of credit  **43**   47   51      Commitments to extend credit generally have fixed expiration dates, are variable-rate, andcontain clauses that permit Huntington to terminate or otherwise renegotiate the contracts in theevent of a significant deterioration in the customer’s credit quality. These arrangements normallyrequire the payment of a fee by the customer, the pricing of which is based on prevailing marketconditions, credit quality, probability of funding, and other relevant factors. Since many of thesecommitments are expected to expire without being drawn upon, the contract amounts are notnecessarily indicative of future cash requirements. The interest rate risk arising from thesefinancial instruments is insignificant as a result of their predominantly short-term, variable-ratenature.     Standby letters of credit are conditional commitments issued to guarantee the performance of acustomer to a third party. These guarantees are primarily issued to support public and privateborrowing arrangements, including commercial paper, bond financing, and similar transactions. Mostof these arrangements mature within two years. The carrying amount of deferred revenue associatedwith these guarantees was $5.3 million, $4.0 million, and $3.6 million at March 31, 2006, December31, 2005, and March 31, 2005, respectively.     Commercial letters of credit represent short-term, self-liquidating instruments thatfacilitate customer trade transactions and generally have maturities of no longer than 90 days. Themerchandise or cargo being traded normally secures these instruments.***Commitments to sell loans:***     Huntington enters into forward contracts relating to its mortgage banking business. At March31, 2006, December 31, 2005, and March 31, 2005, Huntington had commitments to sell residentialreal estate loans of $406.3 million, $348.3 million, and $388.5 million, respectively. Thesecontracts mature in less than one year.     During the 2005 second quarter, Huntington entered into a two-year agreement to sell about 50%of monthly automobile loan production at the cost of such loans, subject to certain limitations,provided the production meets certain pricing, asset quality, and volume parameters. At March 31,2006, approximately $67.3 million of automobile loans related to this commitment were classified asheld for sale.***Litigation:***     In the ordinary course of business, there are various legal proceedings pending againstHuntington and its subsidiaries. In the opinion of Management, the aggregate liabilities, if any,arising from such proceedings are not expected to have a material adverse effect on Huntington’sconsolidated financial position.
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**Note12 — Derivative Financial Instruments**     A variety of derivative financial instruments, principally interest rate swaps, are used inasset and liability management activities to protect against the risk of adverse price or interestrate movements on the value of certain assets and liabilities and on future cash flows. Thesederivative financial instruments provide flexibility in adjusting the Company’s sensitivity tochanges in interest rates without exposure to loss of principal and higher funding requirements. Byusing derivatives to manage interest rate risk, the effect is a smaller, more efficient balancesheet, with a lower wholesale funding requirement and a higher net interest margin. All derivativesare reflected at fair value in the consolidated balance sheet.     Market risk, which is the possibility that economic value of net assets or net interest incomewill be adversely affected by changes in interest rates or other economic factors, is managedthrough the use of derivatives. Derivatives are sold to meet customers’ financing needs and, likeother financial instruments, contain an element of credit risk, which is the possibility thatHuntington will incur a loss because a counter-party fails to meet its contractual obligations.Notional values of interest rate swaps and other off-balance sheet financial instrumentssignificantly exceed the credit risk associated with these instruments and represent contractualbalances on which calculations of amounts to be exchanged are based. Credit exposure is limited tothe sum of the aggregate fair value of positions that have become favorable to Huntington,including any accrued interest receivable due from counterparties. Potential credit losses areminimized through careful evaluation of counterparty credit standing, selection of counterpartiesfrom a limited group of high quality institutions, collateral agreements, and other contractualprovisions.***Asset and Liability Management***     Derivatives that are used in asset and liability management are classified as fair valuehedges or cash flow hedges and are required to meet specific criteria. To qualify as a hedge, thehedge relationship is designated and formally documented at inception, detailing the particularrisk management objective and strategy for the hedge. This includes identifying the item and riskbeing hedged, the derivative being used, and how the effectiveness of the hedge is being assessed.A derivative must be highly effective in accomplishing the objective of offsetting either changesin fair value or cash flows for the risk being hedged. Correlation is evaluated on a retrospectiveand prospective basis using quantitative measures. If a hedge relationship is found not to beeffective, the derivative no longer qualifies as a hedge and any excess gains or lossesattributable to ineffectiveness, as well as subsequent changes in its fair value, are recognized inother income.     For fair value hedges, deposits, short-term borrowings, and long-term debt are effectivelyconverted to variable-rate obligations by entering into interest rate swap contracts wherebyfixed-rate interest is received in exchange for variable-rate interest without the exchange of thecontract’s underlying notional amount. Forward contracts, used primarily in connection withmortgage banking activities, can be settled in cash at a specified future date based on thedifferential between agreed interest rates applied to a notional amount. The changes in fair valueof the hedged item and the hedging instrument are reflected in current earnings.     For cash flow hedges, the Company enters into interest rate swap contracts which require thepayment of fixed-rate interest in exchange for the receipt of variable-rate interest without theexchange of the contract’s underlying notional amount, which effectively converts a portion of itsfloating-rate debt to fixed-rate. This reduces the potentially adverse impact of increases ininterest rates on future interest expense. In like fashion, certain LIBOR-based commercial andindustrial loans are effectively converted to fixed-rate by entering into contracts that swapvariable-rate interest for fixed-rate interest over the life of the contracts. To the extent thesederivatives are effective in offsetting the variability of the hedged cash flows, changes in thederivatives’ fair value will not be included in current earnings, but are reported as a componentof accumulated other comprehensive income in shareholders’ equity. These changes in fair value willbe included in earnings of future periods when earnings are also affected by the changes in thehedged cash flows. To the extent these derivatives are not effective, changes in their fair valuesare immediately included in earnings.
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          Derivatives used to manage interest rate risk at March 31, 2006, are shown in the tablebelow:                       **Notional** **Average***