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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Income***(Unaudited)*                   Three Months Ended Six Months Ended  June 30, June 30,*(in thousands, except per share amounts)* **2008** 2007 **2008** 2007 Interest and fee income                Loans and leases                Taxable **$****604,746**  $466,904  **$****1,263,216**  $928,045 Tax-exempt  **1,775**   114   **3,511**   585 Investment securities                Taxable  **54,563**   49,684   **108,458**   104,799 Tax-exempt  **7,524**   6,528   **14,878**   12,621 Other  **28,067**   19,231   **60,023**   31,360  Total interest income  **696,675**   542,461   **1,450,086**   1,077,410  Interest expenses                Deposits  **227,765**   198,108   **502,648**   394,831 Short-term borrowings  **11,785**   23,271   **30,941**   43,108 Federal Home Loan Bank advances  **25,925**   16,009   **59,645**   28,519 Subordinated notes and other long-term debt  **41,334**   51,682   **90,162**   102,006  Total interest expense  **306,809**   289,070   **683,396**   568,464  Net interest income  **389,866**   253,391   **766,690**   508,946 Provision for credit losses  **120,813**   60,133   **209,463**   89,539  **Net interest income after provision for credit losses**  **269,053**   193,258   **557,227**   419,407  Service charges on deposit accounts  **79,630**   50,017   **152,298**   94,810 Trust services  **33,089**   26,764   **67,217**   52,658 Brokerage and insurance income  **35,694**   17,199   **72,254**   33,281 Other service charges and fees  **23,242**   14,923   **43,983**   28,131 Bank owned life insurance income  **14,131**   10,904   **27,881**   21,755 Mortgage banking income  **12,502**   7,122   **5,439**   16,473 Securities gains (losses)  **2,073**   (5,139)  **3,502**   (5,035)Other income  **36,069**   34,403   **99,608**   59,297  **Total non-interest income**  **236,430**   156,193   **472,182**   301,370  Personnel costs  **199,991**   135,191   **401,934**   269,830 Outside data processing and other services  **30,186**   25,701   **64,547**   47,515 Net occupancy  **26,971**   19,417   **60,214**   39,325 Equipment  **25,740**   17,157   **49,534**   35,376 Amortization of intangibles  **19,327**   2,519   **38,244**   5,039 Marketing  **7,339**   8,986   **16,258**   16,682 Professional services  **13,752**   8,101   **22,842**   14,583 Telecommunications  **6,864**   4,577   **13,109**   8,703 Printing and supplies  **4,757**   3,672   **10,379**   6,914 Other expense  **42,876**   19,334   **71,223**   42,760  **Total non-interest expense**  **377,803**   244,655   **748,284**   486,727  Income before income taxes  **127,680**   104,796   **281,125**   234,050 Provision for income taxes  **26,328**   24,275   **52,705**   57,803  **Net income** **$****101,352**  $80,521  **$****228,420**  $176,247                   Dividends declared on preferred shares  **11,151**   —   **11,151**   —                   Net income applicable to common shares **$****90,201**  $80,521  **$****217,269**  $176,247                   Average common shares — basic  **366,206**   236,032   **366,221**   235,809 Average common shares — diluted  **367,234**   239,008   **387,322**   238,881                  **Per common share**                Net income — basic **$****0.25**  $0.34  **$****0.59**  $0.75 Net income — diluted  **0.25**   0.34   **0.59**   0.74 Cash dividends declared  **0.1325**   0.2650   **0.3975**   0.5300 *See notes to unaudited condensed consolidated financial statements*
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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Changes in Shareholders’ Equity***(Unaudited)*                                                                       Accumulated         Convertible                      Other         Preferred Stock  Common Stock  Capital  Treasury Stock  Comprehensive  Retained    *(in thousands)* Shares  Amount  Shares  Amount  Surplus  Shares  Amount  Loss  Earnings  Total  Six Months Ended June 30, 2007:                                        Balance, beginning of period  —  $—   236,064  $2,064,764  $—   (590) $(11,141) $(55,066) $1,015,769  $3,014,326                                          Comprehensive Income:                                        Net income                                  176,247   176,247 Unrealized net losses on investment securitiesarising during the period, net of reclassification (1)for net realized gains, net of tax of ($30,423)                              (31,497)      (31,497)Unrealized gains on cash flow hedging derivatives,net of tax of $619                              1,150       1,150 Amortization included in net periodic benefit costs:                                        Net actuarial loss, net of tax of ($2,188)                              4,063       4,063 Prior service costs, net of tax of ($108)                              200       200 Transition obligation, net of tax of ($194)                              360       360                                         Total comprehensive income                                      150,523                                         Assignment of $0.01 par value per share for eachshare of Common Stock              (2,062,404)  2,062,404                   — Cash dividends declared ($0.53 per share)                                  (125,216)  (125,216)Recognition of the fair value of share-basedcompensation                  7,816                   7,816 Other share-based compensation activity          881   9   16,852                   16,861 Other (2)                  2,444   (111)  (2,613)          (169)                                          Balance, end of period  —   —   236,945   2,369   2,089,516   (701)  (13,754)  (80,790)  1,066,800   3,064,141                                           **Six Months Ended June 30, 2008:**                                        **Balance, beginning of period**  **—**   **—**   **367,001**   **3,670**   **5,237,783**   **(739****)**  **(14,391****)**  **(49,611****)**  **771,689**   **5,949,140** **Cumulative effect of change in accounting principlefor fair value of assets and libilities, net of tax of ($803)**                                  **1,491**   **1,491** **Cumulative effect of changing measurement dateprovisions for pension and post-retirement assetsand 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**   **5,942,602**                                          **Comprehensive Income:**                                        **Net income**                                  **228,420**   **228,420** **Unrealized net losses on investment securitiesarising during the period, net of reclassification****(1)for net realized gains, net of tax of ($74,479)**                              **(136,297****)**      **(136,297****)****Unrealized losses on cash flow hedging derivatives,net of tax of ($29,668)**                              **(55,097****)**      **(55,097****)****Amortization included in net periodic benefit costs:**                                        **Net actuarial loss, net of tax of ($562)**                              **1,043**       **1,043** **Prior service costs, net of tax of ($169)**                              **313**       **313** **Transition obligation, net of tax of ($194)**                              **361**       **361**                                         **Total comprehensive income**                                      **38,743**                                         **Issuance of preferred stock**  **569**   **569,000**           **(18,151****)**                  **550,849** **Cash dividends declared:**                                        **Common ($0.3975 per share)**                                  **(145,485****)**  **(145,485****)****Preferred ($19.597 per share)**                                  **(11,151****)**  **(11,151****)****Recognition of the fair value of share-basedcompensation**                  **7,194**                   **7,194** **Other share-based compensation activity**          **19**   **—**   **(279****)**              **(154****)**  **(433****)****Other****(2)**                  **(221****)**  **(84****)**  **(833****)**          **(1,054****)**   **Balance, end of period**  **569**  **$****569,000**   **367,020**  **$****3,670**  **$****5,226,326**   **(823****)** **$****(15,224****)** **$****(243,122****)** **$****840,615**  **$****6,381,265**  (1) Reclassification adjustments represent net unrealized gains or losses as of December31 of the prior year on investment securities that were sold during the current year. For the sixmonths ended June 30, 2008 and 2007, the reclassification adjustments were $2,276, net of tax of($1,266), and ($3,273), net of tax of $1,762, respectively. (2) Represents net share activity for amounts held in deferred compensation plans.*See notes to unaudited condensed consolidated financial statements.*
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**Huntington Bancshares Incorporated****Condensed Consolidated Statements of Cash Flows*****(Unaudited)***           **Six Months Ended**   **June 30,** *(in thousands)* **2008**  **2007**  **Operating activities**        Net income **$****228,420**  $176,247 Adjustments to reconcile net income to net cash provided by operating activites:        Provision for credit losses  **209,463**   89,539 Depreciation and amortization  **119,243**   41,280 Net decrease in current and deferred income taxes  **(7,176****)**  (59,837)Net increase in trading account securities  **(263,494****)**  (583,780)Originations of loans held for sale  **(1,835,956****)**  (1,280,343)Principal payments on and proceeds from loans held for sale  **1,911,111**   1,185,067 Other, net  **(81,667****)**  (51,260) **Net cash provided by (used for) operating activities**  **279,944**   (483,087)          **Investing activities**        Increase in interest bearing deposits in banks  **(10,743****)**  (123,345)Proceeds from:        Maturities and calls of investment securities  **242,465**   242,945 Sales of investment securities  **341,988**   550,070 Purchases of investment securities  **(1,087,439****)**  (340,837)Proceeds from sales of loans  **471,362**   108,588 Net loan and lease originations, excluding sales  **(1,569,943****)**  (817,197)Purchases of operating lease assets  **(149,963****)**  (4,994)Proceeds from sale of operating lease assets  **15,791**   23,031 Purchases of premises and equipment  **(31,122****)**  (53,029)Other, net  **39,461**   11,983  **Net cash used for investing activities**  **(1,738,143****)**  (402,785)          **Financing activities**        Increase (decrease) in deposits  **378,758**   (442,428)Decrease (increase) in short-term borrowings  **(513,090****)**  1,184,750 Proceeds from issuance of subordinated notes  **—**   250,010 Maturity/redemption of subordinated notes  **(50,000****)**  — Proceeds from Federal Home Loan Bank advances  **953,894**   850,600 Maturity/redemption of Federal Home Loan Bank advances  **(979,539****)**  (450,023)Proceeds from issuance of long-term debt  **887,111**   — Maturity of long-term debt  **(236,824****)**  (240,099)Dividends paid on common stock  **(183,621****)**  (124,003)Repurchases of common stock  **—**   — Net proceeds from issuance of preferred stock  **550,849**   — Other, net  **(433****)**  12,275  **Net cash provided by financing activities**  **807,105**   1,041,082  **(Decrease) increase in cash and cash equivalents**  **(651,094****)**  155,210 **Cash and cash equivalents at beginning of period**  **2,009,246**   1,520,747  **Cash and cash equivalents at end of period** **$****1,358,152**  $1,675,957  Supplemental disclosures:        Income taxes paid **$****59,881**  $169,822 Interest paid  **702,140**   580,982 Non-cash activities        Common stock dividends accrued, paid in subsequent quarter  **38,626**   48,484 Preferred stock dividends accrued, paid in subsequent quarter  **11,151**   — *See notes to unaudited condensed consolidated financial statements.*
