UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY PERIOD ENDED September 30, 2007

Commission File Number 0-2525

Huntington Bancshares Incorporated

Maryland		31-0724920
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

41 South High Street, Columbus, Ohio 43287

Registrant’s telephone number (614) 480-8300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. [x] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [x]		Accelerated filer [ ]		Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [x] No

There were 365,898,439 shares of Registrant’s common stock ($0.01 par value) outstanding on September 30, 2007.

Huntington Bancshares Incorporated

INDEX

Part I. Financial Information
Item 1.		Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets at September 30, 2007, December 31, 2006, and September 30, 2006			59
		Condensed Consolidated Statements of Income for the three-month and nine-month periods ended September 30, 2007 and 2006			60
		Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine-month periods ended September 30, 2007 and 2006			61
		Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2007 and 2006			62
		Notes to Unaudited Condensed Consolidated Financial Statements			63
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			3
Item 3.		Quantitative and Qualitative Disclosures about Market Risk			80
Item 4.		Controls and Procedures			80
Item 4T.		Controls and Procedures			80
Part II. Other Information
Item 6.		Exhibits			81
Signatures					82
EX-10.5
EX-10.6
EX-10.7
EX-12.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part 1. Financial Information

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

     Huntington Bancshares Incorporated (we or our) is a multi-state diversified financial holding company organized under Maryland law in 1966 and headquartered in Columbus, Ohio. Through our subsidiaries, including our bank subsidiary, The Huntington National Bank (the Bank), organized in 1866, we provide full-service commercial and consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, reinsurance of private mortgage insurance, reinsurance of credit life and disability insurance, and other insurance and financial products and services. Our banking offices are located in Ohio, Michigan, Indiana, Pennsylvania, West Virginia, and Kentucky. Selected financial service activities are also conducted in other states including: Dealer Sales offices in Arizona, Florida, Georgia, Nevada, New Jersey, New York, North Carolina, South Carolina, and Tennessee; Private Financial and Capital Markets Group offices in Florida; and Mortgage Banking offices in Maryland and New Jersey. Sky Insurance offers retail and commercial insurance agency services, through offices in Ohio, Pennsylvania, and Indiana. International banking services are available through the headquarters office in Columbus and a limited purpose office located in both the Cayman Islands and Hong Kong.

     The following discussion and analysis provides you with information we believe necessary for understanding our financial condition, changes in financial condition, results of operations, and cash flows and should be read in conjunction with the financial statements, notes, and other information contained in this report. The Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) appearing in our 2006 Annual Report on Form 10-K (2006 Form 10-K), as updated by the information contained in this report, should be read in conjunction with this discussion and analysis.

     Our discussion is divided into key segments:

	•		Introduction - Provides overview comments on important matters including risk factors, acquisitions, and other items. These are essential for understanding our performance and prospects.
	•		Discussion of Results of Operations - Reviews financial performance from a consolidated company perspective. It also includes a Significant Items Influencing Financial Performance Comparisons section that summarizes key issues helpful for understanding performance trends. Key consolidated balance sheet and income statement trends are also discussed in this section.
	•		Risk Management and Capital - Discusses credit, market, liquidity, and operational risks, including how these are managed, as well as performance trends. It also includes a discussion of liquidity policies, how we fund ourselves, and related performance. In addition, there is a discussion of guarantees and/or commitments made for items such as standby letters of credit and commitments to sell loans, and a discussion that reviews the adequacy of capital, including regulatory capital requirements.
	•		Lines of Business Discussion - Provides an overview of financial performance for each of our major lines of business and provides additional discussion of trends underlying consolidated financial performance.

Forward-Looking Statements

     This report, including MD&A, contains certain forward-looking statements, including certain plans, expectations, goals, and projections, and including statements about the benefits of the merger between Huntington and Sky Financial, which are subject to numerous assumptions, risks, and uncertainties.

     Actual results could differ materially from those contained or implied by such statements for a variety of factors including: the expected merger efficiencies and any revenue synergies from the merger may not be fully realized within the expected timeframes; disruption from the merger may make it more difficult to maintain relationships with clients, associates, or suppliers; changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of other business strategies; the nature, extent, and timing of governmental actions and reforms; and extended disruption of vital infrastructure. Additional factors that could cause results to differ materially

from those described above can be found in our 2006 Annual Report on Form 10-K, and documents subsequently filed with the Securities and Exchange Commission (SEC).

     All forward-looking statements speak only as of the date they are made. We assume no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.

Risk Factors

     We, like other financial companies, are subject to a number of risks, many of which are outside of our direct control, though efforts are made to manage those risks while optimizing returns. Among the risks assumed are: (1) credit risk, which is the risk that loan and lease customers or other counter parties will be unable to perform their contractual obligations, (2) market risk, which is the risk that changes in market rates and prices will adversely affect our financial condition or results of operation, (3) liquidity risk, which is the risk that we, or the Bank, will have insufficient cash or access to cash to meet operating needs, and (4) operational risk, which is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events. Refer to the ‘Risk Management and Capital’ section for additional information regarding risk factors. Additionally, more information on risk is set forth under the heading “Risk Factors” included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2006, and subsequent filings with the SEC.

Critical Accounting Policies and Use of Significant Estimates

     Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The preparation of financial statements in conformity with GAAP requires us to establish critical accounting policies and make accounting estimates, assumptions, and judgments that affect amounts recorded and reported in our financial statements. Note 1 of the Notes to Consolidated Financial Statements included in our 2006 Form 10-K as supplemented by this report lists significant accounting policies we use in the development and presentation of our financial statements. This discussion and analysis, the significant accounting policies, and other financial statement disclosures identify and address key variables and other qualitative and quantitative factors necessary for an understanding and evaluation of our company, financial position, results of operations, and cash flows.

