Exhibit 99.1
 
 Item 1. Financial Statements
 Huntington Bancshares Incorporated
 
 Condensed Consolidated Balance Sheets  (Unaudited)
 2008
    
    2007(in thousands, except number of shares)
    
    September 30,
    
    December 31,
    
    September 30,AssetsCash and due from banks
    
    $
    901,239
    
    
    $
    1,416,597
    
    
    $
    1,202,381Federal funds sold and securities
purchased under resale agreements
    
    
    269,519
    
    
    
    592,649
    
    
    
    431,244Interest bearing deposits in banks
    
    
    298,297
    
    
    
    340,090
    
    
    
    288,841Trading account securities
    
    
    998,249
    
    
    
    1,032,745
    
    
    
    1,034,240Loans held for sale
    
    
    286,751
    
    
    
    494,379
    
    
    
    479,853Investment securities
    
    
    4,565,064
    
    
    
    4,500,171
    
    
    
    4,288,974Loans and leases
    
    
    41,191,723
    
    
    
    40,054,338
    
    
    
    39,987,240Allowance for loan and lease losses
    
    
    (720,738
    )
    
    
    (578,442
    )
    
    
    (454,784
    )Net loans and leases
    
    
    40,470,985
    
    
    
    39,475,896
    
    
    
    39,532,456Bank owned life insurance
    
    
    1,353,400
    
    
    
    1,313,281
    
    
    
    1,302,363Premises and equipment
    
    
    527,798
    
    
    
    557,565
    
    
    
    547,380Goodwill
    
    
    3,056,386
    
    
    
    3,059,333
    
    
    
    2,995,961Other intangible assets
    
    
    375,914
    
    
    
    427,970
    
    
    
    443,446Accrued income and other assets
    
    
    1,556,987
    
    
    
    1,486,792
    
    
    
    2,756,788Total Assets
    
    $
    54,660,589
    
    
    $
    54,697,468
    
    
    $
    55,303,927Liabilities and Shareholders EquityLiabilitiesDeposits
    
    $
    37,569,056
    
    
    $
    37,742,921
    
    
    $
    38,404,365Short-term borrowings
    
    
    1,974,368
    
    
    
    2,843,638
    
    
    
    2,227,116Federal Home Loan Bank advances
    
    
    3,483,001
    
    
    
    3,083,555
    
    
    
    2,716,265Other long-term debt
    
    
    2,497,002
    
    
    
    1,937,078
    
    
    
    1,974,387Subordinated notes
    
    
    1,864,728
    
    
    
    1,934,276
    
    
    
    1,919,625Accrued expenses and other liabilities
    
    
    898,528
    
    
    
    1,206,860
    
    
    
    1,812,495Total Liabilities
    
    
    48,286,683
    
    
    
    48,748,328
    
    
    
    49,054,253Shareholders equityPreferred stock  authorized 6,617,808 shares -
8.50% Series A Non-cumulative Perpetual Convertible Preferred
Stock, Par value of $1,000, 569,000 shares issued and outstanding
    
    
    569,000
    
    
    
    
    
    
    
    Common stock -Par value of $0.01 and authorized 1,000,000,000 shares;
issued 366,970,661; 367,000,815 and 366,636,953
shares respectively; outstanding 366,068,762; 366,261,676 and
365,898,439 shares, respectively
    
    
    3,670
    
    
    
    3,670
    
    
    
    3,665Capital surplus
    
    
    5,228,381
    
    
    
    5,237,783
    
    
    
    5,226,556Less 901,899; 739,139 and 738,514
treasury shares at cost, respectively
    
    
    (15,501
    )
    
    
    (14,391
    )
    
    
    (14,447
    )Accumulated other comprehensive loss:Unrealized (losses) on investment securities
    
    
    (207,816
    )
    
    
    (10,011
    )
    
    
    (3,221
    )Unrealized (losses) gains on cash flow
hedging derivatives
    
    
    (13,450
    )
    
    
    4,553
    
    
    
    9,392Pension and other postretirement benefit
cumulative adjustments
    
    
    (45,411
    )
    
    
    (44,153
    )
    
    
    (80,272
    )Retained earnings
    
    
    855,033
    
    
    
    771,689
    
    
    
    1,108,001Total Shareholders Equity
    
    
    6,373,906
    
    
    
    5,949,140
    
    
    
    6,249,674Total Liabilities and Shareholders Equity
    
    $
    54,660,589
    
    
    $
    54,697,468
    
    
    $
    55,303,927
 See notes to unaudited condensed consolidated financial statements
 67




---



##### 



Huntington Bancshares Incorporated
 
 Condensed Consolidated Statements of Income  (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands, except per share amounts)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Interest and fee incomeLoans and leasesTaxable
    
    $
    600,340
    
    
    $
    747,938
    
    
    $
    1,863,556
    
    
    $
    1,675,983Tax-exempt
    
    
    1,388
    
    
    
    2,409
    
    
    
    4,899
    
    
    
    2,994Investment securitiesTaxable
    
    
    55,042
    
    
    
    60,152
    
    
    
    163,500
    
    
    
    164,951Tax-exempt
    
    
    7,497
    
    
    
    7,100
    
    
    
    22,375
    
    
    
    19,721Other
    
    
    21,461
    
    
    
    33,556
    
    
    
    81,484
    
    
    
    64,916Total interest income
    
    
    685,728
    
    
    
    851,155
    
    
    
    2,135,814
    
    
    
    1,928,565Interest expensesDeposits
    
    
    219,086
    
    
    
    320,490
    
    
    
    721,734
    
    
    
    715,321Short-term borrowings
    
    
    7,604
    
    
    
    26,264
    
    
    
    38,545
    
    
    
    69,372Federal Home Loan Bank advances
    
    
    23,435
    
    
    
    34,661
    
    
    
    83,080
    
    
    
    63,180Subordinated notes and other
long-term debt
    
    
    46,967
    
    
    
    60,107
    
    
    
    137,129
    
    
    
    162,113Total interest expense
    
    
    297,092
    
    
    
    441,522
    
    
    
    980,488
    
    
    
    1,009,986Net interest income
    
    
    388,636
    
    
    
    409,633
    
    
    
    1,155,326
    
    
    
    918,579Provision for credit losses
    
    
    125,392
    
    
    
    42,007
    
    
    
    334,855
    
    
    
    131,546Net interest income after
provision for credit losses
    
    
    263,244
    
    
    
    367,626
    
    
    
    820,471
    
    
    
    787,033Service charges on deposit
accounts
    
    
    80,508
    
    
    
    78,107
    
    
    
    232,806
    
    
    
    172,917Trust services
    
    
    30,952
    
    
    
    33,562
    
    
    
    98,169
    
    
    
    86,220Brokerage and insurance income
    
    
    34,309
    
    
    
    28,806
    
    
    
    106,563
    
    
    
    62,087Other service charges and fees
    
    
    23,446
    
    
    
    21,045
    
    
    
    67,429
    
    
    
    49,176Bank owned life insurance income
    
    
    13,318
    
    
    
    14,847
    
    
    
    41,199
    
    
    
    36,602Mortgage banking income
    
    
    10,302
    
    
    
    9,629
    
    
    
    15,741
    
    
    
    26,102Securities losses
    
    
    (73,790
    )
    
    
    (13,152
    )
    
    
    (70,288
    )
    
    
    (18,187
    )Other income
    
    
    48,812
    
    
    
    31,830
    
    
    
    148,420
    
    
    
    91,127Total non-interest income
    
    
    167,857
    
    
    
    204,674
    
    
    
    640,039
    
    
    
    506,044Personnel costs
    
    
    184,827
    
    
    
    202,148
    
    
    
    586,761
    
    
    
    471,978Outside data processing and
other services
    
    
    32,386
    
    
    
    40,600
    
    
    
    96,933
    
    
    
    88,115Net occupancy
    
    
    25,215
    
    
    