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**Notes to Unaudited Condensed Consolidated Financial Statements****Note 1 – Basis of Presentation**          The accompanying unaudited condensed consolidated financial statements of HuntingtonBancshares Incorporated (Huntington or the Company) reflect all adjustments consisting of normalrecurring accruals, which are, in the opinion of Management, necessary for a fair presentation ofthe consolidated financial position, the results of operations, and cash flows for the periodspresented. These unaudited condensed consolidated financial statements have been preparedaccording to the rules and regulations of the Securities and Exchange Commission (SEC) and,therefore, certain information and footnote disclosures normally included in financial statementsprepared in accordance with accounting principles generally accepted in the United States (GAAP)have been omitted. The Notes to Consolidated Financial Statements appearing in Huntington’s 2007Annual Report on Form 10-K, (2007 Form 10-K), which include descriptions of significant accountingpolicies, as updated by the information contained in this report, should be read in conjunctionwith these interim financial statements.          Certain amounts in the prior-year’s financial statements have been reclassified to conform tothe current period presentation.          For statement of cash flows purposes, cash and cash equivalents are defined as the sum of“Cash and due from banks” and “Federal funds sold and securities purchased under resaleagreements.”**Note 2 – New Accounting Pronouncements****FASB Statement No. 157, Fair Value Measurements (Statement No. 157) –**In September 2006, the FASBissued Statement No. 157. This Statement establishes a common definition for fair value to beapplied to GAAP guidance requiring use of fair value, establishes a framework for measuring fairvalue, and expands disclosure about such fair value measurements. Statement No. 157 is effectivefor fiscal years beginning after November 15, 2007. Huntington adopted Statement No. 157 effectiveJanuary 1, 2008. The financial impact of this pronouncement was not material to Huntington’sconsolidated financial statements (See Condensed Consolidated Statements of Shareholders’ Equityand Note 10).In February 2008, the FASB issued two Staff Positions (FSPs) on Statement No. 157: FSP 157-1,“*Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting PronouncementsThat Address Fair Value Measurements for Purposes of Lease Classification or Measurement UnderStatement 13*,” and FSP 157-2, “*Effective Date of FASB Statement No. 157*.” FSP 157-1 excludes fairvalue measurements related to leases from the disclosure requirements of Statement No. 157. FSP157-2 delays the effective date of Statement No. 157 for all non-recurring fair value measurementsof nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15,2008. Huntington is applying the deferral guidance in FSP 157-2, and accordingly, has not appliedthe non-recurring disclosure to non-financial assets or non-financial liabilities valued at fairvalue on a non-recurring basis.**FASB Statement No. 159,*****The Fair Value Option for Financial Assets and Financial Liabilitie*****s(Statement No. 159)**– In February 2007, the FASB issued Statement No. 159. This Statement permitsentities to choose to measure financial instruments and certain other financial assets andfinancial liabilities at fair value. This Statement is effective for fiscal years beginning afterNovember 15, 2007. Huntington adopted Statement No. 159, effective January 1, 2008. The impact ofthis new pronouncement was not material to Huntington’s consolidated financial statements (SeeCondensed Consolidated Statements of Shareholders’ Equity and Note 10).**FSP FIN 39-1,*****Amendment of FASB Interpretation No. 39*****(FSP 39-1)**– In April 2007, the FASB issuedFSP 39-1, Amendment of FASB Interpretation No. 39, Offsetting of Amounts Related to CertainContracts. FSP 39-1 permits entities to offset fair value amounts recognized for multiplederivative instruments executed with the same counterparty under a master netting agreement.FSP 39-1 clarifies that the fair value amounts recognized for the right to reclaim cash collateral,or the obligation to return cash collateral, arising from the same master netting arrangement,should also be offset against the fair value of the related derivative instruments. The Companyhas historically presented all of its derivative positions and related collateral on a gross basis.Effective January 1, 2008, the Company adopted a net presentation for derivative positions andrelated collateral entered into under master netting agreements pursuant to the guidance in FIN 39and FSP 39-1. The adoption of this guidance resulted in balance sheet reclassifications of certaincash collateral-based short-term investments against the relatedderivative liabilities and certain deposit liability balances against the related fair values ofderivative assets. The effects of these reclassifications will fluctuate based on the fair valuesof the derivative contracts but overall are not expected to have
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 a material impact on either totalassets or total liabilities. The adoption of this presentation change did not have an impact onstockholders’ equity, results of operations, or liquidity.**Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 109,*****Written LoanCommitments Recorded at Fair Value Through Earnings*****(SAB 109)**– In November 2007, the SEC issuedSAB 109. SAB 109 provides the staff’s views on the accounting for written loan commitments recordedat fair value. To make the staff ’s views consistent with Statement No. 156, *Accounting forServicing of Financial Assets*, and Statement No. 159, SAB 109 revises and rescinds portions of SABNo. 105, *Application of Accounting Principles to Loan Commitments*, and requires that the expectednet future cash flows related to the associated servicing of a loan should be included in themeasurement of all written loan commitments that are accounted for at fair value through earnings.The provisions of SAB 109 are applicable to written loan commitments issued or modified in fiscalquarters beginning after December 15, 2007. Huntington adopted SAB 109, effective January 1, 2008.The impact of this new pronouncement was not material to Huntington’s consolidated financialstatements.**FASB Statement No. 141 (Revised 2007),*****Business Combinations (Statement No. 141R)***– Statement No.141R was issued in December 2007. The revised statement requires an acquirer to recognize theassets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at theacquisition date, measured at their fair values as of that date, with limited exceptions specifiedin the Statement. Statement No. 141R requires prospective application for business combinationsconsummated in fiscal years beginning on or after December 15, 2008. Early application isprohibited.**FASB Statement No. 160,*****Noncontrolling Interests in Consolidated Financial Statement*****s – a*****namendment of ARB No. 51 (Statement No. 160)***– Statement No. 160 was issued in December 2007. TheStatement requires that noncontrolling interests in subsidiaries be initially measured at fairvalue and classified as a separate component of equity. The Statement is effective for fiscal yearbeginning on or after December 15, 2008. Earlier adoption is prohibited. The Company is currentlyassessing the impact this Statement will have on its consolidated financial statements.**FASB Statement No. 161,*****Disclosures about Derivative Instruments and Hedging Activities – anamendment of FASB Statement No. 133*****(Statement No. 161)**– The FASB issued Statement No. 161 inMarch 2008. This Statement changes the disclosure requirements for derivative instruments andhedging activities. Entities are required to provide enhanced disclosures about (a) how and why anentity uses derivative instruments, (b) how derivative instruments and related hedged items areaccounted for under Statement 133 and its related interpretations, and (c) how derivativeinstruments and related hedged items affect an entity’s financial position, financial performance,and cash flows. This Statement is effective for financial statements issued for fiscal years andinterim periods beginning after November 15, 2008, with early application encouraged. ThisStatement encourages, but does not require, comparative disclosures for earlier periods at initialadoption. The Company is currently assessing the impact this Statement will have on itsconsolidated financial statements.**FASB Statement No. 162**, ***The Hierarchy of Generally Accepted Accounting Principles (Statement No.162)***– Statement No. 162 identifies the sources of accounting principles and the framework forselecting the principles to be used in the preparation of financial statements of nongovernmentalentities that are presented in conformity with generally accepted accounting principles (GAAP) inthe United States (the GAAP hierarchy). This Statement will be effective 60 days after the SEC’sapproval of the Public Company Accounting Oversight Board’s amendments to AU Section 411. Theimpact of this new Statement will not have an impact on the Company’s consolidated financialstatements.**FASB Statement No. 163**, ***Accounting for Financial Guarantee Insurance Contracts—an interpretation ofFASB Statement No. 60 (Statement No. 163)***– Statement No. 163 requires that an insurance enterpriserecognize a claim liability prior to an event of default (insured event) when there is evidencethat credit deterioration has occurred in an insured financial obligation. This Statement alsoclarifies how Statement No. 60 applies to financial guarantee insurance contracts, including therecognition and measurement to be used to account for premium revenue and claim liabilities. ThisStatement requires expanded disclosures about financial guarantee insurance contracts. ThisStatement is effective for financial statements issued for fiscal years and interim periodsbeginning after December 15, 2008. The adoption of this Statement will not have an impact on theCompany’s consolidated financial statements.**Note 3 – Restructured Loans*****Franklin Credit Management relationship***          Franklin is a specialty consumer finance company primarily engaged in the servicing andresolution of performing, reperforming, and nonperforming residential mortgage loans. Franklin’sportfolio consists of loans secured by 1-4 family residential real estate that generally falloutside the underwriting standards of the Federal National Mortgage