     An accounting estimate requires assumptions about uncertain matters that could have a material effect on the financial statements if a different amount within a range of estimates were used or if estimates changed from period to period. Readers of this report should understand that estimates are made under facts and circumstances at a point in time, and changes in those facts and circumstances could produce actual results that differ from when those estimates were made.

Acquisition of Sky Financial

     The merger with Sky Financial Group Inc. (Sky Financial) was completed on July 1, 2007. At the time of acquisition, Sky Financial had assets of $16.8 billion, including $13.3 billion of loans, and total deposits of $12.9 billion. Sky Financial results were fully included in our consolidated results for the full 2007 third quarter, and will impact all quarters thereafter. Additionally, during the 2007 third quarter, Sky Bank and Sky Trust, National Association (“Sky Trust”), merged into the Bank and systems integration was completed. As a result, performance comparisons of 2007 third quarter and 2007 nine-month performance to prior periods are affected as Sky Financial results were not included in the prior periods. Comparisons of the 2007 third quarter and 2007 nine-month performance compared with prior periods are impacted as follows:

	•		Increased the absolute level of reported average balance sheet, revenue, expense, and the absolute level of certain credit quality results (e.g., amount of net charge-offs).
	•		Increased the absolute level of reported non-interest expense items because of costs incurred as part of merger integration activities, most notably employee retention bonuses, outside programming services related to systems conversions, occupancy expenses, and marketing expenses related to customer retention initiatives. These net merger costs were $32.3 million in the 2007 third quarter.

     Given the significant impact of the merger on reported 2007 results, we believe that an understanding of the impacts of the merger is necessary to understand better underlying performance trends. When comparing post-merger period results to premerger periods, we use the following terms when discussing financial performance:

•

“Merger related” refers to amounts and percentage changes representing the impact attributable to the merger.

	•		“Merger costs” represent non-interest expenses primarily associated with merger integration activities.
	•		“Non-merger related” refers to performance not attributable to the merger and include:

•

“Merger efficiencies”, which represent non-interest expense reductions realized as a result of the merger.

     The following methodology has been implemented to estimate the approximate effect of the Sky Financial merger used to determine “merger-related” impacts.

Balance Sheet Items

For loans and leases, as well as total deposits, Sky Financial’s balances as of June 30, 2007, adjusted for purchase accounting adjustments, and transfers of loans to loans held-for-sale, are used in the comparison. To estimate the impact on 2007 third quarter average balances, it was assumed that the June 30, 2007 balances, as adjusted, remained constant throughout the 2007 third quarter and will remain constant in all subsequent periods.

Income Statement Items

For income statement line items, Sky Financial’s actual results for the first six months of 2007, adjusted for the impact of unusual items and purchase accounting adjustments, were determined. This six-month adjusted amount was divided by two to estimate a quarterly amount. This results in an approximate quarterly impact, as the methodology does not adjust for any unusual items, market related changes, or seasonal factors in Sky Financial’s 2007 six-month results. Nor does it consider any revenue or expense synergies realized since the merger date. This same estimated amount will also be used in all subsequent quarterly reporting periods. The one exception to this methodology of holding the estimated quarterly impact constant relates to the amortization of intangibles expense where the amount is known and is therefore used.

     Certain tables contained within our discussion and analysis provide detail of changes to reported results to quantify the estimated impact of the Sky Financial merger using this methodology.

DISCUSSION OF RESULTS OF OPERATIONS

     This section provides a review of financial performance from a consolidated perspective. It also includes a Significant Items Influencing Financial Performance Comparisons section that summarizes key issues important for a complete understanding of performance trends. Key consolidated balance sheet and income statement trends are discussed in this section. All earnings per share data are reported on a diluted basis. For additional insight on financial performance, please read this section in conjunction with the Lines of Business Discussion.

Summary

     We reported 2007 third quarter net income of $138.2 million and earnings per common share of $0.38. These results compared favorably to net income of $80.5 million and earnings per common share of $0.34 in the 2007 second quarter, but declined from net income of $157.4 million and earnings per common share of $0.65 in the third quarter of 2006. Our year-to-date net income was $314.4 million, or $1.12 per common share, down from net income of $373.5 million, or $1.56 per common share, in the comparable year-ago period. Additionally, comparisons with the prior year are impacted by the benefits for income taxes and balance sheet restructuring charges in the comparable year-ago period. Period-to-period comparisons are significantly impacted by the Sky Financial acquisition, which closed on July 1, 2007. The acquisition solidified our position in Ohio, greatly expanded our presence in the Indianapolis market, and established western Pennsylvania as a new market. Customer reaction has been very positive, and we continue to work to ensure that all of the growth opportunities afforded by the acquisition are realized.

     Expense control was a major highlight for the quarter. Although non-interest expense increased $140.9 million from the prior quarter, $161.3 million of the increase was merger related, either through merger related expenses or increased merger costs. Non-merger related expenses actually declined $20.4 million and represented most of the merger efficiencies that we targeted from the acquisition. We expect to achieve most of the remaining benefit next quarter. Our efficiency

ratio, which has been a key focal point for us, is approaching our targeted range, and we expect to be within, or very near, that range, once we achieve the remaining targeted merger efficiencies.

     Fee income performance was mixed for the quarter. In addition to the increase in non-interest income that was merger related, non-merger related deposit service charges and other service charges showed very good growth, however, non-merger related trust services, mortgage banking, and brokerage and insurance income were down.