    33,334
    
    
    
    85,429
    
    
    
    72,659Equipment
    
    
    22,102
    
    
    
    23,290
    
    
    
    71,636
    
    
    
    58,666Amortization of intangibles
    
    
    19,463
    
    
    
    19,949
    
    
    
    57,707
    
    
    
    24,988Marketing
    
    
    7,049
    
    
    
    13,186
    
    
    
    23,307
    
    
    
    29,868Professional services
    
    
    13,405
    
    
    
    11,273
    
    
    
    36,247
    
    
    
    25,856Telecommunications
    
    
    6,007
    
    
    
    7,286
    
    
    
    19,116
    
    
    
    15,989Printing and supplies
    
    
    4,316
    
    
    
    4,743
    
    
    
    14,695
    
    
    
    11,657Other expense
    
    
    24,226
    
    
    
    29,754
    
    
    
    95,449
    
    
    
    72,514Total non-interest expense
    
    
    338,996
    
    
    
    385,563
    
    
    
    1,087,280
    
    
    
    872,290Income before income taxes
    
    
    92,105
    
    
    
    186,737
    
    
    
    373,230
    
    
    
    420,787Provision for income taxes
    
    
    17,042
    
    
    
    48,535
    
    
    
    69,747
    
    
    
    106,338Net income
    
    $
    75,063
    
    
    $
    138,202
    
    
    $
    303,483
    
    
    $
    314,449Dividends declared on preferred
shares
    
    
    12,091
    
    
    
    
    
    
    
    23,242
    
    
    
    Net income applicable to common
shares
    
    $
    62,972
    
    
    $
    138,202
    
    
    $
    280,241
    
    
    $
    314,449Average common shares  basic
    
    
    366,124
    
    
    
    365,895
    
    
    
    366,188
    
    
    
    279,171Average common shares  diluted
    
    
    367,361
    
    
    
    368,280
    
    
    
    367,268
    
    
    
    282,014Per common shareNet income  basic
    
    $
    0.17
    
    
    $
    0.38
    
    
    $
    0.77
    
    
    $
    1.13Net income  diluted
    
    
    0.17
    
    
    
    0.38
    
    
    
    0.76
    
    
    
    1.12Cash dividends declared
    
    
    0.1325
    
    
    
    0.2650
    
    
    
    0.5300
    
    
    
    0.7950
 See notes to unaudited condensed consolidated financial statements
 68




---



##### 



Huntington Bancshares Incorporated
 
 Condensed Consolidated Statements of Changes in Shareholders Equity  (Unaudited)
 AccumulatedOtherPreferred Stock
    
    
    Common Stock
    
    
    Capital
    
    
    Treasury Stock
    
    
    Comprehensive
    
    
    Retained(in thousands)
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Surplus
    
    
    Shares
    
    
    Amount
    
    
    Loss
    
    
    Earnings
    
    
    TotalNine Months Ended September 30, 2007:Balance, beginning of period
    
    
    
    
    
    $
    
    
    
    
    236,064
    
    
    $
    2,064,764
    
    
    $
    
    
    
    
    (590
    )
    
    $
    (11,141
    )
    
    $
    (55,066
    )
    
    $
    1,015,769
    
    
    $
    3,014,326Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    314,449
    
    
    
    314,449Unrealized net losses on investment securities
arising during the period, net of
reclassification (1)
for net realized gains, net of tax of ($9,497)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,475
    )
    
    
    
    
    
    
    (17,475
    )Unrealized gains on cash flow hedging
derivatives,
net of tax of ($4,101)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,616
    )
    
    
    
    
    
    
    (7,616
    )Amortization included in net periodic benefit
costs:Net actuarial loss, net of tax of ($2,809)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,216
    
    
    
    
    
    
    
    5,216Prior service costs, net of tax of ($161)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    300Transition obligation, net of tax of ($291)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    540
    
    
    
    
    
    
    
    540Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    295,414Assignment of $0.01 par value per share for each
share of Common Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,062,404
    )
    
    
    2,062,404
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash dividends declared ($0.795 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (222,217
    )
    
    
    (222,217
    )Shares issued pursuant to acquisition
    
    
    
    
    
    
    
    
    
    
    129,639
    
    
    
    1,296
    
    
    
    3,131,936
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,133,232Recognition of the fair value of share-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,725
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,725Other share-based compensation activity
    
    
    
    
    
    
    
    
    
    
    934
    
    
    
    9
    
    
    
    17,050
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,059Other (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,441
    
    
    
    (149
    )
    
    
    (3,306
    )
    
    
    
    
    
    
    
    
    
    
    (865
    )Balance, end of period
    
    
    
    
    
    $
    
    
    
    
    366,637
    
    
    $
    3,665
    
    
    $
    5,226,556
    
    
    
    (739
    )
    
    $
    (14,447
    )
    
    $
    (74,101
    )
    
    $
    1,108,001
    
    
    $
    6,249,674Nine Months Ended September 30, 2008:Balance, beginning of period
    
    
    
    
    
    $
    
    
    
    
    367,001
    
    
    $
    3,670
    
    
    $
    5,237,783
    
    
    
    (739
    )
    
    $
    (14,391
    )
    
    $
    (49,611
    )
    
    $
    771,689
    
    
    $
    5,949,140Cumulative effect of change in accounting
principle
for fair value of assets and libilities, net
of tax of ($803)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,491
    
    
    
    1,491Cumulative effect of changing measurement date
provisions for pension and post-retirement
assets
and obligations, net of tax of $4,324
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,834
    )
    
    
    (4,195
    )
    
    
    (8,029
    )Balance, beginning of period  as adjusted
    
    
    
    
    
    
    
    
    
    
    367,001
    
    
    
    3,670
    
    
    
    5,237,783
    
    
    
    (739
    )
    
    
    (14,391
    )
    
    
    (53,445
    )
    
    
    768,985
    
    
    
    5,942,602Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303,483
    
    
    
    303,483Unrealized net losses on investment securities
arising during the period, net of
reclassification(1)for net realized gains, net of tax of
($108,049)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (197,805
    )
    
    
    
    
    
    
    (197,805
    )Unrealized losses on cash flow hedging
derivatives,
net of tax of ($9,696)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,006
    )
    
    
    
    
    
    
    (18,006
    )Amortization included in net periodic benefit
costs:Net actuarial loss, net of tax of ($843)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,565
    
    
    
    
    
    
    
    1,565Prior service costs, net of tax of ($253)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    470
    
    
    
    
    
    
    
    470Transition obligation, net of tax of ($291)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541
    
    
    
    
    
    
    
    541Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,248Issuance of preferred stock
    
    
    569
    
    
    
    569,000
    
    
    
    
    
    
    
    
    
    
    
    (18,866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    550,134Cash dividends declared:Common ($0.53 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193,998
    )
    
    
    (193,998
    )Preferred ($40.847 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,242
    )
    
    
    (23,242
    )Recognition of the fair value of share-based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,544
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,544Other share-based compensation activity
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    
    
    
    
    (674
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (195
    )
    
    
    (869
    )Other(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (406
    )
    
    
    (163
    )
    
    
    (1,110
    )
    
    
    3
    
    
    
    
    
    
    
    (1,513
    )Balance, end of period
    
    
    569
    
    
    $
    569,000
    
    
    
    366,971
    
    
    $
    3,670
    
    
    $
    5,228,381
    
    
    
    (902
    )
    
    $
    (15,501
    )
    
    $
    (266,677
    )
    
    $
    855,033
    
    
    $
    6,373,906
 
 (1)
    
    Reclassification adjustments represent net unrealized gains or losses as of December
31 of the prior year on investment securities that were sold during the current year.
For the nine months ended September 30, 2008 and 2007, the reclassification adjustments were
$45,687, net of tax of ($24,601), and $11,822, net of tax of ($6,365), respectively.(2)
    