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Association (FNMA or FannieMae) and Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) and involve elevated creditrisk as a result of the nature or absence of income documentation, limited credit histories, andhigher levels of consumer debt or past credit difficulties. Franklin purchased these loanportfolios at a discount to the unpaid principal balance and originated loans with interest ratesand fees calculated to provide a rate of return adjusted to reflect the elevated credit riskinherent in these types of loans. Franklin originated nonprime loans through its wholly ownedsubsidiary, Tribeca Lending Corp., and has generally held for investment the loans acquired and asignificant portion of the loans originated.          Loans to Franklin are funded by a bank group, of which Huntington is the lead bank and largestparticipant. The loans participated to other banks have no recourse to Huntington. The term debtexposure is secured by over 30,000 individual first- and second-priority lien residentialmortgages. In addition, pursuant to an exclusive lockbox arrangement, Huntington receives allpayments made to Franklin on these individual mortgages.          The following table details Huntington’s loan relationship with Franklin as of June 30, 2008:**Commercial Loans to Franklin**                               **Bank Group**  **Participated**    *(in thousands)* **Franklin**  **Tribeca**  **Exposure**  **to others**  **Total** Variable rate, term loan (Facility A) $541,521  $386,069  $927,590  $(166,409) $761,181 Variable rate, subordinated term loan (Facility B)  318,764   97,949   416,713   (69,300)  347,413 Fixed rate, junior subordinated term loan(Facility C)  125,000   —   125,000   (8,224)  116,776 Line of credit facility  853   —   853   —   853 Other variable rate term loans  41,929   —   41,929   (20,964)  20,965                 Subtotal  1,028,067   484,018   1,512,085  $(264,897) $1,247,188                     Participated to others  (166,496)  (98,401)  (264,897)                          Total principal owed to Huntington  861,571   385,617   1,247,188         Amounts charged off  (116,776)  —   (116,776)                          Total book value of loans $744,795  $385,617  $1,130,412                                     Included in the allowance for loan and lease losses was an allowance of $115.3 millionassociated with the Franklin relationship. The adequacy of this reserve is determined using thesame allowance for loan and lease losses (ALLL) methodology for non-Franklin-related loans,including estimates of probability-of-default for each of Franklin’s three portfolios of loans. Assuch, it is management’s opinion that the Franklin-related allowance was adequate based on ourestimate at the end of the quarter of probable losses inherent in that portfolio. However, eventscurrently unforeseen could result in changes to the estimate of probable losses.          The Bank has committed to a plan to reduce its exposure to Franklin to its legal lending limitby September 30, 2008. Management anticipates that it can achieve this plan either by the sale ofloans to third parties, or by the transfer of these balances to a subsidiary of the holdingcompany.          On July 30, 2008, The Housing and Economic Recovery Act of 2008 was signed into law. Thislegislation is designed to reduce the growing number of housing foreclosures, assure mortgagefinance giants Fannie Mae and Freddie Mac continued access to capital and liquidity and provide taxincentives primarily for homeownership and affordablehousing. Huntington has not yet quantified what impact, if any, that the legislation mighthave on its financial condition or results of operations, including any impact to the allowance forloan losses associated with Franklin.***Other***          From time to time, as part of our loss mitigation process, loans may be renegotiated in atroubled debt restructuring when we determine that greater economic value will ultimately berecovered under the new terms than through foreclosure, liquidation or bankruptcy. We may considerthe borrower’s payment status and history, borrower’s ability to pay upon a rate reset on anadjustable rate mortgage, size of the payment increase upon a rate reset, period of time remainingprior to the rate reset and other relevant factors in determining whether a borrower isexperiencing financial difficulty. These restructurings generally occur within the residentialmortgage and home equity loan portfolios and are not material in any period presented.
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**Note 4– Investment Securities**     Listed below are the contractual maturities (under 1 year, 1-5 years, 6-10 years, and over 10years) of investmentsecurities at June 30, 2008, December 31, 2007, and June 30, 2007:                           **June 30, 2008** December 31, 2007 June 30, 2007  **Amortized**     Amortized     Amortized  *(in thousands of dollars)* **Cost** **Fair Value** Cost Fair Value Cost Fair Value U.S. Treasury                        Under 1 year **$****349**  **$****355**  $299  $303  $200  $201 1-5 years  **—**   **—**   250   253   548   546 6-10 years  **—**   **—**   —   —   —   — Over 10 years  **—**   **—**   —   —   —   —  **Total U.S. Treasury**  **349**   **355**   **549**   **556**   **748**   **747**  Federal agencies                        Mortgage backed securities                        Under 1 year  **600**   **604**   —   —   2,896   2,888 1-5 years  **13,948**   **14,096**   —   —   11,110   11,105 6-10 years  **9,812**   **9,784**   1   1   3,501   3,476 Over 10 years  **1,907,774**   **1,906,654**   1,559,387   1,571,991   1,181,589   1,176,050  **Total mortgage-backed Federal agencies**  **1,932,134**   **1,931,138**   **1,559,388**   **1,571,992**   **1,199,096**   **1,193,519**  Other agencies                        Under 1 year  **—**   **—**   101,367   101,412   99,751   99,531 1-5 years  **352,425**   **348,964**   62,121   64,010   49,668   49,357 6-10 years  **—**   **—**   6,707   6,802   —   — Over 10 years  **—**   **—**   —   —   —   —  **Total other Federal agencies**  **352,425**   **348,964**   **170,195**   **172,224**   **149,419**   **148,888**  **Total Federal agencies**  **2,284,559**   **2,280,102**   **1,729,583**   **1,744,216**   **1,348,515**   **1,342,407**  Municipal securities                        Under 1 year  **16**   **16**   61   61   45   45 1-5 years  **18,903**   **19,187**   14,814   15,056   9,650   9,541 6-10 years  **219,369**   **218,709**   179,423   181,018   168,481   165,195 Over 10 years  **475,112**   **470,457**   497,086   501,191   503,199   496,378  **Total municipal securities**  **713,400**   **708,369**   **691,384**   **697,326**   **681,375**   **671,159**  Private label CMO                        Under 1 year  **—**   **—**   —   —   —   — 1-5 years  **—**   **—**   —   —   —   — 6-10 years  **—**   **—**   —   —   —   — Over 10 years  **725,896**   **686,122**   784,339   783,047   727,026   723,515  **Total private label CMO**  **725,896**   **686,122**   **784,339**   **783,047**   **727,026**   **723,515**  Asset backed securities                        Under 1 year  **—**   **—**   —   —   —   — 1-5 years  **—**   **—**   —   —   30,000   30,000 6-10 years  **—**   **—**   —   —   —   — Over 10 years  **847,443**   **673,739**   869,654   834,489   933,778   926,599  **Total asset backed securities**  **847,443**   **673,739**   **869,654**   **834,489**   **963,778**   **956,599**  Other                        Under 1 year  **1,700**   **1,703**   2,750   2,744   5,600   5,594 1-5 years  **6,200**   **6,145**   10,399   10,401   2,747   2,736 6-10 years  **698**   **686**   446   452   844   833 Over 10 years  **164**   **214**   3,606   4,004   44   86 Non-marketable equity securities  **424,271**   **424,271**   414,583   414,583   152,071   152,071 Marketable equity securities  **9,860**   **6,569**   8,368   8,353   7,053   7,435  **Total other**  **442,893**   **439,588**   **440,152**   **440,537**   **168,359**   **168,755**  **Total investment securities** **$****5,014,540**  **$****4,788,275**  **$****4,515,661**  **$****4,500,171**  **$****3,889,801**  **$****3,863,182**  
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          Other securities included Federal Home Loan Bank and Federal Reserve Bank stock, corporatedebt, and marketable equity securities.          For the three months ended June 30, 2008, gross gains from sales of securities totaled $2.0million. For the three months ended June 30, 2008 and 2007 gross losses totaled less than $0.1million and $5.1 million, respectively. For the six months ended June 30, 2008 and 2007, grossgains from sales of securities totaled $6.6 million and $5.0 million, respectively and gross lossestotaled less than $0.1 million and $10.0 million, respectively. For the six month periods endedJune 30, 2008 and 2007, Huntington also recognized an additional $3.1 million and $8.4 million,respectively, of losses relating to securities that were identified as other-than-temporarilyimpaired. These securities, included in the asset-backed securities portfolio, had a total carryingvalue of $2.6 million at June 30, 2008.          As of June 30, 2008, Management has evaluated all other investment securities with unrealizedlosses and all non-marketable securities for impairment. The unrealized losses are the result ofwider liquidity spreads on asset backed securities and, additionally, increased market volatilityon non-agency mortgage and asset backed securities that are backed by certain mortgage loans. Thefair values of these assets have been impacted by various market conditions. Huntington hasreviewed its asset backed portfolio with an independent party and does not believe there has beenan adverse change in the estimated future cash flows that are expected to be received from thesesecurities. In addition, the expected average lives of the asset backed securities backed bytrust preferred securities have extended, due to changes in the expectations of when the underlyingsecurities would be repaid. The contractual terms and/or cash flows of the investments do notpermit the issuer to settle the securities at a price less than the amortized cost. Huntington hasthe intent and ability to hold these investment securities until the fair value is recovered, whichmay be maturity, and therefore, does not consider them to be other-than-temporarily impaired atJune 30, 2008.**Note 5 – Loan Servicing Rights*****Residential Mortgage Loans***          For the three months ended June 30, 2008 and 2007, Huntington sold $1.2 billion and $410.4million of residential mortgage loans with servicing rights retained, resulting in a net pre-taxgain of $12.3 million and $6.2 million, respectively. During the first six months of 2008 and2007, sales of residential mortgage loans with servicing rights retained totaled $1.9 billion and$909.8 million, respectively, resulting in a net pre-tax gain of $16.0 million and 10.8 million,respectively.          A mortgage servicing right (MSR) is established only when the servicing is contractuallyseparated from the underlying mortgage loans by sale or securitization of the loans with servicingrights retained. MSRs are accounted for under the fair value provisions of FASB Statement No. 156,*Accounting for Servicing of Financial Assets – an amendment of FASB Statement No. 140*.          At initial recognition, the MSR asset is established at its fair value using assumptions thatare consistent with assumptions used to estimate the fair value of the total MSR portfolio.Subsequent to initial capitalization, MSR assets are carried at fair value and are included inaccrued income and other assets. Any increase or decrease in fair value during the period isrecorded as an increase or decrease in mortgage banking income, which is reflected in non-interestincome in the consolidated statements of income.          In the second quarter of 2008, Huntington refined its MSR valuation to incorporate marketimplied forward interest rates to estimate the future direction of mortgage and discount rates. Theforward rates utilized are derived from the current yield curve for U.S. dollar interest rate swapsand are consistent with pricing of capital markets instruments. In prior periods, the MSR valuationmodel assumed that interest rates remained constant over the life of the servicing asset cashflows. The impact of this change was not material to the valuation of the MSR asset.