     Net interest income for the third quarter of 2007 increased $156.2 million from the prior quarter. The current quarter included three months of net interest income attributable to the acquisition of Sky Financial, which added $12.8 billion of loans, net of transfers to loans held-for-sale and purchase accounting adjustment, and $12.9 billion of deposits at July 1, 2007. During the current quarter, we saw good growth in non-merger related commercial loans and certain consumer loans, however, average automobile leases continued to shrink, as expected, due to low consumer demand and competitive pricing. Additionally, the lack of growth in non-merger related average home equity loans and average residential real estate loans continued to reflect the softness in the real estate markets. Growth in non-merger related average total deposits was also good during the quarter, driven by strong growth in interest-bearing demand deposits and money market accounts. Our net interest margin was 3.52%, consistent with expectations and up from 3.26% in the second quarter, primarily merger related.

     Consistent with expectations, overall credit quality was stable during the quarter. The allowance for loan and leases losses (ALLL) was 1.14% of total loans, down slightly from 1.15% at June 30, 2007. The ALLL coverage of nonperforming loans (NPLs) improved to 182% at September 30, 2007, from 145% at June 30, 2007, and declined from 189% at December 31, 2006. However, nonperforming assets (NPAs) increased $173.9 million from the prior quarter as we acquired $144.5 million of NPAs from Sky Financial. Additionally, we designated $16.3 million of impaired asset-backed securities as other NPAs. During the quarter, non-merger related NPLs and other-real-estate-owned (OREO) grew $13.0 million. Our outlook remains for NPLs to rise modestly in the 2007 fourth quarter, as there remains pressure on businesses and consumers in our markets.

     Market conditions remain difficult and we do not expect that to change in the near future. We anticipate that the economic environment will continue to be negatively impacted by weakness in residential real estate markets and negative impacts from the on-going challenges in the automotive manufacturing and supplier sector. We expect our greatest impacts to be in our eastern Michigan and northern Ohio markets.

Significant Items

     Certain components of the income statement are naturally subject to more volatility than others. As a result, readers of this report may view such items differently in their assessment of “underlying” or “core” earnings performance compared with their expectations and/or any implications resulting from them on their assessment of future performance trends.

     Therefore, we believe the disclosure of certain “Significant Items” in current and prior period results aids readers of this report in better understanding corporate performance so that they can ascertain for themselves what, if any, items they may wish to include or exclude from their analysis of performance, within the context of determining how that performance differed from their expectations, as well as how, if at all, to adjust their estimates of future performance accordingly.

     To this end, we have adopted a practice of listing as “Significant Items” in our external disclosure documents (including earnings press releases, investor presentations, Forms 10-Q and 10-K) individual and/or particularly volatile items that impact the current period results by $0.01 per share or more. Such “Significant Items” generally fall within one of two categories: timing differences and other items.

Timing Differences

     Part of our regular business activities are by their nature volatile, including capital markets income and sales of loans. While such items may generally be expected to occur within a full year reporting period, they may vary significantly from period to period. Such items are also typically a component of an income statement line item and not, therefore, readily discernable. By specifically disclosing such items, analysts/investors can better assess how, if at all, to adjust their estimates of future performance.

Other Items

     From time to time an event or transaction might significantly impact revenues, expenses, or taxes in a particular reporting period that are judged to be unusual, short-term in nature, and/or materially outside typically expected performance. Examples would be (1) merger costs, including restructuring charges and asset valuation adjustments, as they typically impact expenses for only a few quarters during the period of transition; (2) changes in an accounting principle; (3) unusual tax assessments or refunds; (4) a large gain/loss on the sale of an asset; (5) outsized commercial loan net charge-offs; and other items deemed significant. By disclosing such items, analysts/investors can better assess how, if at all, to adjust their estimates of future performance.

Provision for Credit Losses

     While the provision for credit losses may vary significantly among periods, and often exceeds $0.01 per share, we typically exclude it from the list of significant items unless, in our view, there is a significant, specific credit (or multiple significant, specific credits) affecting comparability among periods. In determining whether any portion of the provision for credit losses should be included as a significant item, we consider, among other things, that the provision is a major income statement caption rather than a component of another caption and, therefore, the period-to-period variance can be readily determined.

Other Exclusions

     “Significant Items” for any particular period are not intended to be a complete list of items that may significantly impact future periods. A number of factors, including those described in Huntington’s 2006 Annual Report on Form 10-K and other factors described from time to time in Huntington’s other filings with the SEC, could also significantly impact future periods.

