##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 March 31, 2008
 000-33243
 Huntington Preferred Capital, Inc.
 Ohio
    
    31-1356967(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 41 South High Street, Columbus, Ohio 43287
 (614) 480-8300
   Large accelerated filer
[  ]
    
    Accelerated filer [  ]
    
    Non-accelerated filer   [x]
(Do not check if a smaller reporting company)
    
    Smaller reporting company
[  ]




---



##### 



HUNTINGTON PREFERRED CAPITAL, INC.
  Part I. Financial InformationItem 1.
    
    Financial Statements (Unaudited)Condensed Consolidated Balance Sheets -
At March 31, 2008, December 31, 2007, and March 31, 2007
    
    
    3Condensed Consolidated Statements of Income -
For the three-months ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Changes in Shareholders Equity -
For the three-months ended March 31, 2008 and 2007
    
    
    5Condensed Consolidated Statements of Cash Flows -
For the three-months ended March 31, 2008 and 2007
    
    
    6Notes to The Unaudited Condensed Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    24Item 4T.
    
    Controls and Procedures
    
    
    24Part II. Other InformationItem 6.
    
    Exhibits
    
    
    24Signatures
    
    
    26EX-31.1EX-31.2EX-32.1EX-32.2EX-99.1
  2




---



##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Balance Sheets  (Unaudited)
 March 31,
    
    
    December 31,
    
    
    March 31,(in thousands, except share data)
    
    2008
    
    
    2007
    
    
    2007AssetsCash and interest bearing deposits with The Huntington National Bank
    
    $
    308,359
    
    
    $
    47,464
    
    
    $
    464,325Due from The Huntington National Bank
    
    
    74,285
    
    
    
    121,981
    
    
    
    ---Loan participation interests:Commercial
    
    
    20,284
    
    
    
    22,526
    
    
    
    29,072Commercial real estate
    
    
    3,023,828
    
    
    
    3,098,557
    
    
    
    3,043,252Consumer and residential real estate
    
    
    1,146,364
    
    
    
    1,217,956
    
    
    
    1,074,171Total loan participation interests
    
    
    4,190,476
    
    
    
    4,339,039
    
    
    
    4,146,495Allowance for loan participation losses
    
    
    (63,799
    )
    
    
    (62,275
    )
    
    
    (50,107
    )Net loan participation interests
    
    
    4,126,677
    
    
    
    4,276,764
    
    
    
    4,096,388Accrued income and other assets
    
    
    15,937
    
    
    
    19,665
    
    
    
    38,126Total assets
    
    $
    4,525,258
    
    
    $
    4,465,874
    
    
    $
    4,598,839Liabilities and shareholders equityLiabilitiesAllowance for unfunded loan participation commitments
    
    $
    2,388
    
    
    $
    3,856
    
    
    $
    3,512Dividends payable
    
    
    4,761
    
    
    
    ---
    
    
    
    12,536Due to The Huntington National Bank
    
    
    ---
    
    
    
    ---
    
    
    
    19,477Other liabilities
    
    
    45
    
    
    
    59
    
    
    
    701Total liabilities
    
    
    7,194
    
    
    
    3,915
    
    
    
    36,226Shareholders 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; 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; 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
    
    
    3,660,959
    
    
    
    3,660,959
    
    
    
    3,694,753Retained earnings
    
    
    56,105
    
    
    
    ---
    
    
    
    66,860Total shareholders equity
    
    
    4,518,064
    
    
    
    4,461,959
    
    
    
    4,562,613Total liabilities and shareholders equity
    
    $
    4,525,258
    
    
    $
    4,465,874
    
    
    $
    4,598,839
 See notes to unaudited condensed consolidated financial statements.
 3




---



##### Table of Contents



Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Statements of Income  (Unaudited)
 Three Months EndedMarch 31,(in thousands)
    