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          The following table is a summary of the changes in MSR fair value during the three and sixmonths ended June 30, 2008 and 2007:                   Three Months Ended Six Months Ended  June 30, June 30,*(in thousands)* **2008** 2007 **2008** 2007 Fair value, beginning of period **$****191,806**  $134,845  **$****207,894**  $131,104 New servicing assets created  **16,211**   8,990   **25,130**   17,426 Change in fair value during the period due to:                Time decay (1)  **(1,936****)**  (1,123)  **(3,601****)**  (2,199)Payoffs (2)  **(5,088****)**  (3,326)  **(10,337****)**  (5,888)Changes in valuation inputs or assumptions (3)  **39,031**   16,034   **20,938**   14,977  **Fair value, end of period** **$****240,024**  $155,420  **$****240,024**  $155,420  (1) Represents decrease in value due to passage of time, including the impact from bothregularly 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 ininterest rates (see Note 12).          MSRs do not trade in an active, open market with readily observable prices. While sales ofMSRs occur, the precise terms and conditions are typically not readily available. Therefore, thefair value of MSRs is estimated using a discounted future cash flow model. The model considersportfolio characteristics, contractually specified servicing fees and assumptions related toprepayments, delinquency rates, late charges, other ancillary revenues, costs to service, and othereconomic factors. Changes in the assumptions used may have a significant impact on the valuationof MSRs.          A summary of key assumptions and the sensitivity of the MSR value at June 30, 2008 to changesin these assumptions follows:                   Decline in fair value      due to      10% 20%      adverse adverse*(in thousands)* Actual change change Constant pre-payment rate  9.44% $(8,129) $(14,777)Spread over forward interest rate swap rates  457   (4,913)  (9,826)          MSR values are very sensitive to movements in interest rates as expected future net servicingincome depends on the projected outstanding principal balances of the underlying loans, which canbe greatly impacted by the level of prepayments. The Company hedges against changes in MSR fairvalue attributable to changes in interest rates through a combination of derivative instruments andtrading securities.          Servicing fees, net of amortization of capitalized servicing assets, included in mortgagebanking income amounted to $4.1 million and $2.5 million for the three months ended June 30, 2008and 2007, respectively. For the respective six month periods, the fees were $8.1 million and $5.7million.**Note 6 – Goodwill and Other Intangible Assets**          Goodwill by line of business as of June 30, 2008, was as follows:                       Regional Dealer     Treasury/ Huntington*(in thousands)* Banking Sales PFCMG Other Consolidated Balance, January 1, 2008 $2,906,155  **$****—**  $87,517  $65,661  $3,059,333 Adjustments  (16,175)  **—**   —   13,533   (2,642) Balance, June 30, 2008 **$****2,889,980**  **$****—**  **$****87,517**  **$****79,194**  **$****3,056,691**            The change in goodwill for the six months ended June 30, 2008, primarily related to purchaseaccounting adjustments of acquired bank branches, operating facilities and other contingentobligations primarily from the Sky
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Financial acquisition made on July 1, 2007. Huntington does notexpect a material amount of goodwill from mergers in 2007 to be deductible for tax purposes.          In accordance with FASB Statement No. 142, *Goodwill and Other Intangible Assets*(Statement No.142), goodwill is not amortized, but is evaluated for impairment on an annual basis at October1st of each year or whenever events or changes in circumstances indicate that thecarrying value may not be recoverable.          Due to the adverse changes in the business climate in which the Company operates, goodwillimpairment tests were performed as of June 30, 2008 relating to the carrying value of goodwill ofour reporting units, in accordance with Statement No. 142. The goodwill impairment testingindicated that goodwill was not impaired at June 30, 2008.          At June 30, 2008, December 31, 2007 and June 30, 2007, Huntington’s other intangible assetsconsisted of the following:               **Gross** **Accumulated** **Net***(in thousands)* **Carrying Amount** **Amortization** **Carrying Value****June 30, 2008**            Core deposit intangible $373,300  $(78,610) $294,690 Customer relationship  104,574   (11,926)  92,648 Other  29,177   (21,265)  7,912  Total other intangible assets $507,051  $(111,801) $395,250  **December 31, 2007**            Core deposit intangible $373,300  $(46,057) $327,243 Customer relationship  104,574   (7,055)  97,519 Other  23,655   (20,447)  3,208  Total other intangible assets $501,529  $(73,559) $427,970  **June 30, 2007**            Core deposit intangible $45,000  $(11,230) $33,770 Customer relationship  19,437   (2,178)  17,259 Other  23,655   (20,038)  3,617  Total other intangible assets $88,092  $(33,446) $54,646            The estimated amortization expense of other intangible assets for the remainder of 2008 andthe next five years are as follows:     2008 $38,110 2009  67,994 2010  60,224 2011  53,227 2012  46,093 2013  40,482 
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**Note 7– Shareholders’ Equity****Issuance of Convertible Preferred Stock**          On April 22, 2008, Huntington completed the public offering of 500,000 shares of 8.50% SeriesA Non-Cumulative Perpetual Convertible Preferred Stock (Series A Preferred Stock) with aliquidation preference of $1,000 per share, resulting in an aggregate liquidation preference of$500 million. In connection with the offering, Huntington granted the underwriters an optionexercisable for 30 days after the date of the offering, to purchase, from time to time, in whole orin part, up to an aggregate of 75,000 shares of Preferred Stock to the extent the underwriters sellmore than 500,000 shares of Preferred Stock in the offering. On May 1, 2008, the underwritersexercised this option and purchased an additional 69,000 shares of Preferred Stock in the offering.          On May 27, 2008, the board of directors declared a quarterly cash dividend on the Series APreferred Stock of $19.597 per share. This amount was pro-rated over the initial dividend period asfurther set forth in the Articles Supplementary classifying the preferred stock. The dividend ispayable July 15, 2008, to shareholders of record on July 1, 2008. On July 16, 2008, the board ofdirectors declared a quarterly cash dividend on the Preferred Stock of $21.25 per share. Thedividend is payable October 15, 2008, to shareholders of record on October 1, 2008.          Each share of the Series A Preferred Stock is non-voting and may be convertible at any time,at the option of the holder, into 83.6680 shares of common stock of Huntington, which represents anapproximate initial conversion price of $11.95 per share of common stock (for a total ofapproximately 47.6 million shares at June 30, 2008). The conversion rate and conversion price willbe subject to adjustments in certain circumstances. On or after April 15, 2013, at the option ofHuntington, the Series A Preferred Stock will be subject to mandatory conversion into Huntington’scommon stock at the prevailing conversion rate, if the closing price of Huntington’s common stockexceeds 130% of the then applicable conversion price for 20 trading days during any 30 consecutivetrading day period.***Share Repurchase Program:***          On April 20, 2006, the Company announced that its board of directors authorized a new programfor the repurchase of up to 15 million shares (the 2006 Repurchase Program). The Company announcedits expectation to repurchase the shares from time to time in the open market or through privatelynegotiated transactions depending on market conditions.          Huntington did not repurchase any shares under the 2006 Repurchase Program for the threemonths ended June 30, 2008. At the end of the period, the remaining 3,850,000 shares may bepurchased under the 2006 Repurchase Program.**Note 8– Earnings per Share**          Basic earnings per share is the amount of earnings available to each share of common stockoutstanding during the reporting period. Diluted earnings per share is the amount of earningsavailable to each share of common stock outstanding during the reporting period adjusted to includethe effect of potentially dilutive common shares. Potentially dilutive common shares includeincremental shares issued for stock options, restricted stock units, distributions from deferredcompensation plans, and the conversion of the Company’s convertible preferred stock. Potentiallydilutive common shares are excluded from the computation of diluted earnings per share in periodsin which the effect would be antidilutive. For diluted earnings per share, net income available tocommon shares can be affected by the conversion of the Company’s convertible preferred stock.Where the effect of this conversion would be dilutive, net income available to common shareholdersis adjusted by the associated preferred dividends. The calculation of basic and diluted earningsper share for the three and six months ended June 30, 2008 and 2007, was as follows:
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                   Three Months Ended Six Months Ended  June 30, June 30,*(in thousands, except per share amounts)* **2008** 2007 **2008** 2007   **Basic earnings per common share**                Net income **$****101,352**  $80,521  **$****228,420**  $176,247 Preferred stock dividends  **(11,151****)**      **(11,151****)**       Net income available to common shareholders **$****90,201**  $80,521  **$****217,269**  $176,247 Average common shares issued and outstanding  **366,206**   236,032   **366,221**   235,809 **Basic earnings per common share** **$****0.25**  $0.34  **$****0.59**  $0.75  **Diluted earnings per common share**                Net income available to common shareholders **$****90,212**  $80,521  **$****217,280**  $176,247 Effect of assumed preferred stock conversion  **—**       **11,151**        Net income applicable to diluted earnings per share **$****90,212**  $80,521  **$****228,431**  $176,247 Average common shares issued and outstanding  **366,206**   236,032   **366,221**   235,809 Dilutive potential common shares:                Stock options and restricted stock units  **221**   2,387   **212**   2,483 Shares held in deferred compensation plans  **807**   589   **788**   589 Conversion of preferred stock  **—**   —   **20,101**   —    Dilutive potential common shares:  **1,028**   2,976   **21,101**   3,072    Total diluted average common shares issued and outstanding  **367,234**   239,008   **387,322**   238,881 **Diluted earnings per common share** **$****0.25**  $0.34  **$****0.59**  $0.74           For the three months ended June 30, 2008, 39.7 million average dilutive potential commonshares associated with the convertible preferred stock issued in April of 2008 were excluded fromthe dilutive potential common shares because the result would have been antidilutive under the“if-converted” method. Options to purchase 26.4 million shares during the three months and sixmonths ended June 30, 2008 and 9.4 million shares during the three month and six month periodsended June 30, 2007, respectively, were outstanding but were not included in the computation ofdiluted earnings per share because the effect would be antidilutive. The weighted average exerciseprice for these options was $20.35 for the three months and six months ended June 30, 2008 and$24.60 and $24.61 per share for the three months and six months ended June 30, 2007.          With the issuance of the Series A Convertible Preferred Stock (as described in Note 7),Huntington assumed a diluted conversion impact of approximately 47.6 million additional shares ofcommon stock, subject to adjustments in certain circumstances, including a proration of the impactfor the second quarter of 2008. The additional shares impact diluted earnings per share, subjectto the antidilution provisions under the “if-converted” method, on a weighted-average basisstarting in the second quarter of 2008.**Note 9– Share-based Compensation**          Huntington sponsors nonqualified and incentive share-based compensation plans. These plansprovide for the granting of stock options and other awards to officers, directors, and otheremployees. Stock options are granted at the market price on the date of the grant. Options vestratably over three years or when other conditions are met. Options granted prior to May 2004 have amaximum term of ten years. All options granted after May 2004 have a maximum term of seven years.          Huntington also grants restricted stock units under the 2004 Stock and Long-Term IncentivePlan. Restricted stock units are issued at no cost to the recipient, and can be settled only inshares at the end of the vesting period, subject to certain service restrictions. The fair valueof the restricted stock unit awards was based on the closing market price of the Company’s commonstock on the grant date.          Huntington uses the Black-Scholes option-pricing model to value share-based compensationexpense. The estimated fair value of options is amortized over the options’ vesting periods and isrecognized in personnel costs in the consolidated statements of income. Forfeitures are estimatedat the date of grant based on historical rates and reduce the compensation expense recognized. Therisk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant.Expected volatility is based on the historical volatility of Huntington’s stock. The expected termof options granted is derived from historical data on employee exercises. The expected dividendyield is based on the dividend rate
