##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY PERIOD ENDED March 31, 2009
 Commission File Number: 000-33243
 Huntington Preferred Capital, Inc.
 Ohio
    
    31-1356967(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 41 South High Street, Columbus, Ohio 43287
 (614) 480-8300
 þ Yes o No
 o Yes o No
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 oYes þ No




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##### 



HUNTINGTON PREFERRED CAPITAL, INC.
  Part 1. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets at March 31, 2009, December 31, 2008, and March 31, 2008
    
    
    3Condensed Consolidated Statements of Income for the three months ended March 31, 2009 and 2008
    
    
    4Condensed Consolidated Statements of Changes in Shareholders Equity for the
three months ended March 31, 2009 and 2008
    
    
    5Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25Item 4T. Controls and Procedures
    
    
    25PART II. OTHER INFORMATIONItem 6. Exhibits
    
    
    25Signatures
    
    
    27Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1
   2




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##### Table of Contents



Part 1. FINANCIAL INFORMATION
 
 Item 1.
Financial Statements (Unaudited)
 Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Balance Sheets
 (Unaudited)
 March 31,
    
    
    December 31,
    
    
    March 31,(in thousands, except share data)
    
    2009
    
    
    2008
    
    
    2008AssetsCash and interest bearing deposits with The Huntington National Bank
    
    $
    272,375
    
    
    $
    293,009
    
    
    $
    308,359Due from The Huntington National Bank
    
    
    95,196
    
    
    
    38,423
    
    
    
    74,285Loan participation interests:Commercial real estate
    
    
    3,282,302
    
    
    
    3,433,872
    
    
    
    3,044,112Consumer and residential real estate
    
    
    902,608
    
    
    
    974,619
    
    
    
    1,146,364Total loan participation interests
    
    
    4,184,910
    
    
    
    4,408,491
    
    
    
    4,190,476Allowance for loan participation losses
    
    
    (79,889
    )
    
    
    (65,456
    )
    
    
    (63,799
    )Net loan participation interests
    
    
    4,105,021
    
    
    
    4,343,035
    
    
    
    4,126,677Accrued income and other assets
    
    
    11,683
    
    
    
    14,101
    
    
    
    15,937Total assets
    
    $
    4,484,275
    
    
    $
    4,688,568
    
    
    $
    4,525,258Liabilities and shareholders equityLiabilitiesAllowance for unfunded loan participation commitments
    
    $
    2,492
    
    
    $
    2,301
    
    
    $
    2,388Dividends and distributions payable
    
    
    1,493
    
    
    
    225,000
    
    
    
    4,761Other liabilities
    
    
    46
    
    
    
    50
    
    
    
    45Total liabilities
    
    
    4,031
    
    
    
    227,351
    
    
    
    7,194Shareholders EquityPreferred securities, Class A, 8.000% noncumulative, non-
exchangeable; $1,000 par and liquidation value per share;
1,000 shares authorized, issued and outstanding
    
    
    1,000
    
    
    
    1,000
    
    
    
    1,000Preferred securities, Class B, variable-rate, noncumulative, and
conditionally exchangeable; $1,000 par and liquidation
value per share; authorized 500,000 shares; 400,000
shares issued and outstanding
    
    
    400,000
    
    
    
    400,000
    
    
    
    400,000Preferred securities, Class C, 7.875% noncumulative and
conditionally exchangeable; $25 par and liquidation value
per share; 2,000,000 shares authorized, issued, and outstanding
    
    
    50,000
    
    
    
    50,000
    
    
    
    50,000Preferred securities, Class D, variable-rate, noncumulative, and
conditionally exchangeable; $25 par and liquidation value
per share; 14,000,000 shares authorized, issued, and outstanding
    
    
    350,000
    
    
    
    350,000
    
    
    
    350,000Preferred securities, $25 par, 10,000,000 shares
authorized; no shares issued or outstanding
    
    
    
    
    
    
    
    
    
    
    Common stock  without par value; 14,000,000 shares authorized,
issued, and outstanding
    