    Primarily represents net share activity for amounts held in deferred compensation
plans. See notes to unaudited condensed consolidated financial statements.
 69




---



##### 



Huntington Bancshares Incorporated
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
 Nine Months EndedSeptember 30,(in thousands)
    
    2008
    
    2007Operating activitiesNet income
    
    $
    303,483
    
    
    $
    314,449Adjustments to reconcile net income to net cash provided by
operating activites:Provision for credit losses
    
    
    334,855
    
    
    
    131,546Depreciation and amortization
    
    
    181,253
    
    
    
    80,339Net increase (decrease) in current and deferred income taxes
    
    
    210
    
    
    
    (15,471
    )Net decrease (increase) in trading account securities
    
    
    34,496
    
    
    
    (1,833,142
    )Originations of loans held for sale
    
    
    (2,379,803
    )
    
    
    (2,027,442
    )Principal payments on and proceeds from loans held for sale
    
    
    2,526,903
    
    
    
    1,892,573Other, net
    
    
    (28,801
    )
    
    
    28,148Net cash provided by (used for) operating activities
    
    
    972,596
    
    
    
    (1,429,000
    )Investing activitiesDecrease (increase) in interest bearing deposits in banks
    
    
    5,145
    
    
    
    (129,950
    )Net cash paid in acquisitions
    
    
    
    
    
    
    (48,821
    )Proceeds from:Maturities and calls of investment securities
    
    
    319,625
    
    
    
    345,973Sales of investment securities
    
    
    546,169
    
    
    
    785,702Purchases of investment securities
    
    
    (1,315,393
    )
    
    
    (353,354
    )Proceeds from sales of loans
    
    
    471,362
    
    
    
    108,588Net loan and lease originations, excluding sales
    
    
    (1,803,047
    )
    
    
    (1,199,908
    )Purchases of operating lease assets
    
    
    (198,693
    )
    
    
    (6,365
    )Proceeds from sale of operating lease assets
    
    
    20,383
    
    
    
    25,004Purchases of premises and equipment
    
    
    (44,890
    )
    
    
    (75,991
    )Other, net
    
    
    56,509
    
    
    
    23,497Net cash used for investing activities
    
    
    (1,942,830
    )
    
    
    (525,625
    )Financing activities(Decrease) increase in deposits
    
    
    (178,316
    )
    
    
    501,648(Decrease) increase in short-term borrowings
    
    
    (846,866
    )
    
    
    848,020Proceeds from issuance of subordinated notes
    
    
    
    
    
    
    250,010Maturity/redemption of subordinated notes
    
    
    (76,659
    )
    
    
    (46,660
    )Proceeds from Federal Home Loan Bank advances
    
    
    1,557,114
    
    
    
    2,101,683Maturity/redemption of Federal Home Loan Bank advances
    
    
    (1,158,046
    )
    
    
    (1,110,545
    )Proceeds from issuance of long-term debt
    
    
    887,111
    
    
    
    Maturity of long-term debt
    
    
    (358,730
    )
    
    
    (301,283
    )Net proceeds from issuance of preferred stock
    
    
    550,134
    
    
    
    Dividends paid on preferred stock
    
    
    (11,151
    )
    
    
    Dividends paid on common stock
    
    
    (231,976
    )
    
    
    (193,567
    )Other, net
    
    
    (869
    )
    
    
    17,797Net cash provided by financing activities
    
    
    131,746
    
    
    
    2,067,103(Decrease) increase in cash and cash equivalents
    
    
    (838,488
    )
    
    
    112,478Cash and cash equivalents at beginning of period
    
    
    2,009,246
    
    
    
    1,520,747Cash and cash equivalents at end of period
    
    $
    1,170,758
    
    
    $
    1,633,225Supplemental disclosures:Income taxes paid
    
    $
    69,538
    
    
    $
    176,507Interest paid
    
    
    992,116
    
    
    
    990,828Non-cash activitiesCommon stock dividends accrued, paid in subsequent quarter
    
    
    38,784
    
    
    
    75,921Preferred stock dividends accrued, paid in subsequent quarter
    
    
    12,091
    
    
    
    
 See notes to unaudited condensed consolidated financial statements.
 70




---



##### 



Notes to Unaudited Condensed Consolidated Financial Statements
 Note 1  Basis of Presentation
    Note 2  New Accounting Pronouncements
 FASB Statement No. 157, Fair Value Measurements (Statement No. 157) 
 Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements
That Address Fair Value Measurements for Purposes of Lease Classification or Measurement Under
Statement 13 Effective Date of FASB Statement No. 157
 Determining the Fair Value of a Financial Asset When
the Market for That Asset Is Not Active Fair Value Measurements,
 FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilitie s
(Statement No. 159)
 FSP FIN 39-1, Amendment of FASB Interpretation No. 39 (FSP 39-1) Amendment of FASB Interpretation No. 39, Offsetting of Amounts Related to Certain
Contracts
 71




---



##### 



Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 109, Written Loan
Commitments Recorded at Fair Value Through Earnings (SAB 109) Accounting for
Servicing of Financial Assets Application of Accounting Principles to Loan Commitments
 FASB Statement No. 141 (Revised 2007), Business Combinations (Statement No. 141R)
 FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statement s  a n
amendment of ARB No. 51 (Statement No. 160)
 FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities  an
amendment of FASB Statement No. 133 (Statement No. 161)
 FASB Statement No. 162 The Hierarchy of Generally Accepted Accounting Principles (Statement No.
162)
 FASB Statement No. 163 Accounting for Financial Guarantee Insurance Contractsan interpretation of
FASB Statement No. 60 (Statement No. 163)
 72




---



##### 



Note 3  Restructured Loans
 Franklin Credit Management relationship
    Commercial Loans to Franklin
 Bank Group
    
    
    Participated
    
    
    Previously(in thousands)
    
    Franklin
    
    
    Tribeca
    
    
    Exposure
    
    
    to others
    
    
    charged off
    
    
    TotalVariable rate, term loan (Facility A)
    
    $
    513,335
    
    
    $
    363,252
    
    
    $
    876,587
    
    
    $
    (147,910
    )
    
    $
    
    
    
    $
    728,677Variable rate, subordinated term loan (Facility B)
    
    
    315,764
    
    
    
    96,849
    
    
    
    412,613
    
    
    
    (68,296
    )
    
    
    
    
    
    
    344,317Fixed rate, junior subordinated term loan
(Facility C)
    
    
    125,000
    
    
    
    
    
    
    
    125,000
    
    
    
    (8,224
    )
    
    
    (116,776
    )
    
    
    Line of credit facility
    
    
    949
    
    
    
    
    
    
    
    949
    
    
    
    
    
    
    
    
    
    
    
    949Other variable rate term loans
    
    
    41,243
    
    
    
    
    
    
    
    41,243
    
    
    
    (20,622
    )
    
    
    
    
    
    
    20,621Subtotal
    
    
    996,291
    
    
    
    460,101
    
    
    
    1,456,392
    
    
    $
    (245,052
    )
    
    $
    (116,776
    )
    
    $
    1,094,564Participated to others
    
    
    (151,883
    )
    
    
    (93,169
    )
    
    
    (245,052
    )Total principal owed to Huntington
    
    
    844,408
    
    
    
    366,932
    
    
    
    1,211,340Amounts charged off
    
    
    (116,776
    )
    
    
    
    
    
    
    (116,776
    )Total book value of loans
    
    $
    727,632
    
    
    $
    366,932
    
    
    $
    1,094,564
   Other
  73




---



##### 



Note 4  Investment Securities
  September 30, 2008
    
    December 31, 2007
    
    September 30, 2007Amortized
    
    
    
    
    
    Amortized
    
    
    
    
    
    Amortized(in thousands of dollars)
    
    Cost
    
    Fair Value
    
    Cost
    
    Fair Value
    
    Cost
    
    Fair ValueU.S. Treasury
Under 1 year
    
    $
    1,361
    
    
    $
    1,372
    
    
    $
    299
    
    
    $
    303
    
    
    $
    599
    
    
    $
    6041-5 years
    
    
    253
    
    
    