Table 1 — Selected Quarterly Income Statement Data^{(1), (7)}

		2007												2006
(in thousands, except per share amounts)		Third				Second				First				Fourth				Third
Interest income		$	851,155			$	542,461			$	534,949			$	544,841			$	538,988
Interest expense			441,522				289,070				279,394				286,852				283,675
Net interest income			409,633				253,391				255,555				257,989				255,313
Provision for credit losses			42,007				60,133				29,406				15,744				14,162
Net interest income after provision for credit losses			367,626				193,258				226,149				242,245				241,151
Service charges on deposit accounts			78,107				50,017				44,793				48,548				48,718
Trust services			33,562				26,764				25,894				23,511				22,490
Brokerage and insurance income			28,806				17,199				16,082				14,600				14,697
Other service charges and fees			21,045				14,923				13,208				13,784				12,989
Bank owned life insurance income			14,847				10,904				10,851				10,804				12,125
Mortgage banking income			9,629				7,122				9,351				6,169				8,512
Securities (losses) gains (2)			(13,152	)			(5,139	)			104				(15,804	)			(57,332	)
Other income			31,830				34,403				24,894				38,994				35,711
Total non-interest income			204,674				156,193				145,177				140,606				97,910
Personnel costs			202,148				135,191				134,639				137,944				133,823
Outside data processing and other services			40,600				25,701				21,814				20,695				18,664
Net occupancy			33,334				19,417				19,908				17,279				18,109
Equipment			23,290				17,157				18,219				18,151				17,249
Marketing			13,186				8,986				7,696				6,207				7,846
Professional services			11,273				8,101				6,482				8,958				6,438
Telecommunications			7,286				4,577				4,126				4,619				4,818
Printing and supplies			4,743				3,672				3,242				3,610				3,416
Amortization of intangibles			19,949				2,519				2,520				2,993				2,902
Other expense			29,754				19,334				23,426				47,334				29,165
Total non-interest expense			385,563				244,655				242,072				267,790				242,430
Income before income taxes			186,737				104,796				129,254				115,061				96,631
Provision (benefit) for income taxes (3)			48,535				24,275				33,528				27,346				(60,815	)
Net income		$	138,202			$	80,521			$	95,726			$	87,715			$	157,446
Average common shares — diluted			368,280				239,008				238,754				239,881				240,896
Per common share
Net income — diluted		$	0.38			$	0.34			$	0.40			$	0.37			$	0.65
Cash dividends declared			0.265				0.265				0.265				0.250				0.250
Return on average total assets			1.02	%			0.92	%			1.11	%			0.98	%			1.75	%
Return on average total shareholders’ equity			8.8				10.6				12.9				11.3				21.0
Return on average tangible shareholder’s equity (4)			20.9				13.6				16.5				14.5				27.1
Net interest margin (5)			3.52				3.26				3.36				3.28				3.22
Efficiency ratio (6)			57.7				57.8				59.2				63.3				57.8
Effective tax rate (3)			26.0				23.2				25.9				23.8				(62.9	)
Revenue — fully taxable equivalent (FTE)
Net interest income		$	409,633			$	253,391			$	255,555			$	257,989			$	255,313
FTE adjustment			5,712				4,127				4,047				4,115				4,090
Net interest income (5)			415,345				257,518				259,602				262,104				259,403
Non-interest income			204,674				156,193				145,177				140,606				97,910
Total revenue (5)		$	620,019			$	413,711			$	404,779			$	402,710			$	357,313

Table 2 — Selected Year to Date Income Statement Data ^{(1), (7)}

		Nine Months Ended September 30,								Change
(in thousands, except per share amounts)		2007				2006				Amount				Percent
Interest income		$	1,928,565			$	1,525,678			$	402,887				26.4	%
Interest expense			1,009,986				764,490				245,496				32.1
Net interest income			918,579				761,188				157,391				20.7
Provision for credit losses			131,546				49,447				82,099				N.M.
Net interest income after provision for credit losses			787,033				711,741				75,292				10.6
Service charges on deposit accounts			172,917				137,165				35,752				26.1
Trust services			86,220				66,444				19,776				29.8
Brokerage and insurance income			62,087				44,235				17,852				40.4
Other service charges and fees			49,176				37,570				11,606				30.9
Bank owned life insurance income			36,602				32,971				3,631				11.0
Mortgage banking income			26,102				35,322				(9,220	)			(26.1	)
Securities losses (2)			(18,187	)			(57,387	)			39,200				(68.3	)
Other income			91,127				124,143				(33,016	)			(26.6	)
Total non-interest income			506,044				420,463				85,581				20.4
Personnel costs			471,978				403,284				68,694				17.0
Outside data processing and other services			88,115				58,084				30,031				51.7
Net occupancy			72,659				54,002				18,657				34.5
Equipment			58,666				51,761				6,905				13.3
Marketing			29,868				25,521				4,347				17.0
Professional services			25,856				18,095				7,761				42.9
Telecommunications			15,989				14,633				1,356				9.3
Printing and supplies			11,657				10,254				1,403				13.7
Amortization of intangibles			24,988				6,969				18,019				N.M.
Other expense			72,514				90,601				(18,087	)			(20.0	)
Total non-interest expense			872,290				733,204				139,086				19.0
Income before income taxes			420,787				399,000				21,787				5.5
Provision for income taxes (3)			106,338				25,494				80,844				N.M.
Net income		$	314,449			$	373,506			$	(59,057	)			(15.8)	%
Average common shares — diluted			282,014				239,933				42,081				17.5	%
Per common share
Net income per common share — diluted		$	1.12			$	1.56			$	(0.44	)			(28.2)	%
Cash dividends declared			0.795				0.750				0.045				6.0
Return on average total assets			1.02	%			1.43	%			(0.41	)			(28.7)	%
Return on average total shareholders’ equity			10.3				17.2				(6.9	)			(40.1	)
Return on average tangible shareholders’ equity (4)			17.3				21.5				(4.2	)			(19.5	)
Net interest margin (5)			3.40				3.29				0.11				3.3
Efficiency ratio (6)			58.2				58.1				0.1				0.2
Effective tax rate (3)			25.3				6.4				18.9				N.M.
Revenue — fully taxable equivalent (FTE)
Net interest income		$	918,578			$	761,188			$	157,390				20.7	%
FTE adjustment (5)			13,886				11,910				1,976				16.6
Net interest income			932,464				773,098				159,366				20.6
Non-interest income			506,046				420,463				85,583				20.4
Total revenue		$	1,438,510			$	1,193,561			$	244,949				20.5	%

Significant Items Influencing Financial Performance Comparisons

     Earnings comparisons from the beginning of 2006 through the third quarter of 2007 were impacted by a number of significant items summarized below.

1.