    
    3,660,217
    
    
    
    3,660,217
    
    
    
    3,660,959Retained earnings
    
    
    19,027
    
    
    
    
    
    
    
    56,105Total shareholders equity
    
    
    4,480,244
    
    
    
    4,461,217
    
    
    
    4,518,064Total liabilities and shareholders equity
    
    $
    4,484,275
    
    
    $
    4,688,568
    
    
    $
    4,525,258
 See notes to unaudited condensed consolidated financial statements.
  3




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Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Statements of Income
 (Unaudited)
 Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Interest and fee incomeInterest on loan participation interests:Commercial real estate
    
    
    29,326
    
    
    
    46,531Consumer and residential real estate
    
    
    15,476
    
    
    
    19,689Total loan participation interest income
    
    
    44,802
    
    
    
    66,220Fees from loan participation interests
    
    
    269
    
    
    
    314Interest on deposits with The Huntington National Bank
    
    
    102
    
    
    
    1,876Total interest and fee income
    
    
    45,173
    
    
    
    68,410Provision for (reduction in) allowances for credit losses
    
    
    18,988
    
    
    
    (1,145
    )Interest income after provision for (reduction in) allowances for credit losses
    
    
    26,185
    
    
    
    69,555Noninterest income:Rental income
    
    
    16
    
    
    
    17Collateral fees
    
    
    677
    
    
    
    776Total noninterest income
    
    
    693
    
    
    
    793Noninterest expense:Servicing costs
    
    
    2,551
    
    
    
    2,835Other
    
    
    165
    
    
    
    146Total noninterest expense
    
    
    2,716
    
    
    
    2,981Net income
    
    $
    24,162
    
    
    $
    67,367Dividends declared on preferred securities
    
    
    (5,135
    )
    
    
    (11,262
    )Net income applicable to common shares
    
    $
    19,027
    
    
    $
    56,105
 See notes to unaudited condensed consolidated financial statements.
  4




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Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Statements of Changes in Shareholders Equity
 (Unaudited)
 Preferred, Class A
    
    
    Preferred, Class B
    
    
    Preferred, Class C(in thousands)
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    AmountThree Months Ended March 31, 2008:Balance, beginning of period
    
    
    1
    
    
    $
    1,000
    
    
    
    400
    
    
    $
    400,000
    
    
    
    2,000
    
    
    $
    50,000Comprehensive Income:Net incomeTotal comprehensive incomeBalance, end of the period
    
    
    1
    
    
    $
    1,000
    
    
    
    400
    
    
    $
    400,000
    
    
    
    2,000
    
    
    $
    50,000Three Months Ended March 31, 2009:Balance, beginning of period
    
    
    1
    
    
    $
    1,000
    
    
    
    400
    
    
    $
    400,000
    
    
    
    2,000
    
    
    $
    50,000Comprehensive Income:Net incomeTotal comprehensive incomeBalance, end of the period
    
    
    1
    
    
    $
    1,000
    
    
    
    400
    
    
    $
    400,000
    
    
    
    2,000
    
    
    $
    50,000
 Preferred, Class D
    
    
    Preferred
    
    
    Common
    
    
    Retained(in thousands)
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    TotalThree Months Ended March 31, 2008:Balance, beginning of period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    
    
    
    $
    
    
    
    
    14,000
    
    
    $
    3,660,959
    
    
    $
    
    
    
    $
    4,461,959Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,367
    
    
    
    67,367Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,367Dividends declared on Class A preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80
    )
    
    
    (80
    )Dividends declared on Class B preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,681
    )
    
    
    (4,681
    )Dividends declared on Class C preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (984
    )
    
    
    (984
    )Dividends declared on Class D preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,517
    )
    
    
    (5,517
    )Balance, end of the period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    
    
    
    $
    
    
    
    
    14,000
    
    
    $
    3,660,959
    
    
    $
    56,105
    
    
    $
    4,518,064Three Months Ended March 31, 2009:Balance, beginning of period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    
    