    2008
    
    
    2007Interest and fee incomeInterest on loan participation interests:Commercial
    
    $
    328
    
    
    $
    541Commercial real estate
    
    
    46,203
    
    
    
    56,445Consumer and residential real estate
    
    
    19,689
    
    
    
    16,082Total loan participation interest income
    
    
    66,220
    
    
    
    73,068Fees from loan participation interests
    
    
    314
    
    
    
    198Interest on deposits with The Huntington National Bank
    
    
    1,876
    
    
    
    5,608Total interest and fee income
    
    
    68,410
    
    
    
    78,874Reduction in allowances for credit losses
    
    
    (1,145
    )
    
    
    (2,693
    )Interest income after reduction in allowances for credit losses
    
    
    69,555
    
    
    
    81,567Non-interest income:Rental income
    
    
    17
    
    
    
    1,710Collateral fees
    
    
    776
    
    
    
    92Total non-interest income
    
    
    793
    
    
    
    1,802Non-interest expense:Servicing costs
    
    
    2,835
    
    
    
    2,450Other
    
    
    146
    
    
    
    1,130Total non-interest expense
    
    
    2,981
    
    
    
    3,580Income before provision for income taxes
    
    
    67,367
    
    
    
    79,789Provision for income taxes
    
    
    ---
    
    
    
    393Net income
    
    $
    67,367
    
    
    $
    79,396Dividends declared on preferred securities
    
    
    (11,262
    )
    
    
    (12,536
    )Net income applicable to common shares
    
    $
    56,105
    
    
    $
    66,860
 See notes to unaudited condensed consolidated financial statements.
 4




---



##### Table of Contents



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, 2007: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, 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
    
    
    $
    50,000
 Preferred, Class D
    
    
    Preferred
    
    
    Common
    
    
    Retained(in thousands)
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Earnings
    
    
    TotalThree Months Ended March 31, 2007:Balance, beginning of period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    ---
    
    
    $
    ---
    
    
    
    14,000
    
    
    $
    3,694,753
    
    
    $
    ---
    
    
    $
    4,495,753Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,396
    
    
    
    79,396Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,396Dividends declared on Class A preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (80
    )
    
    
    (80
    )Dividends declared on Class B preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,360
    )
    
    
    (5,360
    )Dividends declared on Class C preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (984
    )
    
    
    (984
    )Dividends declared on Class D preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,112
    )
    
    
    (6,112
    )Balance, end of the period
    
    
    14,000
    
    
    $
    350,000
    
    
    
    ---
    
    
    $
    ---
    
    
    
    14,000
    
    
    $
    3,694,753
    
    
    $
    66,860
    
    
    $
    4,562,613Three 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
    
    
    $
    4,518,064
 See notes to unaudited condensed consolidated financial statements.
 5




---



##### Table of Contents



Huntington Preferred Capital, Inc.
 
 Condensed Consolidated Statements of Cash Flows  (Unaudited)
 Three Months EndedMarch 31,(in thousands)
    
    2008
    
    
    2007Operating activitiesNet income
    
    $
    67,367
    
    
    $
    79,396Adjustments
to reconcile net income to net cash provided by operating activities:Reduction of allowances for credit losses
    
    
    (1,145
    )
    
    
    (2,693
    )Deferred income tax benefit
    
    
    ---
    
    
    
    (163
    )Decrease (Increase) in due from The Huntington National Bank
    
    
    8,113
    
    
    
    (1,616
    )Other, net
    
    
    3,992
    
    
    
    3,395Net cash provided by operating activities
    
    
    78,327
    
    
    
    78,319Investing activitiesParticipation interests acquired
    
    
    (460,395
    )
    
    
    (540,184
    )Sales and repayments of loans underlying participation interests
    
    
    649,464
    
    
    
    650,036Net cash provided by investing activities
    
    
    189,069
    
    
    
    109,852Financing activitiesDividends paid on preferred securities
    
    
    (6,501
    )
    