Sky Financial Acquisition. The merger with Sky Financial was completed on July 1, 2007. At the time of acquisition, Sky Financial had assets of $16.8 billion, including $13.3 billion of loans, and total deposits of $12.9 billion. Sky Financial results are reflected in our consolidated results beginning July 1, 2007. The impacts of the affected quarterly and year-to-date reported results compared with premerger reporting periods are as follows:

	•		Increased the absolute level of reported average balance sheet, revenue, expense, and credit quality results (for example, net charge-offs).
	•		Increased reported non-interest expense items as a result of costs incurred as part of merger integration activities, most notably employee retention bonuses, outside programming services related to systems conversions, and marketing expenses related to customer retention initiatives. These net merger costs were $0.8 million in the 2007 first quarter, $7.6 million in the 2007 second quarter, and $32.3 million in the 2007 third quarter.

2.

Balance Sheet Restructuring. In third and fourth quarters of 2006, we utilized the excess capital resulting from the third quarter’s significant reduction to federal tax expense (see Item 6 below) to restructure certain under-performing components of our balance sheet. Total securities losses as a result of these actions totaled $73.3 million. The refinancing of Federal Home Loan Bank (FHLB) funding and the sale of mortgage loans resulted in total charges of $4.4 million, resulting in total balance sheet restructuring costs of $77.7 million ($0.21 per common share). Our actions impacted 2006 third and fourth quarter results as follows:

	•		$57.3 million pretax ($0.16 per common share) negative impact in the 2006 third quarter from securities impairment. Subsequent to the end of the quarter, we initiated a review of our investment securities portfolio. The objective of this review was to reposition the portfolio to optimize performance in light of changing economic conditions and other factors. A total of $2.1 billion of securities, primarily consisting of U.S. Treasury, agency securities, and mortgage-backed securities, as well as certain other asset-backed securities, were identified as other-than-temporarily impaired as a result of this review.
	•		$20.2 million pretax ($13.1 million after tax or $0.05 per common share) negative impact in the 2006 fourth quarter related to costs associated with the completion of the balance sheet restructuring. This consisted of $9.0 million pretax of investment securities losses as well as $6.8 million of additional impairment on certain asset-backed securities not included in the restructuring recognized in the third quarter, and $4.4 million pretax of other balance sheet restructuring expenses, most notably FHLB funding refinancing costs.

3.

Mortgage servicing rights (MSRs) and related hedging. Included in net market related losses are net losses or gains from our mortgage servicing rights and the related hedging. MSR fair values are very sensitive to movements in interest rates as expected future net servicing income depends on the projected outstanding principal balances of the underlying loans, which can be greatly reduced by prepayments. Prepayments usually increase when mortgage interest rates decline and decrease when mortgage interest rates rise. A hedging strategy is used to minimize the impact from MSR fair value changes. However, volatile changes in interest rates can diminish the effectiveness of these hedges. We typically report MSR fair value adjustments net of hedge-related trading activity. Net income included the following net impact of MSR hedging activity (reference Table 11):

(in thousands)
		Net				Non-												Per
		interest				interest				Pretax				Net				Common
Period		income				income				income				income				Share
1Q ‘07		$	—			$	(2,018	)		$	(2,018	)		$	(1,312	)		$	(0.01	)
2Q ‘07			248				(4,998	)			(4,750	)			(3,088	)			(0.01	)
3Q ‘07			2,357				(6,002	)			(3,645	)			(2,369	)			(0.01	)
9 mo. ‘07		$	2,605			$	(13,018	)		$	(10,413	)		$	(6,769	)		$	(0.02	)
1Q ‘06		$	—			$	4,575	(1)		$	4,575			$	2,974			$	0.01
2Q ‘06			—				1,542				1,542				1,002				—
3Q ‘06			38				(38	)			—				—				—
9 mo. ‘06			38				6,079				6,117				3,976				0.02
4Q ‘06			(2	)			(2,493	)			(2,495	)			(1,622	)			(0.01	)
12 mo. ‘06		$	36			$	3,586			$	3,622			$	2,354			$	0.01

Beginning in the 2006 first quarter, we adopted Statement of Financial Accounting Standards (Statement) No. 156, Accounting for Servicing of Financial Assets (an amendment of FASB Statement No. 140), which allowed us to carry MSRs at fair value. This resulted in a $5.1 million pretax ($0.01 per common share) positive impact in the 2006 first quarter (this impact is reflected in the above table). Under the fair value approach, servicing assets and liabilities are recorded at fair value at each reporting date. Changes in fair value between reporting dates are recorded as an increase or decrease in mortgage banking income. MSR assets are included in other assets.

4.

Other net market-related losses. Other net market-related losses include losses and gains related to the following market-driven activities: gains and losses from equity investing (included in other non-interest income), net securities gains and losses, and the impact from the extinguishment of debt (included as other non-interest expense). Total net market-related losses also include the net impact of MSRs and related hedging (see item 3 above). Net income included the following impact from other net market-related losses:

(in thousands)
		Securities								Debt												Per
		Gains/				Equity				Extinguish-				Pretax				Net				Common
Period		(Losses)				Investing				ment				income				income				Share
1Q ‘07		$	104			$	(8,530	)		$	—			$	(8,426	)		$	(5,477	)		$	(0.02	)
2Q ‘07			(5,139	)			2,301				4,090				1,252				814				—
3Q ‘07			(13,152	)			(4,387	)			3,220				(14,319	)			(9,307	)			(0.03	)
9 mo. ‘07		$	(18,187	)		$	(10,616	)		$	7,310			$	(21,493	)		$	(13,970	)		$	(0.05	)
1Q ‘06		$	(20	)		$	1,505			$	—			$	1,485			$	965			$	—
2Q ‘06			(35	)			2,322				—				2,287				1,487				0.01
3Q ‘06			(57,332	)			352				—				(56,980	)			(37,037	)			(0.15	)
9 mo. ‘06			(57,387	)			4,179				—				(53,208	)			(34,585	)			(0.14	)
4Q ‘06			(15,804	)			3,257				(4,389	)			(16,936	)			(11,008	)			(0.05	)
12 mo. ‘06		$	(73,191	)		$	7,436			$	(4,389	)		$	(70,144	)		$	(45,593	)		$	(0.19	)