    
    $
    
    
    
    
    14,000
    
    
    $
    3,660,217
    
    
    $
    
    
    
    $
    4,461,217Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,162
    
    
    
    24,162Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,162Dividends declared on Class A preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80
    )
    
    
    (80
    )Dividends declared on Class B preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,413
    )
    
    
    (1,413
    )Dividends declared on Class C preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (984
    )
    
    
    (984
    )Dividends declared on Class D preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,658
    )
    
    
    (2,658
    )Balance, end of the period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    
    
    
    $
    
    
    
    
    14,000
    
    
    
    3,660,217
    
    
    
    19,027
    
    
    $
    4,480,244
 See notes to unaudited condensed consolidated financial statements.
  5




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Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 (Unaudited)
 Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Operating activitiesNet income
    
    $
    24,162
    
    
    $
    67,367Adjustments to reconcile net income to net
cash provided by operating activities:Provision for (reduction in) allowances for credit losses
    
    
    18,988
    
    
    
    (1,145
    )Change in due to/from The Huntington National Bank
    
    
    3,376
    
    
    
    8,113Other, net
    
    
    2,414
    
    
    
    3,992Net cash provided by operating activities
    
    
    48,940
    
    
    
    78,327Investing activitiesParticipation interests acquired
    
    
    (324,860
    )
    
    
    (460,395
    )Sales and repayments of loans underlying participation interests
    
    
    483,928
    
    
    
    649,464Net cash provided by investing activities
    
    
    159,068
    
    
    
    189,069Financing activitiesDividends paid on preferred securities
    
    
    (3,642
    )
    
    
    (6,501
    )Dividends paid on common stock
    
    
    (224,258
    )
    
    
    Return of capital to common shareholders
    
    
    (742
    )
    
    
    Net cash used for financing activities
    
    
    (228,642
    )
    
    
    (6,501
    )Increase (decrease) in cash and cash equivalents
    
    
    (20,634
    )
    
    
    260,895Cash and cash equivalents at beginning of year
    
    
    293,009
    
    
    
    47,464Cash and cash equivalents at end of period
    
    $
    272,375
    
    
    $
    308,359Supplemental information:Dividends and distributions declared, not paid
    
    $
    1,493
    
    
    $
    4,761Non cash change in loan participation activity with The Huntington National Bank
    
    
    60,149
    
    
    
    (39,583
    )
 See notes to unaudited condensed consolidated financial statements.
  6




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Notes to Unaudited Condensed Consolidated Financial Statements
 Note 1  Organization
   Note 2  Basis of Presentation and New Accounting Pronouncements
      7




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FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statement s  a n
amendment of ARB No. 51 (Statement No. 160)
 Note 3  Lending Concentrations and Participations in Non-Performing Assets and Past Due Loans
   March 31,
    
    
    December 31,
    
    
    March 31,(in thousands)
    
    2009
    
    
    2008
    
    
    2008Commercial real estate
    
    $
    100,675
    
    
    $
    54,246
    
    
    $
    45,827Consumer and residential real estate
    
    
    7,035
    
    
    
    6,041
    
    
    
    4,841Total participations in non-performing assets
    
    $
    107,710
    
    
    $
    60,287
    
    
    $
    50,668Participations in accruing loans past due 90 days or more
    
    $
    4,909
    
    
    $
    9,543
    
    
    $
    6,251
 Note 4  Allowance for Credit Losses (ACL)
   8




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Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008ALPL balance, beginning of period
    
    $
    65,456
    
    
    $
    62,275ALPL for loan participations acquired
    
    
    4,130
    
    
    
    3,873Net loan losses
    
    
    (8,494
    )
    
    
    (2,672
    )Provision for ALPL
    
    
    18,797
    
    
    
    323ALPL balance, end of period
    
    $
    79,889
    
    
    $
    63,799AULPC balance, beginning of period
    
    $
    2,301
    
    
    $
    3,856Provision for (reduction in) AULPC
    
    
    191
    
    
    