    
    ---Dividends paid on common stock
    
    
    ---
          
    
    
    (296,292
    )Return of capital to common shareholders
    
    
    ---
    
    
    
    (153,708
    )Net cash used for financing activities
    
    
    (6,501
    )
    
    
    (450,000
    )Increase (decrease) in cash and cash equivalents
    
    
    260,895
    
    
    
    (261,829
    )Cash and cash equivalents at beginning of year
    
    
    47,464
    
    
    
    726,154Cash and cash equivalents at end of period
    
    $
    308,359
    
    
    $
    464,325Supplemental information:Income taxes paid
    
    $
    ---
    
    
    $
    55Dividends and distributions declared, not paid
    
    
    4,761
    
    
    
    12,536Non cash change in loan participation activity with The Huntington National Bank
    
    
    (39,583
    )
    
    
    (155,908
    )
 See notes to unaudited condensed consolidated financial statements.
 6




---



##### Table of Contents



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




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
 FASB Statement No. 157, Fair Value Measurements (Statement No. 157)
 FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilitie s
(Statement No. 159)
 Note 3 - Lending Concentrations and Participations in Non-Performing Assets and Past Due Loans
   March 31,
    
    
    December 31,
    
    
    March 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2007Commercial
    
    $
    343
    
    
    $
    137
    
    
    $
    408Commercial real estate
    
    
    45,484
    
    
    
    41,923
    
    
    
    23,162Consumer and residential real estate
    
    
    4,841
    
    
    
    4,136
    
    
    
    4,902Total participations in non-performing assets
    
    $
    50,668
    
    
    $
    46,196
    
    
    $
    28,472Participations in accruing loans past due 90 days or more
    
    $
    6,251
    
    
    $
    4,440
    
    
    $
    3,046
 8




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
 Note 4 - Allowances for Credit Losses (ACL)
   Three Months EndedMarch 31,(in thousands)
    
    2008
    
    
    2007ALPL balance, beginning of period
    
    $
    62,275
    
    
    $
    48,703ALPL for loan participations acquired
    
    
    3,873
    
    
    
    5,301Net loan losses
    
    
    (2,672
    )
    
    
    (1,496
    )Provision for (reduction in) ALPL
    
    
    323
    
    
    
    (2,401
    )ALPL balance, end of period
    
    $
    63,799
    
    
    $
    50,107AULPC balance, beginning of period
    
    $
    3,856
    
    
    $
    3,804Reduction in AULPC
    
    
    (1,468
    )
    
    
    (292
    )AULPC balance, end of period
    
    $
    2,388
    
    
    $
    3,512Total ACL
    
    $
    66,187
    
    
    $
    53,619
  Note 5
- Preferred Dividends
    9




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
 i.e.
 i.e.,
  Three Months EndedMarch 31,(in thousands)
    
    2008
    
    
    2007Class A preferred securities
    
    $
    80
    
    
    $
    80Class B preferred securities
    
    
    4,681
    
    
    
    5,360Class C preferred securities
    
    
    984
    
    
    
    984Class D preferred securities
    
    
    5,517
    
    
    
    6,112Total dividends declared
    
    $
    11,262
    
    
    $
    12,536
  Note 6 - Related Party Transactions
   10




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
  January 1, 2007throughMarch 31, 2008Commercial and commercial real estate
    
    
    0.125
    %Consumer
    
    
    0.650
    %Residential real estate
    
    
    0.267
    %
    Number ofCommon
    
    
    Number of Preferred SecuritiesShareholder:
    
    Shares
    
    
    Class A
    
    
    Class B
    
    
    Class C
    
    
    Class DHeld by related parties:HPC II
    
    
    4,550,000
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---HCF
    
    
    6,580,000
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---Holdings
    
    
    2,851,333
    
    
    
    895
    
    
    
    ---
    
    
    
    ---
    
    
    
    14,000,000HPC Holdings-II, Inc.
    