5.		Significant commercial loan provision expense. Performance for the 2007 second quarter included $24.8 million ($16.1 million after tax, or $0.07 per common share) in provision for credit losses associated with three credit relationships: two in the eastern Michigan single-family home builder sector and one northern Ohio commercial credit to an auto industry-related manufacturing company. In the 2007 second quarter, charge-offs of $12.2 million were recorded against two of these credit relationships. In the 2007 third quarter, an additional $10.0 million of charge-offs were recorded, relating to all three of these credit relationships.
6.		Effective tax rate. The effective tax rate for the 2006 third quarter included an $84.5 million ($0.35 per common share) reduction of federal income tax expense from the release of tax reserves as a result of the resolution of the federal income tax audit for 2002 and 2003 and the recognition of federal tax loss carry backs.
7.		Other significant items influencing earnings performance comparisons. In addition to the items discussed separately in this section, a number of other items impacted financial results. These included:
		2007 - First Quarter

•

$1.9 million pretax ($1.2 million after tax or $0.01 per common share) negative impact due to litigation losses.

2006 - Fourth Quarter

	•		$10.0 million pretax ($6.5 million after tax or $0.03 per common share) contribution to the Huntington Foundation.
	•		$5.2 million pretax ($3.6 million after tax or $0.02 per common share) increase in automobile lease residual value losses. This increase reflected higher relative losses on vehicles sold at auction, most notably high-line imports and larger sport utility vehicles.
	•		$4.5 million pretax ($2.9 million after tax or $0.01 per common share) in severance and consolidation expenses. This reflected severance-related expenses associated with a reduction of 75 Regional Banking staff positions, as well as costs associated with the retirements of a vice chairman and an executive vice president.
	•		$2.6 million pretax ($1.7 million after tax or $0.01 per common share) gain related to the sale of MasterCard® stock.

2006 - First Quarter

•

$2.3 million pretax ($1.5 million after tax or $0.01 per common share) negative impact, reflecting a cumulative adjustment to defer annual fees related to home equity loans.

Table 3 reflects the earnings impact of the above-mentioned significant items for periods affected by this Discussion of Results of Operations:

Table 3 — Significant Items Influencing Earnings Performance Comparison ⁽¹⁾

		Three Months Ended
		September 30, 2007								June 30, 2007								September 30, 2006
(in millions)		After-tax				EPS				After-tax				EPS				After-tax				EPS
Net income — reported earnings		$	138.2							$	80.5							$	157.4
Earnings per share, after tax						$	0.38							$	0.34							$	0.65
Change from prior quarter — $							0.04								(0.06	)							0.19
Change from prior quarter — %							11.8	%							(15.0	)%							41.3	%
Change from a year-ago — $						$	(0.27	)						$	(0.12	)						$	0.18
Change from a year-ago — %							(41.5	)%							(26.1	)%							38.3	%

Significant items - favorable (unfavorable) impact:		Earnings (2)				EPS				Earnings (2)				EPS				Earnings (2)				EPS
Merger costs		$	(32.3	)		$	(0.06	)		$	(7.6	)		$	(0.02	)		$	—			$	—
Net market-related losses			(18.0	)			(0.03	)			(3.5	)			(0.01	)			—				—
Significant commercial loan provision expense			—				—				(24.8	)			(0.07	)			—				—
Reduction to federal income tax expense (3)			—				—				—				—				84.5				0.35
Balance sheet restructuring			—				—				—				—				(57.3	)			(0.16	)
Adjustment for equity method investments			—				—				—				—				(2.1	)			(0.01	)

		Nine Months Ended
		September 30, 2007								September 30, 2006
(in millions)		After-tax				EPS				After-tax				EPS
Net income — reported earnings		$	314.4							$	373.5
Earnings per share, after tax						$	1.12							$	1.56
Change from a year-ago — $							(0.44	)							0.22
Change from a year-ago — %							(28.2	)%							16.4	%

Significant items - favorable (unfavorable) impact:		Earnings (2)				EPS				Earnings (2)					EPS
Merger costs		$	(40.7	)		$	(0.09	)		$	(4.2	)		$	(0.01	)
Net market-related losses			(32.0	)			(0.07	)			5.1				0.01
Significant commercial loan provision expense			(24.8	)			(0.06	)			—				—
Reduction to federal income tax expense (3)			—				—				84.5				0.35
MSR FAS 156 accounting change			—				—				5.1				0.01
Balance sheet restructuring			—				—				(57.3	)			(0.16	)
Adjustment for equity method investments			—				—				(3.2	)			(0.01	)
Adjustment to defer home equity annual fees			—				—				(2.3	)			(0.01	)

Net Interest Income
(This section should be read in conjunction with Significant Items 1, 2, 3, and 7.)

2007 Third Quarter versus 2006 Third Quarter

     Fully taxable equivalent net interest income for the 2007 third quarter was $415.3 million. This represented an increase of $155.9 million, or 60%, from the year-ago quarter. This reflected the favorable impact of a $14.9 billion increase in average earning assets, of which $13.5 billion represented an increase in average loans and leases, as well as the benefit of an increase in the fully taxable equivalent net interest margin of 30 basis points to 3.52%. The 3.52% fully taxable equivalent net interest margin was consistent with our expectations for a relatively stable net interest margin compared with the pro forma 2007 second quarter level of 3.50%.