    255
    
    
    
    250
    
    
    
    253
    
    
    
    250
    
    
    
    2516-10 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Over 10 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total U.S. Treasury
    
    
    1,614
    
    
    
    1,627
    
    
    
    549
    
    
    
    556
    
    
    
    849
    
    
    
    855Federal agenciesMortgage backed securitiesUnder 1 year
    
    
    200
    
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    1,349
    
    
    
    1,3521-5 years
    
    
    16,228
    
    
    
    16,465
    
    
    
    
    
    
    
    
    
    
    
    11,530
    
    
    
    11,6716-10 years
    
    
    9,359
    
    
    
    9,365
    
    
    
    1
    
    
    
    1
    
    
    
    4,502
    
    
    
    4,533Over 10 years
    
    
    1,668,348
    
    
    
    1,666,049
    
    
    
    1,559,387
    
    
    
    1,571,991
    
    
    
    1,409,953
    
    
    
    1,408,323Total mortgage-backed Federal agencies
    
    
    1,694,135
    
    
    
    1,692,079
    
    
    
    1,559,388
    
    
    
    1,571,992
    
    
    
    1,427,334
    
    
    
    1,425,879Other agenciesUnder 1 year
    
    
    
    
    
    
    
    
    
    
    101,367
    
    
    
    101,412
    
    
    
    99,834
    
    
    
    99,8751-5 years
    
    
    562,446
    
    
    
    559,153
    
    
    
    62,121
    
    
    
    64,010
    
    
    
    49,692
    
    
    
    50,4156-10 years
    
    
    
    
    
    
    
    
    
    
    6,707
    
    
    
    6,802
    
    
    
    
    
    
    
    Over 10 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total other Federal agencies
    
    
    562,446
    
    
    
    559,153
    
    
    
    170,195
    
    
    
    172,224
    
    
    
    149,526
    
    
    
    150,290Total Federal agencies
    
    
    2,256,581
    
    
    
    2,251,232
    
    
    
    1,729,583
    
    
    
    1,744,216
    
    
    
    1,576,860
    
    
    
    1,576,169Municipal securitiesUnder 1 year
    
    
    16
    
    
    
    16
    
    
    
    61
    
    
    
    61
    
    
    
    45
    
    
    
    451-5 years
    
    
    24,568
    
    
    
    24,970
    
    
    
    14,814
    
    
    
    15,056
    
    
    
    14,895
    
    
    
    14,9846-10 years
    
    
    227,333
    
    
    
    225,901
    
    
    
    179,423
    
    
    
    181,018
    
    
    
    164,291
    
    
    
    164,071Over 10 years
    
    
    459,412
    
    
    
    440,022
    
    
    
    497,086
    
    
    
    501,191
    
    
    
    501,677
    
    
    
    501,170Total municipal securities
    
    
    711,329
    
    
    
    690,909
    
    
    
    691,384
    
    
    
    697,326
    
    
    
    680,908
    
    
    
    680,270Private label CMOUnder 1 year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1-5 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6-10 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Over 10 years
    
    
    696,558
    
    
    
    611,200
    
    
    
    784,339
    
    
    
    783,047
    
    
    
    700,578
    
    
    
    701,039Total private label CMO
    
    
    696,558
    
    
    
    611,200
    
    
    
    784,339
    
    
    
    783,047
    
    
    
    700,578
    
    
    
    701,039Asset backed securitiesUnder 1 year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1-5 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000
    
    
    
    30,0006-10 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Over 10 years
    
    
    774,310
    
    
    
    565,142
    
    
    
    869,654
    
    
    
    834,489
    
    
    
    893,346
    
    
    
    889,097Total asset backed securities
    
    
    774,310
    
    
    
    565,142
    
    
    
    869,654
    
    
    
    834,489
    
    
    
    923,346
    
    
    
    919,097OtherUnder 1 year
    
    
    1,699
    
    
    
    1,694
    
    
    
    2,750
    
    
    
    2,744
    
    
    
    3,650
    
    
    
    3,6471-5 years
    
    
    6,348
    
    
    
    6,315
    
    
    
    10,399
    
    
    
    10,401
    
    
    
    9,497
    
    
    
    9,4896-10 years
    
    
    798
    
    
    
    785
    
    
    
    446
    
    
    
    452
    
    
    
    446
    
    
    
    443Over 10 years
    
    
    64
    
    
    
    136
    
    
    
    3,606
    
    
    
    4,004
    
    
    
    2,808
    
    
    
    2,858Non-marketable equity securities
    
    
    427,474
    
    
    
    427,474
    
    
    
    414,583
    
    
    
    414,583
    
    
    
    350,080
    
    
    
    350,080Marketable equity securities
    
    
    9,632
    
    
    
    8,550
    
    
    
    8,368
    
    
    
    8,353
    
    
    
    44,903
    
    
    
    45,027Total other
    
    
    446,015
    
    
    
    444,954
    
    
    
    440,152
    
    
    
    440,537
    
    
    
    411,384
    
    
    
    411,544Total investment securities
    
    $
    4,886,407
    
    
    $
    4,565,064
    
    
    $
    4,515,661
    
    
    $
    4,500,171
    
    
    $
    4,293,925
    
    
    $
    4,288,974
 74




---



##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Gross gains on sales of securities
    
    $
    2,764
    
    
    $
    10,317
    
    
    $
    9,365
    
    
    $
    15,274Gross (losses) on sales of securities
    
    
    (1
    )
    
    
    (134
    )
    
    
    (4
    )
    
    
    (1,682
    )Other-than-temporary impairment recorded
    
    
    (76,553
    )
    
    
    (23,335
    )
    
    
    (79,649
    )
    
    
    (31,779
    )Total securities gain (loss)
    
    $
    (73,790
    )
    
    $
    (13,152
    )
    
    $
    (70,288
    )
    
    $
    (18,187
    )
   Alt-A Mortgage Loan Backed Portfolio (in thousands of dollars)
 September 30, 2008Impaired
    
    
    Unimpaired
    
    
    TotalPar value
    
    $
    212,062
    
    
    $
    342,844
    
    
    $
    554,906Book value
    
    $
    134,821
    
    
    $
    338,053
    
    
    $
    472,874Unrealized losses
    
    
    
    
    
    
    (90,405
    )
    
    
    (90,405
    )Fair value
    
    $
    134,821
    
    
    $
    247,648
    
    
    $
    382,469Cumulative OTTI
    
    $
    76,553
    
    
    $
    
    
    
    $
    Weighted average: (1)Fair value
    
    
    64
    %
    
    
    72
    %
    
    
    69
    %Collateral LTV
    
    
    73
    
    
    
    71
    
    
    
    72Expected loss
    
    
    2.4
    
    
    
    0.0
    
    
    
    0.9
 
 (1)
    
    Based on par values.  75




---



##### 



Note 5  Mortgage Servicing Rights
  Accounting for Servicing of Financial Assets  an amendment of FASB Statement No. 140
    Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Fair value, beginning of period
    
    $
    240,024
    
    
    $
    155,420
    
    
    $
    207,894
    
    
    $
    131,104New servicing assets created
    
    
    6,859
    
    
    
    8,497
    
    
    
    31,989
    
    
    
    25,923Servicing assets acquired
    
    
    
    
    
    
    81,450
    
    
    
    
    
    
    
    81,450Change in fair value during the period due to:Time decay (1)
    
    
    (2,232
    )
    
    
    (2,037
    )
    
    
    (5,833
    )
    
    
    (4,236
    )Payoffs (2)
    
    
    (4,002
    )
    
    
    (4,534
    )
    
    
    (14,339
    )
    
    
    (10,422
    )Changes in valuation inputs or assumptions (3)
    
    
    (10,251
    )
    