    (1,468
    )AULPC balance, end of period
    
    $
    2,492
    
    
    $
    2,388Total ACL
    
    $
    82,381
    
    
    $
    66,187
  Note 5  Preferred Dividends
   i.e.
 i.e.,
  9




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##### Table of Contents



Three Months EndedMarch 31,(in thousands)
    
    2009
    
    
    2008Class A preferred securities
    
    $
    80
    
    
    $
    80Class B preferred securities
    
    
    1,413
    
    
    
    4,681Class C preferred securities
    
    
    984
    
    
    
    984Class D preferred securities
    
    
    2,658
    
    
    
    5,517Total dividends declared
    
    $
    5,135
    
    
    $
    11,262
  Note 6  Related Party Transactions
    January 1, 2008throughMarch 31, 2009Commercial real estate
    
    
    0.125
    %Consumer
    
    
    0.650
    %Residential real estate
    
    
    0.267
    %
  10




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Number ofCommon
    
    
    Number of Preferred SecuritiesShareholder:
    
    Shares
    
    
    Class A
    
    
    Class B
    
    
    Class C
    
    
    Class DHeld by related parties:HPCII
    
    
    4,550,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    HCF
    
    
    6,580,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Holdings
    
    
    2,870,000
    
    
    
    895
    
    
    
    
    
    
    
    
    
    
    
    14,000,000HPC Holdings-II, Inc.
    
    
    
    
    
    
    
    
    
    
    400,000
    
    
    
    
    
    
    
    Total held by related parties
    
    
    14,000,000
    
    
    
    895
    
    
    
    400,000
    
    
    
    
    
    
    
    14,000,000Other shareholders
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    2,000,000
    
    
    
    Total shares outstanding
    
    
    14,000,000
    
    
    
    1,000
    
    
    
    400,000
    
    
    
    2,000,000
    
    
    
    14,000,000
     11




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Note 7  Commitments and Contingencies
 /
    Note 8  Segment Reporting
   12




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Item 2.

    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 INTRODUCTION
    Forward-looking Statements
     13




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Risk Factors
  Update to Risk Factors
 During the first quarter of 2009, the Banks and HPCIs commercial and residential real estate
and real estate-related portfolios continued to be affected by the ongoing reduction in real estate
values and reduced levels of sales and, more generally, HPCIs participation interest portfolio has
been affected by the sustained economic weakness of the Midwest markets and the impact of higher
unemployment rates. The continued economic weakness could adversely impact HPCIs business,
financial condition, liquidity, capital, and results of operations, as well as the Banks financial
condition, liquidity, capital, capital ratios, and results of operations.
   Critical Accounting Policies
   14




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Use of Significant Estimates
  QUALIFICATION TESTS
     15




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RESULTS OF OPERATIONS
   Table 1  Quarterly Statements of Income
 2009
    
    
    2008
    
    
    1Q09 vs 1Q08(in thousands)
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    $ Chg
    
    
    % ChgInterest and fee incomeInterest on loan participation interests:Commercial real estate
    
    $
    29,326
    
    
    $
    44,591
    
    
    $
    44,375
    
    
    $
    40,551
    
    
    $
    46,531
    
    
    $
    (17,205
    )
    
    
    (37.0
    )%Consumer and residential real estate
    
    
    15,476
    
    
    
    16,614
    
    
    
    17,454
    
    
    
    18,260
    
    
    
    19,689
    
    
    
    (4,213
    )
    
    
    (21.4
    )Total loan participation interest income
    
    
    44,802
    
    
    
    61,205
    
    
    
    61,829
    
    
    
    58,811
    
    
    
    66,220
    
    
    
    (21,418
    )
    
    
    (32.3
    )Fees from loan participation interests
    
    
    269
    
    
    
    277
    
    
    
    274
    
    
    
    333
    
    
    
    314
    
    
    
    (45
    )
    
    
    (14.3
    )Interest on deposits with the Bank
    
    
    102
    
    
    
    498
    
    
    
    830
    
    
    
    2,082
    
    
    