     The following table details the estimated merger related impacts on our reported loans and deposits:

Table 4 — Average Loans/Leases and Deposits — Estimated Merger Related Impacts — 3Q’07 vs. 3Q’06

		Third Quarter								Change								Merger				Non-merger Related
(in millions)		2007				2006				Amount				%				Related				Amount				% (1)
Loans
Total commercial		$	22,016			$	12,039			$	9,977				82.9	%		$	8,746			$	1,231				5.9	%
Automobile loans and leases			4,354				4,055				299				7.4				432				(133	)			(3.0	)
Home equity			7,355				5,041				2,314				45.9				2,385				(71	)			(1.0	)
Residential mortgage			5,456				4,748				708				14.9				1,112				(404	)			(6.9	)
Other consumer			647				430				217				50.5				143				74				12.9
Total consumer			17,812				14,274				3,538				24.8				4,072				(534	)			(2.9	)
Total loans		$	39,828			$	26,313			$	13,515				51.4	%		$	12,818			$	697				1.8	%
Deposits
Demand deposits — non-interest bearing		$	5,384			$	3,509			$	1,875				53.4	%		$	1,829			$	46				0.9	%
Demand deposits — interest bearing			3,808				2,169				1,639				75.6				1,460				179				4.9
Money market deposits			6,869				5,689				1,180				20.7				996				184				2.8
Savings and other domestic deposits			5,043				2,923				2,120				72.5				2,594				(474	)			(8.6	)
Core certificates of deposit			10,425				5,334				5,091				95.4				4,630				461				4.6
Total core deposits			31,529				19,624				11,905				60.7				11,509				396				1.3
Other deposits			6,123				4,969				1,154				23.2				1,342				(188	)			(3.0	)
Total deposits		$	37,652			$	24,593			$	13,059				53.1	%		$	12,851			$	208				0.6	%

     The $0.7 billion, or 2%, non-merger related increase in total average loans primarily reflected:

•

$1.2 billion, or 6%, increase in average total commercial loans, reflecting continued strong growth in middle-market commercial and industrial (C&I) loans. The increase in commercial loans was spread across substantially all regions.

Partially offset by:

•

$0.5 billion, or 3%, decrease in average total consumer loans, reflecting continued declines in automobile leasing due to low consumer demand and competitive pricing, as well as the impact of mortgage loan sales over the last 12 months.

     Also contributing to the growth in average earning assets was a $1.1 billion increase in average trading account securities. The increase in these assets reflected a change in our strategy to use trading account securities to hedge the change in fair value of our MSRs.

     Concerning total average deposits, the $0.2 billion of non-merger related increase primarily reflected:

•

$0.4 billion, or 1%, increase in average total core deposits, reflecting strong growth in interest bearing demand deposits and money market accounts. While there was strong growth in core certificates of deposits, this was offset by a decline in savings and other domestic deposits, as customers transferred funds from lower rate to higher rate accounts.

Partially offset by:

•

$0.2 billion, or 3%, decline in other non-core deposits driven by a decline in brokered deposits and negotiable certificates of deposit.

2007 Third Quarter versus 2007 Second Quarter

     Fully taxable equivalent net interest income for the 2007 third quarter was $415.3 million. This represented an increase of $157.8 million, or 61%, from the prior quarter. This reflected the favorable impact of a $15.2 billion increase in average earning assets, of which $13.4 billion represented an increase in average loans and leases, as well as the benefit of an increase in the fully taxable equivalent net interest margin of 26 basis points to 3.52%. These increases were primarily merger related.

     The following table details the estimated merger related impacts on our reported loans and deposits:

Table 5 — Average Loans/Leases and Deposits — Estimated Merger Related Impacts — 3Q’07 vs. 2Q’07

		Third				Second
		Quarter				Quarter				Change								Merger				Non-merger Related
(in millions)		2007				2007				Amount				Percent				Related				Amount				% (1)
Loans
Total commercial		$	22,016			$	12,818			$	9,198				71.8	%		$	8,746			$	452				2.1	%
Automobile loans and leases			4,354				3,873				481				12.4				432				49				1.1
Home equity			7,355				4,973				2,382				47.9				2,385				(3	)			(0.0	)
Residential mortgage			5,456				4,351				1,105				25.4				1,112				(7	)			(0.1	)
Other consumer			647				424				223				52.6				143				80				14.1
Total consumer			17,812				13,621				4,191				30.8				4,072				119				0.7
Total loans		$	39,828			$	26,439			$	13,389				50.6	%		$	12,818			$	571				1.5	%
Deposits
Demand deposits — non-interest bearing		$	5,384			$	3,591			$	1,793				49.9	%		$	1,829			$	(36	)			(0.7	)%
Demand deposits — interest bearing			3,808				2,404				1,404				58.4				1,460				(56	)			(1.4	)
Money market deposits			6,869				5,466				1,403				25.7				996				407				6.3
Savings and other domestic deposits			5,043				2,863				2,180				76.1				2,594				(414	)			(7.6	)
Core certificates of deposit			10,425				5,591				4,834				86.5				4,630				204				2.0
Total core deposits			31,529				19,915				11,614				58.3				11,509				105				0.3
Other deposits			6,123				4,358				1,765				40.5				1,342				423				7.4
Total deposits		$	37,652			$	24,273			$	13,379				55.1	%		$	12,851			$	528				1.4	%

     The $0.6 billion, or 1%, non-merger related increase in average total loans and leases primarily reflected 2% growth in average total commercial loans due to continued strong growth across substantially all regions. Non-merger related average total consumer loans increased 1% with most categories essentially unchanged.