    
    (9,863
    )
    
    
    10,687
    
    
    
    5,114Fair value, end of period
    
    $
    230,398
    
    
    $
    228,933
    
    
    $
    230,398
    
    
    $
    228,933
 
 (1)
    
    Represents decrease in value due to passage of time, including the impact from
both regularly scheduled loan principal payments and partial loan paydowns.(2)
    
    Represents decrease in value associated with loans that paid off during the period.(3)
    
    Represents change in value resulting primarily from market-driven changes in
interest rates (see Note 12). 76




---



##### 



Decline in fair valuedue to10%
    
    20%adverse
    
    adverse(in thousands)
    
    Actual
    
    change
    
    changeConstant pre-payment rate
    
    
    9.91
    %
    
    $
    (8,726
    )
    
    $
    (16,049
    )Spread over forward interest rate swap rates
    
    
    462
    
    
    
    (4,681
    )
    
    
    (9,362
    )
   Note 6  Goodwill and Other Intangible Assets
  Regional
    
    Dealer
    
    
    
    
    
    Treasury/
    
    Huntington(in thousands)
    
    Banking
    
    Sales
    
    PFCMG
    
    Other
    
    ConsolidatedBalance, January 1, 2008
    
    $
    2,906,155
    
    
    $
    
    
    
    $
    87,517
    
    
    $
    65,661
    
    
    $
    3,059,333Adjustments
    
    
    (16,244
    )
    
    
    
    
    
    
    (721
    )
    
    
    14,018
    
    
    
    (2,947
    )Balance, September 30, 2008
    
    $
    2,889,911
    
    
    $
    
    
    
    $
    86,796
    
    
    $
    79,679
    
    
    $
    3,056,386
  Goodwill and Other Intangible Assets st
 77




---



##### 



Gross
    
    Accumulated
    
    Net(in thousands)
    
    Carrying Amount
    
    Amortization
    
    Carrying ValueSeptember 30, 2008Core deposit intangible
    
    $
    373,300
    
    
    $
    (94,887
    )
    
    $
    278,413Customer relationship
    
    
    104,574
    
    
    
    (14,361
    )
    
    
    90,213Other
    
    
    29,327
    
    
    
    (22,039
    )
    
    
    7,288Total other intangible assets
    
    $
    507,201
    
    
    $
    (131,287
    )
    
    $
    375,914December 31, 2007Core deposit intangible
    
    $
    373,300
    
    
    $
    (46,057
    )
    
    $
    327,243Customer relationship
    
    
    104,574
    
    
    
    (7,055
    )
    
    
    97,519Other
    
    
    23,655
    
    
    
    (20,447
    )
    
    
    3,208Total other intangible assets
    
    $
    501,529
    
    
    $
    (73,559
    )
    
    $
    427,970September 30, 2007Core deposit intangible
    
    $
    373,300
    
    
    $
    (28,644
    )
    
    $
    344,656Customer relationship
    
    
    99,887
    
    
    
    (4,510
    )
    
    
    95,377Other
    
    
    23,655
    
    
    
    (20,242
    )
    
    
    3,413Total other intangible assets
    
    $
    496,842
    
    
    $
    (53,396
    )
    
    $
    443,446
  2008
    
    $
    19,1582009
    
    
    68,3722010
    
    
    60,4552011
    
    
    53,3102012
    
    
    46,0662013
    
    
    40,429
 Note 7  Shareholders Equity
 Issuance of Convertible Preferred Stock
    78




---



##### 



Troubled Asset Relief Program (TARP)
   Share Repurchase Program
   Note 8  Earnings per Share
  79




---



##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(in thousands, except per share amounts)
    
    2008
    
    2007
    
    2008
    
    2007Basic earnings per common shareNet income
    
    $
    75,063
    
    
    $
    138,199
    
    
    $
    303,483
    
    
    $
    314,446Preferred stock dividends
    
    
    (12,091
    )
    
    
    
    
    
    
    (23,242
    )Net income available to common shareholders
    
    $
    62,972
    
    
    $
    138,199
    
    
    $
    280,241
    
    
    $
    314,446Average common shares issued and outstanding
    
    
    366,124
    
    
    
    365,895
    
    
    
    366,188
    
    
    
    279,171Basic earnings per common share
    
    $
    0.17
    
    
    $
    0.38
    
    
    $
    0.77
    
    
    $
    1.13Diluted earnings per common shareNet income available to common shareholders
    
    $
    62,972
    
    
    $
    138,199
    
    
    $
    280,241
    
    
    $
    314,446Effect of assumed preferred stock conversion
    
    
    
    
    
    
    
    
    
    
    Net income applicable to diluted earnings per share
    
    $
    62,972
    
    
    $
    138,199
    
    
    $
    280,241
    
    
    $
    314,446Average common shares issued and outstanding
    
    
    366,124
    
    
    
    365,895
    
    
    
    366,188
    
    
    
    279,171Dilutive potential common shares:Stock options and restricted stock units
    
    
    354
    
    
    
    1,668
    
    
    
    260
    
    
    
    2,211Shares held in deferred compensation plans
    
    
    883
    
    
    
    717
    
    
    
    820
    
    
    
    632Conversion of preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dilutive potential common shares:
    
    
    1,237
    
    
    
    2,385
    
    
    
    1,080
    
    
    
    2,843Total diluted average common shares issued and outstanding
    
    
    367,361
    
    
    
    368,280
    
    
    
    367,268
    
    
    
    282,014Diluted earnings per common share
    
    $
    0.17
    
    
    $
    0.38
    
    
    $
    0.76
    
    
    $
    1.12
   Note 9  Share-based Compensation
    80




---



##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007AssumptionsRisk-free interest rate
    
    
    3.41
    %
    
    
    4.75
    %
    
    
    3.41
    %
    
    
    4.74
    %Expected dividend yield
    
    
    5.26
    
    
    
    5.27
    
    
    
    5.28
    
    
    
    5.26Expected volatility of Huntingtons common stock
    
    
    35.0
    
    
    
    21.1
    
    
    
    34.8
    
    
    
    21.1Expected option term (years)
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0Weighted-average grant date fair value per share
    
    $
    1.54
    
    
    $
    2.80
    
    
    $
    1.54
    
    
    $
    2.80
   Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    Intrinsic(in thousands, except per share amounts)
    
    Options
    
    
    Price
    
    
    Life (Years)
    
    
    ValueOutstanding at January 1, 2008
    
    
    28,065
    
    
    $
    20.57Granted
    
    
    1,872
    
    
    
    7.23Exercised
    
    
    
    
    
    
    Forfeited/expired
    
    
    (2,396
    )
    
    
    23.13Outstanding at September 30, 2008
    
    
    27,541
    
    
    $
    19.43
    
    
    
    4.0
    
    
    $
    1,995Exercisable at September 30, 2008
    
    
    23,806
    
    
    $
    20.27
    
    
    
    3.7
    
    
    $
    
    Weighted-AverageRestricted
    
    
    Grant DateStock
    
    
    Fair Value(in thousands, except per share amounts)
    
    Units
    
    
    Per ShareNonvested at January 1, 2008
    
    
    1,086
    
    
    $
    21.35Granted
    
    
    873
    
    
    
    7.08Vested
    
    
    (52
    )
    
    
    20.75Forfeited
    
    
    (71
    )
    
    
    19.68Nonvested at September 30, 2008
    
    
    1,836
    
    
    $
    14.65
 81




---



##### 



Note 10  Fair Values of Assets and Liabilities
   Net IncreaseAs of
    
    
    to Retained
    
    
    As ofJanuary 1, 2008
    
    
    Earnings
    
    
    January 1, 2008(in thousands)
    
    prior to Adoption
    
    
    upon Adoption
    
    
    after AdoptionMortgage loans held for sale
    
    $
    420,895
    
    
    $
    2,294
    
    
    $
    423,189Tax impact
    
    
    
