Huntington Bancshares Files 2003 Second Quarter Form 10-Q; Reaffirms 2003 Earnings Guidance of $1.48-$1.52 Per Share; Completes Sale of West Virginia Banking Offices

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Huntington Bancshares Files 2003 Second Quarter Form 10-Q; Reaffirms 2003 Earnings Guidance of $1.48-$1.52 Per Share; Completes Sale of West Virginia Banking Offices
    COLUMBUS, Ohio, Aug. 14 /PRNewswire-FirstCall/ -- Huntington Bancshares
Incorporated (Nasdaq: HBAN) ( http://www.huntington.com ) today filed its 2003 Second
Quarter Form 10-Q with the Securities and Exchange Commission.  Results in the
Form 10-Q reflect the July 17, 2003 announcement of the voluntary restatement
of prior period results to reflect a series of actions related to the timing
of the recognition of origination fees paid to automobile dealers, commissions
paid to employees for deposit gathering activities, certain residential
mortgage loan origination fee income, expense related to pension settlements,
and reserves related to the sale of an automobile debt cancellation product.
The cumulative effect of this restatement on total equity as of March 31, 2003
was a reduction of $30.4 million, or 1.3%.
    Huntington also announced on July 17, 2003 that it is reviewing the
application of SFAS 91 (Accounting for Nonrefundable Fees and Costs Associated
with Originating or Acquiring Loans and Initial Direct Costs of Leases) on
historical results.  SFAS 91 deals with the timing of recognition of loan and
lease origination fees and certain expenses and requires that such fees and
costs, if material, be deferred and amortized over the estimated life of the
asset.
    Huntington is not filing at this time a second amended 2002 Annual Report
on Form 10-K/A or an amended 2003 First Quarter 10-Q/A because it has not
completed gathering and analyzing data for 1995-1997, which is necessary to
finalize its review of the impact on prior period results of not having
deferred net origination fees and costs.  Based upon information currently
available, Huntington expects the majority of any additional impact that might
result from a restatement, should it occur, would be reflected in 1999 and
earlier periods, similar to the timing impact of the restatement announced on
July 17, 2003.
    Significant disclosures included in the 2003 Second Quarter 10-Q included
the following:
    FIN 46 - As previously announced on July 17, 2003, Huntington adopted FASB
Interpretation No. 46 (FIN 46) (Consolidation of Variable Interest Entities)
effective July 1, 2003.  This resulted in the reconsolidation of $1.0 billion
of indirect automobile loans on the balance sheet.  At the time of the
securitization in 2000, outside ownership of 3% qualified the securitization
for off balance sheet treatment as a special purpose entity (SPE).  Under FIN
46, off balance sheet treatment for an SPE is only possible if the outside
ownership is a minimum of 10%.  The consolidation of that trust involved
recognition of the trust's assets and liabilities, elimination of the related
retained interest and servicing assets, recognition of other related assets,
and establishment of a 1.01% allowance for loan and lease losses (ALLL).
Reflecting these impacts, Huntington expects that the adoption of FIN 46 will
result in a cumulative effect charge of approximately $11 million after-tax,
or $0.05 per share, in the third quarter; a reduction in the company's total
ALLL ratio by approximately 3 basis points; and a reduction in the tangible
common equity ratio of approximately 30 basis points.
    Deferral of Loan and Lease Origination Fees and Expenses - On July 17,
2003, the company also announced it would defer origination fees and expenses
prospectively for all loans and leases originated after June 30, 2003.
Management believes the prospective adoption of this deferral accounting will
reduce net income in the second half of 2003 by approximately $0.05 per share.
If prior periods are restated, the impact on earnings in the second half of
2003 would be less.
    Divestitures - On July 25, 2003, Huntington completed the sale of four
banking offices located in the Martinsburg, West Virginia area, announced on
February 13, 2003.  This sale included approximately $50 million of loans and
$130 million of deposits.  Huntington expects to report a $13 million pre-tax
gain ($8 million after tax; $0.04 per share) from the sale in the third
quarter.

    2003 Outlook and Forward Looking Comments
    The economy, while weak, seems to be showing early signs of improvement.
While the absolute low level of interest rates continues to be a challenge,
the recent steepening of the yield curve is a positive development.
    Huntington reaffirmed 2003 full-year earnings per share guidance of
$1.48-$1.52, unchanged from the guidance issued on July 17, 2003.  This
guidance takes into consideration the negative impacts of implementing FIN 46
and the prospective deferral of loan and lease origination fees and costs,
offset by the positive impact the improved interest rate environment has had
on mortgage servicing rights valuations and, to a lesser degree, modest
economic improvement.  This guidance excludes the gain from the sale of the
West Virginia banking offices and any impact from future loan sales that might
occur.

    Forward-looking Statements
    This press release contains certain forward-looking statements, including
certain plans, expectations, goals, and projections, which are subject to
numerous assumptions, risks, and uncertainties.  A number of factors,
including but not limited to those set forth under the heading "Business
Risks" included in Item 1 of Huntington's Annual Report on Form 10-K/A for the
year ended December 31, 2002 which was filed on May 20, 2003, and other
factors described from time to time in Huntington's other filings with the
Securities and Exchange Commission, could cause actual conditions, events, or
results to differ significantly from those described in the forward-looking
statements.  All forward-looking statements included in this news release are
based on information available at the time of the release.  Huntington assumes
no obligation to update any forward-looking statement.

    About Huntington
    Huntington Bancshares Incorporated is a $28 billion regional bank holding
company headquartered in Columbus, Ohio.  Through its affiliated companies,
Huntington has more than 137 years of serving the financial needs of its
customers.  Huntington provides innovative retail and commercial financial
products and services through more than 300 regional banking offices in
Indiana, Kentucky, Michigan, Ohio and West Virginia. Huntington also offers
retail and commercial financial services online at http://www.huntington.com ;
through its technologically advanced, 24-hour telephone bank; and through its
network of more than 850 ATMs.  Selected financial service activities are also
conducted in other states including: Dealer Sales offices in Florida, Georgia,
Tennessee, Pennsylvania and Arizona; Private Financial Group offices in
Florida; and Mortgage Banking offices in Florida, Maryland and New Jersey.
International banking services are made available through the headquarters
office in Columbus and additional offices located in the Cayman Islands and
Hong Kong.
SOURCE Huntington Bancshares Incorporated
http://www.huntington.com
CONTACT:
Analysts, Jay Gould, +1-614-480-4060, or
Susan Stuart, +1-614-480-3878, or Media, Jeri Grier,
+1-614-480-5413, or Karen Del Toro, +1-614-480-3077, all of
Huntington Bancshares