     Also contributing to the growth in average earning assets were $0.9 billion increase in average trading account securities and $0.7 billion in average investment securities. These increases were primarily merger related. The increase in these assets reflected a change in our strategy to use trading account securities to hedge the change in fair value of our MSRs.

     Concerning the $13.4 billion increase in average total deposits, $12.9 billion was merger related. The $0.5 billion, or 1%, non-merger related increase reflected:

	•		$0.4 billion, or 7%, increase in other non-core deposits, reflecting an increase in wholesale deposits.
	•		$0.1 billion increase in average total core deposits. This reflected strong growth in money market deposits and core certificates of deposit, partially offset by a decline in savings and other domestic deposits as those depositors moved funds into higher rate accounts. The decline in interest bearing and non-interest bearing demand deposits reflected seasonality.

Tables 6 and 7 reflect quarterly average balance sheets and rates earned and paid on interest-earning assets and interest-bearing liabilities.

Table 6 — Consolidated Quarterly Average Balance Sheets

		Average Balances																					Change
Fully taxable equivalent basis		2007												2006									3Q07 vs 3Q06
(in millions)		Third				Second				First				Fourth				Third					Amount				Percent
Assets
Interest bearing deposits in banks		$	292			$	259			$	93			$	77			$	75				$	217				N.M.	%
Trading account securities			1,149				230				48				116				96					1,053				N.M.
Federal funds sold and securities purchased under resale agreements			557				574				503				531				266					291				N.M.
Loans held for sale			419				291				242				265				275					144				52.4
Investment securities:
Taxable			3,951				3,253				3,595				3,792				4,364					(413	)			(9.5	)
Tax-exempt			675				629				591				594				581					94				16.2
Total investment securities			4,626				3,882				4,186				4,386				4,945					(319	)			(6.5	)
Loans and leases: (1)
Commercial:
Middle market commercial and industrial			10,301				6,209				6,070				5,882				5,651					4,650				82.3
Middle market commercial real estate:
Construction			1,782				1,245				1,151				1,170				1,129					653				57.8
Commercial			5,623				2,865				2,772				2,839				2,846					2,777				97.6
Middle market commercial real estate			7,405				4,110				3,923				4,009				3,975					3,430				86.3
Small business			4,310				2,499				2,466				2,421				2,413					1,897				78.6
Total commercial			22,016				12,818				12,459				12,312				12,039					9,977				82.9
Consumer:
Automobile loans			2,931				2,322				2,215				2,111				2,079					852				41.0
Automobile leases			1,423				1,551				1,698				1,838				1,976					(553	)			(28.0	)
Automobile loans and leases			4,354				3,873				3,913				3,949				4,055					299				7.4
Home equity			7,355				4,973				4,913				4,973				5,041					2,314				45.9
Residential mortgage			5,456				4,351				4,496				4,635				4,748					708				14.9
Other loans			647				424				422				430				430					217				50.5
Total consumer			17,812				13,621				13,744				13,987				14,274					3,538				24.8
Total loans and leases			39,828				26,439				26,203				26,299				26,313					13,515				51.4
Allowance for loan and lease losses			(475	)			(297	)			(278	)			(282	)			(291	)				(184	)			(63.2	)
Net loans and leases			39,353				26,142				25,925				26,017				26,022					13,331				51.2
Total earning assets			46,871				31,675				31,275				31,674				31,970					14,901				46.6
Cash and due from banks			1,111				748				826				830				823					288				35.0
Intangible assets			3,337				626				627				631				634					2,703				N.M.
All other assets			3,124				2,398				2,480				2,617				2,633					491				18.6
Total Assets		$	53,968			$	35,150			$	34,930			$	35,470			$	35,769				$	18,199				50.9	%
Liabilities and Shareholders’ Equity
Deposits:
Demand deposits — non-interest bearing		$	5,384			$	3,591			$	3,530			$	3,580			$	3,509				$	1,875				53.4	%
Demand deposits — interest bearing			3,808				2,404				2,349				2,219				2,169					1,639				75.6
Money market deposits			6,869				5,466				5,489				5,548				5,689					1,180				20.7
Savings and other domestic deposits			5,043				2,863				2,827				2,849				2,923					2,120				72.5
Core certificates of deposit			10,425				5,591				5,455				5,380				5,334					5,091				95.4
Total core deposits			31,529				19,915				19,650				19,576				19,624					11,905				60.7
Other domestic deposits of $100,000 or more			1,694				1,124				1,219				1,282				1,141					553				48.5
Brokered deposits and negotiable CDs			3,728				2,682				3,020				3,252				3,307					421				12.7
Deposits in foreign offices			701				552				562				598				521					180				34.5
Total deposits			37,652				24,273				24,451				24,708				24,593					13,059				53.1
Short-term borrowings			2,542				2,075				1,863				1,832				1,660					882				53.1
Federal Home Loan Bank advances			2,553				1,329				1,128				1,121				1,349					1,204				89.3
Subordinated notes and other long-term debt			3,912				3,470				3,487				3,583				3,921					(9	)			(0.2	)
Total interest bearing liabilities			41,275				27,556				27,399				27,664				28,014					13,261				47.3
All other liabilities			1,103				960				987				1,142				1,276					(173	)			(13.6	)
Shareholders’ equity			6,206				3,043				3,014				3,084				2,970					3,236				N.M.
Total Liabilities and Shareholders’ Equity		$	53,968			$	35,150			$	34,930			$	35,470			$	35,769				$	18,199				50.9	%