    
    
    
    (803
    )Cumulative effect adjustment, net of tax
    
    
    
    
    
    $
    1,491
   Level 1
 Level 2
 82




---



##### 



Level 3
   Securities
   Mortgage loans held for sale
  Mortgage servicing rights
  Equity Investments
  Derivatives
  83




---



##### 



Assets and Liabilities measured at fair value on a recurring basis
  Fair Value Measurements at Reporting Date Using
    
    Netting
    
    Balance at(in thousands)
    
    Level 1
    
    Level 2
    
    Level 3
    
    Adjustments(1)
    
    September 30, 2008AssetsTrading account securities
    
    $
    46,755
    
    
    $
    951,494
    
    
    
    
    
    
    
    
    
    
    $
    998,249Investment securities
    
    
    572,259
    
    
    
    2,388,989
    
    
    $
    1,176,342
    
    
    
    
    
    
    
    4,137,590Mortgage loans held for sale
    
    
    
    
    
    
    273,249
    
    
    
    
    
    
    
    
    
    
    
    273,249Mortgage servicing rights
    
    
    
    
    
    
    
    
    
    
    230,398
    
    
    
    
    
    
    
    230,398Derivative assets
    
    
    1,177
    
    
    
    198,490
    
    
    
    2,729
    
    
    $
    (22,404
    )
    
    
    179,992Equity investments
    
    
    
    
    
    
    
    
    
    
    40,032
    
    
    
    
    
    
    
    40,032LiabilitiesDerivative liabilities
    
    
    4,817
    
    
    
    91,811
    
    
    
    423
    
    
    
    (47,639
    )
    
    
    49,412
 
 (1)
    
    Amounts represent the impact of legally enforceable master netting agreements that
allow the Company to settle positive and negative positions and cash collateral held or placed with
the same counterparties.  Level 3 Fair Value MeasurementsThree months ended September 30, 2008Mortgage
    
    Net Interest
    
    Investment
    
    Equity(in thousands)
    
    Servicing Rights
    
    Rate Locks
    
    Securities
    
    investmentsBalance, June 30, 2008
    
    $
    240,024
    
    
    $
    2,005
    
    
    $
    673,739
    
    
    $
    32,200Total gains/losses:Included in earnings
    
    
    (9,207
    )
    
    
    357
    
    
    
    (75,921
    )
    
    
    5,915Included in other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    (81,048
    )Purchases, issuances, and settlements
    
    
    (419
    )
    
    
    
    
    
    
    (26,550
    )
    
    
    1,917Transfers in/out of Level 3
    
    
    
    
    
    
    (56
    )
    
    
    686,122Balance, September 30, 2008
    
    $
    230,398
    
    
    $
    2,306
    
    
    $
    1,176,342
    
    
    $
    40,032The amount of total gains or losses for
the
period included in earnings (or other
comprehensive loss) attributable to the
change in unrealized gains or losses relating
to assets still held at reporting date:
    
    $
    (9,207
    )
    
    $
    301
    
    
    $
    (156,969
    )
    
    $
    5,915
 84




---



##### 



Level 3 Fair Value MeasurementsNine months ended September 30, 2008Mortgage
    
    Net Interest
    
    Investment
    
    Equity(in thousands)
    
    Servicing Rights
    
    Rate Locks
    
    Securities
    
    investmentsBalance, January 1, 2008
    
    $
    207,894
    
    
    $
    (46
    )
    
    $
    834,489
    
    
    $
    41,516Total gains/losses:Included in earnings
    
    
    22,730
    
    
    
    2,610
    
    
    
    (78,252
    )
    
    
    (7,374
    )Included in other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    (259,945
    )Purchases, issuances, and settlements
    
    
    (226
    )
    
    
    
    
    
    
    (104,873
    )
    
    
    5,890Transfers in/out of Level 3
    
    
    
    
    
    
    (258
    )
    
    
    784,923Balance, September 30, 2008
    
    $
    230,398
    
    
    $
    2,306
    
    
    $
    1,176,342
    
    
    $
    40,032The amount of total gains or losses for the
period included in earnings (or other
comprehensive loss) attributable to the
change in unrealized gains or losses relating
to assets still held at reporting date:
    
    $
    22,730
    
    
    $
    2,352
    
    
    $
    (338,197
    )
    
    $
    (1,601
    )
  Level 3 Fair Value MeasurementsThree months ended September 30, 2008Mortgage
    
    Net Interest
    
    Investment
    
    Equity(in thousands)
    
    Servicing Rights
    
    Rate Locks
    
    Securities
    
    InvestmentsClassification of gains and
losses in earnings:Mortgage banking income (loss)
    
    $
    (9,207
    )
    
    $
    357Securities gains (losses)
    
    
    
    
    
    
    
    
    
    $
    (76,554
    )Other income (expense)
    
    
    
    
    
    
    
    
    
    
    633
    
    
    $
    5,915Total
    
    $
    (9,207
    )
    
    $
    357
    
    
    $
    (75,921
    )
    
    $
    5,915
 Level 3 Fair Value MeasurementsNine months ended September 30, 2008Mortgage
    
    Net Interest
    
    Investment
    
    Equity(in thousands)
    
    Servicing Rights
    
    Rate Locks
    
    Securities
    
    InvestmentsClassification of gains and
losses in earnings:Mortgage banking income (loss)
    
    $
    22,730
    
    
    $
    2,610Securities gains (losses)
    
    
    
    
    
    
    
    
    
    $
    (79,650
    )Other income (expense)
    
    
    
    
    
    
    
    
    
    
    1,398
    
    
    $
    (7,374
    )Total
    
    $
    22,730
    
    
    $
    2,610
    
    
    $
    (78,252
    )
    
    $
    (7,374
    )
 Assets and Liabilities measured at fair value on a nonrecurring basis
  Accounting by Creditors for
Impairment of a Loan
 85




---



##### 



Note 11  Benefit Plans
   Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106,
and 132R (Statement No. 158)
  Pension Benefits
    
    Post Retirement BenefitsThree Months Ended
    
    Three Months EndedSeptember 30,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Service cost
    
    $
    5,954
    
    
    $
    5,780
    
    
    $
    420
    
    
    $
    484Interest cost
    
    
    6,761
    
    
    
    6,859
    
    
    
    903
    
    
    
    989Expected return on plan assets
    
    
    (9,786
    )
    
    
    (10,132
    )
    
    
    
    
    
    
    Amortization of transition asset
    
    
    1
    
    
    
    
    
    
    
    276
    
    
    
    276Amortization of prior service cost
    
    
    78
    
    
    
    
    
    
    
    95
    
    
    
    95Settlements
    
    
    450
    
    
    
    323
    
    
    
    
    
    
    
    Recognized net actuarial loss (gain)
    
    
    1,038
    
    
    
    1,729
    
    
    
    (274
    )
    
    
    (64
    )Benefit expense
    
    $
    4,496
    
    
    $
    4,559
    
    
    $
    1,420
    
    
    $
    1,780
 Pension Benefits
    
    Post Retirement BenefitsNine Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2008
    
    2007Service cost
    
    $
    17,862
    
    
    $
    14,670
    
    
    $
    1,259
    
    
    $
    1,233Interest cost
    
    
    20,283
    
    
    
    18,792
    
    
    
    2,709
    
    
    
    2,323Expected return on plan assets
    
    
    (29,358
    )
    
    
    (28,372
    )
    
    
    
    
    
    
    Amortization of transition asset
    
    
    3
    
    
    
    3
    
    
    
    828
    
    
    
    828Amortization of prior service cost
    
    
    236
    
    
    
    1
    
    
    
    284
    
    
    
    284Settlements
    
    
    1,350
    
    
    
    2,323
    
    
    
    
    
    
    
    Recognized net actuarial loss (gain)
    
    
    3,114
    
    
    
    7,960
    
    
    
    (821
    )
    