    
    ---
    
    
    
    ---
    
    
    
    400,000
    
    
    
    ---
    
    
    
    ---Huntington
    
    
    18,667
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---
    
    
    
    ---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




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
       Note 7 - Commitments and Contingencies
 /
   12




---



##### Table of Contents



Notes
to the Unaudited Condensed Consolidated Financial Statements
(Continued)
   Note 8
- Segment Reporting
  13




---



##### Table of Contents



Item 2. Managementss Discussion and Analysis of Financial Condition and Results of
Operations
 INTRODUCTION
    Forward-looking Statements
     Critical Accounting Policies
  14




---



##### Table of Contents



Use of Significant Estimates
  QUALIFICATION TESTS
    15




---



##### Table of Contents



RESULTS OF OPERATIONS
   Table 1 - Quarterly Statements of Income2008
    
    2007

    
    
    1Q08 vs 1Q07(in thousands)
    
    First

    
    Fourth
    
    
    Third
    
    
    Second
    
    
    First
    
    
    
    $ Chg
    
    
    % ChgInterest and fee incomeInterest on loan participation interests:Commercial
    
    $
    328
    
    
    $
    414
    
    
    $
    487
    
    
    $
    514
    
    
    $
    541
    
    
    
    $
    (213
    )
    
    
    (39.4)
    %Commercial real estate
    
    
    46,203
    
    
    
    55,824
    
    
    
    60,350
    
    
    
    56,419
    
    
    
    56,445
    
    
    
    
    (10,242
    )
    
    
    (18.1
    )Consumer and residential real estate
    
    
    19,689
    
    
    
    20,927
    
    
    
    21,129
    
    
    
    19,015
    
    
    
    16,082
    
    
    
    
    3,607
    
    
    
    22.4Total loan participation interest income
    
    
    66,220
    
    
    
    77,165
    
    
    
    81,966
    
    
    
    75,948
    
    
    
    73,068
    
    
    
    
    (6,848
    )
    
    
    (9.4
    )Fees from loan participation interests
    
    
    314
    
    
    
    162
    
    
    
    216
    
    
    
    203
    
    
    
    198
    
    
    
    
    116
    
    
    
    58.6Interest on deposits with
The Huntington National Bank
    
    
    1,876
    
    
    
    3,203
    
    
    
    1,961
    
    
    
    5,113
    
    
    
    5,608
    
    
    
    
    (3,732
    )
    
    
    (66.5
    )Total interest and fee income
    
    
    68,410
    
    
    
    80,530
    
    
    
    84,143
    
    
    
    81,264
    
    
    
    78,874
    
    
    
    
    (10,464
    )
    
    
    (13.3
    )(Reduction in) provision for
allowances for credit losses
    
    
    (1,145
    )
    
    
    10,167
    
    
    
    (5,175
    )
    
    
    1,091
    
    
    
    (2,693
    )
    
    
    
    1,548
    
    
    
    57.5Interest income after (reduction in)
provision for allowances for credit losses
    
    
    69,555
    
    
    
    70,363
    
    
    
    89,318
    
    
    
    80,173
    
    
    
    81,567
    
    
    
    
    (12,012
    )
    
    
    (14.7
    )Non-interest income:Rental income
    
    
    17
    
    
    
    1,710
    
    
    
    1,710
    
    
    
    1,710
    
    
    
    1,710
    
    
    
    
    (1,693
    )
    
    
    (99
    )Collateral fees
    
    
    776
    
    
    
    4,943
    
    
    
    81
    
    
    
    86
    
    
    
    92
    
    
    
    
    684
    
    
    
    N.M.Total non-interest income
    
    
    793
    
    
    
    6,653
    
    
    
    1,791
    
    
    
    1,796
    
    
    
    1,802
    
    
    
    
    (1,009
    )
    
    
    (56.0
    )Non-interest expense:Servicing costs
    
    
    2,835
    
    
    