    1,876
    
    
    
    (1,774
    )
    
    
    (94.6
    )Total interest and fee income
    
    
    45,173
    
    
    
    61,980
    
    
    
    62,933
    
    
    
    61,226
    
    
    
    68,410
    
    
    
    (23,237
    )
    
    
    (34.0
    )Provision for (reduction in)
allowances for credit losses
    
    
    18,988
    
    
    
    (1,194
    )
    
    
    (7,437
    )
    
    
    (5,079
    )
    
    
    (1,145
    )
    
    
    20,133
    
    
    
    N.M.Interest income after (reduction in)
provision for allowances for credit losses
    
    
    26,185
    
    
    
    63,174
    
    
    
    70,370
    
    
    
    66,305
    
    
    
    69,555
    
    
    
    (43,370
    )
    
    
    (62.4
    )Noninterest income:Rental income
    
    
    16
    
    
    
    16
    
    
    
    17
    
    
    
    16
    
    
    
    17
    
    
    
    (1
    )
    
    
    (6
    )Collateral fees
    
    
    677
    
    
    
    745
    
    
    
    744
    
    
    
    733
    
    
    
    776
    
    
    
    (99
    )
    
    
    (12.8
    )Total noninterest income
    
    
    693
    
    
    
    761
    
    
    
    761
    
    
    
    749
    
    
    
    793
    
    
    
    (100
    )
    
    
    (12.6
    )Non-interest expense:Servicing costs
    
    
    2,551
    
    
    
    2,675
    
    
    
    2,718
    
    
    
    2,707
    
    
    
    2,835
    
    
    
    (284
    )
    
    
    (10.0
    )Other
    
    
    165
    
    
    
    181
    
    
    
    182
    
    
    
    245
    
    
    
    146
    
    
    
    19
    
    
    
    13.0Total noninterest expense
    
    
    2,716
    
    
    
    2,856
    
    
    
    2,900
    
    
    
    2,952
    
    
    
    2,981
    
    
    
    (265
    )
    
    
    (8.9
    )Net income
    
    $
    24,162
    
    
    $
    61,079
    
    
    $
    68,231
    
    
    $
    64,102
    
    
    $
    67,367
    
    
    $
    (43,205
    )
    
    
    (64.1
    )Dividends declared on preferred securities
    
    
    (5,135
    )
    
    
    (10,188
    )
    
    
    (7,632
    )
    
    
    (7,439
    )
    
    
    (11,262
    )
    
    
    6,127
    
    
    
    54.4Net income applicable to common shares(1)
    
    $
    19,027
    
    
    $
    50,891
    
    
    $
    60,599
    
    
    $
    56,663
    
    
    $
    56,105
    
    
    $
    (37,078
    )
    
    
    (66.1
    )%
 (1)
    
    All of HPCIs common stock is owned by HPCII, HCF, and Holdings and, therefore, net
income per share is not presented.  Interest and Fee Income
   16




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Table 2  Interest and Fee Income
 Three Months Ended March 31,2009
    
    
    2008Average
    
    
    
    
    
    
    
    
    
    
    Average(in millions)
    
    Balance
    
    
    Income(1)
    
    
    Yield
    
    
    Balance
    
    
    Income(1)
    
    
    YieldLoan participation interests:Commercial real estate
    
    $
    3,383.5
    
    
    $
    29.5
    
    
    
    3.53
    %
    
    $
    3,079.3
    
    
    $
    46.7
    
    
    
    6.07
    %Consumer and residential real estate
    
    
    940.2
    
    
    
    15.6
    
    
    
    6.73
    
    
    
    1,186.7
    
    
    
    19.8
    
    
    
    6.72Total loan participations
    
    
    4,323.7
    
    
    
    45.1
    
    
    
    4.23
    
    
    
    4,266.0
    
    
    
    66.5
    
    
    
    6.27Interest bearing deposits in the Bank
    
    
    176.4
    
    
    
    0.1
    
    
    
    0.23
    
    
    
    225.7
    
    
    