    
    (267
    )Benefit expense
    
    $
    13,490
    
    
    $
    15,377
    
    
    $
    4,259
    
    
    $
    4,401
  86




---



##### 



Note 12  Derivative Financial Instruments
 Derivatives used in Asset and Liability Management Activities
  Fair Value
    
    Cash Flow(in thousands )
    
    Hedges
    
    Hedges
    
    TotalInstruments associated with:Loans
    
    $
    
    
    
    $
    3,275,000
    
    
    $
    3,275,000Deposits
    
    
    90,000
    
    
    
    150,000
    
    
    
    240,000Federal Home Loan Bank
advances
    
    
    
    
    
    
    445,000
    
    
    
    445,000Subordinated notes
    
    
    675,000
    
    
    
    
    
    
    
    675,000Other long-term debt
    
    
    50,000
    
    
    
    
    
    
    
    50,000Total notional value at
September 30, 2008
    
    $
    815,000
    
    
    $
    3,870,000
    
    
    $
    4,685,000
  Average
    
    
    
    
    
    Weighted-AverageNotional
    
    Maturity
    
    Fair
    
    Rate(in thousands )
    
    Value
    
    (years)
    
    Value
    
    Receive
    
    PayAsset conversion swapsReceive fixed  generic
    
    $
    3,275,000
    
    
    
    1.8
    
    
    $
    (8,723
    )
    
    
    2.97
    %
    
    
    2.78
    %Total asset conversion swaps
    
    
    3,275,000
    
    
    
    1.8
    
    
    
    (8,723
    )
    
    
    2.97
    
    
    
    2.78Liability conversion swapsReceive fixed  generic
    
    
    725,000
    
    
    
    8.1
    
    
    
    46,238
    
    
    
    5.33
    
    
    
    3.04Receive fixed  callable
    
    
    90,000
    
    
    
    6.6
    
    
    
    (16
    )
    
    
    4.93
    
    
    
    2.76Pay fixed  generic
    
    
    595,000
    
    
    
    0.7
    
    
    
    (7,842
    )
    
    
    2.63
    
    
    
    4.97Total liability conversion swaps
    
    
    1,410,000
    
    
    
    4.8
    
    
    
    38,380
    
    
    
    4.17
    
    
    
    3.84Total swap portfolio
    
    
    4,685,000
    
    
    
    2.7
    
    
    
    29,657
    
    
    
    3.33
    %
    
    
    3.10
    %Weighted-AverageStrike RatePurchased CapsInterest rate caps
    
    
    300,000
    
    
    
    0.8
    
    
    
    2
    
    
    5.50 %Total purchased caps
    
    $
    300,000
    
    
    
    0.8
    
    
    $
    2
    
    
    
    5.50 %Purchased FloorsInterest rate floors
    
    
    300,000
    
    
    
    3.4
    
    
    
    2,362
    
    
    
    3.00 %Total purchased floors
    
    $
    300,000
    
    
    
    3.4
    
    
    $
    2,362
    
    
    
    3.00 %
 87




---



##### 



Derivatives Used in Trading Activities
   .
  88




---



##### 



Note 13  Commitments and Contingent Liabilities
 Commitments to extend credit
  September 30,
    
    December 31,
    
    September 30,(in millions)
    
    2008
    
    2007
    
    2007Contract amount represents credit riskCommitments to extend creditCommercial
    
    $
    6,640
    
    
    $
    6,756
    
    
    $
    6,674Consumer
    
    
    4,928
    
    
    
    4,680
    
    
    
    4,673Commercial real estate
    
    
    2,007
    
    
    
    2,565
    
    
    
    2,556Standby letters of credit
    
    
    1,577
    
    
    
    1,549
    
    
    
    1,403
     Commitments to sell loans
  Income Taxes
  89




---



##### 



Litigation
      90




---



##### 



Note 14 Parent Company Financial Statements
  Balance Sheets
    
    September 30,
    
    December 31,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2007ASSETSCash and cash equivalents (1)
    
    $
    279,688
    
    
    $
    153,489
    
    
    $
    240,228Due from The Huntington National Bank
    
    
    30,741
    
    
    
    144,526
    
    
    
    141,864Due from non-bank subsidiaries
    
    
    324,216
    
    
    
    332,517
    
    
    
    303,398Investment in The Huntington National Bank
    
    
    5,552,026
    
    
    
    5,607,872
    
    
    
    5,703,000Investment in non-bank subsidiaries
    
    
    1,141,774
    
    
    
    844,032
    
    
    
    882,493Accrued interest receivable and other assets
    
    
    179,153
    
    
    
    165,416
    
    
    
    140,450Total assets
    
    $
    7,507,598
    
    
    $
    7,247,852
    
    
    $
    7,411,433LIABILITIES AND SHAREHOLDERS EQUITYShort-term borrowings
    
    $
    1,693
    
    
    $
    2,578
    
    
    $
    3,900Long-term borrowings
    
    
    803,699
    
    
    
    902,169
    
    
    
    902,169Dividends payable, accrued expenses, and other liabilities
    
    
    328,300
    
    
    
    393,965
    
    
    
    255,690Total liabilities
    
    
    1,133,692
    
    
    
    1,298,712
    
    
    
    1,161,759Shareholders equity
    
    
    6,373,906
    
    
    
    5,949,140
    
    
    
    6,249,674Total liabilities and shareholders equity
    
    $
    7,507,598
    
    
    $
    7,247,852
    
    
    $
    7,411,433
 
 (1)
    
    Includes restricted cash of $125,000 at September 30, 2008 Three months ended
    
    Nine months endedStatements of Income
    
    September 30,
    
    September 30,(in thousands)
    
    2008
    
    2007
    
    2008
    
    2007IncomeDividends fromThe Huntington National Bank
    
    $
    142,254
    
    
    $
    150,000
    
    
    $
    142,254
    
    
    $
    239,000Non-bank subsidiaries
    
    
    
    
    
    
    29,154
    
    
    
    16,845
    
    
    
    39,259Interest fromThe Huntington National Bank
    
    
    4,094
    
    
    
    3,858
    
    
    
    14,525
    
    
    
    12,236Non-bank subsidiaries
    
    
    3,434
    
    
    
    3,635
    
    
    
    10,366
    
    
    
    10,660Management fees from subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,882Other
    
    
    21,795
    
    
    
    572
    
    
    
    22,393
    
    
    
    723Total income
    
    
    171,577
    
    
    
    187,219
    
    
    
    206,383
    
    
    
    305,760ExpensePersonnel costs
    
    
    5,903
    
    
    
    3,040
    
    
    
    16,892
    
    
    
    11,204Interest on borrowings
    
    
    10,353
    
    
    
    15,053
    
    
    
    33,594
    
    
    
    26,838Other
    
    
    6,721
    
    
    
    1,238
    
    
    
    14,768
    
    
    
    9,079Total expense
    
    
    22,977
    
    
    
    19,331
    
    
    
    65,254
    
    
    
    47,121Income (loss) before income taxes and equity in
undistributed net income of subsidiaries
    
    
    148,600
    
    
    
    167,888
    
    
    
    141,129
    
    
    
    258,639Income taxes
    
    
    (3,196
    )
    
    
    (7,766
    )
    
    
    (16,386
    )
    
    
    (16,698
    )Income before equity in undistributed net income
of subsidiaries
    
    
    151,796
    
    
    
    175,654
    
    
    
    157,515
    
    
    
    275,337Increase (decrease) in undistributed net income of:The Huntington National Bank
    
    
    (92,516
    )
    
    
    (18,807
    )
    
    
    140,404
    
    
    
    47,953Non-bank subsidiaries
    
    
    15,783
    
    
    
    (18,645
    )
    
    
    5,564
    
    
    
    (8,841
    )Net income
    
    $
    75,063
    
    
    $
    138,202
    
    
    $
    303,483
    
    
    $
    314,449
 91




---



##### 



Nine months endedStatements of Cash Flows
    
    September 30,(in thousands)
    