    2,955
    
    
    
    2,971
    
    
    
    2,704
    
    
    
    2,450
    
    
    
    
    385
    
    
    
    15.7Other
    
    
    146
    
    
    
    1,173
    
    
    
    1,088
    
    
    
    1,116
    
    
    
    1,130
    
    
    
    
    (984
    )
    
    
    (87.1
    )Total non-interest expense
    
    
    2,981
    
    
    
    4,128
    
    
    
    4,059
    
    
    
    3,820
    
    
    
    3,580
    
    
    
    
    (599
    )
    
    
    (16.7
    )Income before provision for income taxes
    
    
    67,367
    
    
    
    72,888
    
    
    
    87,050
    
    
    
    78,149
    
    
    
    79,789
    
    
    
    
    (12,422
    )
    
    
    (15.6
    )Provision for income taxes
    
    
    
    
    
    
    378
    
    
    
    428
    
    
    
    418
    
    
    
    393
    
    
    
    
    (393
    )
    
    
    N.M.Net income
    
    $
    67,367
    
    
    $
    72,510
    
    
    $
    86,622
    
    
    $
    77,731
    
    
    $
    79,396
    
    
    
    $
    (12,029
    )
    
    
    (15.2)
    %Dividends declared on preferred securities
    
    
    (11,262
    )
    
    
    (12,213
    )
    
    
    (12,456
    )
    
    
    (12,438
    )
    
    
    (12,536
    )
    
    
    
    1,274
    
    
    
    10.2Net income applicable to common shares(1)
    
    $
    56,105
    
    
    $
    60,297
    
    
    $
    74,166
    
    
    $
    65,293
    
    
    $
    66,860
    
    
    
    $
    (10,755
    )
    
    
    (16.1
    )%
 (1)
  16




---



##### Table of Contents



Interest and Fee Income
   Table 2 - Interest and Fee IncomeThree Months Ended March 31,2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    Average(in millions)
    
    Balance
    
    
    Income(1)
    
    
    Yield
    
    
    Balance
    
    
    Income(1)
    
    
    YieldLoan participation interests:Commercial
    
    $
    20.6
    
    
    $
    0.3
    
    
    
    6.41
    %
    
    $
    30.0
    
    
    $
    0.5
    
    
    
    7.33
    %Commercial real estate
    
    
    3,058.7
    
    
    
    46.4
    
    
    
    6.10
    
    
    
    3,079.6
    
    
    
    56.6
    
    
    
    7.45Consumer and residential real estate
    
    
    1,186.7
    
    
    
    19.8
    
    
    
    6.72
    
    
    
    990.8
    
    
    
    16.2
    
    
    
    6.63Total loan participations
    
    
    4,266.0
    
    
    
    66.5
    
    
    
    6.27
    
    
    
    4,100.4
    
    
    
    73.3
    
    
    
    7.24Interest bearing deposits in the Bank
    
    
    225.7
    
    
    
    1.9
    
    
    
    3.29
    
    
    
    427.2
    
    
    
    5.6
    
    
    
    5.25Total
    
    $
    4,491.7
    
    
    $
    68.4
    
    
    
    6.12
    %
    
    $
    4,527.6
    
    
    $
    78.9
    
    
    
    7.06
    %
 (1)
  Reduction in allowances for credit losses
  Non-Interest Income and Non-Interest 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




---



##### Table of Contents



January 1, 2007throughMarch 31, 2008Commercial and commercial real estate
    
    
    0.125
    %Consumer
    
    
    0.650
    %Residential real estate
    
    
    0.267
    %
  Provision for Income Taxes
  CREDIT RISK
  Credit Exposure Mix
  Commercial Credit
  18




---



##### Table of Contents



Single family homebuilders
   Table 3 - Commercial and Commercial Real Estate Loans by Property Type and Borrower LocationAt March 31, 2008Geographic RegionTotal
    