    1.9
    
    
    
    3.29Total
    
    $
    4,500.1
    
    
    $
    45.2
    
    
    
    4.07
    %
    
    $
    4,491.7
    
    
    $
    68.4
    
    
    
    6.12
    %
 (1)
    
    Income includes interest and fees.  Provision for (reduction in) allowance for credit losses
  Noninterest Income and Noninterest Expense
 (See Note 7 to the
unaudited condensed consolidated financial statements for more information regarding use of HPCIs
assets as collateral for the Banks advances from the FHLB.)
  17




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##### Table of Contents



January 1, 2008throughMarch 31, 2009Commercial real estate
    
    
    0.125
    %Consumer
    
    
    0.650
    %Residential real estate
    
    
    0.267
    %
  Provision for Income Taxes
   CREDIT EXPOSURE MIX
  Credit Risk
     18




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##### Table of Contents



Commercial Real Estate Credit
    Table 3  Commercial Real Estate Loans by Property Type and Borrower Location
 At March 31, 2009Geographic Region
    
    
    
    
    
    
    Percent(in thousands of
dollars)
    
    Ohio
    
    
    Michigan
    
    
    Indiana
    
    
    Kentucky
    
    
    Pennsylvania
    
    
    Other
    
    
    Total Amount
    
    
    of TotalIndustrial and warehouse
    
    $
    383,309
    
    
    $
    175,323
    
    
    $
    55,436
    
    
    $
    16,584
    
    
    $
    5,687
    
    
    $
    42,812
    
    
    $
    679,151
    
    
    
    20.7
    %Retail properties
    
    
    379,770
    
    
    
    73,426
    
    
    
    59,401
    
    
    
    40,449
    
    
    
    37,244
    
    
    
    85,402
    
    
    
    675,692
    
    
    
    20.6Office
    
    
    324,974
    
    
    
    142,095
    
    
    
    23,433
    
    
    
    18,733
    
    
    
    31,648
    
    
    
    52,920
    
    
    
    593,803
    
    
    
    18.1Raw land and other land uses
    
    
    196,190
    
    
    
    117,316
    
    
    
    32,555
    
    
    
    10,938
    
    
    
    9,794
    
    
    
    15,643
    
    
    
    382,436
    
    
    
    11.7Single family home builders
    
    
    163,307
    
    
    
    55,761
    
    
    
    15,804
    
    
    
    9,614
    
    
    
    16,692
    
    
    
    42,789
    
    
    
    303,967
    
    
    
    9.3Multi family
    
    
    112,481
    
    
    
    14,383
    
    
    
    65,205
    
    
    
    40,100
    
    
    
    1,218
    
    
    
    12,966
    
    
    
    246,353
    
    
    
    7.5Health care
    
    
    109,299
    
    
    
    7,585
    
    
    
    1,026
    
    
    
    179
    
    
    
    2,727
    
    
    
    15,097
    
    
    
    135,913
    
    
    
    4.1Other
    
    
    135,388
    
    
    
    56,862
    
    
    
    10,753
    
    
    
    2,093
    
    
    
    9,952
    
    
    
    49,939
    
    
    
    264,987
    
    
    
    8.0Total
    
    $
    1,804,718
    
    
    $
    642,751
    
    
    $
    263,613
    
    
    $
    138,690
    
    
    $
    114,962
    
    
    $
    317,568
    
    
    $
    3,282,302
    
    
    
    100.0
    %
  Retail properties
   Single family homebuilders
    19




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Consumer Credit
   Allowance for Credit Losses (ACL)
   Table 4  Allowances for Credit Loss Activity
 2009
    
    
    2008(in thousands)
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstALPL balance, beginning of period
    
    $
    65,456
    
    
    $
    72,073
    
    
    $
    66,876
    
    
    $
    63,799
    
    
    $
    62,275Allowance of loan participations acquired
    
    
    4,130
    
    
    
    4,461
    
    
    
    15,828
    
    
    
    12,123
    
    
    