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and stock price on the date of the grant. The following tableillustrates the weighted-average assumptions used in the option-pricing model for options grantedin each of the periods presented.                   Three Months Ended Six Months Ended  June 30, June 30,  **2008** 2007 **2008** 2007   **Assumptions**                Risk-free interest rate  **2.98**%  4.57 %  **3.12**%  4.57 Expected dividend yield  **5.11**   4.45   **6.82**   4.45 Expected volatility of Huntington’s common stock  **27.5**   21.1   **23.7**   21.1 Expected option term (years)  **6.0**   6.0   **6.0**   6.0                  **Weighted-average grant date fair value per share** **$****1.71**  $3.75  $1.21  $3.75           Total share-based compensation expense for the three months ended June 30, 2008 and 2007 was$3.5 million and $3.9 million, respectively. For the six month periods ended June 30, 2008 and2007, share-based compensation expense was $7.2 million and $7.8 million, respectively. Huntingtonalso recognized $1.2 million and $1.4 million, respectively, in tax benefits for each of thethree-months ended June 30, 2008 and 2007, related to share-based compensation. The tax benefitsrecognized related to share-based compensation for the six month periods ended June 30, 2008 and2007 were $2.5 million and $2.7 million, respectively.                           Weighted-          Weighted-  Average          Average  Remaining  Aggregate       Exercise  Contractual  Intrinsic *(in thousands, except per share amounts)* Options  Price  Life *(Years)*  Value  Outstanding at January 1, 2008  28,065  $20.57         Granted  27   11.99         Exercised  —   —         Forfeited/expired  (1,659)  23.94          **Outstanding at June 30, 2008**  **26,433**  **$****20.35**   **4.1**  **$****—**  **Exercisable at June 30, 2008**  **22,765**  **$****20.10**   **3.9**  **$****—**            Huntington’s stock option activity and related information for the six months ended June 30,2008, was as follows:          The aggregate intrinsic value represents the amount by which the fair value of underlyingstock exceeds the option exercise price. The total intrinsic value of stock options exercisedduring the six months ended June 30, 2007, was $4.1 million. There were no exercises of stockoptions in the first six months of 2008.          Cash received from the exercise of options for the three and six months ended June 30, 2007was $10.7 million and $14.6 million respectively. The estimated tax benefit realized for the taxdeductions from option exercises totaled $0.9 million and $1.8 million for the same periods.          The following table summarizes the status of Huntington’s restricted stock units as of June30, 2008 and activity for the six months ended June 30, 2008:               Weighted-       Average   Restricted  Grant Date   Stock  Fair Value *(in thousands, except per share amounts)* Units  Per Share  Nonvested at January 1, 2008  **1,086**  **$****21.35** Granted  **5**   **11.99** Vested  **(19****)**  **21.39** Forfeited  **(50****)**  **21.05**  **Nonvested at June 30, 2008**  **1,022**  **$****21.32**  
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          The weighted-average grant date fair value of nonvested shares granted for the six monthsended June 30, 2008 and 2007, were $11.99 and $23.62, respectively. The total fair value of awardsvested during each of the six months ended June 30, 2008 and 2007 was $0.1 million. As of June 30,2008, the total unrecognized compensation cost related to nonvested awards was $10.8 million with aweighted-average remaining expense recognition period of 1.7 years.          Of the 33.9 million shares of common stock authorized for issuance under the plans at June 30,2008, 26.4 million were outstanding and 6.5 million were available for future grants. Huntingtonissues shares to fulfill stock option exercises and restricted stock units from availableauthorized shares. At June 30, 2008, the Company believes there are adequate authorized shares tosatisfy anticipated stock option exercises in 2008.**Note10 – Fair Values of Assets and Liabilities**          As discussed in Note 2, “New Accounting Pronouncements”, Huntington adopted fair valueaccounting standards Statement No. 157 and Statement No. 159 effective January 1, 2008. Huntingtonelected to apply the provisions of Statement No. 159, the fair value option, for mortgage loansoriginated with the intent to sell which are included in loans held for sale. Previously, amajority of the mortgage loans held for sale were recorded at fair value under the fair valuehedging requirements of Statement No. 133. Application of the fair value option allows for boththe mortgage loans held for sale and the related derivatives purchased to hedge interest rate riskto be carried at fair value without the burden of hedge accounting under Statement No. 133. Theelection was applied to existing mortgage loans held for sale as of January 1, 2008 and is alsobeing applied prospectively to mortgage loans originated for sale. As of the adoption date, thecarrying value of the existing loans held for sale was adjusted to fair value through acumulative-effect adjustment to beginning retained earnings. This adjustment represented anincrease in value of $2.3 million, or $1.5 million after tax.          The following table summarizes the impact of adopting the fair value accounting standards asof January 1, 2008:                   Net Increase      As of  to Retained  As of   January 1, 2008  Earnings  January 1, 2008 *(in thousands)* prior to Adoption  upon Adoption  after Adoption  Mortgage loans held for sale $420,895  $2,294  $423,189 Tax impact      (803)                Cumulative effect adjustment, net of tax     $1,491                           At June 30, 2008, mortgage loans held for sale had an aggregate fair value of $350.3 millionand an aggregate outstanding principal balance of $346.3 million. Interest income on these loansis recorded in interest and fees on loans and leases. Included in mortgage banking income were netgains resulting from changes in fair value of these loans, including realized gains and losses of$17.8 million for the six months ended June 30, 2008.          Statement No. 157 defines fair value as the exchange price that would be received for an assetor paid to transfer a liability (an exit price) in the principal or most advantageous market forthe asset or liability in an orderly transaction between market participants on the measurementdate. Statement No. 157 also establishes a three-level valuation hierarchy for disclosure of fairvalue measurements. The valuation hierarchy is based upon the transparency of inputs to thevaluation of an asset or liability as of the measurement date. The three levels are defined asfollows:*Level 1*- inputs to the valuation methodology are quoted prices (unadjusted) for identical assetsor liabilities in active markets.*Level 2*- inputs to the valuation methodology include quoted prices for similar assets andliabilities in active markets, and inputs that are observable for the asset or liability, eitherdirectly or indirectly, for substantially the full term of the financial instrument.*Level 3*- inputs to the valuation methodology are unobservable and significant to the fair valuemeasurement.A financial instrument’s categorization within the valuation hierarchy is based upon the lowestlevel of input that is significant to the fair value measurement.
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Following is a description of the valuation methodologies used for instruments measured at fairvalue, as well as the general classification of such instruments pursuant to the valuationhierarchy.*Securities*Where quoted prices are available in an active market, securities are classified within Level 1 ofthe valuation hierarchy. Level 1 securities include US Treasury and other federal agencysecurities, and money market mutual funds. If quoted market prices are not available, then fairvalues are estimated by using pricing models, quoted prices of securities with similarcharacteristics, or discounted cash flows. Level 2 securities include US Government and agencymortgage-backed securities, municipal securities and certain private label CMOs. In certain caseswhere there is limited activity or less transparency around inputs to the valuation, securities areclassified within Level 3 of the valuation hierarchy. Securities classified within Level 3 includeasset backed securities, for which Huntington obtains third party pricing. With the current marketconditions, the assumptions used to determine the fair value of many Level 3 securities havegreater subjectivity due to the lack of observable market transactions.Certain non-marketable equity securities include stock acquired for regulatory purposes, such asFederal Home Loan Bank stock and Federal Reserve Bank stock that are accounted for at cost; andtherefore, not subject to the disclosure requirements of Statement No. 157.*Mortgage loans held for sale*Mortgage loans held for sale are estimated using security prices for similar product types; andtherefore, are classified in Level 2.*Mortgage servicing rights*MSRs do not trade in an active, open market with readily observable prices. For example, sales ofMSRs do occur, but the precise terms and conditions typically are not readily available.Accordingly, MSRs are classified in Level 3 (See Note 5).*Equity Investments*Equity investments are valued initially based upon transaction price. The carrying values are thenadjusted from the transaction price to reflect expected exit values as evidenced by financing andsale transactions with third parties, or when determination of a valuation adjustment is considerednecessary based upon a variety of factors including, but not limited to, current operatingperformance and future expectations of the particular investment, industry valuations of comparablepublic companies, and changes in market outlook. Due to the absence of quoted market prices andinherent lack of liquidity and the long-term nature of such assets, these equity investments areincluded in Level 3. Certain equity investments are accounted for under the equity method; andtherefore, are not subject to the disclosure requirements of Statement No. 157.*Derivatives*Huntington uses derivatives for a variety of purposes including asset and liability management,mortgage banking, and for trading activities (See Note 12). Level 1 derivatives consist ofexchange traded options and forward commitments to deliver mortgage backed securities which havequoted prices. Level 2 derivatives include basic asset and liability conversion swaps and options,and interest rate caps. These derivative positions are valued using internally developed modelsthat use readily observable market parameters. Derivatives in Level 3 consist of interest ratelock agreements used for mortgage loan commitments. The valuation includes assumptions related tothe likelihood that a commitment will ultimately result in a closed loan, which is a significantunobservable assumption.