    
    Percent(in thousands of dollars)
    
    Indiana
    
    
    Kentucky
    
    
    Michigan
    
    
    Ohio
    
    
    Other
    
    
    Amount
    
    
    of TotalIndustrial and warehouse
    
    $
    22,389
    
    
    $
    20,694
    
    
    $
    200,358
    
    
    $
    345,680
    
    
    $
    77,334
    
    
    $
    666,455
    
    
    
    22
    %Retail properties
    
    
    68,190
    
    
    
    37,036
    
    
    
    68,248
    
    
    
    324,574
    
    
    
    80,916
    
    
    
    578,964
    
    
    
    19Single family home
builders
    
    
    23,710
    
    
    
    19,156
    
    
    
    99,082
    
    
    
    227,547
    
    
    
    107,185
    
    
    
    476,680
    
    
    
    16Office
    
    
    23,122
    
    
    
    19,475
    
    
    
    111,710
    
    
    
    277,059
    
    
    
    45,155
    
    
    
    476,521
    
    
    
    16Raw land and other land
uses
    
    
    23,351
    
    
    
    11,584
    
    
    
    100,245
    
    
    
    195,782
    
    
    
    15,123
    
    
    
    346,085
    
    
    
    11Multi family
    
    
    66,951
    
    
    
    2,468
    
    
    
    16,564
    
    
    
    84,980
    
    
    
    2,735
    
    
    
    173,698
    
    
    
    6Health care
    
    
    1,053
    
    
    
    190
    
    
    
    7,114
    
    
    
    56,315
    
    
    
    17,227
    
    
    
    81,899
    
    
    
    3Hotel
    
    
    10,784
    
    
    
    
    
    
    
    22,509
    
    
    
    11,615
    
    
    
    2,331
    
    
    
    47,239
    
    
    
    2Other
    
    
    18,945
    
    
    
    20,058
    
    
    
    40,391
    
    
    
    116,803
    
    
    
    374
    
    
    
    196,571
    
    
    
    6Total
    
    $
    258,495
    
    
    $
    130,661
    
    
    $
    666,221
    
    
    $
    1,640,355
    
    
    $
    348,380
    
    
    $
    3,044,112
    
    
    
    100
    %
 Consumer Credit
   19




---



##### Table of Contents



Allowances for Credit Losses (ACL)
   Table 4 - Allowances for Credit Loss Activity2008

    
    2007(in thousands)
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstALPL balance, beginning of period
    
    $
    62,275
    
    
    $
    56,255
    
    
    $
    57,074
    
    
    $
    50,107
    
    
    $
    48,703Allowance of loan participations acquired
    
    
    3,873
    
    
    
    4,650
    
    
    
    6,906
    
    
    
    9,673
    
    
    
    5,301Net loan lossesCommercial
    
    
    263
    
    
    
    52
    
    
    
    15
    
    
    
    81
    
    
    
    20Commercial real estate
    
    
    (1,460
    )
    
    
    (7,720
    )
    
    
    (1,658
    )
    
    
    (2,201
    )
    
    
    (590
    )Consumer and residential real estate
    
    
    (1,475
    )
    
    
    (1,398
    )
    
    
    (1,135
    )
    
    
    (836
    )
    
    
    (926
    )Total net loan losses
    
    
    (2,672
    )
    
    
    (9,066
    )
    
    
    (2,778
    )
    
    
    (2,956
    )
    
    
    (1,496
    )Provision for (reduction in) ALPL
    
    
    323
    
    
    
    10,436
    
    
    
    (4,947
    )
    
    
    250
    
    
    
    (2,401
    )ALPL balance, end of period
    
    $
    63,799
    
    
    $
    62,275
    
    
    $
    56,255
    
    
    $
    57,074
    
    
    $
    50,107AULPC balance, beginning of period
    
    $
    3,856
    
    
    $
    4,125
    
    
    $
    4,353
    
    
    $
    3,512
    
    
    $
    3,804Provision for (reduction in) AULPC
    
    
    (1,468
    )
    