    3,873Net loan lossesCommercial real estate
    
    
    (6,742
    )
    
    
    (9,100
    )
    
    
    (179
    )
    
    
    (2,007
    )
    
    
    (1,197
    )Consumer and residential real estate
    
    
    (1,752
    )
    
    
    (1,905
    )
    
    
    (2,168
    )
    
    
    (1,772
    )
    
    
    (1,475
    )Total net loan losses
    
    
    (8,494
    )
    
    
    (11,005
    )
    
    
    (2,347
    )
    
    
    (3,779
    )
    
    
    (2,672
    )Provision for (reduction in) ALPL
    
    
    18,797
    
    
    
    (697
    )
    
    
    (8,284
    )
    
    
    (5,267
    )
    
    
    323Reserve transfer from AULPC
    
    
    
    
    
    
    624
    
    
    
    
    
    
    
    
    
    
    
    ALPL balance, end of period
    
    $
    79,889
    
    
    $
    65,456
    
    
    $
    72,073
    
    
    $
    66,876
    
    
    $
    63,799AULPC balance, beginning of period
    
    $
    2,301
    
    
    $
    3,423
    
    
    $
    2,576
    
    
    $
    2,388
    
    
    $
    Provision for (reduction in) AULPC
    
    
    191
    
    
    
    (498
    )
    
    
    847
    
    
    
    188
    
    
    
    (1,468
    )Reserve transfer to ALPL
    
    
    
    
    
    
    (624
    )
    
    
    
    
    
    
    
    
    
    
    AULPC balance, end of period
    
    $
    2,492
    
    
    $
    2,301
    
    
    $
    3,423
    
    
    $
    2,576
    
    
    $
    (1,468
    )Total Allowance for Credit Losses
    
    $
    82,381
    
    
    $
    67,757
    
    
    $
    75,496
    
    
    $
    69,452
    
    
    $
    62,331ALPL as a % of total participation interests
    
    
    1.91
    %
    
    
    1.48
    %
    
    
    1.57
    %
    
    
    1.53
    %
    
    
    1.52
    %ACL as a % of total participation interests
    
    
    1.97
    
    
    
    1.54
    
    
    
    1.65
    
    
    
    1.59
    
    
    
    1.49
  20




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Non-Performing Assets (NPAs)
   Table 5  Quarterly Non-Performing Assets
 2009
    
    
    2008(in thousands)
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstParticipation interests in non-accrual loansCommercial real estate
    
    $
    100,675
    
    
    $
    54,246
    
    
    $
    59,701
    
    
    $
    52,406
    
    
    $
    45,827Consumer and residential real estate
    
    
    7,035
    
    
    
    6,041
    
    
    
    6,834
    
    
    
    6,063
    
    
    
    4,841Total Non-Performing Assets
    
    $
    107,710
    
    
    $
    60,287
    
    
    $
    66,535
    
    
    $
    58,469
    
    
    $
    50,668Participations in Accruing LoansPast Due 90 Days or More
    
    $
    4,909
    
    
    $
    9,543
    
    
    $
    8,315
    
    
    $
    6,214
    
    
    $
    5,421NPAs as a % of totalparticipation interests
    
    
    2.57
    %
    
    
    1.37
    %
    
    
    1.45
    %
    
    
    1.34
    %
    
    
    1.21
    %ALPL as a % of NPAs
    
    
    74
    
    
    
    109
    
    
    
    108
    
    
    
    114
    
    
    
    126ACL as a % of NPAs
    
    
    76
    
    
    
    112
    
    
    
    113
    
    
    
    119
    
    
    
    131
 Accounting by Creditors for Impairment of a
Loan.
  21




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MARKET RISK
     OFF-BALANCE SHEET ARRANGEMENTS
   22




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
        Table 6  Regulatory Capital Ratios
 2009
    
    
    2008First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstTier 1 Leverage Ratio (5.00% well-capitalized)
    
    
    5.95
    %
    
    
    5.99
    %
    
    
    6.36
    %
    
    
    6.37
    %
    
    
    6.24
    %Tier 1 Risk-based Capital Ratio (6.00% well-capitalized)
    
    
    6.79
    
    
    
    6.44
    
    
    
    7.01
    
    
    
    7.10
    
    
    
    6.89Total Risk-based Capital Ratio (10.00% well-capitalized)
    
    
    11.00
    
    
    
    10.71
    
    
    
    10.25
    
    
    
    10.32
    
    
    
    10.39
  23




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24




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##### Table of Contents



Item 3.

    Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
   
 Item 4T. Controls and Procedures
  
 PART II. OTHER INFORMATION
  
 Item 6. Exhibits
  http://www.sec.gov http://www.huntington.com
  3.1.
    
    
    Amended and Restated Articles of Incorporation (previously
filed as Exhibit 3(a)(ii) to Amendment No. 4 to Registration Statement of Form
S-11 (File No. 333-61182), filed with the Securities and Exchange Commission on
October 12, 2001, and incorporated herein by reference.)3.2.
    
    
    Code of Regulations (previously filed as Exhibit 3(b) to the
Registrants Registration Statement of Form S-11 (File No. 333-61182), filed
with the Securities and Exchange Commission on May 17, 2001, and incorporated
herein by reference.)
  25




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##### Table of Contents



4.1.
    
    
    Specimen of certificate representing Class C preferred
securities, previously filed as Exhibit 4 to the Registrants Amendment No. 1
to Registration Statement of Form S-11 (File No. 333-61182), filed with the
Securities and Exchange Commission on May 31, 2001, and incorporated herein by
reference.31.1.
    
    
    Rule 13a  14(a) Certification  President (chief executive officer).31.2.
    
    
    Rule 13a  14(a) Certification  Vice President (chief financial officer).32.1.
    
    
    Section 1350 Certification  President (chief executive officer).32.2.
    
    
    Section 1350 Certification  Vice President (chief financial officer).99.1.
    
    
    Unaudited Condensed Consolidated Financial Statements of
Huntington Bancshares Incorporated as of and for the three month periods ended
March 31, 2009 and 2008.
  26




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##### Table of Contents



SIGNATURES
  HUNTINGTON PREFERRED CAPITAL, INC.(Registrant)By:
    
    /s/ Donald R. Kimble

Donald R. Kimble
    
    
    
    By:
    
    /s/ Thomas P. Reed

Thomas P. ReedPresident and Director
    
    
    
    
    
    Vice President and Director(Principal Executive Officer)
    
    
    
    
    
    (Principal Financial and Accounting Officer)
  27




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EXHIBIT INDEX
 ExhibitNo.
    
    Description3.1.
    
    
    Amended and Restated Articles of Incorporation (previously
filed as Exhibit 3(a)(ii) to Amendment No. 4 to Registration Statement of Form
S-11 (File No. 333-61182), filed with the Securities and Exchange Commission on
October 12, 2001, and incorporated herein by reference.)3.2.
    
    
    Code of Regulations (previously filed as Exhibit 3(b) to the
Registrants Registration Statement of Form S-11 (File No. 333-61182), filed
with the Securities and Exchange Commission on May 17, 2001, and incorporated
herein by reference.)4.1.
    
    
    Specimen of certificate representing Class C preferred
securities, previously filed as Exhibit 4 to the Registrants Amendment No. 1
to Registration Statement of Form S-11 (File No. 333-61182), filed with the
Securities and Exchange Commission on May 31, 2001, and incorporated herein by
reference.31.1.
    
    
    Rule 13a  14(a) Certification  President (chief executive officer).31.2.
    
    
    Rule 13a  14(a) Certification  Vice President (chief financial officer).32.1.
    
    
    Section 1350 Certification  President (chief executive officer).32.2.
    
    
    Section 1350 Certification  Vice President (chief financial officer).99.1.
    
    
    Unaudited Condensed Consolidated Financial Statements of
Huntington Bancshares Incorporated as of and for the three month periods ended
March 31, 2009 and 2008.
  28