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***Assets and Liabilities measured at fair value on a recurring basis***Assets and liabilities measured at fair value on a recurring basis are summarized below:                       Fair Value Measurements at Reporting Date Using Netting **Balance at***(in thousands)* Level 1 Level 2 Level 3 Adjustments (1) **June 30, 2008** **Assets**                    Trading account securities $43,200  $1,053,039          **$****1,096,239**                      Investment securities  358,681   3,331,584  $673,739       **4,364,004**   Mortgage loans held for sale      350,304           **350,304** Mortgage servicing rights          240,024       **240,024** Derivative assets  3,473   140,126   2,708  $(17,358)  **128,949** Equity investments          32,200       **32,200**                      **Liabilities**                    Derivative liabilities  1,626   153,662   703   (50,978)  **105,013**  (1) Amounts represent the impact of legally enforceable masternetting agreements that allow the Company to settle positive and negativepositions and cash collateral held or placed with the same counterparties.          The table below presents a reconciliation for all assets and liabilities measured at fairvalue on a recurring basis using significant unobservable inputs (Level 3) for the three months andsix months ended June 30, 2008.                   **Level 3 Fair Value Measurements (Three months ended June 30, 2008)**  Mortgage Net Interest Investment Equity*(in thousands)* Servicing Rights Rate Locks Securities investments **Balance, March 31, 2008** $191,806  $2,948  $750,695  $35,345 Total gains/losses:                Included in earnings  48,674   (736)  (36)  (4,512)Included in other comprehensive loss          (67,522)    Purchases, issuances, and settlements  (456)      (9,398)  1,367 Transfers in/out of Level 3      (207)         **Balance, June 30, 2008** **$****240,024**  **$****2,005**  **$****673,739**  **$****32,200**                     **Level 3 Fair Value Measurements (Six months ended June 30, 2008)**  Mortgage Net Interest Investment Equity*(in thousands)* Servicing Rights Rate Locks Securities investments **Balance, January 1, 2008** $207,894  $(46) $834,489  $41,516 Total gains/losses:                Included in earnings  31,937   2,253   (3,353)  (13,289)Included in other comprehensive loss          (138,539)    Purchases, issuances, and settlements  193       (18,858)  3,973 Transfers in/out of Level 3      (202)         **Balance, June 30, 2008** **$****240,024**  **$****2,005**  **$****673,739**  **$****32,200**  
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          The table below summarizes gains and losses due to changes in fair value, including bothrealized and unrealized gains and losses, recorded in earnings for Level 3 assets and liabilitiesfor the three and six months ended June 30, 2008.                       **Mortgage**          **Servicing** **Net interest** **Investment** **Equity**  *(in thousands)* **Rights** **rate locks** **securities** **Investments** **Total** Classification of gains and losses in earningsfor the three months ended June 30, 2008:                    Mortgage banking income (loss) $(48,674) $(736)         $(49,410)Securities gains (losses)         $(36) $(4,512)  (4,548)   **Total** **$****(48,674****)** **$****(736****)** **$****(36****)** **$****(4,512****)** **$****(53,958****)**                        Change in unrealized gains or lossesfor the three months ended June 30, 2008to assets still held at reporting date: **$****(48,674****)** **$****(943****)** **$****(67,558****)** **$****(4,639****)** **$****(121,814****)**                          **Mortgage**          **Servicing** **Net interest** **Investment** **Equity**  *(in thousands)* **Rights** **rate locks** **securities** **Investments** **Total** Classification of gains and losses in earningsfor the six months ended June 30, 2008:                    Mortgage banking income (loss) $31,937  $2,253          $34,190 Securities gains (losses)         $(3,353) $(13,289)  (16,642)   **Total** **$****31,937**  **$****2,253**  **$****(3,353****)** **$****(13,289****)** **$****17,548**                         Change in unrealized gains or lossesfor the six months ended June 30, 2008to assets still held at reporting date: **$****31,937**  **$****2,051**  **$****(141,892****)** **$****(7,516****)** **$****(115,420****)**   ***Assets and Liabilities measured at fair value on a nonrecurring basis***          Certain assets and liabilities may be required to be measured at fair value on a nonrecurringbasis in periods subsequent to their initial recognition. These assets and liabilities are notmeasured at fair value on an ongoing basis; however, they are subject to fair value adjustments incertain circumstances, such as when there is evidence of impairment.          Periodically, Huntington records nonrecurring adjustments of collateral-dependent loansmeasured for impairment in accordance with FASB Statement No. 114, “*Accounting by Creditors forImpairment of a Loan*,” when establishing the allowance for credit losses. Such amounts aregenerally based on the fair value of the underlying collateral supporting the loan. In cases wherethe carrying value exceeds the fair value of the collateral, an impairment charge is recognized.During the first and second quarter of 2008, Huntington identified $32.4 million and $65.1 million,respectively of impaired loans for which the fair value is recorded based upon collateral value, aLevel 3 input in the valuation hierarchy. For the three and six months ended June 30, 2008,nonrecurring fair value losses of $37.0 million and $51.5 million, respectively were recordedwithin the provision for credit losses.
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**Note11 – Benefit Plans**          Huntington sponsors the Huntington Bancshares Retirement Plan (the Plan), a non-contributorydefined benefit pension plan covering substantially all employees. The Plan provides benefits basedupon length of service and compensation levels. The funding policy of Huntington is to contributean annual amount that is at least equal to the minimum funding requirements but not more than thatdeductible under the Internal Revenue Code.          In addition, Huntington has an unfunded, defined benefit post-retirement plan (Post-RetirementBenefit Plan) that provides certain healthcare and life insurance benefits to retired employees whohave attained the age of 55 and have at least 10 years of vesting service under this plan. For anyemployee retiring on or after January 1, 1993, post-retirement healthcare benefits are based uponthe employee’s number of months of service and are limited to the actual cost of coverage. Lifeinsurance benefits are a percentage of the employee’s base salary at the time of retirement, with amaximum of $50,000 of coverage.          On January 1, 2008, Huntington transitioned to fiscal year-end measurement date of plan assetsand benefit obligations as required by FASB Statement No. 158, *Employer’s Accounting for DefinedBenefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106,and 132R (Statement No. 158)*. As a result, Huntington recognized a charge to beginning retainedearnings of $4.2 million, representing the net periodic benefit costs for the last three months of2007 and a charge to the opening balance of accumulated other comprehensive loss of $3.8 million,representing the change in fair value of plan assets and benefit obligations for the last threemonths of 2007 (net of amortization included in net periodic benefit cost).          The following table shows the components of net periodic benefit expense of the Plan and thePost-Retirement Benefit Plan:                   Pension Benefits  Post Retirement Benefits   Three Months Ended  Three Months Ended   June 30,  June 30, *(in thousands)* **2008**  2007  **2008**  2007    Service cost **$****5,954**  $4,445  **$****420**  $375 Interest cost  **6,761**   5,967   **903**   667 Expected return on plan assets  **(9,786****)**  (9,120)  **—**   **—** Amortization of transition asset  **1**   1   **276**   276 Amortization of prior service cost  **79**   1   **95**   47 Settlements  **450**   1,000   **—**   **—** Recognized net actuarial loss (gain)  **1,038**   3,115   **(274****)**  (122)                       **Benefit expense** **$****4,497**  $5,409  **$****1,420**  $1,243                       Pension Benefits  Post Retirement Benefits   Six Months Ended  Six Months Ended   June 30,  June 30, *(in thousands)* **2008**  2007  **2008**  2007    Service cost **$****11,908**  $8,890  **$****840**  $749 Interest cost  **13,522**   11,934   **1,806**   1,334 Expected return on plan assets  **(19,572****)**  (18,240)  **—**   **—** Amortization of transition asset  **2**   2   **552**   552 Amortization of prior service cost  **158**   2   **190**   189 Settlements  **900**   2,000   **—**   **—** Recognized net actuarial loss (gain)  **2,076**   6,230   **(548****)**  **(203****)**                       **Benefit expense** **$****8,994**  $10,818  **$****2,840**  $2,621              There is no required minimum contribution for 2008 to the Plan.          Huntington also sponsors other retirement plans, the most significant being the SupplementalExecutive Retirement Plan and the Supplemental Retirement Income Plan. These plans are nonqualifiedplans that provide certain
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former officers and directors of Huntington and its subsidiaries withdefined pension benefits in excess of limits imposed by federal tax law. The cost of providingthese plans was $0.8 million and $0.6 million for the three-month periods ended June 30, 2008 and2007, respectively. For the respective six-month periods, the cost was $1.7 million and $1.4million.          Huntington has a defined contribution plan that is available to eligible employees. Huntingtonmatches participant contributions, up to the first 3% of base pay contributed to the plan. Half ofthe employee contribution is matched on the 4th and 5th percent of base pay contributed to theplan. The cost of providing this plan was $3.8 million and $2.7 million for the three months endedJune 30, 2008 and 2007, respectively. For the respective six month periods, the cost was $7.7million and $5.4 million.**Note 12 – Derivative Financial Instruments****Derivatives used in Asset and Liability Management Activities**          The following table presents the gross notional values of derivatives used in Huntington’sAsset and Liability Management activities at June 30, 2008, identified by the underlying interestrate-sensitive instruments:               **Fair Value** **Cash Flow**  *(in thousands )* **Hedges** **Hedges** **Total** Instruments associated with:            Loans $—  $3,575,000  $3,575,000 Deposits  110,000   150,000   260,000 Federal Home Loan Bankadvances  —   470,000   470,000 Subordinated notes  750,000   —   750,000 Other long-term debt  50,000   —   50,000  **Total notional value at June30, 2008** $910,000  $4,195,000  $5,105,000            The following table presents additional information about the interest rate swaps and capsused in Huntington’s Asset and Liability Management activities at June 30, 2008:                           **Average**     **Weighted-Average**  **Notional** **Maturity** **Fair** **Rate***(in thousands )* **Value** **(years)** **Value** **Receive** **Pay** Asset conversion swaps                     Receive fixed — generic $3,575,000   2.1  $(73,559)  2.99%  2.47% **Total asset conversion swaps**  3,575,000   2.1   (73,559)  2.99   2.47   Liability conversion swaps                    Receive fixed — generic  810,000   8.1   14,282   5.30   2.92 Receive fixed — callable  100,000   6.9   (1,766)  4.95   2.69 Pay fixed — generic  620,000   0.1   (7,411)  2.54   4.97  **Total liability conversion swaps**  1,530,000   5.1   5,105   4.16   3.74  **Total swap portfolio**  **5,105,000**   **3.0**   **(68,454****)**  **3.34****%**  **2.85****%**                                **Weighted-Average**Purchased Caps             **Strike Rate**               Interest rate caps  300,000   1.0   71   5.50% **Total purchased caps** **$****300,000**   **1.0**  **$****71**   **5.50****%**           These derivative financial instruments were entered into for the purpose of altering theinterest rate risk of assets and liabilities. Consequently, net amounts receivable or payable oncontracts hedging either interest earning assets or interest bearing liabilities were accrued as anadjustment to either interest income or interest expense. The net amount resulted in anincrease/(decrease) to net interest income of $3.0 million and ($0.5 million) for the three monthsended June 30, 2008 and 2007, respectively. For the six month periods ended June 30, 2008 and2007, the impact to net interest income was an increase/(decrease) of $2.1 million and ($0.2million), respectively.