    
    (269
    )
    
    
    (228
    )
    
    
    841
    
    
    
    (292
    )AULPC balance, end of period
    
    $
    2,388
    
    
    $
    3,856
    
    
    $
    4,125
    
    
    $
    4,353
    
    
    $
    3,512Total Allowance for Credit Losses
    
    $
    66,187
    
    
    $
    66,131
    
    
    $
    60,380
    
    
    $
    61,427
    
    
    $
    53,619ALPL as a % of total participation interests
    
    
    1.52
    %
    
    
    1.44
    %
    
    
    1.24
    %
    
    
    1.28
    %
    
    
    1.21
    %ACL as a % of total participation interests
    
    
    1.58
    
    
    
    1.52
    
    
    
    1.33
    
    
    
    1.38
    
    
    
    1.29
     20




---



##### Table of Contents



Non-Performing Assets (NPAs)
   Table 5 - Quarterly Non-Performing Assets2008

    
    2007(in thousands)
    
    First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstParticipation interests in non-accrual loansCommercial
    
    $
    343
    
    
    $
    137
    
    
    $
    240
    
    
    $
    391
    
    
    $
    408Commercial real estate
    
    
    45,484
    
    
    
    41,923
    
    
    
    49,151
    
    
    
    43,263
    
    
    
    23,162Consumer and residential real estate
    
    
    4,841
    
    
    
    4,136
    
    
    
    4,489
    
    
    
    4,269
    
    
    
    4,902Total Non-Performing Assets
    
    $
    50,668
    
    
    $
    46,196
    
    
    $
    53,880
    
    
    $
    47,923
    
    
    $
    28,472Participations in Accruing Loans
Past Due 90 Days or More
    
    $
    6,251
    
    
    $
    4,440
    
    
    $
    3,178
    
    
    $
    3,640
    
    
    $
    3,046NPAs as a % of total
participation interests
    
    
    1.21
    %
    
    
    1.06
    %
    
    
    1.19
    %
    
    
    1.07
    %
    
    
    0.69
    %ALPL as a % of NPAs
    
    
    126
    
    
    
    135
    
    
    
    104
    
    
    
    119
    
    
    
    176ACL as a % of NPAs
    
    
    131
    
    
    
    143
    
    
    
    112
    
    
    
    128
    
    
    
    188
     MARKET RISK
  21




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
     22




---



##### Table of Contents



Table 6 - Regulatory Capital Ratios2008

    
    2007First
    
    
    Fourth
    
    
    Third
    
    
    Second
    
    
    FirstTier 1 Leverage Ratio (5.00% well-capitalized)
    
    
    6.24
    %
    
    
    5.99
    %
    
    
    6.23
    %
    
    
    6.09
    %
    
    
    6.13
    %Tier 1 Risk-based Capital Ratio (6.00% well-capitalized)
    
    
    6.89
    
    
    
    6.64
    
    
    
    6.99
    
    
    
    6.55
    
    
    
    6.68Total Risk-based Capital Ratio (10.00% well-capitalized)
    
    
    10.39
    
    
    
    10.17
    
    
    
    10.42
    
    
    
    10.42
    
    
    
    10.64
 23




---



##### 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.)
 24




---



##### 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, 2008
and 2007.
 25




---



##### Table of Contents



Signatures
  HUNTINGTON PREFERRED CAPITAL, INC.
(Registrant)By:
    
    /s/ Donald R. Kimble
    
    
    
    By:
    
    /s/ Thomas P. ReedDonald R. Kimble
    
    
    
    
    
    Thomas P. ReedPresident and Director
    
    
    
    
    
    Vice President and Director(Principal Executive Officer)
    
    
    
    
    
    (Principal Financial and Accounting Officer)
 26