    2008
    
    2007Operating activitiesNet income
    
    $
    303,483
    
    
    $
    314,449Adjustments to reconcile net income to net cash
provided by operating activities:Equity in undistributed net income of subsidiaries
    
    
    (145,968
    )
    
    
    (39,112
    )Depreciation and amortization
    
    
    1,780
    
    
    
    (2,664
    )Change in other, net
    
    
    35,312
    
    
    
    (142,688
    )Net cash provided by operating activities
    
    
    194,607
    
    
    
    129,985Investing activitiesNet cash paid for acquisition
    
    
    
    
    
    
    (313,311
    )Repayments from subsidiaries
    
    
    734,656
    
    
    
    225,209Advances to subsidiaries
    
    
    (1,010,732
    )
    
    
    (245,827
    )Net cash provided by (used in) investing activities
    
    
    (276,076
    )
    
    
    (333,929
    )Financing activitiesProceeds from issuance of long-term borrowings
    
    
    
    
    
    
    250,010Payment of borrowings
    
    
    (98,470
    )
    
    
    (42,577
    )Dividends paid on preferred stock
    
    
    (11,151
    )
    
    
    Dividends paid on common stock
    
    
    (231,976
    )
    
    
    (193,567
    )Proceeds from issuance of preferred stock
    
    
    550,134
    
    
    
    Proceeds from issuance of common stock
    
    
    (869
    )
    
    
    17,582Net cash used for financing activities
    
    
    207,668
    
    
    
    31,448Change in cash and cash equivalents
    
    
    126,199
    
    
    
    (172,496
    )Cash and cash equivalents at beginning of year
    
    
    153,489
    
    
    
    412,724Cash and cash equivalents at end of year
    
    $
    279,688
    
    
    $
    240,228Supplemental disclosure:Interest paid
    
    $
    33,594
    
    
    $
    26,838Dividends in-kind received from The Huntington National Bank
    
    
    124,689
    
    
    
    
 92




---



##### 



Note 15  Segment Reporting
   Regional Banking:
 Auto Finance and Dealer Services (AFDS):
 Private Financial and Capital Markets Group (PFCMG):
 Treasury / Other:
 93




---



##### 



Three Months Ended September 30,Income Statements
    
    Regional
    
    
    
    
    
    
    
    
    
    Treasury/
    
    Huntington(in thousands )
    
    Banking
    
    AFDS
    
    PFCMG
    
    Other
    
    Consolidated2008Net interest income
    
    $
    366,466
    
    
    $
    36,123
    
    
    $
    25,438
    
    
    $
    (39,391
    )
    
    $
    388,636Provision for credit losses
    
    
    (100,319
    )
    
    
    (22,369
    )
    
    
    (2,704
    )
    
    
    
    
    
    
    (125,392
    )Non-interest income
    
    
    140,936
    
    
    
    15,840
    
    
    
    52,124
    
    
    
    (41,043
    )
    
    
    167,857Non-interest expense
    
    
    (220,628
    )
    
    
    (29,811
    )
    
    
    (42,395
    )
    
    
    (46,162
    )
    
    
    (338,996
    )Income taxes
    
    
    (65,259
    )
    
    
    76
    
    
    
    (11,362
    )
    
    
    59,503
    
    
    
    (17,042
    )Operating / reported net income
    
    $
    121,196
    
    
    $
    (141
    )
    
    $
    21,101
    
    
    $
    (67,093
    )
    
    $
    75,0632007Net interest income
    
    $
    351,390
    
    
    $
    34,510
    
    
    $
    23,321
    
    
    $
    412
    
    
    $
    409,633Provision for credit losses
    
    
    (31,398
    )
    
    
    (8,575
    )
    
    
    (2,034
    )
    
    
    
    
    
    
    (42,007
    )Non-interest income
    
    
    135,996
    
    
    
    8,051
    
    
    
    44,461
    
    
    
    16,166
    
    
    
    204,674Non-interest expense
    
    
    (237,964
    )
    
    
    (19,713
    )
    
    
    (45,166
    )
    
    
    (82,720
    )
    
    
    (385,563
    )Income taxes
    
    
    (76,308
    )
    
    
    (4,996
    )
    
    
    (7,204
    )
    
    
    39,973
    
    
    
    (48,535
    )Operating / reported net income
    
    $
    141,716
    
    
    $
    9,277
    
    
    $
    13,378
    
    
    $
    (26,169
    )
    
    $
    138,202
 Nine Months Ended September 30,Income Statements
    
    Regional
    
    
    
    
    
    
    
    
    
    Treasury/
    
    Huntington(in thousands of dollars)
    
    Banking
    
    AFDS
    
    PFCMG
    
    Other
    
    Consolidated2008Net interest income
    
    $
    1,091,329
    
    
    $
    107,638
    
    
    $
    74,694
    
    
    $
    (118,335
    )
    
    $
    1,155,326Provision for credit losses
    
    
    (274,713
    )
    
    
    (46,305
    )
    
    
    (13,837
    )
    
    
    
    
    
    
    (334,855
    )Non-Interest income
    
    
    406,760
    
    
    
    43,585
    
    
    
    141,068
    
    
    
    48,626
    
    
    
    640,039Non-Interest expense
    
    
    (683,879
    )
    
    
    (87,252
    )
    
    
    (135,352
    )
    
    
    (180,797
    )
    
    
    (1,087,280
    )Income taxes
    
    
    (188,824
    )
    
    
    (6,183
    )
    
    
    (23,301
    )
    
    
    148,561
    
    
    
    (69,747
    )Operating / reported net income
    
    $
    350,673
    
    
    $
    11,483
    
    
    $
    43,272
    
    
    $
    (101,945
    )
    
    $
    303,4832007Net interest income
    
    $
    779,983
    
    
    $
    98,484
    
    
    $
    60,528
    
    
    $
    (20,416
    )
    
    $
    918,579Provision for credit losses
    
    
    (108,727
    )
    
    
    (16,623
    )
    
    
    (6,196
    )
    
    
    
    
    
    
    (131,546
    )Non-Interest income
    
    
    322,089
    
    
    
    32,216
    
    
    
    119,024
    
    
    
    32,715
    
    
    
    506,044Non-Interest expense
    
    
    (567,020
    )
    
    
    (57,918
    )
    
    
    (121,882
    )
    
    
    (125,470
    )
    
    
    (872,290
    )Income taxes
    
    
    (149,213
    )
    
    
    (19,657
    )
    
    
    (18,016
    )
    
    
    80,548
    
    
    
    (106,338
    )Operating / reported net income
    
    $
    277,112
    
    
    $
    36,502
    
    
    $
    33,458
    
    
    $
    (32,623
    )
    
    $
    314,449
 Assets at
    
    Deposits atSeptember 30,
    
    December 31,
    
    September 30,
    
    September 30,
    
    December 31,
    
    September 30,(in millions)
    
    2008
    
    2007
    
    2007
    
    2008
    
    2007
    
    2007Regional Banking
    
    $
    34,328
    
    
    $
    34,360
    
    
    $
    34,599
    
    
    $
    33,024
    
    
    $
    32,626
    
    
    $
    32,718AFDS
    
    
    6,342
    
    
    
    5,823
    
    
    
    5,632
    
    
    
    67
    
    
    
    58
    
    
    
    63PFCMG
    
    
    3,080
    
    
    
    2,963
    
    
    
    2,884
    
    
    
    1,553
    
    
    
    1,626
    
    
    
    1,631Treasury / Other
    
    
    10,911
    
    
    
    11,551
    
    
    
    12,189
    
    
    
    2,925
    
    
    
    3,433
    
    
    
    3,992Total
    
    $
    54,661
    
    
    $
    54,697
    
    
    $
    55,304
    
    
    $
    37,569
    
    
    $
    37,743
    
    
    $
    38,404
 94