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          Collateral agreements are regularly entered into as part of the underlying derivativeagreements with Huntington’s counterparties to mitigate the credit risk associated withderivatives. At June 30, 2008, December 31, 2007 and June 30, 2007, aggregate credit riskassociated with these derivatives, net of collateral that has been pledged by the counterparty, was$33.3 million, $31.4 million and $17.2 million, respectively. The credit risk associated withinterest rate swaps is calculated after considering master netting agreements.**Derivatives Used in Trading Activities**          Various derivative financial instruments are offered to enable customers to meet theirfinancing and investing objectives and for their risk management purposes. Derivative financialinstruments used in trading activities consisted predominantly of interest rate swaps, but alsoincluded interest rate caps, floors, and futures, as well as foreign exchange options. Interestrate options grant the option holder the right to buy or sell an underlying financial instrumentfor a predetermined price before the contract expires. Interest rate futures are commitments toeither purchase or sell a financial instrument at a future date for a specified price or yield andmay be settled in cash or through delivery of the underlying financial instrument. Interest ratecaps and floors are option-based contracts that entitle the buyer to receive cash payments based onthe difference between a designated reference rate and a strike price, applied to a notionalamount. Written options, primarily caps, expose Huntington to market risk but not credit risk.Purchased options contain both credit and market risk. The interest rate risk of these customerderivatives is mitigated by entering into similar derivatives having offsetting terms with othercounterparties.          Supplying these derivatives to customers results in non-interest income. These instrumentsare carried at fair value in other assets with gains and losses reflected in other non-interestincome. Total trading revenue for customer accommodation was $8.3 million and $3.4 million for thethree months ended June 30, 2008 and 2007, respectively. For the six month periods ended June 30,2008 and 2007, total trading revenue for customer accommodation was $20.0 million and $6.8 million,respectively. The total notional value of derivative financial instruments used by Huntington onbehalf of customers, including offsetting derivatives was $10.3 billion, $6.4 billion, and $5.2billion at June 30, 2008, December 31, 2007, and June 30, 2007, respectively. Huntington’s creditrisk from interest rate swaps used for trading purposes was $145.4 million, $116.0 million, and$53.3 million at the same dates.          Huntington also uses certain derivative financial instruments to offset changes in value ofits residential mortgage servicing assets. These derivatives consist primarily of forward interestrate agreements, and forward mortgage securities. The derivative instruments used are notdesignated as hedges under Statement No. 133. Accordingly, such derivatives are recorded at fairvalue with changes in fair value reflected in mortgage banking income*.*The total notional value ofthese derivative financial instruments at June 30, 2008, was $1.6 billion. The total notionalamount corresponds to trading assets with a fair value of $2.5 million and trading liabilities witha fair value of $5.4 million. Total losses for the three months ended June 30, 2008 and 2007 were$21.0 million and $12.3 million, respectively. For the six months ended June 30, 2008 and 2007,total losses were $36.9 million and $12.8 million, respectively.          In connection with securitization activities, Huntington purchased interest rate caps with anotional value totaling $1.4 billion. These purchased caps were assigned to the securitizationtrust for the benefit of the security holders. Interest rate caps were also sold totaling $1.4billion outside the securitization structure. Both the purchased and sold caps are marked to marketthrough income.
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**Note 13 – Commitments and Contingent Liabilities*****Commitments to extend credit****:*          In the ordinary course of business, Huntington makes various commitments to extend credit thatare not reflected in the financial statements. The contract amounts of these financial agreementsat June 30, 2008, December 31, 2007, and June 30, 2007, were as follows:               **June 30,** December 31, June 30,*(in millions)* **2008** * *2007 * *2007 **Contract amount represents credit risk**            Commitments to extend credit            Commercial **$****6,233**  $6,756  $4,602 Consumer  **4,896**   4,680   3,491 Commercial real estate  **2,566**   2,565   1,559 Standby letters of credit  **1,644**   1,549   1,230           Commitments to extend credit generally have fixed expiration dates, are variable-rate, andcontain clauses that permit Huntington to terminate or otherwise renegotiate the contracts in theevent of a significant deterioration in the customer’s credit quality. These arrangements normallyrequire the payment of a fee by the customer, the pricing of which is based on prevailing marketconditions, credit quality, probability of funding, and other relevant factors. Since many of thesecommitments are expected to expire without being drawn upon, the contract amounts are notnecessarily indicative of future cash requirements. The interest rate risk arising from thesefinancial instruments is insignificant as a result of their predominantly short-term, variable-ratenature.          Standby letters of credit are conditional commitments issued to guarantee the performance of acustomer to a third party. These guarantees are primarily issued to support public and privateborrowing arrangements, including commercial paper, bond financing, and similar transactions. Mostof these arrangements mature within two years. The carrying amount of deferred revenue associatedwith these guarantees was $4.3 million, $4.6 million, and $3.8 million at June 30, 2008, December31, 2007, and June 30, 2007, respectively.          Commercial letters of credit represent short-term, self-liquidating instruments thatfacilitate customer trade transactions and generally have maturities of no longer than 90 days. Themerchandise or cargo being traded normally secures these instruments.***Commitments to sell loans:***          Huntington enters into forward contracts relating to its mortgage banking business to hedgethe exposures from commitments to make new residential mortgage loans with existing customers andfrom mortgage loans classified as held for sale . At June 30, 2008, December 31, 2007, and June 30,2007, Huntington had commitments to sell residential real estate loans of $577.0 million, $555.9million, and $484.5 million, respectively. These contracts mature in less than one year.
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***Litigation***          Between December 19, 2007 and February 1, 2008, three putative class actions were filed in theUnited States District Court for the Southern District of Ohio, Eastern Division, againstHuntington and certain of its current or former officers and directors purportedly on behalf ofpurchasers of Huntington securities during the periods July 20, 2007 to November 16, 2007 orJuly 20, 2007 to January 10, 2008. These complaints seek to allege that the defendants violatedSection 10(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Rule 10b-5promulgated thereunder, and Section 20(a) of the Exchange Act by issuing a series of allegedlyfalse and/or misleading statements concerning Huntington’s financial results, prospects, andcondition, relating, in particular, to its transactions with Franklin Credit Management (Franklin).On June 5, 2008, two cases were consolidated into a single action. At this early stage, it is notpossible for management to assess the probability of an adverse outcome, or reasonably estimate theamount of any potential loss. A third putative class action lawsuit was filed in the same court onJanuary 18, 2008, with substantially the same allegations, but was dismissed on March 4, 2008.          Three putative derivative class action lawsuits were filed in the Court of Common Pleas ofDelaware County, Ohio, the United States District Court for the Southern District of Ohio, EasternDivision, and the Court of Common Pleas of Franklin County, Ohio, between January 16, 2008, andApril 17, 2008, against certain of Huntington’s current or former officers and directors variouslyseeking to allege breaches of fiduciary duty, waste of corporate assets, abuse of control, grossmismanagement, and unjust enrichment, all in connection with Huntington’s acquisition of SkyFinancial, certain transactions between Huntington and Franklin, and the financial disclosuresrelating to such transactions. Huntington is named as a nominal defendant in each of these actions.At this early stage of the lawsuits, it is not possible for management to assess the probability ofan adverse outcome, or reasonably estimate the amount of any potential loss.          Between February 20, 2008 and February 29, 2008, three putative class action lawsuits werefiled in the United States District Court for the Southern District of Ohio, Eastern Division,against Huntington, the Huntington Bancshares Incorporated Pension Review Committee, the HuntingtonInvestment and Tax Savings Plan (the Plan) Administrative Committee, and certain of the Company’sofficers and directors purportedly on behalf of participants in or beneficiaries of the Planbetween either July 1, 2007 or July 20, 2007 and the present. The complaints seek to allegebreaches of fiduciary duties in violation of the Employee Retirement Income Security Act(ERISA) relating to Huntington stock being offered as an investment alternative for participants inthe Plan. The complaints sought money damages and equitable relief. On May 13, 2008, the threecases were consolidated into a single action. At this early stage, it is not possible formanagement to assess the probability of a material adverse outcome, or reasonably estimate theamount of any potential loss.          On May 7, 2008, a putative class action lawsuit was filed in the United States District Courtfor the Southern District of Ohio, Eastern Division, against Huntington (as successor in interestto Sky Financial), and certain of Sky Financial’s former officers on behalf of all persons whopurchased or acquired Sky Financial common stock in connection with and as a result of SkyFinancial’s October 2006 acquisition of Waterfield Mortgage Company. The complaint seeks to allegethat the defendants violated Sections 11, 12, and 15 of the Securities Act of 1933 in connectionwith the issuance of allegedly false and misleading registration and proxy statements leading up tothe Waterfield acquisition and their disclosures about the nature and extent of Sky Financial’slending relationship with Franklin. At this early stage of this lawsuit, it is not possible formanagement to assess the probability of an adverse outcome, or reasonably estimate the amount ofany potential loss.          It is possible that the ultimate resolution of these matters, if unfavorable, may be materialto the results of operations for a particular period. However, although no assurance can be given,based on information currently available, consultation with counsel, and available insurancecoverage, management believes that the eventual outcome of these claims against us will not,individually or in the aggregate, have a material adverse effect on Huntington’s consolidatedfinancial position.
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**Note 14 – Segment Reporting**          Huntington has three distinct lines of business: Regional Banking, Dealer Sales, and thePrivate Financial and Capital Markets Group (PFCMG). A fourth segment includes the Treasuryfunction and other unallocated assets, liabilities, revenue, and expense. Lines of businessresults are determined based upon the Company’s management reporting system, which assigns balancesheet and income statement items to each of the business segments. The process is designed aroundthe Company’s organizational and management structure and, accordingly, the results derived are notnecessarily comparable with similar information published by other financial institutions. Anoverview of this system is provided below, along with a description of each segment and discussionof financial results.          The following provides a brief description of the four operating segments of Huntington:**Regional Banking:**This segment provides traditional banking products and services to consumer,small business, and, commercial customers located in 13 operating regions within the six states ofOhio, Michigan, Pennsylvania, Indiana, West Virginia and Kentucky. It provides these servicesthrough a banking network of over 600 branches, almost 1,400 ATMs, along with Internet andtelephone banking channels. It also provides certain services outside of these six states,including mortgage banking and equipment leasing. Each region serves both retail and commercialcustomers. Retail products and services include home equity loans and lines of credit, firstmortgage loans, direct installment loans, small business loans, personal and business depositproducts, as well as sales of investment and insurance services. At June 30, 2008, Retail Bankingaccounts for 52% and 80% of total Regional Banking loans and deposits, respectively. CommercialBanking serves middle market commercial banking relationships, which use a variety of bankingproducts and services including, but not limited to, commercial loans, international trade, cashmanagement, leasing, interest rate protection products, capital market alternatives, 401(k) plans,and mezzanine investment capabilities.**Dealer Sales:**This segment provides a variety of banking products and services to more than 3,700automotive dealerships within the Company’s primary banking markets, as well as in Arizona,Florida, Nevada, New Jersey, New York, Tennessee and Texas. Dealer Sales finances the purchase ofautomobiles by customers at the automotive dealerships, purchases automobiles from dealers andsimultaneously leases the automobiles to consumers under long-term leases, finances thedealerships’ new and used vehicle inventories, land, buildings, and other real estate owned by thedealership, and their working capital needs; and provides other banking services to the automotivedealerships and their owners. Competition from the financing divisions of automobile manufacturersand from other financial institutions is intense. Dealer Sales’ production opportunities aredirectly impacted by the general automotive sales business, including programs initiated bymanufacturers to enhance and increase sales directly. Huntington has been in this line of businessfor over 50 years.**Private Financial and Capital Markets Group (PFCMG):**This segment provides products and servicesdesigned to meet the needs of higher net worth customers. Revenue is derived through the sale oftrust, asset management, investment advisory, brokerage, and private banking products andservices. PFCMG also focuses on financial solutions for corporate and institutional customers thatinclude investment banking, sales and trading of securities, mezzanine capital financing, andinterstate risk management products. To serve high net worth customers, a unique distribution modelis used that employs a single, unified sales force to deliver products and services mainly throughRegional Banking distribution channels.**Treasury / Other:**This segment includes revenue and expense related to assets, liabilities, andequity that are not directly assigned or allocated to one of the other three business segments.Assets in this segment include Huntington’s insurance agency business, investment securities andbank owned life insurance. The net interest income/(expense) of this segment includes the netimpact of administering our investment securities portfolios as part of overall liquiditymanagement. A match-funded transfer pricing system is used to attribute appropriate fundinginterest income and interest expense to other business segments. As such, net interest incomeincludes the net impact of any over or under allocations arising from centralized management ofinterest rate risk. Furthermore, net interest income includes the net impact of derivatives used tohedge interest rate sensitivity. Non-interest income includes miscellaneous fee income notallocated to other business segments, including bank owned life insurance income, insurancerevenue, and any investment securities and trading assets gains or losses. The non-interest expenseincludes certain corporate administrative, merger and other miscellaneous expenses not allocatedto other business segments. The provision for income taxes for the other business segments iscalculated at a statutory 35% tax rate, though our overall effective tax rate is lower. As aresult, Treasury/Other reflects a credit for income taxes representing the difference between thelower actual effective tax rate and the statutory tax rate used to allocate income taxes to theother segments.
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          Listed below are certain financial results by line of business. For the three and six monthsended June 30, 2008 and 2007, operating earnings were the same as reported earnings.                       Three Months Ended June 30, **Income Statements** Regional  Dealer      Treasury/  Huntington *(in thousands)* Banking  Sales  PFCMG  Other  Consolidated  **2008**                    Net interest income **$****366,001**  **$****35,344**  **$****24,591**  **$****(36,070****)** **$****389,866** Provision for credit losses  **(104,660****)**  **(6,855****)**  **(9,298****)**  **—**   **(120,813****)**Non-interest income  **148,264**   **14,949**   **44,451**   **28,766**   **236,430** Non-interest expense  **(228,826****)**  **(31,275****)**  **(45,173****)**  **(72,529****)**  **(377,803****)**Income taxes  **(63,273****)**  **(4,257****)**  **(5,100****)**  **46,302**   **(26,328****)** **Operating / reported net income** **$****117,506**  **$****7,906**  **$****9,471**  **$****(33,531****)** **$****101,352**                       **2007**                    Net interest income $213,591  $32,333  $18,107  $(10,640) $253,391 Provision for credit losses  (54,873)  (303)  (4,957)  —   (60,133)Non-interest income  96,636   10,984   43,233   5,340   156,193 Non-interest expense  (166,305)  (18,618)  (38,879)  (20,853)  (244,655)Income taxes  (31,167)  (8,539)  (6,126)  21,557   (24,275) Operating / reported net income $57,882  $15,857  $11,378  $(4,596) $80,521     Six Months Ended June 30,**Income Statements** Regional Dealer     Treasury/ Huntington*(in thousands of dollars)* Banking Sales PFCMG Other Consolidated **2008**                    Net interest income **$****724,863**  **$****71,515**  **$****49,256**  **$****(78,944****)** **$****766,690** Provision for credit losses  **(174,394****)**  **(23,936****)**  **(11,133****)**  **—**   **(209,463****)**Non-Interest income  **265,824**   **27,745**   **88,944**   **89,669**   **472,182** Non-Interest expense  **(463,251****)**  **(57,441****)**  **(92,957****)**  **(134,635****)**  **(748,284****)**Income taxes  **(123,565****)**  **(6,259****)**  **(11,939****)**  **89,058**   **(52,705****)** **Operating / reported net income** **$****229,477**  **$****11,624**  **$****22,171**  **$****(34,852****)** **$****228,420**                       **2007**                    Net interest income $428,593  $63,974  $37,207  $(20,828) $508,946 Provision for credit losses  (77,329)  (8,048)  (4,162)  —   (89,539)Non-Interest income  186,093   24,165   74,563   16,549   301,370 Non-Interest expense  (329,056)  (38,205)  (76,716)  (42,750)  (486,727)Income taxes  (72,905)  (14,661)  (10,812)  40,575   (57,803) Operating / reported net income $135,396  $27,225  $20,080  $(6,454) $176,247                             Assets at  Deposits at   **June 30,**  December 31,  June 30,  **June 30,**  December 31,  June 30, *(in millions)* **2008**  2007  2007  **2008**  2007  2007    Regional Banking **$****34,434**  $34,360  $21,681  **$****33,307**  $32,626  $20,482 Dealer Sales  **6,427**   5,823   5,146   **57**   58   58 PFCMG  **3,006**   2,963   2,296   **1,667**   1,626   1,104 Treasury / Other  **11,467**   11,551   7,298   **3,093**   3,433   2,956    **Total** **$****55,334**  $54,697  $36,421  **$****38,124**  $37,743  $24,600    
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